Prime Time, the property magnate, was applauded by the city analysts for keeping the company out of long term debt shackles at a time when the world is going through a major financial crisis– putting it in a strong position for capital raising for possible acquisitions.
Stockbrokers Botswana said in its Research Note the situation that the company finds itself in gives it a lot of ┬á“room for raising debt capital” that is geared towards its long term strategy of going regional.
“Primetime is well capitalized with no long term debt. It has room for raising debt capital if needed; this puts it in a good position to finance any acquisition that may be availed to it,” Stockbrokers said in the report.
The move comes at a time when the company had pledged to investors in its full year results published in October that it would embark on a regional expansion strategy in a bid to diversify risks from the local market which it said is getting mature.
“The company remains ungeared and is, therefore, well positioned to take advantage of opportunities which present themselves in other countries,” the company warned the market.
The new developments were announced in the┬ácompany’s audited financials to the end of August 2009 that showed that gross debenture return to unit holders was up 18.1 percent against the same period last year.
“The gross debenture interest return to unit holders increased by 18.1 percent over the previous financial year annualized returnÔÇöa result of our policy of strict financial┬á controls, the quality of our tenants mix and continued rental growth. This combination of factors is reflected virtually 100 percent occupancy of our properties and minimal arrear rentals,” the company said.
It added: “Unit holders should be encouraged that the excellent return has been achieved after retaining a small amount of the distributable profits of the company this year for the future property expansion plans.”
Prime Time Property is┬á an off-shoot of Time Projects and┬á came to the market in 2007 seeking to raise P 200 million in exchange of ┬áhand-over 56 percent┬á of the company to investors while the remaining ones will be in the hands of promoters.
The company is well diversified and owns some┬á good quality buildings in some prime location in Gaborone, Gantsi, Francistown, Lobatse, Ramotswa and Serowe.┬á Some of prime┬á buildings include the UN Place, South African High Commission and Bank Gaborone headquarters.
However, the company has expressed concern on the impact of the global economic crisis and bemoans ┬álack of diversification pointing out that ┬áas a results of that the country is still faced with possible budget deficits.
“All our leases that came up for renewal have been renewed,” the company said in its annual financial report.
“The annual revaluation of the property portfolio showed 7.3 percent increase over the last year. With interest rates having dropped during the year by 3.5 percent, we believe this makes prime Time an extremely attractive investment, yielding 11.6 percent on the year end ┬áshare price of 130 thebe compared to government bonds trading at 7.5 percent and bank deposit of approximately 7 percent,” it said.