Dawn Properties has started exploring a business model that leverages on the balance sheet in a bid to unlock value after recording a 14 percent slump in revenue for the six months to September 2015.
Revenue for the six months was $2,3million compared to $2,7 million recorded during the previous comparative period.
The company’s hotel lease segment contributed $1,2 million during the period under review while property consultancy business contributed $1,1m to the half year revenues.
Dawn Properties chairman Mr Phibion Gwatidzo in a statement accompanying the financial results for the six months said revenue reduction recorded during the period is reflective of the pervasive challenging macro-economic environment.
“The past six months have been challenging, reflective of the broader equally challenging macro-economic environment which continues to call for very innovative ways in improving revenue generation and cost containment with the objective of preserving shareholder value.
“The company is currently exploring a business model that leverages on the company’s balance sheet to create and unlock value, as well as sustainably managing the business in a very cost effective manner,” said Mr Gwatidzo.
He said rationalisation of operating expenses continue to be accorded top priority and cost containment already implemented will start bearing visible results in 2016.
Mr Gwatidzo said, included in the operating expenses are income tax penalty provisions of $0,18m following the conclusion of the court case that was disclosed as part of the prior year contingent liabilities.
This provision, coupled with the revenue reductions earlier alluded to, largely accounts for the reduction in the operating profit from $0,8m in the comparative prior period to $0,2m for the period under review.
Mr Gwatidzo said cost containment, improved revenue generation and value creation would remain the dominant objectives in the short to medium term.
He said the company is excited about the establishment of a management contract between African Sun Limited and Legacy Hotels Group in terms of which Legacy would operate the Group’s four prime assets namely Elephant Hills Hotel, Crown Plaza Monomotapa Hotel, Hwange Safari Lodge and Troutbeck Inn hotel on behalf of ASL.
Mr Gwatidzo said this is expected to boost the hotel lease revenues in a significant manner in the years ahead.
“Furthermore, as part of the revenue creation and diversification thrust, the first phase of property development within the Marlborough – Harare land bank commenced during the period under review,” he said.