M&R concludes embassy dispute

HARARE - Listed construction group, Murray & Roberts Zimbabwe (M&R) says it has concluded its dispute with British firm, Mace International Limited (MIL) over payment for the construction of the new British Embassy in Harare.

M&R chairperson Paddy Zhanda in the company’s results for the full year to June 30 said $432 411 had been released towards the final settlement of the company’s claim.

M&R in 2010 had instituted legal action against the company to recover $1,9 million owed after being sub-contracted to build the multi-million pound embassy.

Despite having pocketed $12 million pound profit from the project, MIL had failed to settle the outstanding amount owed to M&R.

According to the British Foreign Office, MIL was awarded the tender at an initial cost of $22 million pound but completed the Embassy complex at a total cost of $35 million.

M&R had been sub-contracted at an agreed cost of $21 million and completed the building complex in March 2011.

In its results M&R recorded a $1,6 million profit before tax, boosted by the re-evaluation of its investment property portfolio.

The group total revenue for year amounted to $43 million, a 20,7 percent increase compared to last year.

“Against the background of a commendable performance during the first half of the year, there was lower business activity during the latter part of the year, especially in the manufacturing division,” Zhanda said.

He said the group’ s financial performance for the second half of the year had been  negatively affected by extraordinary expenses related to provisions for restructuring, certain doubtful receivables and slow moving inventories made in the manufacturing division.

“At $3 981 121, cash generated by operations was $3 476 530 higher than last year.

“This together with additional bank borrowings allowed for greater capitalisation of the business,” Zhanda said.

Capacity utilisation for the groups division was slightly lower during the period under review at 45 percent compared to 46 percent last year.

Going forward, the company said it will focus more on the efficient management and deployment of working capital in order to reduce dependence on short-term debt.

Zhanda recently teamed up with former chief executive Canada Malunga, Malcolm McCulloch — a representative of South Africa’s Carlmac — and South African based business executive Sam Sithole in acquiring a controlling 47 percent in the M&R previously held by Murray & Roberts Ltd of South Africa at a 79 percent discount.

Markets regulator, the Securities Commission of Zimbabwe had however, raised reservations over the deal amid suspicions the transaction was shrouded in irregularities.

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