The Sunday News
Judith Phiri, Business Reporter
THE Zimbabwe Stock Exchange (ZSE) listed roofing and construction products manufacturer Turnall Holdings posted 31 percent revenue growth for the year ended 31 December 2021.
Turnall Holdings said sales volume grew by two percent compared to the same period in the prior year.
The company’s business performed well in spite of the impact of the Covid-19 lockdown measures implemented by Government, liquidity constraints, subdued aggregate demand and pricing challenges due to the exchange rate disparities which were in place throughout the year, said the board chairman, Mr Bothwell Patrick Nyajeka.
“The gross profit margin for the year increased to 41 percent against the same period last year of 33 percent as a result of cost containment strategies and the business restructuring exercise implemented during the year.”
Mr Nyajeka said the company priced its products in both United States dollars and Zimbabwe dollars and was able to generate its own foreign currency to fund its working capital requirements.
He said pricing issues have been a major challenge particularly on the export market owing to the depreciation of the currencies within the region against the US dollar and the business switched to pricing exports in US dollar in order to eliminate the exchange risk.
In the trading update, Mr Nyajeka said: “The company invested $402,7 million in working capital up from $261,1 million in the previous year in order to boost volume growth. This investment was mainly in respect of the purchase of raw materials.”
He said the net capital expenditure for the period declined from $189.5 million to $16.9 million in 2021 pending significant capital expenditure on major new plants in 2022 and 2023.
Mr Nyajeka also said financing costs, at $1.6 million, declined by 72 percent compared to the prior year, while the profit before tax was $422.3 million compared to $264.4 million achieved in the preceding year.
The company managed to pay off all its loans during the course of the year and funded its operations from internally generated cash flows, while it also generated $651.5 million from operating activities before working capital changes, which was a 27 percent increase from the previous year.
In terms of the dividend, he said the board declared a final dividend of $0.04 per share which will be paid on 26 April 2022, while together with the interim dividend paid of $0.03 per share, the total dividend in respect of the 2021 financial year to ZWL$0.07 per share.
Looking forward, Mr Nyajeka added: “The company is also commissioning a Glass Reinforced Plastic (GRP) pipe plant which will bring diversity to its range of pipes.
This new large diameter pipe plant should play a critical part in Government’s plans to both create manufacturing jobs and bring improved water supplies to the country.”
He said the new plant will also reduce the country’s requirement for scarce foreign currency by replacing imported pipes with local production and provide a solid base for new export opportunities into the region.
Mr Nyajeka said the board was extremely optimistic that the business will continue to grow and maximise shareholder wealth, with innovation, production of affordable quality products and superior customer service remaining top priorities.
He said there will be an increased focus going forward on re-capitalizing the plants, improving production efficiencies and reducing production costs.
“Plans are underway to invest in a new plant and resume production of roofing sheets in Harare.
This will augment the Bulawayo plant in line with the increasing demand for the company’s products, while improving customer service further and reducing Turnall’s costs of shipping finished products to its largest market.”
