Diversified investment holding company Brainworks, which completed its primary listing on the JSE in October last year, said improved political developments in Zimbabwe bodes well for the company in the future.
In its maiden annual results covering the year ended December, the group reported 22 percent increase in revenue to $58.6 million (R706.13m) as compared to $48.1m reported last year, with the growth recorded across all the group’s three operating segments, with major growth being recorded by the hospitality segment.
The group reported a profit $11.1m while headline loss per share was 14.22 US cents a share.
The group did not declare a dividend.
Hospitality contributed 88 percent of the total revenues for the year under review; whereas it was 3 percent lower when compared to the prior year on the back of revenue growth in the group’s other investments.
The growth in hospitality was driven by the increase in hotel occupancy from 44 percent recorded in the prior year to 52 percent for the year.
The group’s other investments contributed $6.8m to this year’s revenues.
Hospitality revenue of $51.8m represents growth of 19 percent relative to $43.6m recorded in 2016.
“Following the political developments towards the end of 2017, the new government has declared that “Zimbabwe is open for business” and that broad theme has been well received by the business community in general and international investors in particular,” the group said.
Brainworks’ headquarters are in Mauritius and its investment is based on the Zimbabwean hospitality, real estate, financial services and logistics sectors.
It said the current Zimbabwean government has already begun to reverse some policies that were previously considered restrictive to investors coming into the country and these business friendly developments have reignited investor interest in Zimbabwe particularly within the hospitality sector.
The group is confident because the country’s economy recorded 3.7 percent growth in 2017 on the back of commendable performance particularly by the agricultural and mining sectors.
Despite the challenges the group is particularly pleased with the results for the year to end December.
In October last year the group managed to raise R316.52m by offering 27 523 396 ordinary shares at an offer price of R11.50 a share and the group said it will pursue secondary listing on the Zimbabwean Stock Exchange later this year.
During the year Brainworks said its operating expenses increased by 18 percent to $40.3m compared to 34.1m, mainly driven by listing expenses amounting to $1.7m while finance charges increased by 19 percent $4.4m.
For the year ahead the group’s key objectives will be to raise capital in order to restructure the group’s debt and to consolidate and strengthen portfolio companies.
“The Group will continue to improve operational efficiencies, boost revenues and control costs which should lead to improved profitability and cash flows,” the group said.
It said it will continue to seek new opportunities in key sectors as they become available in order to build shareholder value.
Brett Childs, CEO of Brainworks
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