HomeBusiness DigestMash Holdings’ revenue up 35%

Mash Holdings’ revenue up 35%

Revenue in the period  grew  from  US$2,6 million recorded in 2011, largely helped by  the  26% increase  in rentals  during  the   period under review. Average rentals for the group were US$5,6 per square metre, up  from US$4,18 in the comparative period in 2011.

Group profit grew by 39% to US$1,9 million, up from US$1,4 million posted  in the previous year. Earnings per share rose to 12  US cents from 8 US cents the same  period last year.


Mash Holdings chairman Elisha Mushayakarara said the rental growth was driven by positive lease negotiations.

“Management is aware of the uncertainties in the macroeconomic environment and expects the future rent negotiations to be largely reflective of these circumstances,” Mushayakarara said in a statement accompanying the company’s financial results.

Net property income rose to US$3,2 million from US$2,3 million  despite liquidity constraints in the economy.

The growth in revenue, however, was against a vacancy rate that went up by a percentage point to 8%, which the company attributed to an increase in the total cost of occupancy, owing to a sharp rise in electricity charges. Average    portfolio yield    remained   at 9%. The  industrial and  residential  sectors  achieved  yields  of 11% and 7%,  respectively,  while  office, retail  and   specialised  health space yielded  9%.

However, property expenses went up to US$349 000, representing 10% of   revenue, up from US$285 000 in 2011. The company attributed the 18,3%  growth in  property expenses to an ongoing refurbishment programme to modernise lifts and amenities which is  financed    by   internal  resources.
Persistent liquidity challenges coupled    with   lack of    robust   economic growth drivers continued   to slow   down business in the sector with some tenants facing challenges in paying  rentals.  

Finance minister Tendai Biti recently attributed 70% of the inflationary pressures in the economy to high rentals in the first quarter of the year. He said rising electricity and water bills remained high risk factors likely to erode disposable incomes.

This could partly explain cumulative rental arrears of US$508 000 owed to Mash Holdings.  In the period under review, debts totalled  US$167 000, while US$348 000 was  brought forward  from the previous  year, which   the  company  said  it  would  proactively   manage.

“We  have   already secured  favourable judgement  on  a significant number  of cases like long  outstanding  debtors   and   progress  on the  remainder is  satisfactory”, Mushayakarara   said.

He lamented that the absence of appropriate real estate financing instruments continued to curtail activity in the real estate sector.

The company said inconsistencies in the operating environment in the period under review raised the country’s perceived risk, which negatively impacted on the general business confidence.

In  addition   to a number  of   developmental  projects  that  are  on the  planning stage, Mash Holdings says it will continue   to  seek value-creating opportunities.

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