BUSINESS REPORTER
Zimplow Holdings Limited recorded an 8% drop in revenue in the first quarter of the year from the same period last year with the listed industrials concern painting a rosy outlook, banking on a strong order book.
“Due to the delays in receipts for most of our key customers in both agriculture and the logistics sectors, emanating from the constrained liquidity environment, the group has been behind prior year Q1 by 8%. The group has a strong order book to support the recovery of performance in Q2 and Q3 given the projected trading environment,” group company secretary Sharon Manangazira said in a trading update for the quarter ended March 31, 2023.
On the agricultural equipment and services unit, Mealie Brand’s sales volumes of local implements improved by 72% in comparison to the same period in the prior year.
Preparations for the tobacco season boosted local sales as distributors were preparing themselves for the tobacco season, Manangazira said, adding that sales volumes for the export market reduced by 48% in the period under review.
“Management will continue to take measures to consolidate the volume of local sales and improve the revenue on exports. The capacitation programme continues to o-ffer improved eff-iciency and product diversification opportunities the group is pursuing. The immediate focus however remains to eliminate bottlenecks in the production process as we prepare for the projected growth given the La Nina season in Q2 and Q3,” Manangazira said.
Aftersales service hours at Farmec increased by 16% when compared to the same period in the year 2022 and implements sales grew by 20% against prior year for the period under review.
Given the delayed receipt of wheat proceeds, tractor volumes declined by 23% for the same period under review, she said.
In the logistics and automotive division, Scanlink experienced delays in deliveries of key orders that were expected in Q1. As a result, trucks and bus sales were 50% behind prior year Q1. Service hours were at par when compared with prior year performance. The strength of the business unit’s order book is expected to drive the group’s performance as we approach Q2 and Q3, Manangazira said.
At Trentyre, volumes in retreads for commercial and consumer tyres recorded a 23% increase in the first quarter of 2023 in comparison to the same period in the prior year.
She said Zimplow is at an advanced stage in concluding the acquisition of the 49% in Barzem, in line with the provisions of the Shareholders Agreement. This development is set to propel the performance of the group’s new business Tractive Power Solutions (TPS), which was set up in order to provide earthmoving and heavy equipment solutions to its clientele.
“The launch of TPS in an already contested market was well received by our customers who the Group has served through Barzem. Although the Group is yet to secure exclusive distribution via an internationally acclaimed Original Equipment Manufacturer, the expertise and technical competence in running an earth moving dealership has provided TPS and Zimplow the much-needed depth in providing a one stop shop for earth moving equipment fleet owners,” Manangazira said.
