Zimplow turnover in 4 months to April up 25% on Farmec

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HARARE – Zimplow says there is a general sense of optimism and confidence prevailing in its operations and the environment as a whole. As a result, the year had started on solid footing with positive performances in all the units. In the first four months of F18, turnover was up 25% on last year and 25% up on budget.

Chief executive Mark Hulett in a trading update at the AGM this morning said that units were responding to the aggressive effort being put in growing the market for all its products. All units were profitable with Farmec being the best performer.

“Generally all business units are responding to the aggressive effort that we are putting in order to grow and expand our top line,” he said.

Hulett added that as much as the 2017/18 season had started on a dry spell, the wet period subsequent to January 2018 boosted agriculture output whose projections prior year to January 2018 were fading into negative numbers on a year on year basis.

The massive swing in Barzem’s profitability as well as notable performance at Farmec saw the group’s profit position perform well ahead of last year.

Hulett expects the group to finish the year stronger than last year building on achievements of local businesses while bringing in export orders to the top line with firm commitments already in the pipeline.

“The thrust is also on participating on the infrastructure projects which the government has already commenced,” Hulett said.

On operations, all units were ahead of last year except Mealie Brand.  Farmec performed better than the rest, with tractors sold during the first four months being 76% ahead of last year. Hours sold, boosted by command agricultural programme increased 46% and implements were however 7% down from last year.

“The unit’s aim is to continue providing the right solutions to the farming community which the government is on a drive to support,” said Hulett.

He said Mealie Brand had focused on production with emphasis on containing costs to ensure the unit meets demand for both local and export markets throughout the year. Following the commencement of the tobacco selling season, the unit had matched demand and the monthly target for May 2018 alone has already exceeded with a third of the month still to go. As a result, local implements sales which are 18% behind last year in the first four months of the year, are expected to recover as the year progresses.

“Similary export implement sales orders which came in the first four months are expected to come rather in the second third of 2018, with customer deliveries expected to start in June 2018.” Hulett said the unit has also renewed its thrust to produce hoes which saw an 81% increase in volumes sold.

At Barzem, revenues are 16% ahead of last year with parts sales 150% up from the same period last year. Service hours sold also grew 46% during the period under review as the unit utilized its foreign currency capacity created towards end of last year.

“As a result, the business swung from a loss position to profitability,” he said, adding: “government’s thrust on infrastructure projects offers more confidence to the business unit as we approach the second half.”

Powermec saw a modest growth in generator unit sales increasing 14% on last year while the hours sold continued to improve, achieving a massive 89%.

Hulett said the business received a major boost in the beginning of the year as it managed to establish a direct relationship with Perkins, which in the past came through as third party, thus further strengthening the territorial control of the brand.

CT Bolts sold 70.3 tonnes of milled steel bolts which was a 3% growth on prior year same period. Nails sold also improved 8%, however high tensile bolts were 3% down as the unit struggled to penetrate the informal market owing to the shortages of hard cash.