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ART narrows loss

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Amalgamated Regional Trading (ART) narrowed its full year to September after tax loss to $2,9 million from $6,3 million last year as a result of improved operating profit and cash flow of continuing operations.

Discontinued operations contributed $2,6 million towards the loss largely emanating from the closure of Fleximail division.

Turnover for continuing operations increased to $30 million up from $25 million leading to improved margins of 32% up from 30%.

During the period under review, ART restructured its business, which entailed closure and disposal of non-profitable units.

Fleximail was closed in the second half of the year while AT Intertrade, Fleximail Malawi and Chloride malawi were sold.

“The Fleximail loss includes a retrenchment cost of $250 000 and stock and asset write downs of $525 000. The major assets in this division had been disposed of by year end,” the group said in a statement accompanying its financial results.

“In addition, the stationery trading division AT Intertrade was sold to management during the year, while Fleximail Zambia has been closed.”

Chief executive officer Richard Zirobwa said the company had put in place a debt management strategy to reduce debt of $8,9 million within the next 18-36 months.

Under the plan short-term borrowings at $7,4 million would be restructured into long term.

The group plans to raise at least $3,5 million from the disposal of a building in Zambia and Mutare Board and Paper Mills.

Chloride Zimbabwe turnover grew 32%, while gross margins decreased from 24% to 19%.

ART said resources had been allocated to Chloride to ensure a return to profitability and notable progress had been made in the four months to October 2011.

The paper and stationery division recorded an operating profit of $270 000 and a loss before tax of $144 000 after incurring finance costs of $398 000 and retrenchment costs of $181 000.

The group has set aside $950 000 for capital expenditure with a focus on IT upgrade and factory automation. During the past financial year the company spent $839 000 as capital expenditure.

The plantations business recorded a profit before tax of $785 000, the performance driven by improved timber prices on the international market.

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