Engineering firm Zeco Holdings Limited says material uncertainties continue to cast significant doubt on its ability to remain a going concern, even as the group returned to profitability in 2025 and pursues new revenue streams to stabilise operations.
In its annual report for the year ended December 31, 2025, the group said management expects improved operational prospects to sustain the business in the foreseeable future, although financial pressures and uncertainty over future cash flows remain.
The warning comes as the company attempts to rebuild after consecutive losses in the 2023 and 2024 financial years, with its latest results showing early signs of recovery under a revised strategic focus.
Revenue for the period rose sharply to ZiG5,06 million from ZiG1,65 million in the prior year, while gross profit surged nearly 246% to ZiG2,05 million.
The improved performance helped the group post a profit after tax of ZiG3,36 million, compared to a loss of ZiG549 282 previously.
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However, the company said the turnaround remains fragile.
“The directors have not satisfied themselves with the Group’s ability to continue operating as a going concern. The going concern reporting basis has been maintained with the view of anticipated improved operational prospects for the entity,” the company said.
“While management has put in place measures to preserve cash and secure additional finance, these circumstances create material uncertainties over future operating results and cash flows.”
The group said the prevailing conditions could affect its ability to realise assets and settle liabilities in the normal course of business.
“Management has concluded that the combination of these circumstances represents a material uncertainty that casts significant doubt upon the group’s ability to continue as a going concern and that, therefore, the group may be unable to realise its assets and discharge its liabilities in the normal course of business,” Zeco said.
Despite the warning, management said it still believes the group has sufficient resources to continue operating for the foreseeable future.
To support this position, the company highlighted several recovery initiatives already underway.
These include rental income being generated by subsidiary Crittall-Hope through leasing out space, ongoing construction work at Dingani Investments that management expects will unlock additional revenue opportunities upon completion, and efforts to keep labour costs low by hiring workers based on active projects.
The company also said it is aggressively pursuing new tenders to boost revenue generation.
Crittall-Hope manufactures products used in the construction sector, including door and window frames, roller shutter doors and fittings.
Zeco chairperson Benson Rafemoyo said the group remains in transition as it repositions the business.
“The group’s performance remains in transition as it pursues a new strategic focus,” Rafemoyo said.
“While operations were subdued in certain areas, management has initiated projects aimed at unlocking value and driving sustainable profitability. Positive momentum is expected in 2026, with new projects and partnerships anticipated to enhance revenue streams.”
Total assets increased to ZiG154,25 million from ZiG148,91 million in the prior year, driven mainly by growth in property, plant and equipment as well as retained earnings.
