Turnstar, the property giant in the local market, said its six months results “were better than expected” as they remained flat in the light of economic recession that could have theoretically resulted in high default and vacancy rates.
All segments of the business remained flat for the six months to end of July 2009, a move that was largely attributed to a more hands-on management system implemented during the troubled times.
According to the half year results, revenue stood at P 40 million from P37 million recorded during the first six months to February 2008 before the company changed its reporting periods. And profit before tax was P 27.4 million from P 27.3 million recorded during the corresponding period a year earlier while assets edged up slightly to P 489 million.
“These positive results were achieved through pro-active, hands-on management from all involved. Currently the portfolio is experiencing minimal vacancies and arrears aggressively,” the company said in a statement.
The company, which has just shifted its reporting period from October to January, acquired another shopping complex for P 12.8 million that was wholly funded from its war chest.
The company, which started with Game City Mall on its portfolio, got a boost from some of its giant and deep pocketed shareholders, mainly Botswana Insurance Fund Management (Bifm) to extend its wings wider in the market.
That resulted in acquisition of more property, especially in Gaborone area. The move is part of its plans to build a formidable property investment company that will ultimately be valued at P 1 billion.
However, Turnstar warned earlier in the year that the ongoing global credit crisis is going to impact negatively on Botswana, adding that it would cautiously implement its expansion plan and take a review on some of the investments it has undertaken.
“We believe that due to the job losses in the mining sector in areas like Francistown, Jwaneng and Phikwe, sectors will be greatly affected and in the short term, we should, only in extraordinary circumstances, increase our exposure in these areas.
The sector that gets affected first is retail. This is due to spending power of the masses being reduced following job losses. People concentrate less on buying luxury goods and more on necessities, Turnstar said earlier in the year.
It was anticipated that the negative economic condition would result in more vacancies as a result of close-down by some retail clients. But, the company said it is still upbeat about its investments at Game City Mall in Gaborone which is due for completion by mid next year.
“We do believe that the demand for retail space in Gaborone has not yet been satisfied. We should tap into the captive market that we have created at Game City shopping centre. We have plans to expand and this is mainly driven by demand,” the company said.
It added: “Our focus is on strengthening the quality of tenants in the centre and allowing new tenants that will complement the existing tenants mix. We believe these efforts will once again emphasise Game City as the number one shopping centre in Botswana.”
The company declared dividend of 0.80 thebe per share and interest of 5.80 thebe per debenture in respect of half year ended on July 31, 2009.