Zimplow analyst briefing 24 feb 2011

861 views

Published on

ZImplow Limited analyst briefing - 2011

Published in: Investor Relations
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
861
On SlideShare
0
From Embeds
0
Number of Embeds
154
Actions
Shares
0
Downloads
1
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Zimplow analyst briefing 24 feb 2011

  1. 1. ZIMPLOW LIMITEDANALYST BRIEFING ROYAL HARARE GOLF CLUB24 FEBRUARY 2011 1
  2. 2. INTRODUCTIONWELCOME.The team today comprises of:-Z. Kumwenda (CEO)F. Rwakonda (CFO)B. Mitchell (MD Fasteners)G. Westland (GM Tassburg). 2
  3. 3. MISSION AND VISIONMISSION“To avail quality affordable and reliable steel products on time every time to the mining, farming, construction and manufacturing sectors”Vision:“To be a market leader in the Design, Sourcing and Distribution of at least one of our products in 18 countries south of the Sahara by 2020” 3
  4. 4. ZIMPLOW VALUES Integrity Being absolutely truthful and accepting responsibility for our actions Quality Excellence in everything we do. Teamwork Leverage on each other’s strength. Dependability Our stakeholders must be able to count on us. Fun Enjoy every moment. 4
  5. 5. GENERAL BACKGROUNDThe group comprises of 3 divisions: Mealie Brand, CT Bolts and Tassburg1. Mealie Brand is the largest of the 3 divisions and is involved in the manufacture and export of animal drawn implements and hoes. The factory is based in Bulawayo.2. CT Bolts is a distributor of mild steel bolts and nuts, nails and a wide range of other fasteners. The division also manufactures specialised fasteners at its Bulawayo factory.3. Tassburg is a manufacturer of Wood screws, Veranda Bolts and High tensile bolts. The factory is based in Harare4. The 3 divisions employ about 479 employees amongst themselves. 5
  6. 6. MAJOR COST DRIVERS Steel prices increased by an average of 28% largely driven by the weakening of the dollar against major currencies as investors sought to hedge their positions in steel and oil. Employment costs driven mainly by the labour rate increased by 80% from last year. Rand factor has been significant as it moved from ZAR7.5 to a USD to around ZAR 6.8 end of December. This did not only add to raw material cost but other costs that includes general consumable, repairs and maintenance costs etc.( The above factors combined to reduce margins) 6
  7. 7. MEALIE-BRAND OPERATIONSTURNOVER.Mealie Brand Total Implements sales in units up by 16% from the prior year. Local implements sales in units up by 14%. Exports increased by 18% from prior year. Spares were up by 5%. Production up by 16% to 3 263 tons 7
  8. 8. MEALIE BRAND OPERATIONS 31 December Propor 31 December INCREASE/ 2010 tion 2009 (DECREASE)LOCAL UNITS 29 100 49.7% 25 556 14%EXPORT(UNITS) 29 433 50.3% 24 979 18%TOTAL 58 533 50 535 16%SPARES(Total) 642 236 610 793 5%HOES(UNITS) 107 162 20 850 414% 8
  9. 9. CT BOLTS OPERATIONSCT BOLTSTurnover Mild Steel bolts and nails in Kgs, up by 108% Other Fasteners in units up by 102%. Thread rolling Machines now installed at CT Bolts. 9
  10. 10. CT BOLTS OPERATIONS 31 December 31 December INCREASE/ 2010 2009 (DECREASE)MILD STEEL BOLTSkgs 97 465 44 537 119%NAILS kgs. 29 098 16 362 78%TOTAL KGS 126 564 60 900 108%MILD STEEL UNITS 3 592 629 3 596 969 -HT BOLTS 1 782 391 795 106 124%SCREWS 13 577 960 4 414 671 208%MISCELLENEOUS 936 207 850 159 10%FACTORY STOCK 581 187 463 798 25%TOTAL UNITS 20 470 374 10 120 703 102% 10
  11. 11. TASSBURG OPERATIONS Production volumes up 128% from prior year Capacity utilisation has averaged 15 to 20% Employee numbers are 30 compared to 29 last year. Bolt plant has been re-located and we may see some savings on rental costs. The unit remains cash generative. 11
  12. 12. FINANCIAL RESULTSRESULTS 12
  13. 13. STATEMENT OF COMPREHENSIVE INCOME 31 December 31 December 2010 CHANGE 2009 %TURNOVER 12 298 300 36% 9 061 718DOMESTIC 8 635 365 53% 5 631 169EXPORT 3 662 935 7% 3 430 549PROFIT BEFORE INTERESTAND TAX 2 776 062 2 791 066NET INTEREST INCOME 146 191 28 187PROFIT BEFORE TAX 2 922 253 4% 2 819 253TAXATION (580 271) (615 229)ATTRIBUTABLE INCOME 2 342 106 1% 2 323 55013
  14. 14. STATEMENT OF FINANCIAL POSITION 31 DECEMBER 2010 31 December2010 31 December 2009NON CURRENT ASSETS 2 845 090 2 846 360CURRENT ASSETS 10 648 562 8 124 392TOTAL ASSETS 13 493 652 10 970 752SHAREHOLDERS FUNDS 11 342 051 8 997 645NON CURRENTLIABILITIES 599 833 618 860CURRENT LIABILITIES 1 551 768 1 354 247TOTALEQUITIES/LIABILITIES 13 493 652 10 970 752 14
  15. 15. STATEMENT OF CASH FLOWS 31 December 2010 3 December 2009Operating income beforeWorking Capital changes 3 006 698 3 022 193Working Capital movement (468 961) (1 118 547)Net Cash Flow 2 220 579 1 589 378Financing /Investing (226 942) (318 560)Net Cash flows 3 033 588 1 039 15 951
  16. 16. SEGMENT INFORMATION Mealie CT Bolts Tassburg Adjustment Brand TotalTurnover 9 774 461 1 873 603 683 464 (33 228) 12 298 300%AGE 79% 15% 6% 100%Segment Profit 2 643 070 243 350 (91 708) (18 650) 2 776 062%AGE 95% 9% (3%) (1%) 100%Assets 11 282 200 1 277 297 1 069 771 (135 616) 13 493 652Liabilities 1 225 191 416 612 16 764 (106 799) 1 551 768 16
  17. 17. TRADING UPDATEUPDATE 17
  18. 18. TRADING UPDATEDividend As per the company dividend policy, a final dividend of USD700 000 (0.0021 cents per share) was pr0posed by Directors on 23 February 2011 payable on or about 14 March 2011.January update Turnover for January from all divisions was up 124% from last year and margins were also up by 133% Implements volumes are up by 143% Swing from a loss last year to a profit this year. February has been slow and predominantly exports. Should be a break-even to a small loss position. We are hoping for 18 a better Q1 than last year, all things being equal.
  19. 19. Going forward We see steel prices continuing to increase in the interim due to world shortages of coking coal required for steelmaking. Already steel is being rationed in RSA and prices have been increased by a range of 4-12% Labour demands which are ordinarily driven by the civil service demands. Arbitrary increases in Electricity costs and other utility costs. Initial indication of regional Agricultural output looks good. 19
  20. 20. Going forward We are however, very clear and focused on where we are going regionally and in terms of our business model. It will be a combination a volume game and efficiencies that will drive profitability in 2011 We anticipate a growth in both turnover and profit of about 10% for the full year to December 2011. 20
  21. 21. CONCLUSION THANK YOUAND GOD BLESS 21
  22. 22. QUESTIONSQUESTIONS? 22

×