Michael Tome Business Reporter
NATIONAL Tyre Services (NTS) Limited is optimistic that the removal of multicurrency system and the introduction of supportive policy measures by the Government will have an encouraging impact on the economy.
The firm noted that the new policy interventions had brought sanity in the market, especially to the accounting fraternity, which had been dogged by confusion following the switch from multicurrency to monocurrency regime.
In a statement accompanying the financial results NTS board chairman James Moyo said significant economic growth would come from production and growth from manufacturing and bolstering confidence in the economy.
“The successful implementation of fiscal consolidation by Government and abolition of the multicurrency system, coupled with the recently announced monetary policy supportive measures are expected to impact positively on the economy in the short term.
“Pricing and accounting are expected to be easier under a single domestic currency and a unified exchange rate frame work.
“Long-term real growth of the economy will be premised upon increased production and productivity and improvement in confidence and the resolution of the debt overhang,” said Mr Moyo.
His sentiments come on the back of a buoyant performance for the financial year to March 2019 in which the tyre manufacturer recorded a 31,3 percent operating profit to $5,3 million from $4 million in 2018 financial year.
The firm posted a modest 12 percent revenue growth to $15,5 million from $13,8 million in the corresponding period last year.
Profit before tax stood at $765 233 from $251 688 in the prior comparable period as profit after tax jumped 384 percent to $571 000 from $117 851 posted in the last financial year.
Gross profit margin improved by five percent points over the previous year due to sales mix which was skewed in favour of premium brands which have high margins.
Total assets grew by $2,2 million due to the refurbishment of the Cripps branch and investment in equipment tools and machinery for the workshops.
This was on the back of improved rental income from the company’s properties registering a 41 percent increase compared to the previous year due to rental reviews agreed with tenants. Profit from operations grew by $551 592 to $838 060 from $286 468 recorded in the same period last year.