Powerspeed posts $29m revenue

HARARE - Electricals manufacturer Powerspeed Limited registered a $29, 2 million revenue in the year to September 30, 2012 up 11 percent from $26, 3 million recorded in prior comparative period.

Profit before tax was $711 187 during the period under review increasing from $460 115.

Tax stood at $176 000 resulting in an attributable profit after tax of $535 429.

“The increased profits have been achieved with little increase in stock and a decrease in both trade receivables and trade payables,” said Simba Makoni, Powerspeed’s chairman.

Despite uncertainty obtaining in the macro-economic environment, coupled with depressed investment and tight liquidity, Makoni said measures had been taken to ensure the business remained profitable.

“.....the group has put in place various mitigating strategies such as containing costs, downsizing vulnerable businesses and expanding profitable areas,” said Makoni.

Makoni noted that performance was somehow weighed down by poor performance of some of the non-core engineering operations, adding that if isolate, results of the core business would be different.

Trading turnover was $25, 8 million while profit after interest was 3,5 percent of turnover at $892 000.

In order to maximise growth, Makoni said the group had decided to channel more resources in trading operations, particularly retail, where substantial market opportunities have been identified.

In the outlook, Makoni pointed out that the group will strengthen its already established trading base as well as widen branch network.

“… opening of new ones (branches) will continue during the coming year and we anticipate that this will position the group better to weather the challenges in the Zimbabwe business environment,” said Makoni.

However, the group’s engineering operations suffered as a result of the depressed state of Zimbabwe’s industry.

“This was mostly pronounced in Airflo, which relies heavily on capital projects, especially in mining, and as a result, the group’s engineering infrastructure continued to be reviewed against return on assets,” said Makoni.

The Zimbabwe Stock Exchange listed group said that its engineering infrastructure had been reduced and overhead expenses cut until conditions that enable the firm to quickly take up opportunities emerge.

Given the on-going need for working capital to fund business growth, as well as the need to reduce borrowings, Makoni said the board resolved not to declare a dividend for the period under review. - Buisness Writer

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