Suppressed HY-21, Rosy Year-End Lined-Up For RTG

Author Name
Rugare Mukanganga
Markets 1 month ago

In the six-months ended June 2021, the Rainbow Tourism Group's occupancy closed the period at 24%, a 4% improvement from prior year levels. Inflation-adjusted revenue grew to ZWL 706m from ZWL 462m, representing a 53% growth.

The Group says that in the face of business interruptions, gross margins managed to rise from 63% to 67% in the period. At ZWL 161m, EBITDA ended the half-year 6% down from the previous year’s ZWL 177m. Disposal of an equity investment returned the Group ZWL 132m at the point of the asset’s sale.

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At ZWL 164m, Group profit before tax was 94% ahead of the ZWL 84m recorded in the previous year.

The Group’s working capital ended the period positively at ZWL 132m, a point the Group attributes to prudent financial management.The Group also noted that its gearing ratio fell 5% in the period, highlighting an improved financial position going into the 2nd half of the year. In terms of short-term financial obligations, the Group improved its current ratio from 1.15 to 1.41.

Operational Highlights

Heritage Expeditions Africa continues to build a brand name and reputation in Zimbabwe and abroad through various tourism activities and packages. The division anticipates a quick uptake of inclusive domestic tourism packages as lockdown measures ease. The Gateway Stream platform’s focus has been strategic partnerships and in Zimbabwe and the African continent, with a notable 20k users adopted via a music album launch in the six months to June 2021. The music streaming aspect of the platform is now freely accessible through certain local internet service providers. A 2021 2nd half performance recovery is expected by the Group, driven by a traditional year-end tourism activity peak and the Gateway Stream platform.


The tourism industry continues to be weighed-down by COVID-19, masking the industry’s potential. The fortunate alignment of international vaccinations with the Group’s traditionally more active period of the year present opportunities to maximise income generation and offset the year’s relatively low inflows. By domestic standards, Gateway Stream user adoption metrics are commendable but are not competitive at the global level. The variance therefore is an opportunity to anchor the Group’s growth on a cost-cutting digital platform with multiple revenue generation windows now and adoptable in the future. We expect travel and tour business fluctuations to continue, raising the need for cost management and alternative income drivers for the Group.

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