Liquidity crunch squeezes ART’s performance
LIVINGSTONE MARUFU
Publicly-traded diversified conglomerate, Amalgamated Regional Trading Holdings Limited (ART), says constrained working capital has weighed heavily on turnover and sales, with a liquidity squeeze in the market exacerbating an already volatile operating environment.
CEO Milton Macheka noted that delayed strategy execution has led to subdued performance across most divisions in the first quarter ended December 31, 2025.
“Liquidity remained constrained and high borrowing costs persisted. Power availability improved; however, production was affected by working capital gaps,” Macheka said.
The group’s recovery strategy will continue prioritising margins, liquidity, and operational resilience. Turnover of US$7m was 4% below prior year as management focused on margin improvement and cash generation following the value protection decision to scale down the paper business. Overall sales volumes were 1% lower than the prior year.
Acknowledging stakeholder concerns over the pace of recovery, Macheka expressed confidence that ongoing initiatives will deliver sustained financial improvement over time.
“The business requires recapitalisation and is presently focused on internal funding through improved cash generation, working capital discipline, and asset disposals. Future capital decisions will be guided by shareholder value considerations and prevailing economic conditions,” he said.
ART has continued executing strategic interventions outlined in the 2025 full-year results, including active engagement with creditors, settlement of restructuring obligations, cost control, and tight management of working capital. Progress on property disposals is underway, with proceeds expected in the second quarter at market-reflective prices.
Market demand for Exide batteries and Eversharp pens strengthened; however, production disruptions and logistical delays driven by working capital constraints affected volumes during the period. Export volumes declined by 2% as the group selectively tightened regional credit terms. Local battery sales were marginally higher than the prior year, supported by changes in sales channels and focused marketing efforts.
Gross margin improvements were underpinned by favourable product mix and cost containment initiatives, while Exide brand equity remained strong, with management working to eliminate recurring product shortages.
The stationery segment faced a 14% decline in pen volumes and a 12% reduction in turnover, reflecting improved pricing and stocking strategies by traditional channel partners. Significant back-to-school orders were supplied in January 2026.
Tissue converting operations were deferred to the second half of the year to allow for adequate raw material planning, prioritising working capital deployment. Timber volumes rose 40% as the customer base expanded, although margin compression was experienced due to higher harvesting and milling costs.
