ZIMBABWE Stock Exchange-listed engineering concern Zeco Holdings yesterday complied with listing requirements, escaping censure from the equities markets regulator after it finally released its full year results on the 11th hour.
Report by Bernard Mpofu
The struggling firm, which missed the March 31 2013 deadline to publish audited results for the year ending December 31 2012, was given up to yesterday to comply or face sanctions from the ZSE listing committee.
This came after the Securities Commission of Zimbabwe approached the ZSE over Zeco’s delays in releasing the results.
This is not the first time that the company has delayed publishing its financials. The group has since dollarisation been struggling to timeously release the financials amid indications that its going concern status could be under threat.
In its audited results for the year under review, the company dipped further into a loss-making position posting an after tax loss of $2,4 million from $1,8 million on the back of a slump in revenue.
Revenue for the period under review dropped to $1,48 million from $2,1 million recorded in prior year.
Zeco Holdings operates Crittall Hope, Zimplatsics and Delward Engineering trading as Zeco. The group’s current ratio, which measures the company’s ability to meet current liabilities, was at 0,167 during the period under review, falling below a standard minimum of one.
Its total assets turnover, a measure of how much assets are being used to generate sales, stood at 0,03. This could mean that the company is struggling to efficiently use its assets to generate sales.
The efficiency is below one, showing under-utilisation of assets which might be a management issue or slowdown in business.
Company chairman Phillip Chiyangwa, however, said Zeco had secured contracts with a number of local mining firms in addition to tenders won for infrastructure steelworks.
“The Bulawayo-based subsidiary was negatively affected by the generally low economic activity. Being the group’s flagship, low performance by Zeco significantly affected group results,” said Chiyangwa.
Turning to the going concern status, the company’s external auditors Jack and Fieldsand said: “The ability of the company to continue operating as a going concern is subject to continual assessment and availability of support by the shareholders.”
ZSE listing rules state that companies which miss the due date for publishing audited results should instead publish unaudited results.
“If a listed company has not distributed annual financial statements to all shareholders within three months of its financial year end, it must publish in the Press and distribute to all shareholders a preliminary report even if the information is unaudited at that time,” reads part of the ZSE listing requirements.
The listing rules also spell out: “On the day following the due date of issue of the listed company’s interim/preliminary report, a letter reminder will be sent by post or facsimile to the listed company requesting that it rectify the situation and advising that it has been granted a period of one month, from the date of such reminder, in which to issue its interim/preliminary report, failing which the company’s listing will be suspended and a special meeting of the committee will be convened to consider the continued suspension or termination of the company’s listing . . .”