BUSINESS REPORTER
Zimbabwe Stock Exchange-listed building and roofing material manufacturer, Turnall Holdings Limited, is turning to shareholders to fund capital expenditure plans through a rights issue, Business Times can report.
A rights issue is an invitation to existing shareholders to follow their rights and purchase additional new shares in the company.
In a cautionary notice yesterday, company secretary Cynthia Mahari said the company was engaged in discussions that involve a potential transaction that may have a material impact on the company’s shares.
“The transaction involves raising capital for the company’s major capital expenditure programme through the issuance of shares by way of a rights offer,” Mahari said, urging investors to exercise caution and consult their professional advisors when trading in the company’s shares until finalisation of the matter.
In its financial results for the year to December 31, 2022, Turnall reported a 16% growth in turnover to ZWL$8.4bn from ZWL$7.25bn in the previous year in spite of a 29% reduction in sales volumes.
The sales performance was mainly driven by a deliberate move to focus on the high value but low tonnage products.
However, the liquidity challenges and low aggregate demand prevailing in the economy hampered the group’s efforts to realise its full potential.
The group incurred a loss of ZWL$3.8bn in the reviewed period from a profit of ZWL$1.5bn achieved in the previous year.
Cash generated from operating activities was ZWL$592.4m, representing a 2% decrease compared to the same period last year.
Turnall continued to invest in working capital in order to preserve value in this hyperinflationary environment.
The company’s plant with a value of ZWL$798.9m was impaired during the year and will be replaced by the latest state of the art plant which will be commissioned in Harare in 2024 as part of the company’s recapitalisation programme.
The company had no borrowings during the period under review. All capital requirements were funded from internally generated resources.
