Michael Tome and Enacy Mapakame
DIVERSIFIED financial services group, Old Mutual Zimbabwe, says it is satisfied with the rate of space uptake at the newly constructed Eastgate mall for small to medium enterprises.
The mall opened early this year and the occupancy level now stands at 57 percent with most of the space being occupied by shops such as Foodword.
Inclusively the complex has 12 000 square metres of prime retail space configured to accommodate a diverse range of SME business models under one roof.
Old Mutual is aware that lack of convenient premises and access to markets are some of the major issues inhibiting desired growth levels of the SME sector.
Responding to questions at the analyst briefing recently, Old Mutual managing director Marjorie Mayida indicated that most of the space had been taken up and expect the demand to grow since the building had generated a lot of interest.
“The performance of the building so far is satisfactory and the occupancy level right now is sitting at 57 percent, there is a lot of interest on this place, we have opened line shops and the anchor tenant and all the space has been taken,” Mrs Mayida said.
The development comes on the back of the firm’s 41 percent growth in revenue to $1,4 billion for the year to December 31, 2018 , becoming the second company to hit the billion revenue mark since dollarisation after Innscor.
Old Mutual attributed the revenue growth to an increase in all main revenue lines.
As a result, pre-tax profit for the year under review jumped 36 percent to $329,8 million compared to $242,9 million reported in the previous year.
Operating profit rose 23 percent to $79,2 million on the back of profit growth in the life, banking and asset management business.
Gross premium written was 10 percent firmer to $214 million for life and short term insurance business on improved client retention and new business that was underwritten.
Operating profit for the life business grew 31 percent on growth in the retail segment and in asset based fees.
The short term insurance, however, recorded an underwriting loss of $0,3 million due to a 47 percent growth in claims from prior year.
Private motor claims as repair costs increased due to foreign currency shortages contributed to the increase in claims.
The banking business reported a 17 percent growth in profit to $49,2 million from prior year’s $42,1 million on the back of growth in net interest income that was 19 percent above prior year.
Net interest income rose due to an increase in loans and advances as well as an improvement in net interest margin.
Net non-interest income rose 13 percent on continued use of card based and electronic banking platforms.
Funds under management for the asset management business were 52 percent above prior year at $4,1 billion on a combination growth in net client cash flows and positive investment performance. Resultantly operating profit for the asset management business rose 60 percent.
Management is of the view that the macro-economic environment will play a key role in its operations.
This will, however, depend on Government’s ability to sustainably rebuild public and investor confidence, control spending as well as re-engage with the international community.
“This needs to be accompanied by effective implementation of programmes stemming from the new policies under development. The group has always had confidence in Zimbabwe’s economic potential and supports the development of economic policies that will allow this potential to be realised,” said chairman Mr Johannes Gawaxab.