Botswana Stock Exchange listed diversified real estate company Letlole La Rona Limited (LLR) has released impressive results for the six-month period ended 31 December 2021.
The company’s on-going solid performance was bolstered by government’s relentless efforts to combat the pandemic which assisted in stimulating the economy. According to LLR, Botswana’s relatively high vaccination rate (government statistics show that 73% of the eligible population has been fully vaccinated while 85% having received the first dose) is filtering into the economy, resulting in a noticeable recovery in the property sector with vacancies and tenant arrears receding.
“We are very pleased with the strong results, achieved against a backdrop of economic uncertainty. Our focus on the fundamentals during this time enabled us to grow organically and through strategic acquisitions in every important metric, unlocking value for unitholders.
“Moreover, LLR negotiated the fall-out from the pandemic well and is in an excellent position to capitalise on growth opportunities going forward,” commented Ms Kamogelo Mowaneng, CEO.
LLR’s focus on tight cost control resulted in a P9 million (or 30%) increase in operating profit to P38.85 million, with revenue increasing 8% from P50.14 million in the prior comparative six months to P54.17 million.
The Company further acquired a 32.79% interest in Rail park Mall – one of the prime retail malls in Gaborone – during the period, which, together with the strong operating performance, boosted profit before tax by 60% (or P19.7 million) to P52.43 million (H1 2021: P32.75 million).
“Our strong relationships with our tenants ensured that the portfolio maintained high occupancies, with ongoing demand for our assets supporting the maintenance of rentals in line with market rates. This resulted in the fair value of investment properties increasing by P12.1 million, a 44% increase from the prior comparative period’s gain of P8.4 million,” added Ms Mowaneng.
The investment in Rail park Mall as well as the growth in investment property value, significantly increased LLR’s investment portfolio from P1.0 billion to P1.2 billion on a year-on-year basis, representing an 18% increase.
LLR reported that arrears related to the pandemic have declined significantly, due to economic and business recovery, as well as the Company’s robust collection processes. Collection rates consequently improved significantly, which resulted in a decrease in the debtors’ balance.
“Our focus on the fundamentals enabled LLR to maintain and grow the interim distributions by 6% to P23.5 million in the six months under review. The net asset value of the Company closed at a solid P813.9 million, an increase of 4% from the prior years’ figure of P783.0 million, showing consistent year on year value enhancement to unitholders,” said Mowaneng.
The Company declared an interim distribution to linked unit holders of 8.38 Thebe per linked unit, up from 7.91 Thebe per linked unit in the prior comparative six months. Following the reporting date, the Board of Directors of LLR appointed Mowaneng as its permanent CEO.
LLR interim Board Chairman, Oteng Keabetswe commented: “Since her appointment in an acting capacity, Ms Mowaneng has played an integral role in supporting the Board and managing the executive team, which greatly benefitted the ongoing performance of LLR to the benefit of Unitholders.
“Gender diversity remains a priority for LLR and we are delighted to have appointed a female executive in this important role. The Board looks forward to her continued contribution based on her leadership skills, wealth of experience and knowledge of the sector.”
Going forward, LLR indicated that it intends on making several value accretive investments soon and expects to embark on a capital raise to part-fund these projects.
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