BHC sells majority of Phakalane houses
Pauline Dikuelo | Friday September 22, 2017 15:44
Commenting on the corporation’s financial results for the year ended March 31, 2017, general manager Reginald Motswaiso said the Phakalane project was delivered late.
“The Phakalane project was delivered late due to water and sewage impasse experienced in 2012,” he said. “However, the corporation remained resilient as a majority of these properties were sold in 2016.”
He said the previous year, sales revenue was high in comparison to prior years and the largest contributor was the Phakalane project.
In the year to March 2017, the corporation recorded total revenues of P493 million, a decline of nine percent when compared to the P539 million recorded in the preceding year. The decrease in revenue was mainly driven by sales revenue, which decreased by a significant P43 million or 13%, from P326 million to P284 million.
Rental revenue declined by three percent from P182 million in 2015-2016 to the current P177 million, Motswaiso noted. He said the decline was mainly caused by a once-off sale of a major estate in the year before, which was generating annual rental of P2.4 million. “Gains from the sale of investment properties were P18 million, a decline of 83% from P107 million in 2016, still on the back of this once-off sale. Rental revenue continues to be a significant and key revenue stream for the corporation and it is the pillar of the corporation’s sustainability model,” he said.
Motswaiso further said income from professional fees at P30 million increased by 10% when compared to prior year. Professional fees are revenues from project management done on behalf of third parties.
He said this is the third largest revenue stream for BHC and it demonstrates the corporation’s ability to use its skilled workforce to deliver projects on behalf of other people.
“Professional fee income has grown over the years and it is part of management’s revenue diversification strategy going into the future,” he said.
On the expenditure side, Motswaiso said employee expenses went down by 30% mainly as a result of restructuring expenses, which were incurred, in the prior year. He said that employee expenses also declined on the back of efficiencies brought about by the re-organisation of the corporation. Other expenses also went down by 11% and this combined with savings in employee expenses largely contributed to the increase in profitability.