Mauritius–based leisure and property firm says its revenues have been on the up as its Hospitality operations posted a significantly improved performance.
In a trading update to March 29, 2019, Brainworks said revenue growth was recorded across all the group’s segments, with notable growth being recorded by the hospitality segment.
“The Hospitality business segment’s revenue improved, which was spurred by a 7% increase in occupancy from 52% recorded in the prior year to 59% for the year under review, and a 17% increase in average daily rate (ADR) from US$93 recorded the prior year to USD109, as the hotels continued to align domestic rates to the implied exchange rate between US$ and RTGS dollar,” said the group.
Occupancy growth was driven by strong performance from all our source markets with room nights sold for domestic, international and regional increasing by 12%, 14% and 7%, respectively.
The Real Estate segment also recorded notable increase in revenue, with 70% of the growth attributable to our inaugural revenues recorded from property sales.
This was on the back of a completion of Brainworks’ maiden development project in Harare.
“Over 60% of the units were sold in 2018 and although there was demand for the remaining 22 units, the group adopted a strategic decision of deferring sales as the Zimbabwe currency environment became volatile during the third quarter of 2018.
“The recent currency pronouncements by the monetary authorities are however expected to drive confidence and stabilise the exchange rate in Zimbabwe, which will provide the group with a basis to resume sales of the remaining property units. Efforts to sell the remaining units resumed in 2019,” said Brainworks.
Management said they continue to strategically focus on reducing its debt burden.
Brainworks recorded a notable reduction in its debt reducing it by 55% from the US$38.3 million reported as at the end of the prior year, attracting a weighted average interest rate of 12%.
“This was achieved through: the settlement of debt through the delivery of assets (in lieu of cash), internally generated cashflows; and and equity proceeds,” said the company.
During the period under review, Brainworks completed the disposal of its shareholding in GetBucks Microfinance Bank Ltd, and the financial impact of the exit was notably positive to profitability.
The group also sold its entire equity interest in GetSure Life Assurance Company (Private) Ltd.
“These disposals effectively complete the Group’s initiatives to exit the financial services sector in order to concentrate on core business sectors, namely, hospitality and real estate,” said management.