National Tyre Service Ltd (NTS) plans to reinvest profits earned in the half year ended September 30 to increase operating capacity and capacity utilisation levels in the next financial year.
The ZSE-listed company manufactures retreaded tyres, tread rubber, rubber moulded products, distributes Dunlop and other brands products, supplies accessories for motor vehicles and offers tyre fitting and wheel alignment services.
NTS said the capacity utilisation levels improved during the period under review due to an in increase in the volume of trade.
The company said capacity utilisation averaged 60% in August compared to 30% last year.
“The company’s operations have returned to profitability due to focused marketing initiatives that have resulted in an increase in the volume of trade, whilst overheads have been maintained at sustainable levels,” NTS said.
“The market is responding positively to these initiatives and the company is repositioning itself in the market by capturing some of the lost market share.”
During the review period, NTS re-opened its Masvingo and Gweru branches and looks forward to opening more branches before the end of the financial year, subject to the availability of sustainable demand and working capital.
Before 2008, the peak of Zimbabwe’s economic woes, NTS had 16 branches countrywide, but closed 12 as the meltdown aggravated.
The group currently has seven operating branches.
NTS earnings per share rose to $13,7 cents from $1,8 cents.
Revenue for the company went up to $4,8 million from $2,3 million during the same period last year.
Profit before tax increased to $477 113 from $45 889 in 2009.
“Margins have been kept at reasonably low levels in an increasing sensitive market and there have also been high levels of quality in the company’s products,” NTS said.
The company did not declare any dividend as directors wanted to preserve cash to increase business activity.
Total assets stood at $6,6 million.