Brainworks revenue up on all segments

BRAINWORKS Limited (Brainworks) says revenue went up in all its segments, with a significant growth in the hospitality segment.

The diversified investment firm said its hospitality business segment recorded improved revenue, spurred by a seven percentage points increase in occupancy to 59 percent increase compared to 52 percent achieved in prior year.

In a trading statement, the firm said a 17 percent increase in average daily rate (ADR) was recorded to US$109 from US$93 recorded the prior year as the hotels continued to align domestic rates to the implied exchange rate between USD and RTGS dollar.

“Occupancy growth was driven by strong performance from all our source markets with room nights sold for domestic, international and regional increasing by 12 percent, 14 percent and seven percent, respectively.”

Brainworks said its subsidiaries have delayed the release of financial results as the subsidiaries and the company digest the Public Accountants and Auditors Board (PAAB) guidance and conclude on the most appropriate financial information to be included in respective annual reports.
The listed firm hence provided guidance to its operating performance during the 2018 financial year.

“The board has a reasonable degree of certainty that positive basic earnings per share will be achieved for the financial year ended December 31, 2018. This would mark a notable turnaround given the fact that the group recorded net losses after tax of US8 million in the prior year,” Brainworks said.

“The positive earnings will be driven by growth in revenues, reduction in finance charges and the positive contribution to profitability recorded as a result of the group exiting the financial services sector.”

Brainworks said it completed the disposal of its shareholding in GetBucks Microfinance Bank during the year.
“The financial impact of the exit was notably positive to profitability. Furthermore, the group sold its entire equity interest in GetSure Life Assurance Company (Private) Ltd. 

“These disposals effectively complete the group’s initiatives to exit the financial services sector in order to concentrate on core business sectors, namely, hospitality and real estate,” the firm said.

The firm added that real estate segment also recorded notable increase in revenue, with 70 percent of the growth attributable to it’s inaugural revenues recorded from property sales following the completion of the group’s maiden development project in Harare.

“Over 60 percent of the units were sold in 2018 and although there was demand for the remaining 22 units, the group adopted a strategic decision of deferring sales as the Zimbabwe currency environment became volatile during the third quarter of 2018,” Brainworks said.

“The recent currency pronouncements by the monetary authorities are, however, expected to drive confidence and stabilise the exchange rate in Zimbabwe, which will provide the group with a basis to resume sales of the remaining property units.”
The firm said efforts to sell the remaining units resumed in 2019.
Brainworks said it continues to strategically focus on reducing its debt burden.

The group recorded a notable reduction in its debt reducing it by 55 percent from the US$38,3 million reported as at the end of the prior year, attracting a weighted average interest rate of 12 percent.

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