HARARE – Zimbabwe listed insurance giant, ZIMRE Holdings Limited says it is to accelerate its expansion drive with fresh acquisitions in Zimbabwe, after pre-tax profits for the five months to May, at $5,2 million, were 32 percent above target.

Chief executive officer, Stan Kudenga told shareholders during an annual general meeting on Wednesday that as a result of volatilities in Zimbabwe, ZIMRE had benchmarked its performance with budget targets.

“The group remained profitable with profit before tax coming in at $5,2 million, which was 32 percent above budget,” Kudenga said in a trading update.

However, total revenue, at $31,3 million, was 12 percent below budget, with insurance and reinsurance operations contributing 82 percent.

ZimRe Property Investment contributed 17 percent, he said.

“This encouraging level of profitability was mainly due to lower business acquisition costs, an overall favourable claims experience and exchange gains. ZPI will continue to be aggressive in land bank acquisitions and new property development leveraging on its strong balance sheet and consolidating market positions in the Zimbabwe insurance sector. The group is also exploring and implementing expansion into existing value chains and complementary businesses with synergistic linkages to the operations to create new revenue lines. Leveraging on the strong balance sheet and regionally diversified business portfolio, as well as steps being taken to unlock value from our investments in CFI and ZUPCO, will be key in creating value for shareholders,” said Kudenga.

ZIMRE, as part of a restructuring process already underway, aims to raise more than $30 million through a phased approach to capitalise its regional operations.

On Wednesday, Kudenga said acquisitions in Zimbabwe would be complemented by a footprint expansion, possibly into East and West Africa, where the group may be eyeing high growth frontiers like Kenya and Nigeria.

“The regional business remains key to the future growth of your group and contributed 51 percent of the group total revenue in the first five months of the year,” said Kudenga.

“We however, believe that the regional business’ full potential will only be realised with competitive capitalisation. A process is underway to achieve this. With increased capital the regional operations will enhance underwriting capacity, increase retention, enhance credit ratings, facilitate expansion to other markets and support overall business growth. Overall, the business is now on a sustainable growth path on the back of the continued recovery of the core reinsurance operations and growth of other sustainable revenue sources from ZPI,” Kudenga said.

He said management was confident that 2019 targets will be achieved, underpinned by a remodelling of the property business that presents long-term benefits.