- Posted 67% revenue growth to ZWL1.66b in half-year to 30 June 2021
- Recorded volumes growth across all business units
- Expansion drive highlighted by recent full acquisition of Scanlink and TrenTyre
- New cautionary statement points to further expansion drive
- Positive on outlook
HARARE – Zimplow Holdings Limited is strategically positioned to drive sustainable future growth on the back of a solid earnings performance as all business units are ticking and now likely to be further boosted by new investments as the group plans to solidify its market positioning.
Zimplow manufactures and markets a diverse range of products for the construction, infrastructure and agricultural sectors in Zimbabwe. It also manufactures and distributes metal fasteners for the mining, construction and agricultural sector, and has interests in property management and leasing.
The Group reported this Thursday a 67% revenue growth to ZWL1.66 billion during the half-year ended 30 June 2021 from ZWL0.991 billion recorded in the same period last year.
The growth in turnover was driven by volumes growth across all business units as compared to the prior-year period.
“The Group is encouraged by the growth in revenue and profitability in real terms as well as volumes, to which the Board and management based the interpretation of the financial performance for the period ended 30 June 2021,” Group chairperson Godfrey Manhambara said in a statement accompanying the financials.
Zimplow operates five key divisions namely Barzem, Farmec, Mealie Brand, CT Bolts and Powermec.
The Group recently completed the acquisition of ScanLink and Trentyre while earlier on it also finalised the acquisition of Tredcor Zimbabwe and Birmingham Investments from UniFreight.
Yesterday, the Group issued a cautionary statement indicating that it is involved in a potential transaction with an unnamed entity, an indication that it may be looking to further bolster its operations.
A look at operational performance during the half-year period under review shows that Farmec, a unit under the Group’s farming division continued its growth trajectory with revenue growing by 119% in real terms ahead of prior year driven by tractor and implements volumes which went up by 133% and 77% against prior year respectively.
Aftersales performance grew by 35% against the prior year while the unit also achieved profitability growth of 92% in real terms.
Mealie Brand recorded volumes growth in both local and export sales. Local and export implements volumes were 147% and 69% respectively ahead of prior year pushing revenue growth by 161%. Profit grew by 748%.
Barzem, the local representative of Caterpillar and Hyster, managed to double volumes of earthmoving equipment units sold to 14 compared to prior year. Parts revenue grew by 80% and service hours were 28% ahead of prior year. Overall, the business units’ revenues went up by 116% because of the drive towards performance by the Barzem team supported by renewed customer belief in the CAT product solutions. The unit achieved a profitability growth of 88% in real terms.
Likewise, CT Bolts saw revenue growth of 61% driven by volumes growth of 58%.
Meanwhile, Powermec recorded a 7% drop in revenue on lagging generator unit sales at 24% behind prior year. However, improvement in after-sales performance by 11% against prior year provided stability to the overall performance for the unit despite the impact of COVID-19.
Manhambara indicated that management is seized with the repositioning of the business unit to reach new markets and customers.
“I am happy to welcome Scanlink (Private) Limited and Tredcor Zimbabwe (Private) Limited as 100% subsidiaries of Zimplow following the fulfillment of all conditions precedent in July 2021,” he said.
“The Group is constantly evaluating its positioning in the markets in order to maximise and deliver value to our stakeholders.”
He said that the outlook is positive supported by a firm order book and good leads in the construction and mining industries as well as a positive rainfall forecast for the 2021/22 agricultural season.
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