• The company recorded a 15.5% decline in revenue to ZWG622.1 million in FY2025, with all operating segments experiencing losses or declines
• A forensic audit covering 2020-2024 is ongoing, with Grant Thornton issuing an unmodified opinion but highlighting revenue recognition as a Key Audit Matter
• Zimpapers faces liquidity challenges, with ZWG5.4 million in cash, ZWG20.7 million in borrowings at 19% interest, and ZWG230.4 million in trade payables

Harare- Zimbabwe Newspapers (1980) Limited, the state-linked media group that publishes The Herald, The Sunday Mail, and operates Star FM and ZTN Prime, has a forensic audit of its operations running for the period 1 January 2020 to 31 December 2024. According to the auditor's statement in the FY2025 results, the Board commissioned the review as a comprehensive due-diligence exercise intended to provide a baseline assessment of the company's operational effectiveness and to inform the development of strengthened policies, internal controls, and governance frameworks.

Grant Thornton, the group's auditors, have included an Emphasis of Matter in their audit opinion specifically referencing this forensic audit. An Emphasis of Matter is a formal mechanism through which auditors draw readers' attention to a matter that, in the auditor's judgment, is fundamental to users' understanding of the financial statements. Grant Thornton has not qualified the 2025 financial statements on the basis of the forensic audit , the opinion is unmodified , but it has formally told the market that this audit exists, is ongoing, and is significant enough to require direct disclosure in the auditor's report.

The five-year scope of the forensic audit, covering 2020 through 2024, is itself analytically significant. A forensic audit is not a routine internal review or an efficiency assessment, it is an independent, evidence-based investigation typically deployed when there are concerns about the accuracy of records, the propriety of transactions, or the effectiveness of controls that a standard audit would not fully address. The chairperson's statement describes its purpose in measured governance language, framing it as a baseline assessment to inform improved controls and governance. The framing is careful.

What it does not explain is what triggered the assessment, what the preliminary findings have indicated, or why the scope spans five years rather than one or two. A five-year forensic scope at a company that is simultaneously losing money at an accelerating rate, has seen three executives depart in a single financial year, and has a trade payables book growing faster than its revenue is a data point that demands more explanation than the FY2025 results provide.

The directorate changes section of the FY2025 results records three executive departures within the financial year and its immediate aftermath. Farai Matanhire, the Finance Director, a marketing boss Tapuwa Mandimutsira, and Pikirai Deketeke the chief executive officer, all, were dismissed. To address the leadership gap, William Chikoto was appointed chief executive officer,  and Prisca Makandwa has been appointed new chief finance officer. The departure of a Group CEO and senior executives within the same financial year, during a period when a forensic audit spanning five years of the company's history is underway, is not a routine directorate change.

Companies lose executives for many reasons , retirement, better opportunities, health, personal circumstances , and none of those reasons are disclosed in these results. What the results do show is the timing, and the timing is a fact that any shareholder reading this announcement has a right to consider.

The appointment of the new CFO from within is also worth noting. Appointing the CFO from within, during an ongoing forensic audit means the person responsible for oversight of the company's financial controls was previously in a governance oversight role over those same controls. This does not imply misconduct or impropriety, it is, however, a governance arrangement that the board should have explained more fully in the context of an ongoing forensic review, and it represents a potential independence concern that the board's own governance committee would ordinarily be expected to address directly.

The FY2025 financial results, read on the inflation-adjusted basis that the company has adopted as its primary financial reporting framework under IAS 29, show a business in accelerating decline across all three operating divisions simultaneously.

Revenue fell 15.5% to ZWG 622.1 million from ZWG 736.5 million in 2024. Gross profit fell 26% to ZWG 300.8 million, with the gross margin contracting from 55.3% to 48.3%,  a seven percentage point compression that indicates costs did not fall at the same rate as revenue. The loss from operations widened from ZWG 17.3 million to ZWG 74.6 million, more than quadrupling in a single year. The loss before tax grew from ZWG 55.7 million to ZWG 96.3 million. The loss after tax, which benefited from a tax credit of ZWG 12.8 million, was ZWG 83.5 million, up from ZWG 21.7 million in 2024,  a deterioration of 284%.

Digging into the segment data reveals that no division is carrying the group. The newspaper segment, which is the group's largest revenue contributor at ZWG 342.8 million, generated an operating loss of ZWG 10 million against an operating profit of ZWG 9.2 million in 2024, a swing of ZWG 19.2 million in a single year. Advertising volumes fell 14% as retail sector clients cut spend and shifted budgets toward digital platforms that Zimpapers has been investing in but has not yet monetised at scale.

The commercial printing segment is the most acute operational crisis in the group. Revenue fell 44% to ZWG 84.1 million from ZWG 152 million, and the division posted an operating loss of ZWG 35.1 million against ZWG 6.4 million in 2024. The chairperson attributes this to operational inefficiencies linked to ageing machinery and intermittent stock-outs. A 44% revenue collapse in a single year is not an ageing machinery problem, but a near-total collapse of customer confidence in the division's ability to deliver, which ageing machinery and stock-outs will cause but cannot fully explain without knowing what triggered the initial loss of orders.

The broadcasting division is the only segment showing improvement, with revenue growing to ZWG 195.2 million and its operating loss narrowing from ZWG 23.1 million to ZWG 17.6 million, driven by a 45% growth in radio volumes even as ZTN television volumes fell 35%.

The balance sheet at 31 December 2025 carries signals that the income statement understates. Total liabilities increased to ZWG 342 million from ZWG 249.9 million, a 36.8% increase in a year when revenue fell 15.5%. Trade and other payables grew from ZWG 164.9 million to ZWG 230.4 million, a 40% increase. Within that total, accruals and other payables surged from ZWG 80.6 million to ZWG 141.7 million, an increase of ZWG 61.1 million or 75.8%, which is the largest single working capital movement in the results and one that the notes do not specifically explain beyond the general category heading.

A 75.8% surge in accruals at a company with an ongoing forensic audit, departing executives, and deteriorating operational performance is a figure that auditors would ordinarily examine closely, and the fact that revenue recognition appears as a key audit matter in Grant Thornton's report alongside the forensic audit Emphasis of Matter suggests that the company's income and cost recording were among the areas of highest audit scrutiny in FY2025.

Cash at year end was ZWG 5.4 million, down from ZWG 11.2 million in 2024. The company also carries a bank overdraft of ZWG 4.6 million, which did not exist in 2024, and net borrowings from FBC Bank of ZWG 20.7 million at an interest rate of 19% per annum secured against land and buildings. Net operating cash generation fell from ZWG 29.9 million to ZWG 21.1 million. Capital expenditure was ZWG 24.6 million, driven by the digital transformation programme and machinery investments.

The combined effect is a company that generated ZWG 21 million from operations, spent ZWG 24.6 million on assets, and ended the year with ZWG 5.4 million in cash and a new overdraft facility. No dividend was declared, with the board citing the company's subdued performance and the need to conserve working capital. The board is correct to conserve working capital. The question that the balance sheet raises is whether the working capital position is already past the point where conservation is straightforward.

Against the backdrop of the forensic audit, the executive departures, and the financial deterioration, the chairperson's statement presents Zimpapers as a company in deliberate digital transformation, describing 2025 as the year the company firmly established itself as Zimbabwe's leading digital-first and mobile-first media organisation. The digital transformation narrative is genuine in its operational content , the Super Desk model, the AI-supported digital newsroom, the enhanced audience analytics, and the hyperlocal content strategy are real investments producing real capabilities. The group spent ZWG 24.6 million on capital expenditure in 2025, partly directed at digital infrastructure. These investments are not fiction.

What the digital transformation narrative cannot resolve is the financial arithmetic. The newspaper segment, which generates 55% of group revenue, posted an operating loss of ZWG 10 million because advertising revenue fell 14% and costs did not fall proportionately. Digital monetisation , the mechanism through which the digital investments are supposed to generate revenue to replace declining print advertising , has not yet reached a scale that offsets the decline.

The broadcasting division, where digital investment in video on demand and signal reliability is planned, is still loss-making despite revenue growth. The commercial printing division, which is collapsing for reasons that have nothing to do with the digital strategy, is consuming capital that the digital transformation requires. The company is attempting to fund a digital future from a print and printing present that is deteriorating faster than the digital infrastructure can be built. That is a financially viable transition model only if the balance sheet, the cash position, and the governance environment all remain stable enough to support the investment cycle. In 2025, none of those three conditions held simultaneously.

Zimpapers enters 2026 with more governance questions than its financial statements answer, a loss trajectory that has accelerated rather than stabilised, and a cash position that leaves minimal margin for operational disruption. The forensic audit covering five years of the company's history will produce findings, and those findings will either confirm the governance narrative the board has constructed or complicate it. The market, as of the FY2025 results, does not know which outcome is coming because the audit remains in progress and the results disclose only its existence. Three executive departures in a single financial year at a company with an active forensic audit, a nearly quadrupled operating loss, and a collapsing commercial printing division represent a concentration of simultaneous adverse signals that exceeds what any single explanation , ageing machinery, advertiser migration to digital, liquidity constraints , can account for.

The FY2025 results are the story of a company in concurrent financial and governance distress, presented in the language of strategic transformation, and read most clearly not in the chairperson's statement but in the Emphasis of Matter that Grant Thornton placed in the audit opinion.

 Equity Axis News