Turnall Holdings pumps US$2mln capital expenditure

ROFING and building products manufacturer, Turnall Holdings Limited, has reported a capital expenditure of US$2 million for the period ending 30 June 2024, a significant increase from the US$72 971 spent in the previous year.

The allocation primarily encompassed the acquisition of new templates for the Bulawayo sheeting plant and the procurement of a new sheeting plant designated for Harare.

Notably, the funds for these investments were derived from the shareholders’ rights issue. Civil works are currently underway in preparation for the installation of the machine.

Half year financials for the period ended 30 June 204, the listed firm said the state-of-the-art plant will result in improved production efficiencies and reduced distribution costs due to its proximity to the main markets.

Board chairman, Mr Grenville Hampshire, said the group’s turnover for the half year was US$5,5 million compared to US$5,3 million in the same period last year, representing a four percent growth.

The revenue growth was driven by an 11 percent increase in the sales volumes.

Average selling prices, however, declined by six percent during the period under review as compared to the previous year, which was mainly due to the sales mix, which had a higher proportion of concrete products with high tonnages, but low margins.

Mr Hampshire indicated that the cash flows generated from operating activities were US$1,1 million representing a 127 percent growth compared to last year. The business has implemented several initiatives to manage its working capital including negotiating for favourable credit arrangements with strategic suppliers and reviewing trading terms with key customers.

“Inventories went up by US$1,1 million and this was a deliberate decision by management to stock adequate fibre so as to hedge against long lead times. The fibre was obtained on credit resulting in a sharp increase in trade and other payables during the period under review,” he said.

The company’s financials indicate that trade and other receivables decreased by US$1,1million and this was driven mainly by receipts of the new sheeting plant components, which had been prepaid.

Short-term banking facilities amounting to US$700 000 were received during the period under review and were invested in working capital.

An additional US$540 572 in shareholder loans was received mainly for the funding of civil works in preparation for the new machinery.

The board chair said the group remains focused on delivering on several initiatives that are targeted at achieving sustainable profitability and growth.

“The focus is on re-capitalising the plants with the main project being the installation of a new fibre cement sheeting plant in Harare.

“These initiatives are expected to start bearing fruit from 2025 which will include improved production capacities and efficiencies, an improved product offering and the resumption of export sales,” said Mr Hampshire.-chronicle