BUSINESS REPORTER
Industrial concern Zimplow Holdings Limited is bullish about the outlook after recording growth in all its clusters in the first 5 months of the year despite a volatile trading environment.
Group CEO Vimbayi Nyakudya (pictured) told shareholders last week that initiatives put in place to grow revenue are bearing fruit and management remained committed to provide customer centric services through the reliable premium brands of equipment and an agile after sales services function.
“The order book for the second half of the year is strong supported by a positive pipeline in the logistics and automotive cluster,” Nyakudya said.
He said the group is geared to take advantage of the opportunities in its diversified market approach in order to ameliorate the loss of business through Barzem.
“The focus with Barzem has been to deliver outstanding orders of equipment as well as provide aftersales support in line with the CAT distributorship termination at the end of September 30, 2022, Nyakudya said, adding Zimplow is “actively pursuing” a new distributorship agreement with a new original equipment manufacturer for earth moving equipment.
This will result in the group launching a new business unit to carry out the sales and provision of after sales services towards the end of the third quarter of 2022, he said.
Board chairman Godfrey Manhambara said while the loss of the CAT distributorship was regrettable, the group was confident of closing that gap in the “shortest time possible”.
“We are in intense discussions with potential OEM partners and suppliers. We are very confident that the impact of the Barzem exit is very short and very brief. We are geared to come back to the market in that segment with a more appropriate and robust supply of equipment. We are very confident that it should be done. We are very confident and bullish about that development,” Manhambara said.
In the 5 months to May, Zimplow recorded a 67% growth in profitability from continuing operations in real terms compared to the same period last year.
Revenues dropped 13% and Nyakudya said management was leveraging on a realigned group structure to deliver revenue growth initiatives, in line with strategy and the changing operating environment.
In the agriculture cluster, Farmec recorded a 4% growth in total revenue for the 5 months period ended May 31 from the same period last year.
Tractors and implements volumes increased by 24% and 7% respectively from prior year. Service capacity utilisation increased by 22% compared to same period in the year 2021.
The group expects Farmec to continue the growth trajectory given demand management plans in place, Nyakudya said.
Mealie Brand recorded local and export volumes growth of 34% and 17% respectively versus the same period last year.
Nyakudya said the business unit continues to make inroads in the export market despite the competition from East Asian suppliers.
The business unit also recorded a 45% growth in animal drawn implements spares compared to same period prior year.
“The business unit is gearing towards increased foreign currency generation through exports and increased product development in order to serve new markets,” Nyakudya said.
In the logistics and automotive segment, Scanlink’s revenue increased by 64% in the period under review driven by the sale of trucks and parts and a growth in service hours.
Improved supply of trucks and buses is expected to significantly drive business unit’s revenue and profitability for the financial year 2022, Nyakudya said.
Growth in the volume of OTR tyres at Trentyre continue to drive overall tyre volumes which were 15% ahead of prior year. Improvement in the supply of raw materials as well as the reduction of the curing time at the re-treading factory after the installation of the vacuum system has seen volumes of re-treads growing by 62% against prior year.
In the mining and infrastructure cluster, Powermec recorded increased demand for alternative power sources such as solar equipment in the period under review due to load shedding on the national grid.
Generators sales improved by 189% with a sales mix skewed towards big generator sets, Zimplow said.
Part sales and service also increased by 73% and 87% respectively in comparison to the same period in the prior year.
“Given the prevailing power outages, the business unit expects to be operating at full capacity in order to meet the alternative power demand,” Zimplow said.
CT Bolts achieved a 16% growth in volumes resulting in a 23% growth in revenue in comparison to the same period last year and is penetrating new market segments as it seeks to deliver customer centric solutions, Nyakudya said.
