RDC Properties came out with disappointing interim earnings to end of June this year, but analysts backed it saying that it is set to meet full year forecast through its planned expansion into the rest of Africa and increase rental income from Standard House.
The Botswana stock exchange listed property outfit whose earnings were dented by the refurbishment of Standard House said it is targeting to expand into Madagascar, Nigeria and other unnamed African countries in a bid to bolster its profitability to meet its target of revenue growth of P 21.5 million.
The interim results with EPLU were down 13.8 percent to 15.7 thebe as against 18.3 thebe in the comparable period last year, while turnover moved up marginally to 4.3 percent to P 9.8 million, thanks to improved occupancies at Lotsane Complex in Palapye.
“The property’s lackluster performance for half year to June 30 came as no surprise given that it was the phase of the group’s major transition with the refurbishment of Standard House,” Stockbrokers Botswana said in its research note released Friday.
“Going forward, the thrust for growth remains outside of Botswana as the group targets further investments in Madagascar, Nigeria and other African countries. In Botswana, plans for the P80 million commercial developments in CBD are ongoing,” the research note said.
The group’s portfolio now stands at P 164.1 million boosted by the refurbishment of Standard House, the ongoing construction of 40-bed Isalo Rock Lodge in Madagascar at the cost of 750,000 Euros and the refurbishment of Tholo II. The refurbishment of Standard House has improved its rental income from P 3.2 million per annum to P5.4 million with rental space now up 31.6 percent from 4886 m2.
“An independent valuation will be completed on Standard House prior to year end. We expect revenue to significantly increase in the second half of the year driven by rental income from the now 90 percent let-out Standard House and fully occupied Tholo II with occupancy rates improving to 90 percent,” Stockbrokers said.
Other income streams are expected to come from 1.5 million Euro deal concerning Tana Hotel in Madagascar faced with a booming tourism industry.