LIVINGSTONE MARUFU
Diversified investment group, Zimre Holdings Limited (ZHL) says the business’s growth strategy would be underpinned by an enhanced balance sheet following the acquisition of the entire Zimre Property Investments (ZPI) shareholding and its increased shareholding in Fidelity Life Assurance, Business Times can report.
ZHL, which initially had 20.57% shareholding in Fidelity Life Assurance recently acquired the National Social Security Authority’s 35.09% stake in the insurance company.
The acquisition took ZHL’s shareholding in Fidelity to 55.66%, meaning the life assurer has become a subsidiary of ZHL.
This also means the operations of Fidelity will be consolidated in the financial statements of ZHL.
It is understood that ZHL plans to acquire more Fidelity shares and delist it from the Zimbabwe Stock Exchange in the future.
The move will solidify ZHL’s position in the market and also streamline operational costs in the face of mounting economic challenges, according to board chairman Benjamin Kumalo.
He said the group, which operates insurance, private equity and property portfolios in Zimbabwe and regional countries such as Botswana, Malawi, Zambia and Mozambique, would extract value for shareholders from synergies created.
“Diversifying revenue streams and pursuing opportunities for mergers and acquisition in order to grow the business portfolio leveraging on the enhanced balance sheet are being implemented,” Kumalo said.
He said key business growth strategies will be underpinned by strong cash generation in the business units, customer focus and effective change management.
Kumalo said despite the onset of the Covid-19 pandemic which brought about severe interruptions to economic activity, the group achieved modest growth and profitability in business underpinned by strong performance in the Botswana and Mozambique operations.
In its financial results for the 12 months to December 2020, total income for the group grew 11% to ZWL$2.8bn from ZWL$2.5bn reported in 2019.
The increase was mainly driven by the strong top-line growth in premium income in Mozambique and Botswana as the units consolidated their respective market positions.
There was also the growth in rental income with the coming on stream of property space with high rental yield and the upward reviews of rentals as well as property revaluation gains following the change of functional currency.
The regional operations contributed 57% in GPW in 2020 compared to 64% in 2019.
The contribution mix is underpinned by the clawback in the Zimbabwean operations and the continued beneficial hedging effects of the regional operations.
Profit for the group increased by 107% to ZWL$983m in 2020 from the ZWL$476m reported in the previous year.
Total assets stood at ZWL$12bn in the reviewed period from ZWL$4.9bn in 2019.
Kumalo said the regional diversification strategy became handy as the impact of the outbreak of the Covid-19 pandemic on group performance was less severe as different fiscal and monetary interventions in each country where the group operates were implemented to mitigate the effects of the pandemic.
Rental income rose 5% to ZWL$90m during the reviewed period from ZWL$78m in 2019.
Total claims and expenses declined by 27% to ZWL$1.4bn from ZWL$1.9bn in 2019.
