Harare – Listed agricultural concern, Ariston Holdings Limited says its return to profitability will accelerate debt repayment and reduce it to 40 percent of current position by year end.
Chief executive Paul Timothy Spear in a trading update in the capital on Tuesday said the Group will continue to stringently manage its cash flows so as to clear all legacy debt.
“With the Group’s cash flow improving, settlements discounts were obtained from a number of creditors. This resulted in current liabilities reducing by $4.3 million in FY 18.”
Ariston has a legacy debt estimated around $20.5 million to its lenders but is optimistic that the Group’s financial position will continue to improve and revenue for the year will continue to be export oriented.
“The majority of our crops are destined for the export market, and as long as the Group focus on quality and maintaining its international accreditation, the strides made in 2018 will be improved. Early indications are that export prices and demand will continue to be firm in FY 19.”
In FY 18 the Groups revenue increased by 29 percent from $11 million recorded in the prior year. Gross margin for the year increased to 36 percent from 31 percent in prior year. Profit before taxation of $3.7 million was achieved compared to a loss before taxation of $1.5 million in the prior year.
In 2017, the company’s revenue shot up to $10,9 million from $9,1 million in 2016.
Ariston is not the only company which is struggling to clear its legacy debts as many companies are reporting in their financials that creditors have no choice but limit or stop financial support due to non-payment of their credit.
The local market has shrunk severely due to the disparities between the RTGS and the United States dollar, a situation which needs to be addressed as local market is vital to business survival.
Nampak Zimbabwe Managing Director, John Van Gend presenting a trading update at the company’s AGM said due to the non-payment of its creditor and loan accounts with Nampak Holdings, they had no choice but to limit further external support until such a time as we make inroads into the repayment of the outstanding liabilities.
Surface Wilmar, manufacturers of Pure drop cooking oil closed operations after failing to service a debt in the region of $11 million owed to its foreign raw material suppliers.
Capri Zimbabwe has been closed since November 2018 and had to shed 400 of its workers.
Ariston is engaged in farming operations, which include tea, macadamia nuts, horticulture, deciduous fruits, fishery and poultry.
The Company operates through three divisions: Southdowns Estates, Claremont Estate and Kent Estate. The Southdown Estates division consists of over three tea estates in the Chipinge and Chimanimani areas of Zimbabwe with over 1,200 hectares of tea, approximately 60 hectares of bananas and over 450 hectares of macadamia nuts. The Southdown Estates division is engaged in growing and manufacturing of tea, macadamia nuts, avocados, potatoes and bananas.
The Southdown Estates division is also involved in the packaging of tea for the domestic market. The Claremont Estate division is engaged in growing of pome and stone fruit, passion fruit and potatoes. The Kent Estate division is engaged in growing of horticultural crops, and rearing of poultry and livestock.
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