Johannesburg
Stock Exchange (JSE) listed company and affordable homes
builder RBA Holdings Limited posted an operating profit of
R14.2 million.

According to the company’s financial results for the
year ended December 2011, RBA declared an operating profit
of R14.2 million compared with a loss of R14.5 million for
the previous financial year.

Total revenue was up 62 percent to R176 million, gross
profit was up nearly 90 percent to R72 million and after
tax profit came in at R3.9 million compared to R13.3
million attributable loss in 2011.

Headline Earnings Per share amounted to 2.16 cents as
opposed a loss of 4.94 cents a share last year.

Chief executive officer of RBA Homes, David Wentzel, says
the turnaround can be attributed to a pick up in the
housing market, facilitated by an improvement in the access
to bond finance for potential borrowers.

“The financial recovery of the group has continued and
we anticipate a further improvement in the current
financial year,” he says.

The biggest obstacles still to be overcome are the still
“cautious” approach to lending by the major
financial institutions and high levels of indebtedness
among consumers.

“We are continuously seeing a slow but steady
improvement on both these fronts and demand for housing in
our target market remains strong.”

As at December 2011 RBA Homes had 325 loan applications
submitted to banks awaiting their credit decision, 379 bond
applications approved by the banks and awaiting
registration and 191 houses under construction.

For the year ending 2010 it had 379 equivalent houses
completed and 613 for the year ending December 2011.

Wenztel explains that this figure takes into account the
number of houses under construction at the beginning of the
period, the number of bond registrations during the period
and the total number of houses under construction at the
end of the period.

It represents the number of “equivalent houses”
actually completed in each cycle.

RBA Homes remains one of the country’s most trusted
suppliers of affordable homes and has since its inception,
built and handed over almost 8 000 new homes. 

It currently has stock on its books of 4 629 freehold
stands and 2 657 sectional title stands in Gauteng,
Polokwane and KwaZulu-Natal.

The company owns and manages a complex of 176 sectional
title units for rental in Protea
Glen, Soweto and
construction on the next project which involves 148 units
commenced in 2011.

Wentzel adds that recently announced changes to
government’s housing subsidy system (people earning up
to R15 000/month will qualify for a subsidy) and the
announcement of the new R1 billion housing fund to be
managed by the National Housing Finance Corporation should
add further stimulus to the affordable housing market.