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RBA woes continue as it posts R49m loss for year

RBA Holdings, the listed affordable homes builder, blames its loss for the year to December on the difficult business conditions it experienced during the period. Photo: Supplied

RBA Holdings, the listed affordable homes builder, blames its loss for the year to December on the difficult business conditions it experienced during the period. Photo: Supplied

Published Apr 7, 2015

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Sechaba ka’Nkosi

JSE-LISTED middle-income housing provider RBA Holdings has posted a R49 million loss in its results for the year to December.

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The company, which provides affordable property developments mostly in the townships, blamed the loss on difficult business conditions last year. The group was also hit by a write-down of R9m.

In 2013, the company posted a R28m loss.

The announcement of RBA’s latest results on Thursday caused the company’s stock on the JSE to close 11 percent down at 89c.

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However, the company said despite the loss, its outlook was positive as it had made significant progress in increasing the number of stands available for sale.

“In November, the company secured R156m in funding in the form of an equity recapitalisation of R86m and a working capital facility of R70m,” RBA said. “As a result of the improved fundamentals and also the improved liquidity position of the business, the company is now well positioned to return to profitability in 2015.”

The company said towards the end of last year, its sales and construction capacity was harmed because it did not have sufficient working capital to fund it as a result of losses in profit that started in 2008.

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It said it was forced to raise funds through convertible debenture issues and significant transactions that included a sale of 550 million shares to Old Mutual subsidiary, Housing Impact Fund South Africa (Hifsa), at 10 cents each.

“The company received the R55m in November 2014 and the shares were issued in January 2015,” the company said. “In addition, Hifsa has provided RBA with a R70m facility for the acquisition of land and the provision of working capital for the construction of houses.”

RBA said it had increased the number of stands it purchased and sales in line with its turnaround and growth strategy. It said the number of houses it sold last year rose by 25 percent. It was also involved in seven major construction projects, including the building of 588 social housing rental units in Soweto.

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The company said: “In line with the turnaround and growth strategy adopted in September 2012, the company has continued to increase the number of serviced stands available for sale, improved its project pipeline, increased its construction capacity and in 2014 recorded above break-even levels of sales and marketing performance.

“With these fundamentals increasingly in place and with the improved liquidity position of the company, the company is now well positioned to return to profitability in 2015 after a number of years of poor performance and false starts beginning with the financial crisis of 2008/9.”

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