Turnall 2010 abridged_results_presentation

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Turnall 2010 abridged results presentation

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Turnall 2010 abridged_results_presentation

  1. 1. FULL YEAR RESULTSJANUARY- DECEMBER 2010 J.A. Jere 1 01 MARCH 2011 Managing Director
  2. 2. HISTORYTurnall Holdings Limited, formerly theBuilding and Construction division ofTH Zimbabwe Limited, operates through two divisions Turnall Building Products - 1943 Turnall Piping Products - 1972Sole shareholder of four dormant companiesnamely Acacia Holdings Limited Hastt Corporation Limited Hastt Discs (Private) Limited Tractor and Equipment (Pvt) Ltd 2
  3. 3. OUR VISIONTurnall Holdings serves its Zimbabwe & ExportCustomer needs as the leading brand andmanufacturer of quality shelter and pipe products.We will continue to grow and sustain ourprofitability to satisfy Stakeholders and ourselvesby demonstrating our real commitment to ourvalues, environment and the community. 3
  4. 4. DIRECTORATEH. Nkala - Non Executive ChairmanJ.P. Mutizwa - Non Executive Deputy ChairmanJ Jere - ExecutiveR.S Dube - ExecutiveJ. Mushayavanhu - Non ExecutiveR. Likukuma - Non ExecutiveC.E Dhlembeu - Non ExecutiveL. Manyenga - Non ExecutiveP.C.C Moyo - Non ExecutiveC. M. Gadzikwa - Non ExecutiveK. Naik - Non Executive
  5. 5. EXECUTIVE MANAGEMENTJohn A. Jere - Managing Director Robert S. Dube - Finance Director Elizabeth Mamukwa - HR Director Edwin Kondo - Marketing Director Francis Chigwedere - Technical Director 5
  6. 6. BUILDING PRODUCTSLeaders in Quality Domestic and IndustrialRoofing•Building Products • Endurite • Trafford Tile, Pantile • Flat Sheet Slates • Fascia, Barge Boards, Tapboard • GCIS 6
  7. 7. PANTILE 7
  8. 8. Endurite RoofingLow Cost Market 8
  9. 9. Trafford TileLow / MediumIncome Market 9
  10. 10. GCISLow Cost Market 10
  11. 11. TurnallwareOffice/Home Market 11
  12. 12. PIPING PRODUCTSPipes Pressure (80%) Sewer (20%) 12
  13. 13. RAW MATERIALSCement (70%) Circle Cement (Harare) P.P.C. (Bulawayo) Sino-Cement (Gweru) Imports Regional Pricing (US$200/T) 13
  14. 14. RAW MATERIALSCement (70%)Chrysotile Fibre (10%) Importation Brazil Russia High world demand 14
  15. 15. FIBRE SUPPLYPERTINENT TO HIGHLIGHT THAT THE THREAT ON THEBUSINESS DUE TO FIBRE SUPPLIES HAS BEEN DEALTWITH . (7 000T IMPORTED IN 2010)SECURED ADEQUATE SUPPLIES OF IMPORTED FIBREREPRESENTING 6 MONTHS COVER.IMPACT THOUGH IS ON GROSS MARGINS GIVEN THATIMPORTS ARE AT US$1 200/T AGAINST A LOCAL COSTOF US$690/T. 15
  16. 16. MANUFACTURINGFactories:• Harare - 2 sheeting lines - 2 GCIS sheeting lines• Bulawayo - 1 sheeting lines - 1 Nutec sheeting line - 1 pipe plantPersonnel:• Permanent (500) 16
  17. 17. TOTAL QUALITYQuality Products (SABS / SAZ) SAZ 113:1987 (Pipes) 195:1976 (Sewers) SABS 1223:2000 (Pipes) 819:1985 (Sewers) SABS 685:1998 (Sheets) 803:1995 (Boards) IS0 9000:2000 - Quality ISO 14001 – Environmental ISO 18000 – Health and Safety 17
  18. 18. MARKETSLocal (94% of Sales) Building Products • B2B • B2C CUSTOMER SEGMENTS • A2FARMS •PRIVATE DEVELOPERS (URBAN) •RURAL 18
  19. 19. MARKETSPipe ProjectsPressureSewer Pipes • Contractors • Local Authorities • A2 Irrigation Projects 19
  20. 20. MARKETSExport (6% of Sales) South Africa Namibia Botswana (10%) Mozambique (90%) Malawi / Angola U.S.A. Zambia 20
  21. 21. OVERVIEW OF LOCAL OPERATING ENVIRONMENTFAIRLY STABLE POLITICAL AND MACRO-ECONOMICENVIRONMENT.– SINCE INTRODUCTION OF A MULTI CURRENCY REGIME.– PRICE STABILITY (Inflation 3.2%).– ECONOMY GREW 8.3%.HOWEVER NO MAJOR SIGNS OF FDI.LIQUIDITY REMAINED TIGHT AS A RESULT, ASREFLECTED IN THE HIGH BORROWING RATES 12%-20% . 21
  22. 22. OPERATING ENVIRONMENTGDP GROWTH IMPETUS FELT AT THE LEVEL OF:– MORTGAGE LENDING WHERE WE SAW SOME MARGINAL IMPROVEMENT.– INCREASED SPENDING IN THE COUNTRY.– AN INDUSTRY WIDE IMPROVEMENT IN CAPACITY UTILIZATION LEVELS WHICH IMPROVED TO AROUND 45%. (cf. TURNALL CAPACITY 75%).ON THE DOWN SIDE THOUGH :NO SIGN OF DONOR MONEY FOR THE LARGE INFRA-STRUCTURAL PROJECTS DURING 2010 APART FROMMTSHABEZI LINE. 22
  23. 23. VOLUME DRIVERSUNDERPINNING THE VOLUME SALES ACHIEVED 2010: - AGRICULTURE WHICH GREW 34% AND MINING 47%- TOBACCO, COTTON AND MAIZE WERE KEY CASH CROPS- USD SALARIES WHICH ARE DRIVING PRIVATE HOME CONSTRUCTION - LOCAL AUTHORITIES UPGRADE OF SEWER AND WATER RETICULATION 23
  24. 24. IMPACT ON COMPANY PERFORMANCESECTORIAL CONTRIBUTIONS FOR BUILDING PRODUCTS: AGRICULTURE - 42% PRIVATE HOME DEVELOPMENTS 23% INFORMAL MARKET 14% OTHERS (NGO’s, DIAMOND SALES) 21% 24
  25. 25. SALES VOLUMES (T) EXPORT LOCAL TOTALJAN-DEC 10 2 646 64 725 67 371JAN-DEC 10 P 3 210 56 790 60 000JAN-DEC 09 3 966 38 888 42 854 25
  26. 26. SALES VOLUME COMMENTARYTOTAL VOLUMES AT 67 371T ARE 12% AHEAD OF PLAN OF60 000T AND 57% AHEAD OF SAME PERIOD IN 2009.90% OF THESE CAME FROM LOCAL BUILDING PRODUCTS(ENDURITE/CORRUGATED SHEETS).PIPES DID NOT FEATURE STRONGLY DURING 2010 AND AT1 800T WERE A MERE 19% AHEAD OF 2009.EXPORTS AT 2 646T ( US$ 715K) WERE SUBDUED DUE TO THEASBESTOS BAN IN MOZAMBIQUE AND SA. 26
  27. 27. COMPETITTOR ACTIVITYCOMPETITOR ACTIVITY INTENSIFIED IN THEFOLLOWING LINES- GALVANIZED IRON SHEETS (IMPORTS/LOCAL )- THE DECISION TO MANUFACTURE GCIS HAS STARTED PAYING DIVIDENDS. ( CANNIBALIZATION OF AC MARKET)- PVC PIPING IN THE SMALL DIAMETER PIPES 27
  28. 28. MARKET SHARE SURVEY 28
  29. 29. FULL YEAR FINANCIAL RESULTS TO 31 DECEMBER, 2010 29
  30. 30. FINANCIAL HIGHLIGHTS 31.12.2010 US$Increase in turnover 111.34% to 34.9mIncrease in profit from continuing operations 104.08% to 5.3mIncrease in profit before taxation 103.52% to 4.9mIncrease in attributable profit to equity holders 122.55% to 3.4mBasic earnings per share(cents) 0.69 30
  31. 31. FINANCIAL HIGHLIGHTSTurnover = $34.9 millionExports = $0.7 million [ 2% of T/O].Admin. Expenses = $4.7 million [ 13% of T/O].Selling & Distribution = $1.4 million [4%] ExpensesProfit from operations = $5.3 million [ 15 % return].Attributable profit = $3.4 million.Earnings per share = 0.69 cents 31
  32. 32. INCOME STATEMENT 31.12.2010 31.12.2009 US$ US$Continuing operationsRevenue - local 34,142,896 15,481,192 - export 714,070 1,012,090 34,856,966 16,493,281Cost of sales (23,733,247) (10,402,927)Gross profit 11,123,719 6,090,355Other income 274,553 15,662Selling and distribution expenses (1,416,249) (860,784)Adminstrative expenses (4,731,642) (2,672,477) 32Profit from continuing operations 5,250,382 2,572,756
  33. 33. INCOME STATEMENT Cont.Finance income 15,764 4,030Finance costs (406,964) (189,256)Profit before taxation 4,859,182 2,387,531Taxation (1,441,504) (851,874Profit for the year from continuing operations attributable to equity holders 3,417,678 1,535,657Other comprehensive income for the year, after tax:Revaluation of property, plant and equipment - 6,582,675Other comprehensive income for the period, net of tax - 6,582,675Total comprehensive income for the year 3,417,678 8,118,332Number of shares in issue (000s) 493,040 483,945Basic earnings per share (cents) 0.69 0.32 33
  34. 34. FINANCIAL POSITIONCapital employed = $35.2 million.$ 4.4 million invested in Property, Plant andEquipment.Stock days = 124 days (2009 – 119days)Debtors days = 72 days (2009 -71 days)Gearing ratio = 10% (2009 – 3%)Current ratio = 1.5:1 (2009 – 1.5:1)Quick ratio = 0.9:1 (2009 – 0.9:1)Cash = $1.1 millionShort-term borrowings = $2.9 million 34Long-term borrowings =2.8 million
  35. 35. CONSOLIDATED STATEMENT OF FINANCIAL POSITION 31.12.2010 31.12.2009 US$ US$ RestatedASSETSNon‐ current assetsProperty, plant and equipment 29,254,936  26,583,297 Current assets 17,881,093  7,634,245 Inventories 8,036,016  3,392,815 Other investments 21,129  24,708 Trade and other receivables 8,674,890  3,219,975 Cash and cash equivalents 1,149,058  996,746 Total assets 47,136,029  34,217,541 EQUITYCapital and reserves 25,360,388  21,669,848 Share capital 4,930,403  ‐Share premium 181,908  ‐Non‐ distributable reserve 7,655,239  12,494,688 Revaluation reserve 7,639,504  7,639,504  35Retained earnings 4,953,334  1,535,656 
  36. 36. CONSOLIDATED STATEMENT OF FINANCIAL POSITION 31.12.2010 31.12.2009 US$ US$ RestatedLIABILITIESNon‐current liabilities 9,880,471  7,719,225 Loans and borrowings 2,842,991  629,545 Defferred tax liability 7,037,480  7,089,680 Current liabilities 11,895,170  4,828,468 Loans and borrowings 2,922,741  401,141 Trade and other payables 5,876,935  2,882,445 Provisions 671,192  299,066 Taxation 2,420,953  1,245,806 Bank overdraft 3,349  10 Total liabilities 21,775,641  12,547,693 Total equity and liabilities 47,136,029  34,217,541  36
  37. 37. DIVIDENDS At a meeting held on the 24th of February, 2011,the Board resolved to declare a final dividend of0.173 cents per share (US$853 000) for the yearended 31 December, 2010. 37
  38. 38. OUTLOOK PERIOD 38
  39. 39. OUTLOOKBUSINESS PERFORMANCE GOING FORWARD WILL BEUNDERPINNED BY DEVELOPMENTS IN THE FOLLOWINGTHREE SECTORS:LOCAL BUILDING PRODUCTS INCLUDING GCISPIPE PRODUCTSEXPORTS 39
  40. 40. DEMAND OUTLOOK 2011WE ARE OPTIMISTIC THAT 2011 WILL SEE US GROWVOLUMES.EARLY 2011 SALES AND DEMAND PATTERNS HAVEBEEN ENCOURAGING.FORECAST Q1 SALES AT 15 241T ARE 30% AHEAD OF2010 WHILST TURNOVER AT US$9.6M IS 75% AHEAD.Q1 OPERATING PROFIT MARGINS IN LINE WITH 2010.CAPACITY UTILIZATION IS AT AROUND 90% FOR FIRSTQUARTER. 40
  41. 41. LOCAL DEMAND OUTLOOKWE CONTINUE TO BENEFIT FROM TOBACCOPROCEEDS - FORECAST TO GROW TO 177M KGs,COTTON, MAIZE AND TOBACCO.LOCAL AUTHORITIES PROJECTS FOR SEWER ANDWATER HAVE KICKED OFF.PIPE ORDER BOOK FAIRLY STRONG ON THE BACK OFLOCAL AUTHORITIES PIPE DEMAND. 41
  42. 42. EXPORT VOLUME OUTLOOKEXPORT VOLUME GROWTH WILL BE KEY IN 2011- THE NON ASBESTOS PLANT IS BEING COMMISSIONED AND WILL BE UP AND RUNNING MID-MARCH 2011.-TECHNOLOGY TO ALLOW TURNALL TO PENETRATE THE SA, MOZAMBIQUE & BOTSWANA MARKET AND OFFER A FULL RANGE OF FIBRE CEMENT PRODUCTS.- PRODUCT RANGE TO INCLUDE CEILING, FASCIA, BARGE BOARDS AND ENDURITE SHEETS.- SEE A RETURN TO 20%-30% EXPORT VOLUME CONTRIBUTION 42
  43. 43. 3 CHALLENGESFOR DEVELOPING COUNTRIESFOR OUR PEOPLE:Affordable HousingSafe shelter.Access to Safe Drinking WaterAbout 30% of developing nationspopulation do not have access.Effective SanitationLess than 50% of developing nationspopulation have access. 43
  44. 44. LOW COST HOUSING DEMAND PROFILE BACKLOG 5 YEAR PERIOD SPREAD ( UNITS ) 2011* 2012 2013 2014 2015HIGH DENSITY 488 367 85 000 95 000 97 673 100 000 111 367TOTAL DEMAND  8 790  1 530  1 710  1 758  1 800  2 004 TILES (000)TOTAL DEMAND   398 741 69 400 77 565 79 748 81 648 90 928TONNES Extract from The National Housing Policy Document 2009 44
  45. 45. QUESTIONS ? 45

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