WestProp revenue in 38% jump
REVENUE at the Victoria Falls Stock Exchange (VFEX)-listed WestProp Holdings Limited grew by 37,9% to US$16,09 million during the financial year ended December 31, 2023 compared to the period prior due to a steep increase in premium sales.
The group recorded a net profit after tax of US$50,28 million for the year, with the sharp increase attributable to gains in the group’s property investment portfolio, according to WestProp board chairman Michael Louis.
A market-based valuation of the group’s land banks, inclusive of its 70% interest in Sunshine Development Private Limited done during the period gave an aggregated fair value of US$250,40 million.
Louis, however, said 2023 presented unique challenges and opportunities for Zimbabwe’s economy. The early part of the year was characterised by a tough operating environment as economic activity slowed down following a sudden surge in inflation and volatility in the exchange rate.
“The government’s recent budget had a negative impact on the real estate market as there was increased tax pressure on the middle class, coupled with the property tax which was not well-received in our sector, as our economy is not yet mature with a thriving real estate and much more development is needed before it can be effectively taxed,” he said.
“The group, however, remained viable and managed to ride out the economic downturn aided by the loyalty of our client base as well as the monetary measures introduced by the government to bring about some stability within the environment.
“The group registered significant growth towards the end of the year with a steep increase in premium sales owing to an improved operating environment.”
The chairman said the confirmed order book of sales for the period with paid-up deposits was more than US$25 million, which represents an achievement of both the budget set 13 months prior and an increase on the previous year’s results.
For the year under review, there were current projects in the pipeline worth US$174 million of sales with an anticipated gross profit of US$68 million.
“This is confirmation that we are on track to deliver sales of US$50 million with a gross profit of over US$20 million per year for the period 2025 to 2027. This should result in a PBT [profit before tax] operating income of US$12 to US$14 million per annum,” he said.
Operating expenses for the year 2023 amounted to US$5,18 million compared to US$2,49 million the previous year, representing a US$2,68 million increase.
The major cost drivers were the initial public offer and VFEX listing requirements which resulted in the group incurring ad hoc public relations, advertising, marketing, audit, legal and other professional fees, these were all expensed in year 2023.
Liquidity of the group improved by 209%, with cash and its equivalents amounting to US$2,66 million. The group closed the year with a healthy current ratio of 3,93 times.
The group anticipates continued wide use and stability of the United States dollar environment to 2030 and low inflation to continue, thus enabling all businesses and the economy to register significant growth.