PrimeTime Property Holdings Limited, a Botswana Stock Exchange-listed property investment company, has flagged a significant drop in profit before tax for the year ending August 31, 2024. The company anticipates a reduction of 35 to 45 percent compared to the P104 million profit recorded in 2023. This translates to an estimated decline of P35 million to P45 million.
The expected dip stems from lower valuation gains on investment properties, a non-distributable line item that does not directly impact the distribution of profits to linked unitholders. These valuation gains had experienced a notable uplift in 2023, reflecting a recovery from the COVID-19 years. However, the current period marks a reversion to lower levels, weighing on the company’s overall profit performance.
Despite the anticipated decline, PrimeTime emphasized that the impact is confined to valuation adjustments, with no material effect on cash distributions to unitholders. The company is expected to release its detailed financial results for the year in the coming weeks.
The board advised linked unitholders to exercise caution when trading the company’s securities, pending further updates.
The profit warning signals comes at a time when RDC Properties Limited’s recent plans to acquire PrimeTime Property Holdings Limited hit a roadblock after the Botswana Stock Exchange Limited temporarily suspended the proposed general offer to PrimeTime unitholders.
The BSEL is reportedly investigating key aspects of the offer process, introducing uncertainty into the highly anticipated transaction that could reshape Botswana’s property investment landscape.
In a statement issued on 7 October 2024, PrimeTime informed unitholders that the Regulatory Committee of the BSEL had resolved to halt the publication, posting, and circulation of RDC’s offer circular. The decision will remain in effect until the conclusion of the ongoing investigation, which the BSEL has indicated will take up to 30 business days from the date of the suspension.
The deal in question, which has been in the spotlight since February 2024, would see RDC Properties acquiring all the PrimeTime linked units not already in its possession, significantly expanding its portfolio. If successful, the acquisition would establish RDC as the dominant force in Botswana’s property investment sector, combining its extensive property holdings with those of PrimeTime to create a portfolio spanning Botswana, South Africa, Zambia, and beyond.
RDC Properties, founded in 1992, boasts a property portfolio valued at over P6 billion, with the majority of its assets situated outside of Botswana, in countries such as Namibia, Mozambique, and the U.S. PrimeTime, on the other hand, holds a property portfolio valued at P1.8 billion, making the merger a strategic move that would propel RDC’s market reach even further. The Botswana Public Officers Pension Fund (BPOPF) plays a critical role in both companies, holding significant stakes in both PrimeTime (32.66 percent) and RDC (26.45 percent).
