Letlole records increased profits
Pauline Dikuelo | Tuesday September 29, 2015 12:20
The performance was also credited on contractual revenue growth in real terms through timeous application of rental escalations.
For the period, the company recorded P97.3 million in profits before tax compared to the P92.6 million recorded in the corresponding period, according to the year ended June 30, 2015 results.
Their property portfolio also recorded a gross yield of 10.8 percent despite the challenges that the property market is faced with, especially the commercial office and the downward pressure on economic activity.
According to the group chairman, Roderick Boyd the fair value of the company’s investment properties was based on open market values of the properties as at year-end.
The company realised a profit before fair value adjustment of P60.7 million representing a 27 percent increase over the previous year’s figure of P47.7 million. “This is a reflection of strong cost controls coupled with increase in total revenue generated from contractual rental income and investment income,” he said. Boyd added that an independent valuation of the property portfolio has been carried out which resulted in the revaluation of investment properties to P622.3 million, which reflected an eight percent increase over last year’s value of P578.5 million.
Further, LLR considers investing in new acquisitions as well as developments as part of its strategic intent targeting increased market capitalisation to diversify and grow their portfolio.
The property group operates in the industrial, leisure, retail and commercial office property space with the property investment space skewed in favour of industrial property followed by leisure space.
Boyd said the buoyancy enjoyed by the industrial property market has benefited the company in maintaining a good tenancy base from which the company has enjoyed a stable regular flow of rental income.
According to the group’s portfolio, about 47 percent of their properties is industrial, followed by leisure with 38 percent and lastly the commercial with 15 percent. Under the leisure category, Letlole owns some of the buildings where Cresta Marakanelo operates from. “The hotel space continues to be let to one stable operator, which leases that accommodates annual compound escalation of rental. This contributed to revenue growing at an inflation-beating rate of close to 10 percent relative to prior year,” he added.