ASL turns to regional units

HARARE - Listed hotel concern African Sun Limited (ASL) says it intends to leverage on its regional operations to mitigate a depressed local environment.

The group envisages the foreign market will continue to sustain its ADR and RevPAR as the domestic market may remain depressed into the next 24 months.

“To mitigate the depressed domestic business, the Group will leverage on its aggressive selling of the foreign market improving arrivals from our traditional inbound markets and any other upcoming international markets,”the group said in a statement accompanying its half year results for the year ended March 31, 2014.

ASL recorded a slump in revenue at $25,3 million down from $26,4 million prior year.

The group also recorded a marginal dip in operating profit, from $497 623 the previous year to $483 628.

“Performance for the hospitality company was poor across the board with revenue coming down. Cost of sales, however, went up despite the decline in revenues.

Operating expenses went up to $16,8 million from $16,6 million,” ASL said.

Going forward, the group expects new openings particularly the Ghana lease to steer top line growth for the hotelier.

The Group closed the period with a loss of $766 172 against a gross profit of $ 17,6  million.

ASL realised a total comprehensive loss of $1,7 million for the period under review, against a loss before income tax of $ 813 996.

Investment income remained stagnant; while unrealised income remained a challenge with the group trading in the negative.

“The group’s basic loss per share stood at 0,09 cents, diluted basic loss per share was at 0,09 cents, the headline loss per share was 0,10 cents while the diluted loss per share recorded was 0,10 cents,” the hospitality group said.

This comes as ASL shareholders recently approved the disposal of its 16,54 percent stake in listed property firm, Dawn Properties (Dawn), in an attempt to reduce interest expenses.

ASL offloaded its Dawn shares to Lengrah Investments Private Limited, a subsidiary of private equity group Brainworks Capital (Brainworks), which in turn is a major shareholder in the former.

The sale agreement resulted in ASL disposing of  $4,6 million Dawn stock, constituting 16,54 percent of the total issued shares for a cash consideration of $5,95 per share.

According to Bekhitemba Moyo, ASL chairperson, net proceeds from the disposal will be applied towards reduction of short term debt.

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