HARARE, March 31 (The Source) Turnall Holdings Limited bounced back to profitability after a turbulent period, with a net profit of $115,000 in the full-year to December 31, 2015, as managing director Caleb Musodza told analysts that the worst was over and laying out further belt tightening measures to keep the business in the black.
The building materials producer reported $15,4 million in after tax losses during the prior comparative period in 2014.
Musodza told analysts on Wednesday that his strategy will be a combination of rightsizing the business, further cost reductions and opening up new opportunities to “sustain profitability”.
Radical changes at board and management level implemented in the past year, combined with the cost containment programme, appeared to be reshaping the business.
But analysts pointed out that the Musodza-led executive — appointed to run the business following the departure of long serving MD John Jere — still had a huge task ahead to rebuild a balance sheet described by finance director, Kenny Horonga as still “weak”.
Turnover during the period declined to $29 million, from $33 million in 2014, while sales volumes slowed by nine percent to 62,000 tonnes during the review period, from 62,898 tonnes in 2014, largely as a result of subdued demand in the cash strapped market.
The group has abandoned exports, as it works to sort out a range of issues including a legacy of poor corporate governance, before returning to offshore markets.
“We have been on a turnaround journey which started in 2014,” Musodza told analysts during a presentation of the results in Harare.
“We believe we have set a good basis for sustainable profitability.”
Among the key areas to drive the business were strategic partnership deals with an unnamed South African company for exclusive distribution of its products in Zimbabwe, as well as a shift to a cash model.
“Every cent that we generated in 2015 we have collected and this has been driving the business. We have developed a win-win relationship with creditors and at any time there is no risk of the business being shut down by a creditor,” said Musodza.
However, the group remained in a negative working capital position, starved of cash for day to day operations.
It holds $8,1 million in inventories, from $7,2 million the previous period.