Cresta Marakanelo Limited, was profitable in FY 2022, with attributable earnings of Pula 19.2m (US$1.5m), an improvement from the Pula 40.2m (US$3.4m) loss in FY 2021.
- Cresta was severely affected by Covid 19, hence recorded losses in both FY 2020 and FY 2021 as a result of Covid lockdowns, ban on alcohol sales and limited numbers permitted at conferences.
- 2022 sales revenue increased by 65% to US$28m.
- Operating margins improved to 13% in 2022 from -12% in 2021.
- The company has a high long-term debt/equity ratio of 181% and an interest cover ratio of 1.9 times, primarily attributed to the 2019 acquisition of four hotels that were previously leased. The acquisition was funded through a debt of Pula 252m (US$23m) and has a term until 2029.
- Management has a positive outlook and plans the expansion of Mahalapye hotel (Oct 2023) and construction of a new hotel hotel in Jwaneng (Feb 2024).
- Share price now above its all-time low.
- Will a rights issue be needed to reduce the long-term debt/equity ratio and fund the hotel expansion plans?
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