Dear Shareholders

The Group had a strong financial year with turnover up from $272.9m in 2018 to $504.1m in 2019. Volume performance was mixed across the Group with Powermec and Mealie Brand increasing their volumes while Farmec, Barzem and CT bolts suffered some volume reduction. Through a good mix of exports and local products sold the company was able to surpass prior year profitability in real terms. Profit after tax came in at $100.6m up from $35.4m in the prior year.

Below is a financial review by division/subsidiary.

Operational Review

Farmec
Farmec revenues were up from $99.1m to $172.1m. The business sold 104 tractors which was down 37% from 2018. Parts and implements sold were down 22% on prior year comps.

Farmec contributed 44% of Group profitability after tax at $44.6m.

Mealie Brand
Mealie Brand had a strong year with revenues up from $70m to $112.8m. The division benefited from strong export sales which were up 62% on prior year. Export sales enabled the division to have exchange gains while also providing forex for other group companies. The business achieved a profit after tax figure of $55.9m up from $17.1m.

Powermec
Driven by the ongoing electricity shortages gensets sold doubled from 49 to 102. Service hours sold increased by 28% to 3,840. Revenues grew from $22.9m in the prior year to $51.6m. In terms of profitability, the unit improved from $1.4m in 2018 to a profit after tax of $4.1m. The demand pipeline remains strong and ongoing efforts are being made to ensure that we carry sufficient stocks on hand.

CT Bolts
Revenues were up from $10.2m to $16.2m. Overall volumes were down 26% to 299 tonnes however there was a trade-off in the sales volume mix with high tensile steel bolts up 151% and mild steel down 51%. The business remains profitable and achieved a profit after tax of $493k down from $1.9m in the prior year.

Barzem
Barzem’s turnover went up from $71.2m to $150.6m. Profit after tax came in at $36.3m up from $4.1m in the prior year. Going forward Barzem represents the biggest growth opportunity for the Group over the coming few years.

Outlook
We are staying very close to our customers ensuring an accurate order book which then drives our working capital posture. We remain nimble and maintain a malleable balance sheet.

Dividend
The board would like to declare a final dividend of 3.78 cents per share. A separate announcement will be made with respect to the dividend.

Appreciation
I would like to thank the board, management and staff for their continued positive efforts.

T. CHATAIKA
CHAIRMAN


Related download
ZIMPLOW – 2019 Annual report.pdf