Source: Turnall registers strong turnaround in cash generation – herald
Business Reporter
TURNALL Holdings Limited delivered significantly improved financial performance for the year ended December 31, 2024, marked by a strong turnaround in cash generation, amid growing optimism for future growth.
The group recorded a positive net cash flow of US$1,5 million from operating activities, a substantial reversal from the net cash outflow of US$0,3 million reported in the prior year.
This recovery in cash generation was largely driven by improved working capital management and enhanced collections from customers. Financing activities also yielded net cash inflows of US$0,8 million, up from US$0,7 million in 2023.
The company has been on a recovery path since major shareholders, Mega Market and Zimbabwean Brands, took over in July 2022.
In a statement at the time, Zimbabwean Brands noted: “Due to common interest between Mega Market and Zimbabwean Brands, the total common shareholding became 49,59 percent post-acquisition.”
In 2023, the struggling manufacturer launched a rights offer to raise capital for investment, which closed at US$8 million. These funds were intended to support retooling and renovation of its fibre cement sheeting lines and to establish the Glass Reinforced Pipes (GRP) business, following a challenging period in which plant upgrades were hindered by operational constraints.
“The two investment projects will significantly improve the profitability and cashflows of the group and increase manufacturing capacity to meet growing local and regional demand for its core products.
“The investments will also reduce operational costs through enhanced efficiencies, such as lower distribution costs locally and regionally, leveraging Zimbabwe’s central location in Southern Africa,” the company said in 2023.
Turnall’s improved cash position bodes well for its ongoing recovery and sustainability efforts.
Looking ahead, the company remains optimistic about maintaining this positive trajectory.
“The group will strive to maintain the momentum gained and implement initiatives that will drive growth as we head towards profitability in the medium term,” said board chairman Grenville Hampshire in a statement accompanying the results. Current efforts to de-risk the factories will go a long way in ensuring production is not disrupted by power outages.
Turnall’s leadership has taken a forward-looking stance in navigating economic challenges, with a focus on cost control and operational efficiency.
“Efforts to realign cost structures with the current cost containment initiatives will bring marked improvements to the performance of the group,” Hampshire noted.
The group’s 2024 financial performance reflects notable resilience amid economic pressures.
Turnover for the year stood at US$12,04 million, up from US$10,26 million in 2023 — a 17 percent increase attributed to a four percent growth in volumes, supported by increased production and an improved sales mix.
However, challenges such as reduced aggregate demand, power supply disruptions, and rising costs moderated some of the gains.
Despite this, the group’s gross margin improved to 19 percent, up from 17 percent in the previous year.
The operating expenditure-to-sales ratio also improved to 44 percent, down from 53 percent in 2023, demonstrating enhanced cost discipline and operational efficiency, particularly in the latter half of the year.
Raw material costs remained a pressure point, with the group spending US$7.01 million on inputs due to elevated prices of imported fibre and cement.
However, management implemented efficiency initiatives to mitigate the impact, with better production processes and plant performance.
Operating profit before interest and tax stood at US$2,87 million, including a provision for credit losses of US$271 770 and a Monetary Transaction Tax (MTT) of US$111 700. The group closed the year with a net loss of US$2 million, narrower than in previous years, reflecting improved operational fundamentals.
On sustainability, Turnall has adopted a strategic approach to environmental, social and governance (ESG) principles.
“Sustainability Reporting Frameworks are being developed to address and manage economic, environmental, social and governance aspects critical to our business,” the chairman said.
Regulatory compliance remained strong, with continued adherence to ISO 14001 and ISO 9001 standards. The group also met statutory obligations in Occupational Health and Safety, Environmental Management, and Labour Act provisions.
As part of its future plans, Turnall expects to resume export sales in 2025 following upgrades to its Bulawayo sheeting plant. Although no dividend was declared for the year under review, the chairman expressed optimism and appreciation.
“The directors have resolved that there will not be any dividend declared,” he said.
With improved cash generation, enhanced operational efficiencies, and strategic planning, Turnall appears well positioned for a more profitable and stable 2025.
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