The acquisition of Water Shed Piazza in Mahalapye from Josh Posh Investment in March last year has significantly boosted Letlole la Rona revenues for the financial year ended 30 June 2019, the Botswana Stock Exchange (BSE) listed real estate loan stock outfit reported last week.
Total Revenue for the year grew by 28 % from P82 million recorded at 2018 year end to close the year at over P102 million. Letlole la Rona says the increase was underpinned by a full years’ contribution of Watershed Mall which came into the portfolio at the tail end of the 2018 financial year. On the 7th of December 2017 Letlole La Rona announced that it has entered into an agreement with Jus Posh Investments (Proprietary) Limited to acquire Lot 29052, Mahalapye from the former.
The acquisition of the Property encompassed all land, buildings and improvements, under the real estate parameters of a fully developed retail center known as Watershed Mall located along the A1 road in Mahalapye. In late January 2018 Competition Authority released a circular to the market alerting any interested parties about the transaction. Two months later Letlole La Rona sealed the deal with sole owner of Josh Posh Investment, Seloma Tiro and paid P149 million for the property.
In several communiqués during the acquisition process Letlole La Rona observed that brining Watershed into its fold would add significant weight into their investments and broaden the company’s footprint reach. “This retail property will enhance LLR’s property value and diversify the portfolio in line with the strategic objectives of the Company. It also provides geographical spread opportunities,” noted the company in 2018.
Zooming into other financial highlights during the June 2019 year end shows that rental gatherings went up by 7.5 %. “This underscores the quality of our portfolio which was also enhanced by the purchase of newly developed, fully tenanted warehouses in Gaborone’s Block 3,” observed LLR Chief Executive Officer, Shenjere-Mutiswa. This increase in revenue pushed full year operating profits up by 22 % to plus P75 million from just over P61.4 million registered in the prior year while net cash from operating activities grew by 6 % with tighter working capital management.
The company also recorded improved cash collections resulting in core cash resources ending the year at P44.6 million, significantly higher that the P34.5 million at the end of the previous financial year , this was also bolstered by revenues year on year good. Following its acquisition of the positively performing Watershed Mall last year LLR this year took a decision to divest significantly from the hospitality sector. The company says this was a first decisive execution of LLR’s deliberate strategic shift. This entails sales of the four hotels to Cresta Marakanelo Limited, Botswana’s premier hospitality and hotels operator.
LLR says disposing all its hotel interest via a sale to the sitting tenant was in line with its diversification strategy. Chairperson of Letlole La Rona states in the financial results commentary that the move has seen LLR dramatically reduce its risk profile, removing exposure to a single tenant who occupied up to a third of its portfolio while at the same time unlocking capital to carry out its restructuring and growth path.
This has however led to a book loss of P27 million ,while on the other side there were two additions of properties in Gaborone’s key industrial nodes as the business consolidated its lead in this sought after sector of the market. The net result of this disposal combined with the absence of full year 2018’s significant one-off revaluation gain on a single property resulted in profit tax declining from P95 million recorded at 2018 year end to P65 million . This was also contributed to by taking into consideration of discontinued operations.
On the overall Letlole La Rona directors say the company’s strong performance above expectations continues despite the current subdued economic environment underscoring that a well –diversified growing portfolio has secured the business cash generation ability against macroeconomic headwinds with the company consistently delivering solid financial and operational results.
LLR says a well structured balance sheet and funding strategy has afforded the company the flexibility to swiftly seize opportunities as they arise. “Testimony to this is the fact that over the past two years we has been involved in four of the five largest property transactions in Botswana,” highlighted the company in the financial statements commentary.
The sale of the hospitality assets has seen the investment properties value decline from P970 million to P780 million. However the company says it maintains a very healthy pipeline locally and regionally and shall be deploying the sale proceeds during the course of the coming financial year. On the outlook LLR Board chairperson, B Magopa shared that the company is enthusiastic about the opportunities in Botswana and beyond the country‘s boarders.
“ We remain focused on the company’s vision of becoming the premier real estate company with a signigificant presence in selected regional markets and a well diversified portfolio underpinned by high occupancies and quality tenant covenant,” he said. He added that with its current low generating ratio, healthy pipeline and property investment management expertise, the company is in the prime position to deliver this strategy.
For shareholders take home the BSE listed real estate group declared final distribution of 10.75 thebe per linked unit on the 25th June 2019 for the June year end . This comprised of a dividend of 0.05 thebe and debenture interest of 10.70 thebe per linked unit. The payout included a final distribution of 7.15 thebe per linked unit amounting to 20 020 000 and a special distribution of 3.60 thebe per linked unit totaling to P10 080 00.
This brought total distribution got the 2019 financial year to P57 316 000 being a dividend of 10 thebe per share and interest of 20.37 thebe per linked unit Going forward the company will be looking to grow its distribution payout at a rate comfortably higher than Botswana’s inflation.
China’s Gross Domestic Product (GDP) expanded by 3% year-on-year to 121.02 trillion yuan ($17.93 trillion) in 2022 despite being mired in various growth pressures, according to data from the National Bureau Statistics.
The annual growth rate beat a median economist forecast of 2.8% as polled by Reuters. The country’s fourth-quarter GDP growth of 2.9% also surpassed expectations for a 1.8% increase.
In 2022, the Chinese economy encountered more difficulties and challenges than was expected amid a complex domestic and international situation. However, NBS said economic growth stabilized after various measures were taken to shore up growth.
Industrial output rose 3.6% in 2022 over the previous year, while retail sales slightly shrank by 0.2% data show that fixed-asset investment increased 5.1% over 2021, with a 9.1% hike in manufacturing investment but a 10% fall in property investment.
China created 12.06 million new jobs in urban regions throughout the year, surpassing its annual target of 11 million, and officials have stressed the importance of continuing an employment-first policy in 2023.
Meanwhile, China tourism market is a step closer to robust recovery. Tourism operators are in high spirits because the market saw a good chance of a robust recovery during the Spring Festival holiday amid relaxed COVID-19 travel policies.
On January 27, the last day of the seven-day break, the Ministry of Culture and Tourism published an encouraging performance report of the tourism market. It said that domestic destinations and attractions received 308 million visits, up 23.1% year-on-year. The number is roughly 88.6% of that in 2019, they year before the pandemic hit.
According to the report, tourism-related revenue generated during the seven-day period was about 375.8 billion yuan ($55.41 billion), a year-on-year rise of 30%. The revenue was about 73% of that in 2019, the Ministry said.
The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.
Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.
According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.
The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.
Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.
Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.
Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana. The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.