Dawn seeks to acquire Makasa Sun
DAWN Properties Limited is still in negotiations with Barclays Bank of Zimbabwe to acquire the issued share capital of Makasa Sun Hotel property in Victoria Falls.
Early this year, the commercial bank announced that it had sold its 50 percent stake in Makasa Sun with Dawn Properties expected to pay $7,5 million within 30 days of concluding on the conditions precedent from which selling costs shall be paid.
In a statement accompanying unaudited financial results for the half year ended June 30, 2016, Dawn Properties board chairman Mr Phibion Gwatidzo said: “The company is still in discussions with Barclays Bank Limited and Barclays Bank Pension Fund on a transaction, which if completed, would result in the company acquiring the entire issued share capital of Makasa Sun.”
Makasa Sun owns the Kingdom Hotel in Victoria Falls.
During the period under review, Dawn Properties posted profit after tax of $480 000 from a loss position of $371 000 last year. This was due to cost cutting measures the company embarked on which saw costs being cut by about 50 percent.
Reducing staff by 60 percent is among the cost cutting measures the group embarked on.
As a result of the staff rationalisation exercise operating expenses in the half-year period went down by 47 percent to $1,2 million.
Revenue was 18 percent less than the $2,2 million recognised during the same period last year mainly due to reduction in revenues realised by the hotel rental business segment.
“The tourism industry continues to face a variety of challenges, which among others include the relatively weaker regional currencies, the cash shortages and the international perception of Zimbabwe’s socio-political environment being unstable,” he said.
The group’s operating expenses stood at $1,2 million, 47 percent lower than the $2,3 million recognised during the comparative period mainly due to the positive impact of the cost containment initiatives implemented last year.
“As a result, the group recognised a profit of $480 000. The current period profit reflects a positive turnaround given losses of $371 000 that were recognised during the same period last year,” he said.
On the outlook, Mr Gwatidzo said despite the prevailing economic climate, the board remains committed to broadening revenue sources to cushion the group against possible shocks arising from the economic challenges experienced in the first half — @okazunga.