CHAIRMAN'S MESSAGE
Dear shareholders,
I am pleased to present Lavastone’s integrated report for the year ended 30 September 2022, which provides an overview of the strong performance delivered during the year.
While Mauritius is rebounding from the worst effects of the pandemic, with most industries back on their feet, uncertainty and volatility are still very much the context within which we operate. As an open economy and island nation, Mauritius is directly influenced by global macroeconomic trends and market shifts. Soaring shipping costs, coupled with rising levels of inflation, interest rates and commodity prices, have all aggregated to create a challenging operating environment. The conflict in Ukraine comes on the heels of this socioeconomic crisis.
Barring the impact of rising material costs on our construction projects, Lavastone is well positioned to withstand current and potential pressures. I credit this to a combination of factors: diversified investments across various asset classes, reliable tenants, a conservative risk management approach, a robust balance sheet and a sound gearing level.
Highlights of our strategic and operational performance
Overall, I am satisfied with the performance of Lavastone, which was driven by the execution of a pipeline of developments that has been in motion for a few years. This includes the redevelopment of EDITH, the successful opening and leasing of Sunrise Attitude Hotel and the acquisition of Absa House, which drove up our rental income, the purchase and ongoing redevelopment of PLAY Mourouk Hotel in Rodrigues, and the launch of our most recent project in collaboration with several industry peers, Victoria Urban Terminal, in July 2022.
Lavastone’s strength also comes from taking measured and prudent risks. This includes our selection of investments, whether in terms of size, asset class or location, the business partners we choose to collaborate with, and the tenants who occupy our spaces and who are key to the performance of any investment. Our prudence drives us to continuously review the relevance and feasibility of our projects in accordance with the operating environment, emerging risks and opportunities, and most importantly, in line with our strategy to turn our non-yielding assets into yielding ones. This exercise resulted in the disposal of our land and buildings in Riche Terre, enabling us to reinvest in our existing developments and seek out acquisitive opportunities. The acquisition of Absa House in Ébène was completed in July 2022, adding another strong customer to our tenant mix and expanding our footprint in another prime urban centre.
All our financial and non-financial indicators are on the rise, which gives me confidence in the soundness of our investment philosophy and strategy. We recorded Rs 287M in turnover, a 33% improvement over the previous year, an Operating Profit of Rs 173M and a Profit Before Tax of Rs 208.8M (a 5.6% growth over FY 2021). In turn, this enabled us to create value for our shareholders and deliver earnings per share of Rs 0.25 (an increase of 8.7%).
I would like to congratulate every contributor to Victoria Urban Terminal, in particular the government officials, for bringing this tremendous Private-Public partnership project to life, which is a great testament to the power of cooperation. Victoria Urban Terminal represents not only a major investment for Lavastone and its partners, but also an important milestone in the development of Port Louis. All citizens are expected to benefit from the modernisation of our public infrastructure, and the pockets of economic and social development it will create in the area.
There is no shortage of mixed-use developments or large-scale projects in Mauritius; yet, within this competitive landscape, Lavastone has found a niche in developments that preserve yet revitalise historic sites. As our Managing Director Nicolas rightly points out in his message, the adaptive reuse of a building is a form of sustainable urban regeneration, as it brings back underutilised assets. Victoria Urban Terminal was built in harmony with the existing structures and architectural elements, dating back to 150 years. Similarly, EDITH preserves the original elements of the 18th century edifice and stands as another illustration of our commitment towards the restoration of Mauritian heritage buildings.
CHAIRMAN'S
MESSAGE
All our financial and non-financial indicators are on the rise, which gives me confidence in the soundness of our investment philosophy and strategy.
Dear shareholders,
I am pleased to present Lavastone’s integrated report for the year ended 30 September 2022, which provides an overview of the strong performance delivered during the year.
While Mauritius is rebounding from the worst effects of the pandemic, with most industries back on their feet, uncertainty and volatility are still very much the context within which we operate. As an open economy and island nation, Mauritius is directly influenced by global macroeconomic trends and market shifts. Soaring shipping costs, coupled with rising levels of inflation, interest rates and commodity prices, have all aggregated to create a challenging operating environment. The conflict in Ukraine comes on the heels of this socioeconomic crisis.
Barring the impact of rising material costs on our construction projects, Lavastone is well positioned to withstand current and potential pressures. I credit this to a combination of factors: diversified investments across various asset classes, reliable tenants, a conservative risk management approach, a robust balance sheet and a sound gearing level.
Highlights of our strategic and operational performance
Overall, I am satisfied with the performance of Lavastone, which was driven by the execution of a pipeline of developments that has been in motion for a few years. This includes the redevelopment of EDITH, the successful opening and leasing of Sunrise Attitude Hotel and the acquisition of Absa House, which drove up our rental income, the purchase and ongoing redevelopment of PLAY Mourouk Hotel in Rodrigues, and the launch of our most recent project in collaboration with several industry peers, Victoria Urban Terminal, in July 2022.
Lavastone’s strength also comes from taking measured and prudent risks. This includes our selection of investments, whether in terms of size, asset class or location, the business partners we choose to collaborate with, and the tenants who occupy our spaces and who are key to the performance of any investment. Our prudence drives us to continuously review the relevance and feasibility of our projects in accordance with the operating environment, emerging risks and opportunities, and most importantly, in line with our strategy to turn our non-yielding assets into yielding ones. This exercise resulted in the disposal of our land and buildings in Riche Terre, enabling us to reinvest in our existing developments and seek out acquisitive opportunities. The acquisition of Absa House in Ébène was completed in July 2022, adding another strong customer to our tenant mix and expanding our footprint in another prime urban centre.
All our financial and non-financial indicators are on the rise, which gives me confidence in the soundness of our investment philosophy and strategy. We recorded Rs 287M in turnover, a 33% improvement over the previous year, an Operating Profit of Rs 173M and a Profit Before Tax of Rs 208.8M (a 5.6% growth over FY 2021). In turn, this enabled us to create value for our shareholders and deliver earnings per share of Rs 0.25 (an increase of 8.7%).
I would like to congratulate every contributor to Victoria Urban Terminal, in particular the government officials, for bringing this tremendous Private-Public partnership project to life, which is a great testament to the power of cooperation. Victoria Urban Terminal represents not only a major investment for Lavastone and its partners, but also an important milestone in the development of Port Louis. All citizens are expected to benefit from the modernisation of our public infrastructure, and the pockets of economic and social development it will create in the area.
There is no shortage of mixed-use developments or large-scale projects in Mauritius; yet, within this competitive landscape, Lavastone has found a niche in developments that preserve yet revitalise historic sites. As our Managing Director Nicolas rightly points out in his message, the adaptive reuse of a building is a form of sustainable urban regeneration, as it brings back underutilised assets. Victoria Urban Terminal was built in harmony with the existing structures and architectural elements, dating back to 150 years. Similarly, EDITH preserves the original elements of the 18th century edifice and stands as another illustration of our commitment towards the restoration of Mauritian heritage buildings.
A clear ESG agenda
At Lavastone, we aspire to grow responsibly and ethically, even if it means growing at a slower pace. Good governance plays a central role in ensuring Lavastone remains guided by its values. A central component of this is having a diverse Board of directors with an appropriate balance of experience, objectivity, gender and skills. To this end, I am pleased to announce the appointment of two new non-executive directors to the Board, namely Mrs Ann Charlotte Vallet and Mr Philip Taylor. They will both contribute their independent mindedness and a wealth of experience in hospitality and corporate social responsibility.
Having specialised sub-committees in place is crucial to address matters such as Audit and Risk Management and Corporate Governance. I would like to thank the respective heads of these committees, Vedanand Singh (Shyam) Mohadeb and Vijaya Lakshmi Saha, for their support in strengthening our systems of internal controls and governance during the year.
The notion of shared responsibility also extends to our sustainability commitment. Sustainability is a broad topic, but our collaboration with Dynamia has enabled us to pinpoint the areas that should be at the forefront of our agenda in the coming years.
Appreciation and acknowledgments
I would like to end my message by reminding Lavastone’s shareholders that our focus remains keenly on the long-term. Our properties, which have traditionally been concentrated in Port Louis, are increasingly cementing a position in other major markets, such as Ébène, the East Coast and Rodrigues, providing the basis for further revenue diversity. Looking ahead, assuming the high interest rate environment does not spiral, I remain confident in the demand for our high-quality yielding properties.
What gives me further confidence in Lavastone’s sustained success is the unwavering commitment and dedication of all our people, as attested by the materialisation of incredible projects during the year. On a personal note, a special mention goes out to Charles Derblay, who left no stone unturned in leading the development and launch of Victoria Urban Terminal.
I would also like to thank our management team, led by our Managing Director, Nicolas Vaudin, for inspiring Lavastone’s teams to remain guided by our core values of Humility, Care, Passion and Agility, even in uncertain times.
Finally, I am grateful to our shareholders for your ongoing trust and belief in us, which will help us prepare for the bright future we have ahead of us.
