Cresta profits leap on tighter cost control
Pauline Dikuelo | Tuesday September 22, 2015 14:22
The group recorded P12 million profit before tax, which is a 63 percent rise in the period compared to the P8 million recorded in the corresponding one last year.
Group revenue also increased by seven percent to P150 million from the P140 million recorded last year.
According to the group’s board chairperson, Maria Nthebolan the growth exceeded inflation rate in the primary economy in which they operate.
The group’s total assets also grew by nine percent to P232 million from P214 million recorded last year while equity grew by 13 percent to P143 million compared to P216 million last year.
Nthebolan said with the exception of deferred revenue items of P1.4 million recognised in respect of the group’s Pride and Select customer loyalty schemes, net operating assets have increased in line with the growth in the number of operating units.
However, Nthebolan added that the Botswana market continues to face competition, especially in urban areas such as Gaborone, Francistown and Palapye. “Consumers are becoming more price sensitive and are increasingly demanding more value for what they spend on,” she said. The chairperson also noted that the company is seeing an increasing trend in spending and redemptions by the loyalty members and will continue to evaluate the range of benefits and conditions attached to these schemes in order to enhance guest experience and loyalty. “The company continues to innovate in order to attract and retain customers with the Cresta loyalty card, which the membership continues to grow,” she said.
However, the challenging Zambian operations continue to drag down Cresta Marakanelo’s profits as their Lusaka Hotel recorded a loss P2.7 million compared to the P4 million losses registered in the corresponding period last year. According to the group’s statement, on the back of continued strength of the Pula against the Kwacha, the group recorded a P2.1 million foreign exchange loss on the Pula denominated loan used to finance the acquisition of the Zambian assets.
Nthebolan said they came up with a strategy to win over the lost business and it is already producing results as they have recorded growth in revenues at Cresta Golf View Hotel.
She added that the group continues to explore new markets in an endeavour to increase returns.