Home Afrika seeks investors amid growth in loss
Listed property developer Home Afrika has sunk to a Sh180 million loss for the year ended December 2017.
This is a seven percent growth in loss, from the Sh168 million posted a year earlier.
The result comes despite growing revenues 16 percent to Sh262 million as well as increased uptake of its serviced plots.
However the firm’s unique financial reporting structure saw take hit despite booking deposits of land as revenue during the period.
Home Afrika Managing Director Dan Awendo said the developer recorded a Sh350million increase in deferred revenue to Sh2.35 billion from sale of serviced plots.
He said that the average projects’ stage of completion will continue to increase over time, as the company continues to implement the ongoing infrastructure works.
“Our financial reporting system allows us to only recognize deposits from sales as revenue once a plot owner has completed payment, title has been processed and the project is complete. This means the billions we have received in deposits are reflected as liabilities in our books thus presenting a more depressed outlook on our financial position,” Mr Awendo said.
Home Afrika has been under pressure to complete its mega real estate project amid a cash crunch that has stalled development.
Mr Awendo said the developer is engaging investors to raise capital to complete the multi billion shillings Migaa golf estate in Kiambu.
The firm is seeking to raise Sh1.8 billion from a strategic investor before end of the year to complete its real estate projects.
Mr Awendo said at least 15 high net-worth investors made up of individuals and corporate entities have expressed interest in funding the company.
“Home Afrika is laying a great emphasis on new sales, collections and management of creditors in order to improve our cash position. We will also continue to streamline our operating costs and increase efficiency to improve profitability and grow shareholder value,” he said.
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