THE KLE Group, banking on the delivery of the Bessa development project, said it is hoping to significantly improve profitability this year.
Following a restructuring of its operations earlier this year, the restaurant and real estate company shifted its core restaurant business — which consisted of the popular Usain Bolt Tracks and Records (UBTR) eatery, sports bar and entertainment spot — to associated company FranJam in which it holds a 49 per cent stake, in order to focus attention on its more lucrative property business.
Incurring heavy losses from the restaurant business since the novel coronavirus pandemic after a closure of social activities for over two years, the directors of KLE have been hoping for better fortunes from its Bessa property development which is expected to come on stream this year.
"The board anticipates it will realise a positive return on that project and will also enjoy the revenue from the property management function at Bessa, which it will assume upon the completion of the project," the directors said in the recently released annual report.
The Oracabessa, St Mary-based real estate development, being done in partnership with Sagicor Group which holds a 75 per cent interest, is to see the buildout of 86 luxury residences consisting of 24 ocean front condos priced between US$260,000 and US$600,000; 12 pool villas priced at US$795,000; and 50 river condos priced between US$260,000-US$550,000. The units are now in their final phase of development.
Following the implementation of some cost-containment strategies over the year, the company said it was also hoping for a return to profitability in its restaurant business, expecting to "earn valuable returns from its stake in the associated company which. based on its projections, will return a profit in the coming financial year".
During the last financial year ended December 2021 KLE's revenues amounted to $73 million, still way below the $151 million earned in the previous year and $225 million before the pandemic. The meagre return to profit of $13.8 million, it said, came as a result of sweat equity interest from the Bessa project and the discontinuation of the restaurant division.
"We remain optimistic about the future prospects of the business and are confident that the company will deliver significant value to its shareholders," the directors said of their outlook.