Affordable home builder's R92m income

Tags

---

18-10-2012
Read : 119 times
Property24
Source

Affordable homes builder RBA Holdings Limited’s revenue increased 11 percent to R92 million for the first half of the financial year to end June.

Total profit attributable to ordinary shareholders was R500 000 as against a R2.4 million loss for the previous comparable period.

Headline Earnings Per Share (HEPS) came in at 0.44 cents (last year a HEPS loss of 0.26 cents).

AJ Rothman, newly appointed chief executive officer says although the results for the first half of 2012 do show some improvement over the same period in 2011, they remain disappointing relative to RBA’s competitors and earnings remain marginal after taking into account finance costs for the Group.

The Group is anticipating a better second half as it expects to deliver 260 homes to clients in two key projects where construction has now commenced in addition to ongoing construction in its other developments, he says.

Rothman explains that the proceeds of these projects should begin to make some inroads into de-leveraging the balance sheet and reducing financing costs – a key objective for the new board.

The most disappointing aspect of the first half results was the low level of new sales that amounted to 257 new registrations, notes Rothman.

“Improved marketing and sales performance in the group is our number one priority and I am very excited about the prospects for improved performance over the next year as we roll out a number of new initiatives that have already been approved by the board since their appointment on 10 September”.

In addition to selling affordable homes, RBA also owns 236 rental units and is busy constructing a further 148 units in Protea Glen, Soweto, that should be completed before the end of the year.

The Group is in the process of reviewing its strategy with respect to the rental market and it is possible that it may decide to dispose of some rental units in order to further improve gearing, says Rothman.

He recognises that market conditions in the residential property sector remain challenging and is convinced that the medium to long term prospects for the Group remain very positive as the shortage of housing at all levels in South Africa remains a significant challenge for the country.

Also because of this, the affordable housing market remains an important focal point for lending by the major commercial banks, he says.

“We are committed to doing more to help our clients enter the housing market and in that way make our contribution to social upliftment in South Africa,” adds Rothman.