ZPI income declines 22%

Published: 24 June 2014

Zimre Property Investments recorded a 22 percent decline in income in the five months to May this year following negative growth in rent income and property sales.

The real estate investment company says rent income recorded a five percent negative growth to $1,5 million from $1,6 million recorded in the first five months of 2013. This represented a 15 percent shortfall from the $1,8 million the company budgeted for the period.

ZPI managing director Mr Edson Muvingi told the company's annual general meeting yesterday that property sales recorded a 38 percent negative growth to $906 000 from $1,5 million in the same period last year. The performance was a negative two percent growth on budget.

"The first five months were lower than last year but we remained profitable," said Mr Muvingi.

He said the environment in the five months to May was characterised by subdued rent growth as a number of tenants were closing businesses due to the economic challenges facing the country.

Mr Muvingi said rent collection is a "tough market" due to the business environment prevailing in the country.

There was also an increase in lease surrenders and rising voids and debtors. Limited debt finance had a knock-effect on the uptake of the company's products.

"Low-end products sell and uptake is significantly fast. About 64 percent of the Tynwald project has been sold and about 96 percent costs recovered," said Mr Muvingi.
ZPI has so far sold 220 of the 288 stands in the Tynwald project realising $2,5 million.

The project is valued at $3,7 million of which the total cost is $2,6 and ZPI expects a profit of $1,1 million.

ZPI is waiting for approval and expects to start selling Ruwa stands in September situated on 603,795 square metre development.

The projects involves developing 229 stands averaging 800 square metres at a total project cost of $5,6 million while total income on project is expected to be $6,9 million, giving expected profit of $1,3 million.

Mr Muvingi said 178 of 338 stands in the Zimre Park Masvingo project have been sold to date translating to 47 percent of total project area and raising $3,1 million.

The total value of the project is $7 million of which total cost is about $5 million with a profit margin of about $2 million. About 63 percent of development costs have been recovered to date.

ZPI has so far repurchased 15,5 million shares under the share buy-back scheme. Shareholders approved to extend the share buy-back period and the payment of a final dividend of $0,024 at a total cost of $412 000 for the period to December 2013.
- The Herald

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