Zimplow positioned to sustain growth

Source: Zimplow positioned to sustain growth | Herald (Business)

Business Reporter

DIVERSIFIED agro-concern, Zimplow Holdings says the business is
strategically positioned to sustain growth across all business units
supported by a firm order book and good leads in the construction and
mining industries as well as a positive rainfall forecast for the 2021/22
agricultural season.

The Zimbabwe Stock Exchange (ZSE) listed group manufactures and markets a
diverse range of products for the construction, infrastructure and
agricultural sectors in Zimbabwe. It also manufactures and distributes
metal fasteners for the mining, construction and agricultural sector, and
has interests in property management and leasing.

Its farming division consists of three business units; Mealiebrand, Farmec
and Afritrac and the mining and infrastructure division that manufactures
and distributes mining equipment, spare parts and related products through
four divisions; Barzem, CT Bolts and Farmec.

“The group managed to deliver a solid performance to achieve business
growth during the half-year period to June 30, 2021. Volumes across all
units were up against the prior year driving revenue growth by 67 percent
to $$1,66 billion in inflation-adjusted terms ahead of last year,” Mr
Godfrey Manhambara, the group’s chairman, said in a statement of the
financials.

Mr Manhambara said during the period under review, despite the lockdowns
exacerbated by the third wave of the Covid-19 pandemic, the economic and
trading environment was generally stable driven by a good season in the
agricultural sector, firm global mineral pricing, drive towards
infrastructure projects and fair access to foreign currency.

In terms of operational review, Farmec continued its growth trajectory
with the revenue growing by 119 percent in real terms ahead of the prior
year being driven by the tractor and implements volumes which went up by
133 percent and 77 percent against the prior year respectively.

After-sales performance grew by 35 percent compared to the prior year and
the business unit achieved profitability growth of 92 percent in real
terms.

“The business continues to put effort into meeting the growing demand of
agricultural products following the 2020/21 agricultural season, which has
been very positive,” Mr Manhambara said.

Mealie Brand recorded volume growth in both local and export sales during
the period under review compared to the same period last year with local
and export implements volumes at 147 percent and 69 percent respectively
ahead of the prior year pushing revenue growth by 161 percent in real
terms against prior year.

“In terms of profitability, the unit witnessed a growth of 748 percent in
real terms.” Barzem managed to double volumes of earthmoving equipment
units sold to 14 compared to the prior year.

Parts revenue grew by 80 percent in real terms and service hours were 28
percent ahead of the prior year.

“Overall, the business units’ revenues went up by 116 percent in real
terms because of the drive towards performance by the Barzem team
supported by renewed customer belief in the CAT product solutions. The BU
achieved a profitability growth of 88 percent in real terms,” Mr
Manhambara said.

CT Bolts recorded a 61 percent growth in revenue in real terms ahead of
the prior year with the key driver coming from volume growth which went up
by 58 percent.

“The unit will continue to focus on realigning its distribution channels
and supply chain management,” Mr Manhambara said.

Powermec recorded a 7 percent drop in revenue performance as generator
units sold were 24 percent behind prior year.

Mr Manhambara said the improvement in after-sales performance by 11
percent compared to the previous year provided stability to the overall
performance for the unit despite the impact of Covid-19.

He said management is seized with the repositioning of the business unit
to reach new markets and customers.

This follows the group’s completion of acquisition of Scanlink (Private)
Limited and Tredcor Zimbabwe (Private) Limited as 100 percent subsidiaries
of Zimplow following the fulfillment of all conditions precedent in July
2021.

Mr Manhambara said the group is constantly evaluating its positioning in
the markets in order to maximise and deliver value to stakeholders.

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