Leading hospitality company Rainbow Tourism Group (RTG) is optimistic about the future following its solid performance during first half year of 2022. The Chairman of the RTG Board Mr. Douglas Hoto, in his Chairman’s statement, reported growth in all the key performance indicators which include EBITDA, revenue, and occupancy.
RTG grew its revenue by 246% in the first half of 2022 as reported in just published H1 2022 financial results. Hoto said “The Group posted ZW$7.1 billion, 246% above ZW$2.1 billion posted during the same period in 2021”.
The Group’s gross margin for the period under review closed at 72% closed 5 percentage points above 67% posted in the same period in 2021, this was despite the increasing pressure from inflation. The Group managed to achieve this performance mainly through its cost reduction initiatives and strategic pricing measures during the period under review.
Mr. Hoto reported that the Group posted an Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) of ZW$1.8 billion (26%) during the period under review which was 300% above the ZW$470 million (23%) posted in 2021. “ The Group’s statement of the financial position remains strong. The current ratio has remained relatively strong at 1.19 from 1,15 as at December 2021. The improvement is attributable to prudent cash flow management” he said. The Group declared an interim dividend of ZW$380 million, with a portion of it (US$250,000) payable in foreign currency, payable on or before 31 October 2022.
“Our approach has been to improve operations through investing in products and markets to ensure that Rainbow Tourism Group can grow at a competitive and sustainable pace. Our ability to capture demand through our strong brand, enterprise, and scale, coupled with careful cost control led to an operating profit and strong cash flow position” said Hoto.
In an interview, RTG Chief Executive Tendai Madziwanyika highlighted that the growth in revenue was mainly driven by a strong performance by the hotels’ division where arrivals into the Group grew by 110% in H1 2022 compared to the same period in 2021. This was 17 percentage points above the national growth of 93%. This performance is reflected in the growth in occupancy for the Group which closed the first half of 2022 at 48%, representing a growth of 100% compared to the same period in 2021.
“The growth in occupancies is evidence that the Group’s volumes are now at the pre-pandemic level. The growth in volumes has been experienced across the Group’s business arms. The momentum recorded to date is anticipated to continue on the same trajectory into the rest of the year” he said.
He further reported that the Group’s digital platform the Gateway Stream proved to be a significant business driver positively impacting overall performance. “The Gateway Stream platform continues to enjoy growth in activities across its revenue channels, with the grocery channel being the main revenue driver. The tour operations arm of the business, Heritage Expeditions Africa (HExA) performance mirrored that of the hotel business over the past six months. The Company continues to enjoy growth in leisure and touring activities compared to the same period in 2021” he said.
In his outlook, Hoto highlighted that the Group was optimistic about the growth prospects as presented by the opportunities in the tourism industry largely driven by the domestic market and the returning regional and international markets.
“The Group will continue to safeguard its profit margins through a deliberate cost containment approach taking advantage of the new business models. The approach will be to activate synergies with its business partners, continuous product and market development thereby creating sustainable value to shareholders” he said