Turnstar Group Holdings’ profit before tax was up 23% and revenue was up by 5% for the year ended January 2016 as the property market, particularly the commercial sector, continues to impress.
The group wrapped up what has been has been an impressive run by listed property entities in the Botswana Stock exchange with just an exception to Letlole La rona which posted lower revenues for the half year ended December 2015. Primetime Property Holdings Limited, which is yet to release its interim results, has an issued a cautionary note that profit after tax for the six months ended 29 February 2016 is expected to be significantly higher than the prior interim period to 28 February 2015.
The group’s revenues have been propelled by increased rentals which went up from P236 million to P248 million after straight-line adjustments. The group’s profit before taxation for the reporting period is at P230 million, a surge of 23% from the previous corresponding period. The balance sheet was bolstered by a 13% increase in value of Investment property value to P 2 billion including work in progress, bringing the company’s total assets to P2.4 billion up by 20% from the previous year’s P2 billion. The Net asset Value per linked unit is increased by 14% to 2.76.
The group’s subsidiary, Mlimani in Tanzania, has proven to be a good invest for the Botswana property giant as it contributed P120.8 Million to the total group revenue representing a 49% contribution. The Tanzania based subsidiary which boasts of Mlimani City-the largest mall in Tanzania which opened in 2006- now has investment Property worth over 1 billion representing 52% of the total group investment property of 2 Billion. The BSE listed Group has announced that the development of Phase 3, Mlimani City Tanzania is well in progress.
Mlimani City is being expanded to include additional retail and commercial space including basement parking, additions to the Conference Centre and a Botanical Garden. The additional space is also pre let to a large extent. The expansion is expected to cost USD 25 million. The project is financed by Barclays Bank of Botswana for USD 20.7 million and Turnstar Holdings for USD 4.3 million. The expected date of completion is November 2016.
Turnstar company, home to the local based operations, had its revenue decrease by 4% to P 126.7m due to the sale of the Fairground Office Park property. However, the company’s profitability was strengthened by additional incomes of P 26.3 million which includes interest earned from investment in debentures of Mlimani Holdings Limited of P 21.9 million as well P7.5 million profit generated from the sale of Fairgrounds property. The Fair value of investment property soared by 125% from the previous P6.4 million to 14.4 million.
The profit before taxation for the year ended 31 January 2016 lunged by 19% to P131.3 million before fair value adjustment. The company has announced that the development of Phase 4, Game City shopping centre is nearing completion. This comes after two years since the company embarked on expanding its biggest asset and also the largest mall in Botswana.
Game City is being expanded to include additional retail space including a fashion avenue, restaurant area including a food court, entertainment area and a parkade. The additional space is pre let to a large extent. The project is financed by First National Bank of Botswana for P170 million and interest rate of Prime less 2.1%. The expected date on completion is September 2016.
Turnstar says that it will be limiting its exposure to the office property sub-sector as there has been mounting concerns about oversupply of office spaces due to newly constructed buildings in the new Central Business District (CBD) which comprises mainly of office spaces.
“The sale of the Fairgrounds Office Park property is consistent with the strategic imperative to manage exposure to the office property sub-sector in Botswana which is expected to remain under pressure with increasing vacancies in the medium term. Pursuant to the above, Turnstar’s exposure to the office property sub-sector in Botswana has been strategically limited to one office property, being Turnstar House, which is fully tenanted. Turnstar will continue to maximise performance through the active management of its property portfolio,” read part of the commentary that accompanied the financial statements.
Turnstar Holdings with a market capitalization of P1.7 billion in the BSE’s main domestic counter is currently trading at P3.06, representing a decline of 0.3% since the year began. Turnstar, together with Letlole la Rona are the only property listed companies that have had their share price decline so far this year. The company’s Directors have approved a final distribution of 10.5 thebe per linked unit, split as follows; Debenture interest of 7.65 thebe and 3.85 thebe dividend per share in respect of the six months ended 31 January 2016 to all registered unit holders with the company at close of business on 13th May 2016.
Still on the BSE, the company intends to launch an offering of USD denominated senior unsecured compulsory convertible bonds to raise gross proceeds of US$ 30,000,000. It is expected that the Convertible Bonds will be issued during May 2016 for a period of 7 seven year maturing in 2023. The estimated maturity conversion rate is expected to be between P5 and P5.40.
This week Minister of Finance & Economic Development, Dr Thapelo Matsheka approached parliament seeking lawmakers approval of Government’s intention to increase bond program ceiling from the current P15 Billion to P30 billion.
“I stand to request this honorable house to authorize increase in bond issuance program from the current P15 billion to P30 billion,” Dr Matsheka said. He explained that due to the halt in economic growth occasioned by COVID-19 pandemic government had to revisit options for funding the national budget, particularly for the second half of the National Development Plan (NDP) 11.
Botswana Stock Exchange (BSE) has this week revealed a gloomy picture of diamond mining newcomer, Lucara, with its stock devaluated and its entire business affected by the COVID-19 pandemic.
A BSE survey for a period between 1st January to 31st August 2020 — recording the second half of the year, the third quarter of the year and five months of coronavirus in Botswana — shows that the Domestic Company Index (DCI) depreciated by 5.9 percent.
Botswana Diamond PLC, a diamond exploration company trading on both London Stock Exchange Alternative Investment Market (AIM) and Botswana Stock Exchange (BSE) on Monday unlocked value from its shares to raise capital for its ongoing exploration works in Botswana and South Africa.
A statement from the company this week reveals that the placing was with existing and new investors to raise £300,000 via the issue of 50,000,000 new ordinary shares at a placing price of 0.6p per Placing Share.
Each Placing Share, according to Botswana Diamond Executives has one warrant attached with the right to subscribe for one new ordinary share at 0.6p per new ordinary share for a period of two years from, 7th September 2020, being the date of the Placing Warrants issue.
In a statement Chairman of Botswana Diamonds, John Teeling explained that the funds raised will be used to fund ongoing exploration activities during the current year in Botswana and South Africa, and to provide additional working capital for the Company.
The company is currently drilling kimberlite M8 on the Marsfontein licence in South Africa and has generated further kimberlite targets which will be drilled on the adjacent Thorny River concession.
In Botswana, the funds will be focused on commercializing the KX36 project following the recent acquisition of Sekaka Diamonds from Petra Diamonds. This will include finalizing a work programme to upgrade the grades and diamond value of the kimberlite pipe as well as investigating innovative mining options.
Drilling is planned for the adjacent Sunland Minerals property and following further assessment of the comprehensive Sekaka database more drilling targets are likely. “This is a very active and exciting time for Botswana Diamonds. We are drilling the very promising M8 kimberlite at Marsfontein and further drilling is likely on targets identified on the adjacent Thorny River ground,” he said.
The company Board Chair further noted, “We have a number of active projects. The recently acquired KX36 diamond resource in the Kalahari offers great potential. While awaiting final approvals from the Botswana authorities some of the funds raised will be used to detail the works we will do to refine grade, size distribution and value per carat.”
In addition BOD said the Placing Shares will rank pari passu with the Company’s existing ordinary shares. Application will be made for the Placing Shares to be admitted to trading on AIM and it is expected that such admission will become effective on or around 23 September 2020.
Last month Botswana Diamond announced that it has entered into agreement with global miner Petra Diamonds to acquire the latter’s exploration assets in Botswana. Key to these assets, housed under Sekaka Diamonds, 100 % subsidiary of Petra is the KX36 Diamond discovery, a high grade ore Kimberlite pipe located in the CKGR, considered Botswana’s next diamond glory after the magnificent Orapa and prolific Jwaneng Mines.
The acquisition entailed two adjacent Prospecting Licences and a diamond processing plant. Sekaka has been Petra’s exploration vehicle in Botswana for year and holds three Prospecting Licenses in the Central Kalahari Game Reserve (Kalahari) PL169/2019, PL058/2007 and PL224/2007, which includes the high grade KX36 kimberlite pipe.