Blantyre Hotels Limited has revealed plans to construct a 180 room four star business hotel in the capital city, Lilongwe.
The company which is listed on Malawi Stock Exchange, disclosed about the plans in its financial statement ending September 2017.
Meanwhile discussions are at an advanced stage of negotiations with the landowners for the proposed project. The company anticipates to raise funds through the Stock Market Exchange (MSE) to fund the project.
“Design concept required for the preliminary clearances and approvals from the relevant authorities are in progress. It is anticipated that the company will be raising fresh equity through a rights issue towards funding the project costs,” reads the statement released by the MSE.
The statement says the company will release more details on the project later. Blantyre Hotels Limited registered a total revenue growth of about 17% in 2017. The company made K4.1 billion by September 2017 which is slightly higher on the K3.5 billion in 2016.
The development is mainly being attributed to the increased occupancy through Marriott central reservations system and improved average room rates at the company's Ryalls Hotel.
Blantyre Hotels Limited has also reduced its net financial costs from K100 million in 2016 to K23 million in 2017. The development has been attributed to debt repayment and a reduction in interest rates.
In addition, the company has registered a profit after tax of K507 million against a profit of K414 million in the previous year representing an increase of 23%. However, the company has also incurred more operational costs resulting from backup power and maintenance costs.
“Direct expenses increased from K1, 460 million to K1, 716 million, representing an increase of 18%. This represents overall increase in costs associated with almost all aspects of the hotel operations, especially from areas such as backup power and maintenance costs. Such increases are also in line with the current economic climate and prevailing challenging operating environment,” says the statement.
The statement, however, says the company’s gross profit margins were sustained at 58% as in the previous year.