×
NewsDay

AMH is an independent media house free from political ties or outside influence. We have four newspapers: The Zimbabwe Independent, a business weekly published every Friday, The Standard, a weekly published every Sunday, and Southern and NewsDay, our daily newspapers. Each has an online edition.

Masimba loss widens

Business
MASIMBA Holdings Limited widened its loss to $552 423 for the year ended December 31 2014 from $60 412 in 2013 as revenue tumbled weighed down by the harsh economic environment.

MASIMBA Holdings Limited widened its loss to $552 423 for the year ended December 31 2014 from $60 412 in 2013 as revenue tumbled weighed down by the harsh economic environment.

BY TARISAI MANDIZHA

Revenue declined to $28,2 million last year from $62,3 million in the 18 months to December 2013. In a statement accompanying the group’s audited year-end results, Masimba Holdings chairperson Greg Sebborn said revenue performance was weighed down by the contracting division which continued to be adversely affected by the negative economic environment.

“During the year under review, the economy continued on a downward spiral, which, coupled with the persistent liquidity challenges, had a negative impact on the business operations. The economic environment deteriorated further in the second half of the year and had an adverse impact particularly on the contracting division,” Sebborn said.

He said during the period, contracting revenue contribution to group turnover declined to 53% from 64% in comparative period.

Gross profit margins improved to 19% from 17% in 2013 and this was mainly attributable to the board’s focus on productivity and cost containment strategies. The group recorded Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) of $1,7 million representing 6% of turnover from 7% in 2013.

“Despite these challenges the board’s long view remains optimistic. The board will continue to focus on growth areas in infrastructure development covering mining, water and energy, irrigation and agriculture, roads and transport and housing. This strategic thrust is in line with the company’s vision to be the market leader in infrastructure development in Zimbabwe,” he said.

Sebborn said for several years Masimba has been underpinned by two distinct strategic business units focused on contracting and manufacturing. He said board has considered the situation and was firmly convinced that there was considerable value to be unlocked in pursuing the contracting and manufacturing strategies through two independently managed businesses.

“Accordingly, the board has decided that a strategy to separate the two divisions into two separately listed companies will benefit shareholders by making it easier to attract capital for their separate growth profiles and enable both businesses to strategically position themselves in line with their core businesses,” Sebborn said. He said the board believes that once unbundled into two separate entities, Masimba and Proplastics will be able to attract capital focused on each business unit, following the appointment of new boards to supervise the affairs of the unbundled entities. The board believes the new boards will have focused mandates to enable ease of strategy formulation, execution and oversight. Sebborn said the board was also in the process of consummating a new joint venture with Kosto Holdings, accompany incorporated in Mauritius to establish a new reinforcement steel cutting and bending company. He added that Kosto Holdings is part of the Reinforce Steel Contractor (RSC) group of South Africa and the new business venture will be trading under the RSC flagship.