First Mutual Properties Revenues up 352% y/y

Harare-ZSE-listed Properties Investment concern, First Mutual Properties Limited (FMP)’s total revenue for the 5 months to 31 May 2021 rose 352% over the comparable period in 2020.

This compares favourably with y/y inflation rate as measured by the all items CPI of 162% in the same period.

Revenue to May 2021 was ZWL$153.5m vs ZWL$33.9m in 2020. The business benefitted from US$ denominated leases which are indexed to the ZWL$ at the auction rate. There was also upside from the turnover kickers in the retail business leases as the throughput improved.

Property expenses at ZWL$41.0m up 375% were however ahead of revenue growth while allowances for credit losses increased owing to the rise in utilities.

Allowances for credit losses also increased reflective of the relatively high arrears position despite an improvement in the collection rate to 63% from 54%.Occupancy level was stable at 89% vs 88%.

Net property income rose 334% to ZWL$106.9m while admin costs were 474% up in line with cost of living adjustments for staff as well as the practice by service providers to benchmark their pricing to the alternative market which was at a premium to the interbank over the trading period.

Operating profit was ZWL$41.4m while revaluation gains stood at ZWL$269.40m to result in a PBT of ZWL$309.23m.

The company is currently implemented a carport solar project at FML Park with expected output of 150kW as well as finalising the tendering process for the Arundel Office expansion project.

The historical rental yield was 2% compared to 3% over prior period.

FMP last traded at ZWL1400 cents and is up 419% Year to Date on the Zimbabwe Stock Exchange with a market capitalisation of ZWL$17.3 billion and US$203m at the interbank rate and US$133m at the alternative market rate.