Amalgamated Regional Trading (ART) saw its operating profit growing by over 600% to $1,4 million in the four months to January 2016 attributed to increased efficiencies after the installation of a new Eversharp plant.
BY TATIRA ZWINOIRA
In the same period last year, operating profit was $201 000.
Profit before tax was $901 000 during the period under review from $215 000 in the comparable period last year.
Speaking to NewsDay on the sidelines of the company’s annual general meeting on Friday, ART group chief executive officer Tapiwa Ameer said the increase was mainly due to its Eversharp going through peak season, thanks to recapitalisation of its plants.
“We have put in new equipment in Eversharp, Chloride, and Kadoma Paper Mills. In Eversharp, we have basically automated the assembly of the pen which was a manual process so we brought in machines that have improved efficiencies and are able to do that at a lower cost. We have also increased capacity at Eversharp where we were doing four million pens per month and we now have the capacity to do seven million pens per month,” Ameer said.
“We have put in equipment that is capable of doing a new ruler, a solid ruler, equipment that is also doing special print, so all that has resulted in Eversharp help posting that result.”
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He said ART also recapitalised its plant at Chloride through automating a few processes and Kadoma Paper Mills where cleaning material was put to improve the look of the tissue paper.
Sales volumes for Eversharp pens were up 23% to 20,76 million over the four-month period compared to 16,9 million over the same timeframe last year. Other products also experienced upticks with Softex’s sales volumes up by 1% while sales volumes for paper and batteries were up by 7% and 6% respectively.
ART’s debt stood at $6,59 million down from $7,02 million at the beginning of September 2015. As a result, cash flow remained tight due mainly to legacy debts.
Turnover was $11,3 million which was slightly down from $11,4 million over the same time frame, while operating expenses were down by 14% during the four-month period.
“Our businesses are cyclical like these past four months Eversharp did very well as that is its peak season because schoolchildren were going back to school. As we go into winter, the batteries will also do well because that is their peak season,”Ameer said.
“So our diversity in the group always ensures that at any point in time we have one product doing well while others will be off peak.”
He said Art will be operating on a budget of $31 million and that early half and full year projections were already showing them on course to meet targets.
Total operating profit for 2015 was $1,9 million up from $204 000 in 2014. The group recorded a 4% increase in revenue to $29, 8 million.
