Letlole La Rona Limited, a Gaborone-based property group, reported record revenue and operating profit for the year ended June 30. Despite Botswana's economy straining under soft diamond demand, elevated interest rates, and tight liquidity, the company grew its revenue by 7 percent to 215.2 million pula from 201.8 million a year earlier. Operating profit climbed 8 percent to 128.4 million pula from 118.8 million. The company's cost-to-income ratio improved to 36 percent from 38 percent, indicating efficient cost management.
The company's property portfolio, valued at approximately 1.9 billion pula, maintained a high occupancy rate of 97 percent, with rental collections also at 97 percent. This performance is notable, even in more affluent markets. Letlole La Rona attributes its success to the quality of its assets and a proactive strategy of engaging with tenants to keep them in business and in place. The company's management credits its resilient performance to its diversified portfolio and established tenant base.
However, the company's profit before tax declined to 62.9 million pula from 131.2 million. This drop was largely driven by a 23.6 million pula non-cash fair value loss on investment properties and higher finance costs. Despite this, the company's cash generation remained strong, producing 120.8 million pula from operations during the year. Its net asset value rose 6 percent to 1.25 billion pula from 1.18 billion.
Letlole La Rona completed a refinancing of its portfolio ahead of schedule, securing additional funding from a South African lender on favorable terms. The company's finance costs increased by 25 percent to 61.9 million pula, but management prioritizes debt reduction using available cash. This strategy aims to cut leverage and fortify the balance sheet while maintaining enough liquidity for growth.
The company welcomed new leadership on June 1, with Ronil Besele joining as chief executive. Besele brings over 20 years of industry experience, including more than 12 years in executive roles. His international background is expected to help steer the company's next phase of sustainable growth. Besele's appointment is seen as a strategic move to drive the company's growth and expansion plans.
Letlole La Rona's board declared a final distribution of 6.5 million pula, including a dividend of 0.05 thebe per share and interest of 2.22 thebe per debenture. The distribution will be payable on or about October 28 to holders on the register at October 16. This move demonstrates the company's commitment to delivering returns to its shareholders.
Looking ahead, Letlole La Rona expects the operating environment to remain challenging in the short to medium term. The company anticipates continued pressure on occupancy, tenant performance, and collections as Botswana's economy adjusts. Nevertheless, management remains focused on maintaining a diversified portfolio, controlling costs, and strengthening the balance sheet.
Key points
- Letlole La Rona's revenue grew 7 percent to 215.2 million pula despite economic challenges in Botswana.
- The company's property portfolio maintained a high occupancy rate of 97 percent.
- Letlole La Rona prioritizes debt reduction using available cash to fortify its balance sheet.
