Zimre seeks $5m

HARARE - Listed Zimre Property Investments Limited (ZPI) is seeking $5 million to develop residential properties as part of strategies to boost revenue.

Edson Muvingi, the group’s managing director, said the project — involving servicing of 238 stands in Ruwa — is expected to ease the national housing backlog, estimated at 1,3 million.

He said ZPI managing will finance the multimillion dollar project through debt and internal resources.

The scheme, set to begin next month, is expected to be complete in a 10-month period.

“Currently an Environmental Impact Assessment is being carried out and finalisation of regulatory approvals is in progress,” Muvingi said.

He added that ZPI was expecting a total income of $6,9 million and a 38 percent return.

Recently, the Zimbabwe Stock Exchange-listed property developer sold out 288 stands in Tynwald, yielding a return of 41 percent. The project was valued at $3,7 million.

“Disposal of stands in the Zimre Park is on-going with a total of 191 stands sold to date at a value of $3,8 million. At current prices, the project is expected to gross $7 million with an anticipated return of 40 percent,” said Muvingi.

“Based on the land area, 51 percent of the project has been sold while 65 percent of the total cost of development has been recovered,” he said.

Meanwhile, ZPI’s profit declined slightly in the six months to June 2014 from $1,1 million in the comparable period to $802 000 due to a slowdown in revenue. Basic earnings per share in the half year dropped to 0,05 cents from 0,07 cents registered in the comparable period.

In the period under review, the company recorded a 17 percent decline in revenue from $3,51 million in June 2013 to $2,91 million.

Muvingi noted that the revenue performance was negatively affected by a five percent drop in rental income and a 32 percent fall in projects sales resulting in an 18 percent decline in total income.

“Projects income for the period amounted to $1,06 million, down from $1,55 million in the previous year.

“Total administration costs remained under control and achieved a two percent positive variance when compared to the same period last year.

Similarly, other operating expenses were 16 percent lower,” said Muvingi adding that the decline was a result of rigorous cost cutting measures.

Despite posting a modest profit, ZPI decided not to declare dividend preferring to conserve cash for upcoming projects.

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