DAWN Properties Ltd reported a loss of US$89 448 after its operating profit plummeted to US$1,2 million in the full year ended March 31 2012, down 78% from the previous year, largely due to negative growth in the group’s hotels portfolio and losses incurred from the discontinued agro-business operations.
The group’s total income dropped to US$2,466 million, down from US$6,994 million recorded last year, while administrative expenses went up to US$1 million from US$973 000.
In a statement attached to the group’s financial results, chairman Tendai Chimuriwo said the group’s administrative overheads remained a matter of concern and as a result the group was shedding off its operational subsidiaries and contemplating more radical changes.
Chimuriwo said four hotels in the portfolio recorded a negative growth in rental revenue but this was compensated for by one property which reported a gross yield of 2,4%, leaving overall yield of 3,3% up from 2,8% achieved in the prior year.
Continuing operations comprising mainly the hotel portfolio grew 18% in rental revenue to US$2,4 million.
The group however incurred a loss of US$1,6 million from discontinued operations in its agro-business unit and this was due to the writing off of the bulk of the prior year’s biological assets when the unit ceased to produce flowers.
The strategic decision to shut down this unit entailed selling the balance of the business to management at a nominal price to contain further haemorrhage in the unit.
Chimuriwo said CB Richards Ellis management had also reached an agreement with a technical partner, making it possible to consummate the management buyout of the business by September 1 this year.
He said Brondesbury Park Hotel had attracted acceptable offers and the group was hopeful of concluding its disposal, whilst the execution of the group’s Baines Avenue project was on hold pending finalisation of the restructuring of the hotel portfolio.
Chimuriwo said planning of the Marlborough residential development was progressing at a slower pace than hoped, mainly due to a protracted development cycle.
The Dawn chairperson said with the disposal of non-core businesses, the group was anticipating growth, while the rationalisation of overheads would also put the group on a sustainable growth path.