DataPro assigns an ‘A-’ rating to hospitality group
Following an improvement in financial performance, global data analytics and credit rating agency, DataPro has assigned Smart Residences Limited (SRL) “A-” rating within a year of being assigned a “Bbb-” rating from another rating company, Agusto & Co.
According to DataPro, the latest rating for SRL not only highlights the company’s profitability and cash flow levels, but also recognises its comprehensive approach to risk management.
It added that the rating considers various factors such as SRL’s capitalisation, earnings profile, liquidity, corporate governance, regulatory compliance, and sustainability in evaluating its current sound position in the medium to long term.
In 2022, SRL received a “Bbb-” rating from Rating Company, Agusto & Co, indicating the company’s sound financial health, and capacity to meet its obligations as they fall due.
DataPro’s report emphasised SRL’s strong profitability and cash flow levels, which have been buoyed by the company’s sustained growth since it commenced operations in 2020, noting that the performance underscores SRL’s commitment to delivering exceptional hospitality services and solidifying its position as a leading player in the real estate and hospitality industry.
Indeed, SRL has made impressive strides in generating revenue primarily from the rental of serviced apartments, special spaces, and sales of food and beverages. In FYE 2022, the company recorded N1.2 billion in revenue, representing 162 per cent increase compared to the previous year’s revenue of N485.1 million. The rental of serviced apartments contributed significantly to SRL’s earnings, accounting for 79 per cent of the total revenue in 2022.
The company’s pre-tax profits witnessed an impressive growth of 214 per cent, from N145m in 2021 to N457m in 2022. The margins also improved from 31 per cent to 37 per cent within the same period. The company’s total assets deployed to operations surged to N7.2b in 2022 from N0.6b in 2021, majorly due to the significant increase in current and non-current assets. Notably, a majority of these assets are long-term in nature, indicating the company’s strong future growth prospects.
Moreover, the company’s equity experienced a remarkable boost due to the deposit of shares by shareholders. In 2022 alone, the company received an injection of N4.5b in additional funds, with profit retention contributing N102m. Consequently, the equity surged by 98.2% from N0.5b in 2021, reflecting the company’s financial stability and impressive performance.
Smart Residences Limited’s rating is further bolstered by its highly experienced management team, which includes seasoned professionals and hoteliers with over 17-30 years of expertise in the field. The company is guided by a board of directors consisting of both non-executive and executive members who oversee its affairs.
Despite the significant risks posed by factors such as legal, reputational, credit, and damage risks, the company has developed policies to mitigate these risks and ensure its continued success. Currently, the company is poised to embark on unique upscale residential developments namely HomeAway and The Prestige, which will deliver one of a kind signature apartments for home buyers and accommodation seekers.