HomeBusiness DigestPROPERTY - Dawn shelves expansion plans

PROPERTY – Dawn shelves expansion plans

Roadwin Chirara

DAWN Properties has shelved plans to pay out dividends to shareholders citing an unfavourable operating environment.

Helvetica, sans-serif”>Chairman Farai Rwodzi said the economic environment had necessitated the board’s decision.

“Consequently the board has resolved that no dividends be declared for the financial year under review,” said Rwodzi.

He said the operating environment had forced the company to also shelve its expansion plans.

Rwodzi said Dawn Properties was now focusing on consolidating its current market position.

“Owing to the unfavourable economic environment the company has had to shelve all its expansion plans and rather focus on consolidating its current position,” said Rwodzi.

He said the company had operated in a challenging year under review with the demand for property declining in the second half compared to the demand that had characterised the first half of the year.

“While the first half was strong the second half was characterised by general decline in demand for all goods and services with property and fixed assets at the top of the list,” said Rwodzi.

Rwodzi said the effects of the new monetary policy were felt late in the third quarter yielding mixed fortunes for the company.

He said the monetary policy resulted in the decline of demand for property, a situation unfavourable to the company.

“It is not surprising therefore that property lost its lustre particularly for those investors with speculation in mind,” Rwodzi said.

He said the disappearance of speculators proved favourable to the company enabling it to invest in projects yielding positive results.

“Thankfully we are not speculators and we quite welcomed the stable economic variables that have been set as this will make it easier for the company to allocate its capital to projects yielding a positive net value,” Rwodzi said.

He said regional and international investors interested in purchasing some of the company’s properties, of which the company has taken a decision not to sell, had approached Dawn Properties.

“Several regional and international investors have approached us with attractive offers to purchase some of our properties, however, we have taken a position not to offload any of the properties in the short-term.

Rwodzi said the registration of Dawn Real Estate would add value because it would enable the company to handle transactions of varying sizes and nature.

The company recorded an operating profit of $810,3 million, which translates to an operating margin of 60%.

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