Zimplow in $300K dividend

HARARE - Listed agricultural manufacturing counter, Zimplow, has declared a $300 000 dividend for the year to December 31, 2017 after embarking on a successful restructuring excursive.

This is the firm’s first dividend following three years of turbulence as the firm has been recording losses since 2013.

Zimplow company secretary Maxwell Chinorwadza said the 0,13 US cents per share dividend was to be paid out end of March.

“The dividend will be payable in full to all shareholders of the company registers at the close of business on Friday, March 23, 2018. The payment of the dividend will take place on or about March 28, 2018.

“The withholding tax of 10 percent (where applicable) will be deducted from the gross dividend,” Chinorwadza said.

The Zimplow share also gained 21,95 percent in last week’s trades on the Zimbabwe Stock Exchange as investors warmed up to the stock.

According to the firm’s company secretary, Zimplow’s shares will be traded cum-dividend on the Zimbabwe Stock Exchange up to the market day of March 20, 2018 and ex-dividend from March 21, 2018.

In the year to December 2017, all the firm’s business units achieved profitability as the group recovered from a loss of $2,5 million in the previous year to a net income of $3,4 million for the year ended December, 2017.

Zimplow — which is also among the largest manufacturers and distributors of farming implements in sub-Saharan Africa region –— operates through four divisions, namely, Barzem, Mealie Brand, CT Bolts and Farmec.

In 2014, the company was severely affected by a marked slowdown in its two key sectors of mining and agriculture.

The agricultural season was a write-off after the El Nino weather phenomenon which, coupled with the unavailability of finance left the company saddled with a huge debt on its balance sheet.

In 2014 the company’s debt stood at $9,4 million before it went down to $7 million in 2015 and in an attempt to fight a depressed trading environment, the company focused internally on three areas: gearing, costs and cash management.

The first move, towards an improved financial performance, was to get rid of its debt overhang.

In order to get rid of its debt burden the company offered a rights issue which was concluded in February 2015 for $5 million. The proceeds from the rights issue were used to retire expensive bank debt which was overdue and placing the business under strain.

The combination of cash raised from the rights issue and collection of debtors helped to repay $ 6,78m of borrowings and materially reduced its total debt to equity ratio from 43 percent to 16 percent for that year.

Additionally, the company undertook a restructuring programme between 2013 and 2015 where it right-sized the business. The restructuring also included retrenchment of staff. It reduced overheads across the group, with a target of an average annual saving of $1,7 million annually.

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