The country’s leading hospitality group, Cresta Marakanelo Limited has reported positive outcome from their latest additions to their hotels country wide, Cresta Jwaneng and Cresta Mahalapye.
The company indicated in its latest financial statements that since it started operating Cresta Mahalapye hotel in early 2013, the unit has contributed P14.5million to the Group`s revenue for the year.
At the same time, following the acquisition of the Cezar Hotel business in Jwaneng during June 2013, the hotel was rebranded as Cresta Jwaneng, contributing P8.9million to the Group’s revenue for the year ended 31 December.
The Cresta Group income statement shows that the group achieved a profit tax and other comprehensive income or expenses of P22.4million representing an increase of nine percent over prior year. Profit before tax of P29.4million represents a twenty percent increase on the prior year. Group revenues increased by 16 percent on 2012, reaching P281 million for the year review.
Cresta audited annual financial statements for the year ended 31 December 2013 indicated that excluding the inorganic growth achieved through the new hotels in Mahalapye and Jwaneng, revenue increased by sixteen percent on 2012.
“This is reflective of the continuing sluggish economy in Botswana and an increasingly competitive and price sensitive landscape, especially in urban areas such as Gaborone, Francistown and Palapye,” reads the statement signed by Board Chairman Maria Nthebolan.
Operating profit of P31.4million reflects an operating margin of 11 percent, same as achieved in 2012 which reflects the continuing downward pressure on net room rates and general inflationary environment especially in Botswana.
“Deferred revenue recognized with respect to the Cresta pride and select loyalty card schemes resulted in P01.1million charge to revenue. No such charges had been passed to income during prior year,” reads the statement.
On the balance sheet, the Group’s continuing investment in new hotel and refurbishing of its existing premises contributed to P4.7million increase in the carrying value of the property, plant and equipment.
Capital work-in-progress at 31 December 2013 included P9.9million with respect to the refurbishment of the Cresta Marang hotel, which project was completed in early 2014. “Goodwill arising on the acquisition of the Cezar Hotel business in Jwaneng amounted to P5.3m. This hotel represents the Group’s first foray into the Western Corridor region of Botswana,” reads the statement.
The goodwill is said to be attributed to the trained workforce which was already in situ at the takeover date and also the location of the hotel in the strategic mining town of Jwaneng.
Cresta Group highlighted that trading results for the first nine months that the hotel has operated under the Cresta brand have been positive and the Directors are confident that the investment will generate returns in line with the Group’s overall expectations. The Group revealed that the acquisition of the Cezar Hotel business was financed through a bank loan and added that the deferred lease liability recognized in accordance with the rental straight lining requirement of IAS179 (Leases) increased by a further P602million 92012:P6.5million during the year.
The Group also indicated that the balance is expected to increase for the next two financial years, where after it will be released to income over a period of approximately five financial years. With the exception of deferred revenue items of P101million recognized in respect of the Group’s Pride and Select customer loyalty schemes, net operating assets have increased in line with growth in the number of operating units.
The Cresta Board of Directors declared a dividend at5 thebe per share for all shareholders registered as at the close of business on 9th May 2014 for payment on or before 23th May 2014.