Phakalane housing sales boost BHC revenue
Isaac Pinielo | Wednesday September 2, 2015 18:00
The increase comes on the back of strong sales from the Phakalane housing project. The corporation recorded revenue of P470 million in that year, which is an increase from the P300 million for the same period in 2014.
The increase in revenue was largely driven by Phakalane houses' sales revenue, which increased by P176 million denoting a 193 percent increase. The Phakalane project, which was delayed due to issues of sewerage, was only delivered in the period under review.
“Sales of housing stock is a major revenue stream for the corporation and this growth is welcome as it enables rolling over of projects, resulting in delivery of more houses for the nation,” BHC general manager, Reginald Motswaiso said.
He noted that the rental income has remained stagnant over the last five years as the corporation has not been able to increase rentals. He said BHC rentals are regulated by the government.
“In order to mitigate this challenge management has put strategies in place to sell more of its properties in order to generate more revenue for use in the construction of a larger pool of houses for sale,” said Motswaiso.
According to the BHC boss, income from joint ventures has recorded an increase as a result of the good income received from commercial building investments. He said this income has been growing year-on-year, enabling BHC to further explore the opportunity as part of its commercial business strategy going forward.
He also indicated that although the profit margins on sales revenue are lower than what would be ordinarily obtained in the market, the corporation prides itself on being able to build more and more houses for the nation.
He said the sitting tenants campaign, which is a strategy that management came up with during the financial year, has yielded encouraging results. The campaign led to an increase in revenue from investment properties of 39 percent through the sales of 232 houses to existing tenants nationwide.
“This campaign has gone a long way in promoting homeownership by converting leaseholders into house owners throughout the country. Due to the positive results that came out, the campaign has been extended to financial year 2015/16,” Motswaiso said.
Total comprehensive income for the period under review was P9.8 million, a decrease of 39 percent when compared to the same period on the prior year.
Motswaiso said despite the challenged profitability, the revenue from sale of houses is expected to grow in the coming year and that this will enable the corporation to roll over the proceeds into new projects and deliver on its mandate.
Despite the declining financial surpluses, the corporation’s balance sheet remains very strong with total assets amounting to P2.7 billion.
Going forward, Motswaiso stated that more emphasis would be placed on social and affordable housing to Batswana.
He added that the corporation has been tasked with delivering 1000 SHHA houses every year across the country and that the plan is to increase the footprint to the most remote areas of Botswana.