Dawn seeks to ac­quire Makasa Sun

Chronicle (Zimbabwe) - - Business - Se­nior Busi­ness Re­porter

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.

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