Ariston Holdings gears for profits

bowing to the Securities Commission of Zimbabwe’s directive for additional information on its capital raising initiative.
SECZ directed Ariston to provide more details on the underwriter, Afrifresh, dilutive impact of the rights offer, debt maturity profile, financial projections and breakdown of capital projects.
But the latest statement did not say anything about reconvening a shareholders’ meeting to reconsider the cash call proposal, as has been directed by the commission.
According to the new statement, Ariston is targeting US$4,2 million profit in five years, before tax and adjustment for biological assets.
The firm is targeting profits of US$463 000 this year, US$2 million next year, US$3,6 million in 2014 and US$3,8 million 2016.
Ariston sees its debt at US$1,3 million this year and at a constant US$3,1 million in the four years to September 2016. Of these liabilities, US$500 000 matures in less than a month, US$1,3 million in three months, US$1,2 million in a year and US$4,3 million has to be repaid over a period of five years.
After a capital injection of US$8 million, raised from the cash call, the firm projects finance costs at              US$631 000 this year and to remain flat at US$505 000 in the four years to 2016.
“The projected information includes certain assumptions, estimates and statements, which are forward-looking and are subject to certain risks and other factors, some of which are beyond Ariston Holdings Limited and its directors,” said the statement.
The company intends to undertake a US$2 million mechanisation programme to cut on high fixed costs for optimal profitability.
And US$3 million, from the US$8 million rights offer proceeds, will be used to retire expensive debt, pay off outstanding liabilities and refinance the remaining interest-bearing debt.
Another US$3 million will be invested in vegetable concern Favco to enhance its trading performance, as significant value.