RTG makes significant strides, say CE

RTG has made significant strides towards achieving its stated objectives for 2013 as adopted by the management team, CE Tendai Madziwanyika told the AGM this afternoon.
 
"As you are aware, the company set out to raise $14.5 million from two main sources.....The group managed to raise $4.5 million through a rights issue. The group also managed to attain a $10 million loan facility at the beginning of the year.
 
"Proceeds from the rights issue were applied in full towards the retirement of part of the short term debt. The whole $10 million loan facility was applied to restructuring more of the short term debt into a 3 year facility," he said.
 
Madziwanyika added that the recapitalisation initiatives had the effect of reducing the average cost of funds from 24.6% in 2012 to the current 12%.
 
Turning to product development and refurbishment he noted that they are now on course with the group's refurbishment projects.
 
The refurbishment exercise for the Rainbow Towers Hotel and Conference Centre which had been temporarily stopped at the end of 2012 has now resumed.
 
"We anticipate releasing the first batch of 48 rooms by end of July and the rest of the rooms by the end of the year. However, the whole refurbishment exercise including public areas will be completed by the first quarter of 2014," said Madziwanyika.
 
He told the meeting that cost reduction was the first area of the business to respond to the firm's push for more efficient and effective operational systems.
 
"We realised a reduction in cost of sales now at 10% compared with prior year of 11%, 64% drop in water costs through the roll out of boreholes, 11% drop in electricity costs due to gas in kitchens and energy saving monitors, 13% drop in cost of goods purchased through Central Procurement as compared with November 2012…" he noted.
 
Furthermore, he mentioned that the challenge going forward is of ensuring that the system does not lose sight of the cost reduction gains achieved to date in the wake of the rising revenues.
 
Commenting on revenue generation, he said; "Group revenues have been on an upward trend since the beginning of the year due to the revenue driving programs that are now on the market. We are confident that the trajectory will be sustained."
 
He added that a marked recovery in occupancies was recorded in March, April and May noting that May closed with a record high occupancy as compared with previous years.
 
Madziwanyika stated that several of the hotels under the group are now showing positive occupancy growth rates.
 
"The hotels have not only managed to achieve their budgeted revenues but also achieved an improvement in conferencing business and yield management respectively.
 
"The re-ignition of the South African office as well as the activation of our expansive global network is also set to contribute positively to the revenue driving imperative," he said.
 
Relating to elections, he said the group will experience a marginal decrease in revenue prior to election as most companies will conduct most of their conferencing business after elections.
 
The current focus for the business, as mentioned by Madziwanyika, is to achieve profitability by year end.
 
He said at the same time the restructuring of the group's operations so as to reduce cost structures, ensure maximum productivity and increase revenues will continue to be effected.
 
"Overall, performance across the group is progressing as anticipated. With a better result expected from the second quarter onwards. Management is confident that it will deliver on its targets as communicated to the market by year end," said Madziwanyika.
 
The group's directors were re-appointed and fees of $47 735 approved while auditors Grant Thornton Camelsa were re-elected with remuneration of $130 000 also approved.