Dawn profit at $400k, sees weaker property market

Dawn profit at $400k, sees weaker property market

HARARE, June 24 (The Source) – Dawn Properties on Friday reported an operating profit of $379,000 in the first five months to May, due to cost cutting measures implemented in the prior year.

The group’s cost cutting measures included reducing its staff by 60 percent and paying impairment allowances on the property consultancy, all amounting to $870,000.

Group revenue slumped by 27 percent from last year to $1,4 million.

“In light of the constrained revenue generation, rigorous cost controls will continue to be the focus to protect the business,” said managing director Patrick Matute at the company’s annual general meeting on Friday.

Rent income fell by 30 percent to $620, 500 due to a faltering market and a strong currency.

“Trading conditions remained challenging and worsened compared to last year on the back of faltering domestic market and a strong currency compared to regional peers,” said Matute.

The consultancy business was also negatively affected by harsh economic conditions as its revenues fell 25 percent to $829,000.

“Going forward; we also expect that the changes to the business model of African Sun and the coming in of Legacy Hotels Africa will begin to bear fruit towards the end of the year,” said Matute.

The company will also focus on development of its Marlborough land, which it expects to sell off by year end, and restructuring of the consultancy business.

“Over the past year, the costs to income of the business had averaged 95 percent of the revenue, a position which was unsustainable. Going forward; the future of the business and its growth will be underpinned by the property management division and the valuations division,” he said.