Harare - Zimbabwe Stock Exchange-listed diversified conglomerate, TSL Limited says it has had a positive start of the year, recording a strong performance for the six months ending April 30 2018 riding on the satisfactory performance of the agriculture cluster.

Presenting his first trading update, Group CEO, Patrick Devenish said TSL revenue increased by 4 percent to $24.6 million from $23.6 million prior year.

“The inconsistence rainfall pattern resulted in a reduced uptake of agro-inputs,” he said.

Devenish said tobacco related business is poised to boom due to an increased market share of the Group.

“The tobacco related businesses, are poised to benefit from an increased market share of the national tobacco crop which is expected to be between 10 percent and 15 percent up on prior year with estimates ranging between 210 and 220 million kilograms along with prices that are expected to be marginally firmer.

“The one-week later start to the tobacco selling season has, to an extent affected the numbers reported for the tobacco-related business, but these volumes should be reflected in the Group’s full year results.”

Devenish also pointed out that the trend in the performance of the Group’s logistics and real estate clusters is encouraging.

“All units have contributed positively to profit, with the exception of the forklift business, which is expected to have a stronger second half as tobacco processing commences.

“Our clients, in the logistics cluster continue to be variously impacted by the general economic environment and unavailability of adequate foreign currency for importation of raw materials and finished goods,” he said.

During the period, the Group disposed of its entire 16.53 percent stake in Nampak Zimbabwe Limited, which has designated as available for sale since October 2014.

A sizeable non-operating profit on disposal of $7.7 million has been shown in the income statement.

Devenish said as at half year, $4.8 million of the proceeds had been distributed as a special cash dividend to shareholders.

He also said that $10 million of the funds have been earmarked for capital projects which are to be undertaken in the second half of the year. In the meantime part of the funds has been temporarily invested on the money market to reduce the Group’s cost of funding.

Devenish added that the Group’s financial position remains sound.

“Net Asset Value per share has increased by 8 percent to 22.1 cents. The Group’s current ratio is up 2.7, buoyed by the funds from the disposal of the investment in Nampak.

“Cash generation remains healthy and the focus will be on improving this. Gearing has been reduced to 12 percent to 15 percent as the Group continues to carefully control its financial commitments.”

Going forward Devenish said there has been a noticeable and positive change in the mood of both local and foreign industry players given the new national thrust that is focused on unlocking potential in the country’s economy.

He said the Group will continue to play its part in key sectors of the economy, namely agriculture, logistics and real estate.

Devenish added that, in the meantime, the operating environment remains challenging and the Group will continue to position itself accordingly and also that the Group’s performance for the full year is expected to be ahead of last year given the current momentum, despite the slowdown of the seasonal business in the second half.