BHC to diversify revenue streams
The state housing agency, Botswana Hosing Corporation (BHC) is on a drive to diversify its revenue streams amid tight competition coming from the housing market as well as a drastic cut on expenditure from government, its traditional major customer. Presenting the 2021/2022 financial year recently, the Acting Chief Executive Officer of the institution, Pascaline Sefawe, was quick to point out that, the immediate plan is to push for more business in the facilities management unit, which hitherto has been concentrating on servicing mostly BHC assets.
“The Corporation intends to significantly increase the facilities management income stream by undertaking more third-party maintenance projects. The Corporation is confident that once the economy improves professional fees income stream will start growing as some of the suspended third-party projects would be undertaken,” said the Sefawe, who has been acting for just over year.
During the year under discussion, facilities management revenue decreased by P24 million from P69 million the year before. According to the company, the fall was due to the decline of new projects. The other segment that BHC, which is currently on the its last lap of its 2017-2023 strategy, is seeking to unlock more value from, is professional fees.
Like the facilities management division, professional fees took a nosedive of 64 % to close the year at P5 million. “This is attributed to suspension of planned projects by our clients due to the COVID-19 pandemic,” said the institution, which is a self-funding entity. The Corporation is confident that once the economy improves, the professional fees income stream will start growing as some of the suspended third- party projects would be undertaken.
Meanwhile, Sefawe has told the media that, the corporation is also on a quest to seek funding for planned projects. Due to its strong credit rating status, the company has managed to list a P2 billion bond programme with Botswana Stock Exchange. To date, P700 million has been raised to fund projects, in addition to internally generated funds.
During the period under review, BHC which was established by an Act of Parliament way back in 1970 managed to post a strong surplus of P61 million. The surplus is a resounding achievement compared to a P6 million loss realized the year before. “This growth in surplus was driven mainly by rental revenue that increased by 15 % from P209 million to P240 million and reduction in expenditure from P272 million to P214 million on the back of cost containment,” said BHC.
There are a number of plans that BHC under the tutelage of Sefawe will undertake. The company plans to focus more on low-income segment in terms of housing. More strategic partnerships are lined up to accelerate housing delivery. As part of the bigger plan that government has in terms of citizen economic empowerment, BHC will unbundle projects to promote empowerment for citizen owned companies.
The world over, similar corporates have adopted new technologies to deliver sustainable and affordable houses. BHC plans to build fresh innovative and affordable houses which will be warmly welcomed by some section of the society who feel its price levels are not affordable. BHC strategy, which runs until the end of the current financial year, is still intact. Major priorities of the strategy include, stakeholder engagement, partnerships and collaborations, market segmentation, improved business processes management, people and culture among others.
By the end of the 2021/2022, BHC total assets stood at P2.90 billion. “The Corporation prides itself with financially stable and strong balance sheet, coupled with low gearing ratios. The Corporation continues to provide affordable housing to Batswana all over the country, through social housing projects. The Corporation will continue to focus on its commercial mandate, to ensure financial sustainability.”