PRETORIA – Listed property developer Visual International, whose shares on the JSE were suspended from trading in July last year, is looking to the future, despite reporting a 261 percent increase in its loss from continuing operations to R32.28 million in the year to February last year from the R8.9m loss in the previous year.
The JSE suspended trading in Visual International’s shares because of the company’s failure to comply with the JSE’s listing requirements and submit its provisional financial statements within three months of the end of the reporting period.
Visual’s financial results for the year were prepared on the basis that the company was a going concern and contains a number of restatements related to misstatements in the group’s 2017 financial year.
They included dividends received from an associate of R621 922 not being recorded, consulting fees received being incorrectly recorded, interest and penalties payable to the SA Revenue Service being incorrectly allocated to revenue and loans included in other financial liabilities being incorrectly discounted.
Revenue slumped by almost 100 percent to R39 713 in the year to February last year from R11.5m in the previous year.
It attributed this to no units being developed or properties sold in the year, adding that the group’s primary focus was to decrease operating costs, position itself for future growth and to secure a strategic funding partner.
The group’s diluted loss a share increased by 510 percent to 12.51c from 2.05c.
The company said operating expenses were substantially reduced in the reporting period, resulting in a reduction of almost R500 000 a month at end-February last year compared to the previous year.
It said these cost savings were achieved over the year, but the benefit would only be fully realised in the year to February this year.
The company said that it had been negatively impacted during 2015 and 2016 by the impact of the delay in the commencement of the further development of Stellendale in Kuilsrivier in Cape Town due to a number of constraints, including the delay in listing, the company raising less capital than desired on listing and the banking sector contracting its lending to property developers and potential homeowners in the middle income segment.
It had also incurred very expensive debt, which was causing additional difficulties for the group, which led to it adopting a strategy during the year to February 2017 to reduce gearing and developing strategic initiatives to ensure the protection of its asset base.
Visual International said many of these objectives were achieved in the year to February last year.
Commenting on the group’s future prospects, Visual International said it had eliminated the majority of its debt and creditors and had a positive net tangible asset value in excess of R25m.
“The board will be considering the size and nature of properties held to start its key development initiatives and ensure it has sufficient cash and funding resources to growth the group’s property assets,” it said.
Visual International agreed in December with Makoro Property Developers the terms for the disposal of 277 179 hectares of land in Kuils River in Stellenbosch for R10m.
It said the development potential of the Stellendale Junction land was about 500 apartments on the site.
“The sale and development of these apartment buildings will bring revenue and additional cash to the group. Makoro will be responsible for securing the development funding for Stellendale Junction,” it said.