Property disposal boosts Turnstar profit
Isaac Pinielo | Thursday April 28, 2016 10:25
The proceeds from the disposal helped boost the property giants’ year-end profits, which rose 23 percent to P149 million. Managing director, Gulaam Husain Abdoola stated in the recently published group’s financial results for the period that Turnstar completed the sale of the property for a sum of P129 million, excluding value added tax (VAT).
“The proceeds of the sale will be reinvested in further yield enhancing opportunities,” he said.
He also indicated that the sale of the property is consistent with the strategic imperative to manage exposure to the office property sub-sector in Botswana, which is expected to remain under pressure with increasing vacancies in the medium-term.
“Turnstar’s exposure to the office property sub-sector in Botswana has been strategically limited to one office property, being Turnstar House, which is fully tenanted,” Abdoola said. He stated that Turnstar will continue to maximise performance through the active management of its property portfolio. For the year under review, lease revenue increased by five percent to P247.5 million. Profit from operations before tax and fair value adjustment increased by 23 percent.
Value of investment property increased by three percent to P2 billion including work in progress.
There was also a 14 percent increase in net asset value (NAV) per linked unit to 2.76. Group earnings per share (EPS) are 38.95 thebe per share.
Group tax charge of P6.7 million comprises wholly of a deferred tax charge calculated in accordance with IAS 12. Group profit before fair valuation of investment property and tax increased by 23% from P149 million (2015) to P182 million.
Finance income of P26.3 million includes interest earned from investment in debentures of Mlimani Holdings Limited in Tanzania of P21.9 million. The group subsidiary contributed P120.8 million to the total group revenue of P247.5 million representing a 49 percent contribution.
Investment property fom Tanzania stands at P1.04 billion representing 52 percent of the total group investment property of P2 billion.
The company also announced that the development of Phase 4, Game City shopping centre is nearing completion. “Game City is being expanded to include additional retail space including a fashion avenue, restaurant area including a food court, entertainment area and a parkade,” the MD said.
He noted that the additional space is pre-let to a large extent, adding that the project is financed by First National Bank of Botswana (FNBB) for P170 million and interest rate of prime less 2.1 percent. The expected date of completion is September 2016.
The group further stated that the development of Phase 3, Mlimani City in Tanzania is well in progress, saying it is being expanded to include additional retail and commercial space including basement parking, additions to the Conference Centre and a Botanical Garden.
The additional space is also pre-let to a large extent and the expansion is expected to cost $25 million. The project is financed by Barclays Bank of Botswana (BBB) for $20.7 million and Turnstar Holdings for $4.3 million. The expected date of completion is November 2016.
The directors also approved a final distribution of 10.5 thebe per linked unit, split as follows. Payment of the distribution will be dispatched by the transfer secretaries on or about June 8, 2016.