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ZIMPLOW LIMITED MANUFACTURERS OF QUALITY SCREWS, BOLTS, NUTS AND HOT FORGINGS

The Directors report the following unaudited results in respect of the Company’s operations for the 6 months ended 30 June 2010 CONDENSED STATEMENT OF COMPREHENSIVE INCOME FOR THE 6 MONTHS ENDED: 30 JUNE 2010 US$ 3 477 902 2 628 998 848 904

30 JUNE 2009 US$ 2 018 539 1 244 467 774 072

369 216

239 919

Net finance income/(costs) Finance income Finance costs

54 233 54 296 ( 63)

(20 096) 884 (20 980)

PROFIT BEFORE TAXATION

423 449

219 823

(110 985)

(122 366)

312 464

97 457

TURNOVER Domestic Export PROFIT BEFORE INTEREST AND TAX

Taxation PROFIT AFTER TAXATION

CONDENSED STATEMENT OF CASHFLOWS FOR THE 6 MONTHS ENDED: 30 JUNE 2010 US$

30 JUNE 2009 US$

CASH FLOWS FROM OPERATING ACTIVITIES Net operating income before interest and taxation

369 216

239 919

141 149 (22 419) 487 946

108 289 348 208

Operating income before working capital changes Working capital changes Cash generated from operations

(617 424) (129 478)

40 543 388 751

Taxation paid Net finance income/(costs) Net cash generated from operating activities

(282 914) 54 233 (358 159)

(11 174) (20 096) 357 481

Acquisition of plant and equipment Proceeds from disposal of plant and equipment Net cash utilised in investing activities

(142 439) 31 525 (110 914)

(52 407) (52 407)

(Decrease)/Increase in cash and cash equivalents

(469 073)

305 074

Cash and cash equivalents at the beginning of the year

1 131 363

161 619

662 290

466 693

Non cash items: Depreciation of property, plant and equipment (Profit)/loss on disposal of property, plant and equipment

CASH FLOWS FROM INVESTING ACTIVITIES

OTHER COMPREHENSIVE INCOME Net Gain on Available for Sale Financial Assets (AFS) (Loss)/Gain on Available for Sale Financial Assets Tax effect

(17 611) (18 996) 1 385

50 492 63 833 (13 341)

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

294 853

147 949

Profit attributable to: Owners of the parent entity

312 464

97 457

Total comprehensive income attributable to: Owners of the parent entity

294 853

147 949

0.10

0.03

Basic earnings per share (US cents)

Cash and cash equivalents at the end of the year

31 DEC 2009 US$

2 821 825 2 663 217 158 608

2 848 660 2 671 056 177 604

Current assets Inventories Trade and other receivables Cash and cash equivalents

8 343 439 6 734 680 946 469 662 290

8 124 392 5 829 151 1 163 878 1 131 363

11 165 264

10 973 052

9 294 798

Non current liabilities Deferred tax

601 323

Current liabilities Trade and other payables TOTAL EQUITY AND LIABILITIES

2. Statement of compliance The interim financial report for the six months ended 30 June 2010 have been prepared in accordance with International Accounting Standard IAS 34 “Interim Financial Reporting”, International Financial Reporting Standards (IFRS), the Zimbabwe Stock Exchange Act and the Zimbabwe Companies Act.

3. Accounting policies Accounting policies have been applied consistently, in all material respects, with those applied by the Company in the past.

4. Share Capital At an extraordinary general meeting held on 21 April 2010, shareholders, by special resolution approved the re-denomination of share capital from 500 000 000 ordinary shares of Z$0.00005 nominal value each to 500 000 000 ordinary shares of US$0.0001 nominal value each. US$32 707 was transferred from the capital reserves of the company to the issued share capital to fund the re-denomination.

5.Segment Information The following is an analysis of the Company’s revenue and results by reportable segment:

US$

30 JUNE 2010

30 JUNE 2009

327 071 924

327 071 924

0.10 312 464

0.03 97 457

327 071 924

322 261 675

Authorised and contracted for Authorised and not yet contracted for

142 439 746 060 888 499

52 407 528 631 581 038

8 999 945

DEPRECIATION

141 149

108 289

618 860

1 269 143

1 354 247

11 165 264

10 973 052

Shares in issue Basic earnings per share (US cents) The calculation of basic earnings per share is based on earnings of: And weighted average number of shares of:

Mealie Brand CT Bolts Tassburg Eliminations Total Unallocated items Finance income Finance costs Income taxes Profit after tax

2 440 731 766 805 294 651 (24 285) 3 477 902

US$ 1 612 830 282 298 123 411 2 018 539

US$

US$ 302 294 110 792 (40 959) (2 911) 369 216

236 331 10 232 (6 644) 239 919

54 296 (63) (110 985) 312 464

884 (20 980) (122 366) 97 457

COMMITMENTS FOR CAPITAL EXPENDITURE

Segment assets and liabilities 30/06/2010 31/12/2009

Current Deferred income tax Fair Value Loss on Available for Sale Financial Assets

127 136 (16 151) 110 985 (1 385) 109 600

3 573 118 793 122 366 13 341 135 707

Mealie Brand CT Bolts Tassburg Eliminations Total segment assets

Share Capital US$ 32 707 32 707

US$

US$

8 959 916 1 029 824 1 188 600 (13 076)

8 859 446 896 164 1 227 607 (10 165)

11 165 264

10 973 052

914 366 268 291 86 486 -

1 053 736 215 978 84 533 -

1 269 143

1 354 247

Segment assets

TAXATION CHARGE

STATEMENT OF CHANGES IN EQUITY FOR THE 6 MONTHS ENDED 30 JUNE 2010

Balance as at 1 January 2010 Transfer from capital reserve Total comprehensive income for the 6 months ended 30 June 2010 Balance as at 30 June 2010

Segment profit

Year ended Year ended Year ended Year ended 30/06/2010 30/06/2009 30/06/2010 30/06/2009

SHARE DATA

EQUITY AND LIABILITIES Shareholders’ funds

The interim financial report has been prepared on a historical cost basis, except for available-for-sale investments that have been measured at fair value. The interim financial report is presented in United States Dollars (US$) and all values are rounded to the nearest thousand ($1) except when otherwise indicated.

SUPPLEMENTARY INFORMATION

ASSETS Non current assets Property, plant and equipment Available for Sale Financial Assets

TOTAL ASSETS

1. Basis of preparation

Segment revenue

CONDENSED STATEMENT OF FINANCIAL POSITION AS AT: 30 JUNE 2010 US$

Notes to the condensed financial statements for the half-year ended 30 June 2010

AFS Financial Capital reserve Retained earnings Asset US$ US$ US$ 101 597 7 068 881 1 829 467 (32 707) (17 611) 312 464 83 986 7 036 174 2 141 931

Total equity US$ 8 999 945 294 853 9 294 798

Segment liabilities Mealie Brand CT Bolts Tassburg Eliminations Total segment assets

OPERATIONAL COMMENTARY AND ANALYSIS

Chairman’s Review Introduction I am pleased to present my maiden report as Chairman of Zimplow Limited, a business engaged in the distribution of agricultural equipment, spares, screws, nuts, bolts and a variety of other fasteners. The economic environment for the half year under review has dampened a lot of the expectations built upon the 2009 momentum. Inflation statistics reflect an ever increasing consumer price index, cost of borrowing is still very high, liquidity is short, and the cost of utilities versus service delivery does not make economic sense. All these, and a host of other factors contributed to diminishing the excitement that had started in 2009. One hopes that there will be positive changes going forward.

Tight export margins, increasing operating costs and a loss from Tassburg of US$40 000 weighed down on the operating profit. Local margins are at the same level as last year while average export margins are 18% down. Cost build up from steel, up 19% year on year and labour up 79% year on year contributed to decreasing margins. Attributable profit for the period of USD312, 464 was enhanced by a swing from an interest payable of US$20,096 in 2009 to interest earned of US$54,233 in the current year and a strong profit contribution from CT Bolts. Strategic Review The company continues to have a significant presence in the export markets and aims at growing them. The export market has proved to be an anchor for the business volume throughput. Directors are of the view that although the margins are low, the future lies in growing this part of the business which will deliver medium to long term benefits. Sadly the authorities have not looked seriously at export promotion in this country. The operations of Tassburg are being reviewed with the aim of realigning the fastener division of the company.

Operational Review Mealie Brand implement volumes are up 33% over last year with both the local and export markets contributing to this increase. Local implement volumes are up 43% against the same period last year, while exports increased by 23%.

Prospects The business will continue to be adaptive to the ever changing environment. The major part of this business is largely seasonal and hence affected by weather patterns. Management are optimistic that the three divisions will most likely reflect an improved position in the second half.

While local spares volumes were at the same level as those achieved last year, export spares volumes increased by 27%.

Dividend Due to the seasonal nature of the business and Zimplow’s conservative approach, the directors have decided to pass the interim dividend and review the position at year end.

The factory produced 1710 tonnes of product during the six months period compared to 1022 tonnes last year. The division has enough components to satisfy any possible upturn in business. CT Bolts turnover in dollars increased by 172% from prior year. The rationalisation of the Bolt Plant from Tassburg is ongoing. To this end the Thread Rolling section has been fully installed at CT Bolts and is now operational. Financial Review Revenue of US$3.4 million is 72% ahead of last year. Domestic revenue has doubled while exports in Dollars increased by about 10% from prior year numbers. Revenue breakdown by division is as follows:

Mealie Brand CT Bolts Tassburg

70% 22% 8%

Directorate Having introduced myself, I would like to welcome Eugene Mlambo, Antiock Kurauone and Todd Moyo to the Board. The three directors were appointed together with me after the last Annual General Meeting. During the year, Oliver Chidawu, Ngoni Kudenga and Phineas Whata resigned from the Board. On behalf of the Board, I would like to acknowledge their contribution to the company over the years that they have been directors. My appreciation goes to management and fellow Board members for achieving a commendable half year result.

Z L Rusike Chairman 12 August 2010 DIRECTORS: Z L Rusike (Chairman), P St L Devenish, Z Kumwenda* (CEO), A Kurauone, B Mitchell*, D Mkonto*, E Mlambo, N Nhira , T Moyo, (* Executive)

Zimplow Interim Report 2010  

The Directors report the following unaudited results in respect of the Company’s operations for the 6 months ended 30 June 2010

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