Harare – Mauritius based Johannesburg Stock Exchange listed investment firm, Brainworks says it recorded a ‘positive financial impact’ during the year ended December 31, 2018 after spinning off investments in the financial services to concentrate on the real estate and hospitality sectors.

The group, which has a diversified Zimbabwean investment portfolio, relinquished its shareholding in two firms operating in the financial services sector, GetSure and GetBucks last year.

It said on Monday that its results from Zimbabwe had been delayed by regulatory issues surrounding a currency switch to RTGS dollars from United States dollars announced by the central bank in February, which the Zimbabwe Stock Exchange (ZSE) was assessing.

Brainworks’ major subsidiaries, ZSE listed African Sun Limited and Dawn Properties Limited are incorporated and domiciled in Zimbabwe.

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However, it gave indicators of the profitability that is expected when the financial results are released.

“The successful disposal of the group’s equity investments in GetSure and GetBucks has had a positive financial impact on profitability and reaffirms the strategic focus on the core business sector namely hospitality and real estate,” said Brainworks.

It said the group had recorded revenue growth across all segments during the period, with the hospitality segment driving the rise.

Brainworks said occupancy rates increased by seven percent to 59 percent during the review period, from 52 percent during the prior comparable period in 2017.

The growth was on the back of a 17 percent rise in average daily rate to US$109 during the review period, from US$93 in the comparative period in 2017.

It said the strategic focus on debt reduction yielded notable results with the group reducing its debt burden by 55 percent, from US$38,3 million, attracting a weighted average interest rate of 12 percent.

Chief executive officer, Brett Childs said the growth was achieved even as economic headwinds in Zimbabwe, where it has shareholding in African Sun Limited, continued to escalate.

“Despite Zimbabwe’s economic and political headwinds and the current currency reforms, the group has done exceptionally well for the year under review,” said Childs.

“The expected growth in revenue was underpinned by the strong performance from all our investments and the successful exit from the financial services sector, which had a positive impact on the group’s profitability.  We can now focus on implementing our value chain integration.”

The successful disposal of the group’s equity investments in GetSure and GetBucks has had a positive financial impact on profitability and reaffirms the strategic focus on the core business sector namely hospitality and real estate.

Earnings per share are expected to be positive given the growth in revenues, reduction in finance charges, and the positive contribution to profitability resulting from the group exiting the financial services sector.

While the Zimbabwean economy remains constrained by a number of challenges and in particular the shortage of foreign currency, there are positive signs of growth, with the majority of the business sectors reporting significant growth in earnings for 2018.

Although inflation closed the year under review at 42,1 percent in comparison to 3,46 percent in December 2017, authorities are confident that measures have been implemented to contain inflation from further spiralling upwards.