Times Of Swaziland: MALKERNS SQUARE GENERATES E7.5M REVENUE

MALKERNS SQUARE GENERATES E7.5M REVENUE
================================================================================
Nhlanganiso Mkhonta on 11/09/2023 08:21:00


MBABANE – Over a six-month period ending June 30, 2023, the Malkerns Square
property development generated E7.5 million.
This is according to the SBC Group’s results for the six-month period, which
indicated that the group’s consumer lending revenue grew by 14.4 per cent to
E202.3 million, when compared to the E176.7 million realised by the end of June
2022. SBC Group financial solutions provider to the customer base in both
Lesotho, under Lesana Ltd, and in Eswatini trading as Select Ltd. The revenue
generated by the Malkerns Square property development contributed to the
group’s revenue, which increased by 13.9 per cent to E209.8 million (June
2022: E184.2million). The increase is attributable to the loan book growth in
both Eswatini and Lesotho, while achieving a stable yield in both businesses, of
29.8 per cent and 29.9 per cent respectively.
Increased
Meanwhile, the SBC Group’s total operating expenses increased by 25.2 per cent
to E85.4 million (June 2022: E68.2 million) which was a necessity to support the
future growth strategies of the group, as well as initiatives to protect the
group’s market share. The group reported that in both Eswatini and Lesotho the
book profit margin was diluted when compared to the prior comparable period.
This was reportedly mainly as a result of the higher cost of debt, including
both interest and debt raising cost. As a result of higher than expected
external settlements, management had to put in place certain measures to protect
their loan book, which came at an additional cost of E3.8 million. The group
reported that the pressure on their book margin was partially offset by lower
provisioning for bad debts resulting from improved collections and arrears
account management. A stable collection performance, particularly in managing
the distressed loan portfolio, enabled the total SBC Group’s impairment
provision cost to end on 2.84 per cent of the gross loan book (June 2022: 2.96
per cent).
Due to the current high cost of debt interest cycle, finance costs of E130.9
million (June 2022: E107.6 million) increased by 21.7 per cent, which was in
excess of the loan book growth.
“Our debt is predominately funded through notes issued under the MTN
programmes and other promissory notes. E23.9 million (June 2022: E21.3 million)
of the total interest expense is attributed to the funding cost of the Malkerns
Square project,” read the report.
Attributed
The group mentioned that the balance of this increase was attributed to growth
in the consumer lending business, coupled with the cost of carrying excess
funding. As a percentage of revenue, consumer lending net interest paid amounts
to 30.4 per cent (June 2022: 29.4 per cent) voicing the high market interest
rate cycle globally.