Masimba upbeat on projects

Enacy Mapakame Business Reporter
Building and associated industries firm, Masimba Holdings Limited is banking on its strong order book in the current financial year, despite the prevailing challenging operating environment.

Chief executive officer Canada Malunga said the group had a strong order book, valued at $45 million for projects that cut across various sectors.

This, he said, is expected grow on the back of infrastructure projects line up in the country and help boost revenues.

In the financial year just ended, Masimba’s strong order book contributed to the group’s 46 percent jump in revenue, and management is upbeat of maintaining the same growth trajectory.

The projects are skewed towards agriculture, mining and housing infrastructure with the firm set to embark on a 2000 residential stands project. The residential stands project is expected to start at the beginning of the second half of FY19 while the firm is also working on capacitating roads work business.

“There is still growth opportunity in the market,” he said at an analyst briefing on Wednesday.

“We are pursuing our value and growth strategy; we will sweat our assets. There are projects ranging from road and water infrastructure, housing, mining and agriculture projects to pursue.

“Capacity building and resourcing strategies have been put in place to exploit identified opportunities,” he said.

Malunga bemoaned the challenging operating environment characterised by foreign currency shortages and erratic fuel supplies, which he said posed a threat to smooth flow of business.

This has also resulted in stock outs.

For the full year to December 31, 2018, Masimba’s turnover jumped 46 percent to US$40 million from US$27 million recorded in the prior year on the back of a strong order book which was dominated by retail and commercial buildings, agriculture, mining, housing and road infrastructure projects.

During the period under review, Masimba completed the Old Mutual Eastgate Market, CIPF Norton Mall and the Datvest Office Block in Harare while commissioning of the Nyakomba Irrigation Infrastructure and the Sawanga Shopping Mall projects will be this year.

Earnings before interest, taxation, depreciation and amortisation (EBITDA) came in 38 percent firmer to close the year at US$3,2 million on improved turnover growth and continued cost containment strategies.

Profit for the year ticked 68 percent to US$1,1 million while basic earnings per share grew 64 percent to 0,5 cents.

However, the profitability performance was compromised by the deterioration of overheads and cost escalations particularly in the second half of the year as the impact of the foreign currency shortages became more pronounced.

The group’s financial position strengthened to US$42 million from US$33 million on improved profitability of the business and the board’s deliberate decision to apply positive cash flows to capital expenditure in order to preserve value.

Capex and capital work in progress incurred in the period amounted to US$1,8 million. An overdue debt of US$1,2 million remains outstanding and has been secured against immovable properties.

According to management, an agreement has been reached with the client to preserve the value of this debt which was borne out of a commercial disagreement between a client and its financier. The group declared a dividend of RTGS0,35 cents per share.

By close of trade yesterday, Masimba was pegged at RTGS8,8 cents on the local bourse.

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