Zimplow raises $1,5 million
ZIMPLOW Holdings has raised $1,5 million from the disposal of non-core properties to retire short-term debt.
The group’s chief executive officer, Mr Mark Hulett revealed this in a statement accompanying the group’s unaudited statements for the half year ended June 30, 2016.
Zimplow whose subsidiaries are Mealie Brand, Farmec, Powermec, Barzem and CT Bolts announced in June that it had also reduced its borrowings to $3,2 million from $4,3 million recorded during the year ended December 31, 2015.
In the half year to June 30, 2015 borrowings stood at $11,5 million.
“The group successfully raised $1,5 million net process from the disposal of non-core properties in order to retire short-term debt. The business continues to rely on its balance sheet to re-finance the business as it seeks to reduce borrowings,” said Hulett.
Despite the continued depressed trading environment, the group was focused on internal re-organisation coupled with cost control, cash management and the reduction of borrowings.
Mr Hulett said the internal restructuring was now complete.
He said the El Nino induced drought negatively impacted on their sales.
“Mealie Brand experienced a slow start to the year as most of the local distributors started the year with roll over stocks from the previous year.
“Export performance was also subdued due to weak demand from traditional regional markets as their currencies devalued against the United States dollar,” said Mr Hulett.
He said timely price support initiatives by Mealie Brand to the major distributors ahead of the tobacco season restored competitiveness of the products, decongested the distribution chain and generated the much needed cash as roll over stocks from 2015 began to be liquidated in the second quarter.
“Margins were however under pressure as the average unit price dropped by 15 percent. Volumes of ploughs sold on the local market increased by 20 percent and total implement volumes increased by 15 percent compared to the previous year the same period under review.”
During the period under review, export volumes significantly dropped as there was no off take from the traditional markets.
“Focus for the second half will be on consolidating local distribution through increased market presence and growing the export market starting off with the opening of a branch in Zambia in the third quarter. The business unit is also set to re-enter the East African market in the third quarter,” said Mr Hulett.
On Farmec, he said, the tractor business unit was not spared from the effect of drought conditions as tractor volumes declined by 37 percent compared to the same period in 2015.
The volumes for generators at Powermec went down by 52 percent compared to the same period last year.
“The stability experienced in electricity supply on the national grid caused this drop in volumes,” he said.
Volumes for earthmoving equipment at Barzem for the first half of the year were 50 percent of the same period in 2015 while power units were 28 percent of last year.
Sales of power generation at Barzem remained suppressed due to the overall improved electricity supply in the country.
At CT Bolts, Mr Hulett said the volumes uptake from all key sectors was below projections and even prior year, however, the business showed resilience with turnover only being down 15 percent compared to the same period last year. — @ okazunga