TSL to acquire logistics firm

HARARE - Diversified group TSL Limited (TSL) says it plans to acquire a transport and logistics business through a share swap deal within the next two months.

This comes as the group last year revealed that foreign investors had expressed interest in its transport and freight subsidiary Bak Logistics Limited (Bak).

It will convene an extra-ordinary general meeting at the end of the month to consider the transaction.

“This transaction will result in less than two percent equity dilution if concluded. It is resolved that up to ten percent of the authorised share capital amounting to 60 million unissued shares of one cent nominal value each be and are hereby placed under the control of directors to be issued by them to conclude the deal,” said the Zimbabwe Stock Exchange-listed TSL yesterday.

Last year, TSL’s chief executive Washington Matsaira told businessdaily that while the plan was a long term one and the group was not in hurry, “we believe this is the right move to make.”

“We have received interests from various international companies and we hope to engage the right partner,” he said.

Bak’s revenue went up nine percent in the half year to April 30, 2013, though, profits were subdued owing to a services price restructuring exercise currently underway.

During the period under review, TSL’s revenue went up by 31 percent to $20 million from $15 million registered in prior comparable period buoyed by a good tobacco season.

TSL is a major player in Zimbabwe’s tobacco industry.

Analysts say strong international prices and increased Chinese demand for Zimbabwean tobacco lifted the tobacco processor to a stellar performance on the Zimbabwe Stock Exchange in 2013, a trend likely to be repeated this year.

TSL’s share price grew by 204,4 percent after a good performance from its tobacco arm propelled the company’s earnings growth of 34 percent in the first half of 2013.

The company owns one of the world’s largest tobacco auction floors and is involved in the entire tobacco production chain from growing it to shipping. It also operates the Avis franchise in Zimbabwe.

“A more buoyant tobacco season supported by an expanded customer base for the tobacco related businesses has impacted these results significantly,” said Matsaira.

The group’s profit before tax increased 35 percent to $4,3 million from $3,2 million while profit after tax stood at $3 million compared to $2,3 million.

The listed group’s property unit, TSL Property has already embarked on its warehouse expansion programme in the second quarter of last year.

“The facilities will be ready for use in the first half of 2014. Over $1 million was spent on property refurbishment, a move which should preserve property values,” said Matsaira.

He added that efforts to grow third party tenancy contracts are no course to achieve an increase from 23 percent to 85 percent by the year 2015.

Its joint venture company Hunyani Holdings managed record an 8 percent increase on TSL’s share of profits over the first half of 2012.

“The company is expected to sell more packaging products to the tobacco industry taking advantage of the bigger national crop,” said Matsaira.

Going forward the group expects initiatives undertaken last year to spur growth in revenue and profits.

The company’s board resolved to declare an interim dividend of $0, 20 per share for the period.

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