Zimre in cost-cutting drive

HARARE – Zimre Property Investments (ZPI) has embarked on another cost-cutting drive aimed at keeping the company afloat in an increasingly challenging economic environment.

The realtor’s managing director, Edson Muvingi, said despite another retrenchment that took place last year, the firm still wanted to reduce personnel costs to match dwindling rental revenues.

“We can’t run away from certain changes. It is unfortunate and it is a difficult environment but there are decisions that we have to take. So, we are cutting some staff by July 1, 2017. We have also cut our salaries to manage our administration expenses,” he told shareholders at the company’s annual general meeting in Harare on Tuesday.

“You will find that at executive level we put a 30 percent cut, at middle we have put in a 25 percent cut and at bottom we have put in a 20 percent cut.

“We are not a big organisation and we will let go of eight and cut to 15 people, we are a very lean organisation but the costs remain a challenge so this is an unfortunate and unavoidable decision,” the ZPI boss said.

Muvingi further indicated that while personnel costs had come down nine percent on prior period, revenue streams had also come down so the group needed to take the tough measures.

“You will see that we have also looked at motor vehicles, because they are an often overlooked expense, going forward we will not be acquiring three-litre or four-litre

vehicles, I will probably be driving a $60 000 vehicle, but it needs to be done,” he said.

To complement the restructuring exercise, the firm is also looking at portfolio diversification.

Meanwhile, the group’s rental revenue for the period to May was down 15 percent on prior comparable period while stand sales also remained depressed going down 10 percent.

“We anticipate completing certain projects to be completed by third quarter and offset this because it has messed up all our ratios… Total income is 18 percent below budget with building operation costs up 14 percent…

“The group has been trying to negotiate leases with tenants as voids are leaving the company incurring the building costs when the tenant leaves, so this has pushed building operation costs as tenants leave,” he said, adding the company’s voids had steadily gone from 13 percent in 2012 to 26 percent presently.

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