Zimplow to conclude diversification drive
Agricultural implements manufacturer, Zimplow Holdings, says it is nearing the conclusion of transactions that will see it effectively extending its tentacles into the transport and logistics business.
Last year, the group’s shareholders approved the proposed acquisitions of Scanlink (Pvt) Limited, Tredcor Zimbabwe (Pvt) Limited, Birmingham Investments (Pvt) Limited and Stand 30001 Dagenham Road, Willowvale Township, Harare.
“The group is on course to conclude acquisitions of Scanlink, Tredcor Zimbabwe, Birmingham Road and Dagenham property,” said chairman Godfrey Manhambara in a statement accompanying its FY20 results.
“These are expected to enhance the group’s foot print in its chosen space.”
Scania has a premium quality brand with a nationwide market presence in trucks, buses, and generators.
Tredcor Zimbabwe will see Zimplow venture into the distribution of Goodyear tyres and the re-treading of a variety of brands, while Trentyre is the fifth largest tyre supplier in the country by volume with a brand selection that embraces premium, value and budget tyre brands targeting customers at various price points.
The acquisitions are expected to strengthen Zimplow’s balance sheet and thus raise the firm’s ability to attract capital and pursue growth opportunities organically.
Meanwhile, the group’s FY20 numbers were positive despite the onset of the Covid-19 pandemic last year, as total revenues rose 17 percent driven by volume growth in segments including Barzem, CT Bolts and Farmec.
CT Bolts recorded the biggest gains, as the unit recorded a 180 percent growth in revenue to close the year on $93 million. The business segment’s volumes grew by an average of 55 percent across all product ranges.
According to management, Farmec “had an impressive performance” with revenues growing by 13 percent driven by tractor and implements volumes growth of 30 percent and 37 percent respectively against prior year.
Farmec’s after sales revenues were 21 percent ahead of prior year.
Barzem’s revenue grew by 47 percent and operating profit by 8 percent. This positive performance was driven by a four-fold growth in whole goods volumes.
“We are encouraged by the effort to have Barzem as the dominant supplier of earth moving equipment,” explained the chairman.
“We continue to work together with our partners, Barloworld, to smoothen the supply chain and increase equipment uptake of CAT equipment in Zimbabwe.
“Barzem and Zimplow have made efforts to work closely with our customers through structured finance facilities from local asset finance institutions to enable uptake of the earth moving machinery.”
The unit’s aftersales performance was improved over the year, with parts sales growing by 10 percent in real terms compared to the previous year.
“We however lost time to Covid-19 causing 18 percent drop in hours sold compared to prior year,” said Manhambara.
Nonetheless, the business unit’s contribution to total profitability stood at 20 percent.
The group also reported that Mealie brand recovered in volumes with a 20 percent growth in local implements sold against prior year despite a slow start to the financial year.
On the downside, Powermec posted a 23 percent drop in revenue against prior year.
For FY20, the group has announced a dividend of $10.48 cents per share.–ebusinessweekly.clz.w
