Despite a challenging year for the travel sector and volatility in the currency markets, the Botswana Stock Exchange (BSE)’s newly listed tourism outfit, Wilderness Holdings, posted better than expected results for the year ending February 28 2010.
Andy Payne, Chief Executive Officer of the company on Monday said initiatives, like cost cutting and rights sizing, saved the day at a time when traveling became ‘discretionary’.
“Given the significant cost savings and rightsizing we achieved during the year, as well as the strength of our balance sheet, which will be further buoyed by the $US4.5 million (P33 million) sale of the assets of our Duba Plains camps in Botswana”, said Payne. “We are ready to weather any further storms and to capitalise on a rebound in the market.”
According to the company’s financial statement, income for the year went up 12 percent from P868 million from same period last year to P986 million.
The company posted a profit of P48 million on its maiden results as a public company in a market that experienced declines in occupancy levels.
EBITDA or Earnings Before Interest, Taxes, Depreciation and Amortisation was P115 million up 9 percent from prior year while it managed to reduce fixed costs base by 13 percent.
It was also able to generate P131 million of cash from operations and as a result, its net cash position improved from P39 million to P64 million.
However, there will be no dividend declared until June 2011.
Since October 2008, the global travel market has been hit by credit squeeze as world economy went into recession affecting key Wilderness markets including US.
Occupancy in its mature businesses like Botswana dropped from 65 percent to 59 percent while the developing ones including Zimbabwe dropped from 42 percent to 41.
There was a massive once-off cost in the income statement of P19 million of the re-purchase of preference share rights.
“Meanwhile, the company will continue to focus on achieving financial growth increasing our market share and investing in marketing and operating scale opportunities”, added Payne.
Wilderness, which has operations in Botswana, Namibia, Zimbabwe, Zambia, Malawi and the Seycheles, says it plans to increase the number of beds in the near future. “We are seeing real growth in our business and that is exciting although it is from a lower to a high base”, said Payne.
Payne said they will not be increasing rates rather we are ‘going to put more beds on the infrastructure that we already have’.
The 26-year-old business is invested in 53 destinations and manages and markets a further 17 in seven Southern African countries. ┬á
It also operates specialist travel businesses in six countries as well as a fleet of 49 aircraft (Sefofane) and employing more than 2 700 people, most of them coming from remote rural communities.┬á
In Botswana, the┬ácompany has operations in Chobe, Linyanti area and Okavango Delta including the prestigious Mombo Camp and┬ápresently it is giving the Central Kalahari Game Reserve a lot of┬áattention following the opening of Kalahari Plains operations.
Wilderness listed on the BSE early this year after a successful IPO and after the listing, the company’s largest shareholders and their holdings are management (20.8 percent), Wine Investments (20.9 percent), PUMA (20.1 percent) and Capital Africa Limited (17.3 percent).