Cresta posts lukewarm results
Boitshepo Majube | Wednesday April 2, 2014 11:20
The group states the static margin shows a continuing downward pressure on room rates and the general inflationary environment, especially in Botswana.
According to Statistics Botswana, overall annual inflation rate decreased between February 2013 and February 2014 due to stable prices of commodities, especially the major components such as transport and food and non-alcoholic beverages.
In the period, Cresta achieved a profit after tax and other comprehensive income or expenses of P22.4 million representing an increase of nine percent. This shows profits before tax of P29.4 million, a 20% increase.
“Group revenues increased by 16% on 2012, reaching P281 million for the year under review. The group started operating Cresta Mahalapye Hotel on 28 February 2013. This unit has contributed P14.5 million to the group’s revenue for the year,” Group Board chairman Maria Nthebolan said.
Nthebolan further stated that the group continues to explore new markets to increase returns. “The group further continues to explore opportunities in and outside the country for new hotel businesses with the aim of increasing the number of rooms,” she said.
Cresta stated that the acquisition of Cezar hotel business in Jwaneng, which amounted to P5.3 million, representing the first foray into the Western Corridor of Botswana. “The goodwill is attributed to the trained workforce which was already in situ at the take-over date and also the location of the hotel in the strategic mining town of Jwaneng.”
The group’s net cash generated from operations was P57 million compared to P49 million in the prior year, reflecting an increased cash contribution from newly opened units as well as an improvement in the group’s cash operating cycle.
“The cash generated from operations was applied mainly to finance the group’s continuing rolling refurbishment programme and for the investment in Cresta Mahalapye,” Cresta management stated, adding that the acquisition of the Cezar hotel business in Jwaneng was financed wholly through loan capital.
Cresta says cash balances available at year-end would be utilised to finance the dividend distribution to shareholders and for continuing refurbishment and investment programmes.
Meanwhile the Board of Directors of Cresta has announced a declaration of a dividend at 5 thebe per share for all shareholders registered as at the close of business on May 9, 2014, for payment on or before May 23, 2014.