Turnall sales volumes up in FY20

Listed roofing products manufacturer, Turnall Holdings’ sales volumes, sidestepped the impact of the Covid-19 pandemic, increasing 9 percent for the year to December 2020.

But the group’s exports failed to follow a similar trajectory.

Turnall’s export volumes were 43 percent lower than the previous year as they were affected by border closures, international cargo logistics constraints and lack of competitiveness in the regional markets.

This meant that despite the improved local demand for the company’s products, total turnover for the year was lower, down 4 percent from the prior comparable period.

“The company generated most of its revenues in US dollars and was converted at the fixed exchange rate ruling at that time resulting in the decrease in revenue compared to the previous year,” said chairman Bothwell Nyajeka in a statement accompanying the results.

“The gross profit percentage was 33 percent compared to 34 percent in the prior year and operating expenses were 27 percent of revenue compared to 26 percent in the previous year.”

The group’s inflation adjusted net profit after tax for the year was $165 million compared to 5434 million for the previous year.

Earnings per share were 33,37 cents vs 88,03 impacted by a higher tax charge, following utilisation of accumulated tax losses in 2019.

Management said operating activities generated $320 million of cash, of which 5162 million was invested into working capital, $118 million on capital expenditure and $20 million on loan repayment.

During the year under review, cash and cash equivalents increased by $7 million.

Going forward, the group said they anticipate business to improve as construction projects rise.

“There are good prospects for growth in the construction industry and particularly individual housing projects as the national housing backlog continues to grow.

“The new regulations prohibiting the sale of unserviced stands are expected to improve demand for water and sewage reticulation pipes.

“The strict lockdown for the first one and half months of this year reduced the company’s sales volumes as most of the customers’ businesses were deemed not essential and were closed for business. Volumes started to improve in March and the company expects to get to the normal trading levels in the second quarter if its customers can remain open for business,” said Mr Nyajeka.

“The Covid-19 pandemic continues to cause disruption and its impact on the business in the short to medium term is uncertain. Nonetheless, there is hope in the longer term with the introduction of vaccines, and the good rains of late are expected to provide a significant stimulus to economy this year.”

For the year just ended, the board resolved not to declare a dividend for the period and “reinvest profits to improve working capital.”

The group is still in the process of seeing through a transaction, which saw the National Social Security Authority (NSSA) dispose of its 32,55 percent shareholding in the company. -herald.cl.zw