Dawn Properties posts year-ending loss

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DAWN Properties Limited has recorded a decline in after-tax profit to $149 152 for the year ended March 31 2015 from $2,2 million in 2014 due to losses from fair value adjustment on investment property.

BY TARISAI MANDIZHA

In the period under review, revenue declined by 7% to $5,2 million from $5,5 million in 2014.

In a statement accompanying the group’s financial statements for the year ended March 31 2015, Dawn Properties chairperson Phibion Gwatidzo said a fair value loss was realised on investment property resulting in the firm carrying an amount of $85,1 million for investment property.

“ The past two years have been extremely challenging due to the liquidity constraints, which have made it difficult to grow revenue, therefore, robust cost cutting measures have had to be instituted in order to remain profitable,” Gwatidzo said.

In the period under review, operating expenses decreased by 3% notwithstanding an impairment loss on goodwill of $120 186 and once-off transaction costs for the conversion of the linked unit debentures amounting to $144 977.

The cash and cash equivalents for the period increased by 40% to $2 241 090 compared to $1 604 770 in the prior year.

Gwatidzo said the members approved that the linked unit debentures be converted at a premium to ordinary shares at an extraordinary meeting held last year in November which resulted in an increase in share capital to $1965 738 and elimination of debentures of $1 797 486.

Commenting on operations, he said the rental income for the hotel portfolio was 6% above prior year at $2,6 million primarily driven by the major conferences held in Victoria Falls and Harare during the year under review.

During the period under review, the investment property segment operating profit decreased by 73% to $463 649.

“The property consultancy segment continued to be impacted negatively by the tough economic conditions that were experienced during the year under review,” Gwatidzo said.

Turnover declined by 17% to $2,6 million compared to prior year while profit for the year was $119 969 which was 79% below prior year.

Gwatidzo said the property services segment, however, realised a saving of 3% in operating expenses as a result of cost-cutting measures that were instituted.

“In the short to medium term, cost containment will remain in sharp focus to preserve profitability. Major milestones have been achieved with regard to the development of the land bank in Marlborough. It is anticipated that phase 1 of the project will be rolled out during the current financial year. A significant contribution to both revenues and profitability is expected,” he said.

Brainworks Capital Management (Private) Limited now holds 61,65% shareholding in Dawn Properties Limited after acquiring a further 18,58% in April, making the company the majority shareholder.

Gwatidzo added that to comply with Zimbabwe Stock Exchange requirements, Brainwork’s will be making a mandatory offer to the minority shareholders.

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