The Far Property Company Limited Reports Steady Financial Performance with Profit Before Tax Increasing 22% and a Decrease in Distribution to Unitholders

Published On: November 2, 2023Company: The Far Property Company Limited (FPC.bw)
What is the significance of the decrease in distribution to unitholders?
The decrease in distribution to unitholders, from 18.40 thebe per unit in 2022 to 11.80 thebe in 2023, signifies the company's strategic shift towards reinvesting more profits into business expansion and landbank development as part of their growth plan.

Summary

  • FPC demonstrated resilience and agility in the face of macroeconomic challenges, adapting to changes in consumer behaviour.
  • Financial performance was steady, with revenue increasing by 9% to BWP 153m and profit before tax increasing by 22% to BWP 136m.
  • The company maintained a low vacancy rate, a stable rent yield of 10% and a healthy loan-to-asset ratio of 18%.
  • Distribution to unitholders decreased to 11.80 thebe per unit to allow the Group to focus on business expansion and further development of existing landbanks.
  • The company prefers development over acquisitions and is in the process of constructing five new developments.
  • In Botswana, occupancy is at 98%, while rates in South Africa have decreased due to Choppies exiting the market. FPC is in advanced negotiations to fill the vacant space.
  • FPC aims to diversify its portfolio with an emphasis on smaller business centres and intends to exit the residential sector as soon as a solid process is found.
  • In terms of operations, the company’s preference is for triple net leases and lease renewals are typically for five years with an additional five-year option.
  • There are several planned developments in both Zambia and Botswana, which include warehouse developments, filling stations, and shopping complexes.
  • FPC is progressing well with its five-year strategic plan, aiming to grow and develop its current land bank, and is positioned for future growth.
  • There are ongoing discussions to develop a debt repayment strategy, and pilot projects are underway to lower energy and water usage for environmental reasons.
  • Medium-term goals include replicating the successful Botswana model in Namibia and Zambia, aiming to become Southern Africa’s premier commercial infrastructure property company.

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About The Far Property Company Limited (FPC.bw)

The Far Property Company is a publicly-listed enterprise on the Botswana Stock Exchange that specializes in constructing and managing residential and commercial properties in the region. It owns about 173 properties in Botswana and South Africa, the majority of them being warehouses and shopping centers. With two business segments and 3 active companies, Far Property has a collective presence in markets in Southern Africa.

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