Apex Corporation Zimbabwe, which registered an operating loss of $2,3 million for the year ended October 31 2010, is planning a wholesale disposal of its loss making units as part of its effort to rationalise its operations.
In a statement accompanying the company’s financial results, Apex chairman Farai Rwodzi, said business for the group remained subdued while demand for the company products was below planned levels.
He said the low demand had been a result of low activity in the economy in particular the mining sector from which the company derives it largest market.
“The group will still carry out its plan to dispose of all non performing operations. To date the sale of Marondera Foundry and Philpott and Collins have been concluded and a firm offer has been received for All Metal Foundries in Bulawayo.
“A team of consultants has been engaged to critically review the remaining business operations, being Zimcast, McMeekean and Precision Grinders with a view to rationalising their operations and subsequently improving productivity.
“This exercise has necessitated the temporary suspension of operations at Zimcast, to reduce costs whilst a new business plan is finalised to secure funding from local, regional and international markets.”
During the period under review the Apex group achieved a turnover of $11,2 million. Shareholder equity was $7,1 million and net borrowings $2,6 million.
Apex Holdings incorporating (All Metal Founders, Marondera Foundry, McMeekan, Philpott and Collins, Precision Grinders and Zimcast) achieved a turnover of $3,2 million resulting in an operating loss of $2,5 million.
Precision Grinders posted a marginal profit from turnover of $1,2 million and contributed 60% of turnover.
Rwodzi said marketing strategies had been put in place to expand the steel structure of the business.
Phoenix Consolidated industries posted a turnover of $8,1 million and an operating profit of $218 000. Shareholder funds grew from $6,1 million to $6,2 million.
“The results for the year clearly indicate the need for drastic measures. While the remaining units continue to show promise, a decision has been taken for them to either be sold or to source an investor that would enable recapitalisation and future profitability,” said Rwodzi.
“The proposed sale of various buildings and operating units are at an advanced stage of negotiation and shareholders will be appraised of these developments as they near finalisation.”