Worsening rand a problem for SAPRO

The South African rand played a smaller part in South African Property Opportunities' losses for the financial year, but the group still saw asset value decline in its results posted on Monday.

SAPRO declared an operating loss of £6.147m for the year ended 30 June, widening from the £2.268m loss in 2014.

The AIM-listed property investment group saw net asset value decline by 16p per share, to 21p per share, over the period.

SAPRO put this decline down to a distribution of 5p per share in October 2014, and the net loss for the year of 11p per share.

"The loss of 11p per share arises from foreign exchange losses (2p per share), valuation falls and asset sales at sales prices less than the last reported carrying value (8p per share), and operating expenses of 1p per share", chairman David Hunter said in a statement.

The company's cash balances stood at £1.2m at the end of the period, after the 5p per share distribution which totalled £3.1m.

SAPRO's foreign exchange loss was smaller in 2015, standing at £1.091m - down from £7.686m. This brought the total loss before tax to £6.898m, which was actually smaller than 2014's figure of £8.966m.

The worsening currency conditions in South Africa were still a significant issue for the group at year end, however.

"The South African Rand has continues to move adversely against the Sterling, from an exchange rate of ZAR-GBP 18.19 at 30 June 2014 to 19.09 at year end, a 4.7% fall," Hunter added.

"This trend has continued with significant political and economic unrest post the year end."

At 1030 GMT on Monday, the exchange rate was 22.3653 ZAR-GBP.