Zimpapers revenue increases 102pc
THE country’s leading integrated media group, Zimpapers (1980) Limited, has recorded a 102 percent increase in revenue to $65,5 million for the period ended September 30, 2019.
In a trading update for the period under review, Zimpapers company secretary Mrs Daphine Tomana indicated that during the comparable period last year, the group’s revenue stood at $32,4 million.
“The group’s revenue of $65,5 million was better than the same period last year whilst the profit before tax improved by 252,1 percent to $14 million. The company’s gross profit margin improved by two percentage points to 67 percent compared to the same period last year,” she said.
Zimpapers has continued to leverage on increased investment towards digital opportunities as the group seeks to diversify its operations and broaden its revenue base.
Mrs Tomana said improved gross profit margin was a result of better cost management due to direct procurement from the source and eliminating the middlemen in the process.
“Resultantly, the company recorded a net profit before tax margin of 22 percent compared to 12 percent that was recorded in 2018,” she said.
She said the group’s total assets during the period under review increased by 48 percent to $57,4 million due to an increase in current assets driven by improved working capital position.
Although receivables increased in line with the nominal growth in sales, the management team is committed to improve collections and preserve value, said Mrs Tomana.
The group has put in place a number of collection mechanisms to drive the company’s vision on working capital management.
On product performance, Mrs Tomana highlighted that the group’s print, advertising and circulation volumes declined due to the challenging operating environment.
During the period under review, Zimpapers print advertising and circulation volumes went down by 16 percent and 22 percent respectively when compared to the same period last year.
Circulation volumes were adversely affected by cash shortages while the uptake of advertising space was responding to the budget streamlining by clients owing to the obtaining economic challenges facing the country. “During the period under review, the commercial printing division recorded growth in volumes of 29 percent compared to the same period last year. The growth was mainly a result of improved demand for the division’s products, enhanced capacity utilisation and inefficiencies.
“Although labels and inserts recorded 30 percent and 57 percent growth owing to improved demand, cartons and books declined by 59 percent and five percent respectively.
“The decline was caused by stock outs on account of foreign currency shortages,” she said.
Mrs Tomana said labels export volume into Zambia improved by 67 percent compared to the same period last year as the company’s products gained brand loyalty.
On the broadcasting division, she said Zimpapers’ radio broadcasting division recorded a growth in volumes of 22 percent compared to the same period last year.
The growth was mainly driven by expansion of client base in the Small to Medium Enterprise sector.
“The company’s digital first strategy is starting to bear fruit as digital contributed two percent of the company’s revenue whilst the television project, ZTN also contributed two percent.
“The board and management remains committed to ensure full capacitation of all new projects to promote revenue generation diversification,” she said.
In the outlook, Mrs Tomana said the company’s performance for the last quarter of 2019 is expected to be in line with the current year to date performance trends as the board and management were committed to arresting volume decline that was recorded in the earlier months of the year. “A number of volume recovery course of actions have been developed including promotions and product enhancement to increase value to the clients. Focus will remain on the foreign currency generation, digitalisation strategy and new projects as the company diversifies to broaden its revenue base, whilst also focusing on maintaining the business viability of existing product offering,” she said. — @okazunga