Business / Companies
Zimre Property Investments posts improved interim results
09 Sep 2011 at 07:46hrs | Views
An improved set of interims from the property concern as the attributable earnings grew a massive 255% to $1.1 million on the back of an increase in average rentals. Revenue for the period jumped 53% to $1.9 million backed by an increase in the average rentals and sales income from the disposal of stands at Parklands in Bulawayo and Rhodene in Masvingo.
Net rental rates rose to an average of $15/m2 from $12/m2 as at December 2010. Office rentals also experienced marginal rise to average $7/m2; while industrial space remained unchanged at $1.50/m2. The collection level increased from 74% to 94% year on year while the average portfolio yield also grew marginally to 8%. Portfolio voids went up 100bp to 10% due to the prevailing liquidity challenges.
The balance sheet grew 10% to $41.1 million, while investment projects also went up to $35.5 million from $24.7 million in the comparable period. Debtors remain a challenge as the provision for bad debts went up 24% to $426,000. The current ratio further improved 13% to 7x. As a result of the increase in rental collections, cash from operations jumped 892% to $734 00, while the closing cash position weakened 99% to $4,791 due to ongoing capital expenditure.
Company projects have continued to perform above expectation both in the execution of works and disposal of the completed product. The Rhodene Extension project was completed well ahead of the schedule and within the tender amount of $4 million.
Strategic disposal of the completed phases 1 and 2 has realised $700,000 to date which has been used to finance the outstanding projects. The sale of stands in Parklands is still ongoing with the price having risen 87% to US$ 15/m2 from $8/m2 when the project began selling in 2009.
For the outlook, the company's focus will be on strategic areas such as acquisition of strategic land banks, property development and expansion of the existing portfolio.
Planned maintenance and phased refurbishments on portfolio properties will also remain a key focus. ZPI is still trading at a discount to its NAV and its property portfolio which was valued at $24.8m at balance sheet date. Even though rental yields went up during the period under review, they still lag regional averages of between $14/m2 and $25/m2 for office and retail respectively.
Net rental rates rose to an average of $15/m2 from $12/m2 as at December 2010. Office rentals also experienced marginal rise to average $7/m2; while industrial space remained unchanged at $1.50/m2. The collection level increased from 74% to 94% year on year while the average portfolio yield also grew marginally to 8%. Portfolio voids went up 100bp to 10% due to the prevailing liquidity challenges.
The balance sheet grew 10% to $41.1 million, while investment projects also went up to $35.5 million from $24.7 million in the comparable period. Debtors remain a challenge as the provision for bad debts went up 24% to $426,000. The current ratio further improved 13% to 7x. As a result of the increase in rental collections, cash from operations jumped 892% to $734 00, while the closing cash position weakened 99% to $4,791 due to ongoing capital expenditure.
Strategic disposal of the completed phases 1 and 2 has realised $700,000 to date which has been used to finance the outstanding projects. The sale of stands in Parklands is still ongoing with the price having risen 87% to US$ 15/m2 from $8/m2 when the project began selling in 2009.
For the outlook, the company's focus will be on strategic areas such as acquisition of strategic land banks, property development and expansion of the existing portfolio.
Planned maintenance and phased refurbishments on portfolio properties will also remain a key focus. ZPI is still trading at a discount to its NAV and its property portfolio which was valued at $24.8m at balance sheet date. Even though rental yields went up during the period under review, they still lag regional averages of between $14/m2 and $25/m2 for office and retail respectively.
Source - Imara Stockbrokers
