Thursday, April 25, 2024

Investors warm to Cresta shares in 2014

Shares of local hotelier Cresta Marakanelo have started the year on a positive front following an unfavourable 2013 which saw local financial analysts and stock brokers labelling it a ‘punching bag’.

However since the beginning of the year, figures from the Botswana Stock Exchange (BSE) suggest that local investors are warming up to the shares of the regional hotel operator which recently expanded into neighbouring country, Zambia.

The rush for the Cresta shares comes at a time when the company is about to announce it’s of full year results for the year ended 31 December 2013. The company, originally funded by the government owned Botswana Development Corporation (BDC), exceeded expectations with Earnings per Shares (EPS) rising strongly by 100 by June last year.

 Recent data from the BSE shows that Cresta shares opened the year on a winning side, surging by 7.5 percent to trade at 100thebe. By close of business on Monday this week the company shares, which are capped at 180,942,245 were still trading at 100 thebe per share.

Figures from 2013 shows that Cresta grew its total assets by 16.5 percent as the company added new hotels to its name including Cezar Hotel in Jwaneng which was bought and rebranded Cresta Jwaneng Hotel. The Jwaneng Hotel is expected to benefit from the continuing investment in the Jwaneng diamond mine, thus making a positive contribution to the Group profits in future periods.

Still in 2013, Cresta also opened the Mahalapye hotel, which contributed P5 million to the company and group revenues.

Both the acquisition and building of the Mahalapye Hotel saw Cresta assets growing from P184 million in 2012 to P197 million as at June 2013 following new investment and upgrading of Cresta Marang Gardens in Francistown for P5.5 million.?The company financials shows that after taking account of cost of sales and administration and operating costs, the group achieved an operating profit of P11 million translating to an operating margin of 8.6 percent for the period under review compared to 5.8 percent for the corresponding period.


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