Masimba's $100m dream

HARARE - Masimba Holdings one of Zimbabwe’s leading construction company, is targeting to become a $100 million business in the short-to-medium-term buoyed by increased sector activity.

Canada Malunga, the group’s chief executive, said prospects of the industry are bright and the company has a firm order book spanning to 2019.

“The growth trajectory we started three years ago is on course. We are now targeting to become a $70 to $100 million dollar business driven by the sudden growth of the construction industry,” he said.

He noted that several companies are deploying their Real Time Gross Settlement (RTGS) balances into different projects.

Malunga indicated that confidence in the new government is likely to spur increased activity in construction.

“The economy is currently performing better than where it was and the unintended devaluation of the RTGS balances has seen increased infrastructure projects,” he said.

Masimba’s activities are currently within the mining, infrastructure, property development and agriculture.

The chief executive said a capital expenditure of $2,5 million has been budgeted for in 2018 and to date $1,2 million has been deployed.

He said the company is now looking to shift more focus to roads construction due to the current nature of roads which needs attention.

“As we move towards the rain season, there are a lot of roads rehabilitation projects to be done and the company has capacity to execute the projects,” he said.

Agnes Makamure, the company’s finance director, said the construction firm is now on a solid footing to carry out projects.

She said cumulatively, a capital expenditure of $6,2 million has been spent since 2016 towards increasing capacity and complement growth.

“The company managed positive cash generation and debtors increased in anticipation of more order books,” she said.

However, in the six months to June 2018, capital expenditure increased to $1,2 million and this was in expended on plant and equipment to strengthen business capacity given the prevailing and anticipated contracting opportunities.

Meanwhile, group turnover was at $17,9 million, a 55 percent increase from $11,6 million last year same period while earnings before interest, tax, depreciation and amortisation (EBITDA) was 88 percent ahead of comparative period.

“The growth in turnover was mainly on the back of a solid order book in the housing infrastructure, building and civil engineering segments.

“EBITDA was driven by operating efficiencies and growth in the top-line,” Makamure said.

As a result, she said profit before tax for the period grew 224 percent to close at $600 502.

According to the finance director, the company has an amount of $1,2 million that is overdue on a project that has been suspended due to cash flow difficulties that the client is faced with.

“The client and Masimba are jointly pursuing various measures so that the project, whose commercial viability has been successfully demonstrated and can be resuscitated in the shortest possible time,” she said.

— Financial Gazette

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