Cresta revenue hits P150m

SHARE   |   Tuesday, 22 September 2015   |   By Staff Writer
Cresta Marakanelo MD, Tawanda Makaya Cresta Marakanelo MD, Tawanda Makaya

Cresta Marakanelo Limited has confirmed increased competition in the Botswana market mainly in urban areas such as Gaborone, Francistown and Palapye.

The Botswana Stock Exchange-listed company said in a statement accompanying its unaudited half year results for the period ended 30 June 2015. The hotel operator notes that consumers are becoming more price sensitive and are increasingly demanding more value for the spend.

To this effect, Cresta says it continues to innovate in order to attract and retain customers, with Cresta loyalty card membership continuing to grow.

During the six months, Cresta recorded a revenue of P150 million which is a 7 percent increase. “This growth rate exceeded inflation rate in the primary economy in which we operate and hear and bear testimony to the strength of our core businesses and value of the brand,” the company says.

The company’s profit before tax improved by 63 percent, which the company says it is due to strict cost controls and improved marginal contributions at key units. The strong cost control is reflected in the operating profit of P14 million which mirrors an operating margin of 9.4 percent.

The group’s net cash generated from operations was P24.2 million compared to P22.8 million in the corresponding period, which is said to be a reflection of the increased cash contribution from business units. The company has also raised concerns with regards to the Zambian operations as the market continues to face challenges.

To augment the situation, the group says it came up with a strategy at the beginning of 2015 to win over lost business. The strategy is said to be bearing fruit as the company has recorded growth in revenues at Cresta Goldview Hotel.

The revenue grew by 30 percent compared to the same period last year. On the back of continued strengthening of the Pula against the Kwacha, the company recorded P2.1 million as foreign exchange loss on the Pula denominated loan used to fiancé the acquisition of the Zambian assets.

With regards to the future, Cresta says it continues to explore new markets in an effort to increase returns. The group is constructing a hotel in Maun which will finish in the last quarter of 2016.