LonZim buoyant as economy improves

continues to improve.
In a statement, Lonrho executive chairman Mr David Lenigas noted the improving business conditions in the country.

“LonZim has seen progress during the period, and the economic situation in Zimbabwe continues to improve, albeit from a very low starting point. There is relative stability in the commercial environment that is allowing businesses to manage their operations in a normalised environment, a great improvement from the recent hyperinflationary economic conditions.

“LonZim has five core businesses that are well placed to be part of the growing Zimbabwean economy. Each has quality management, access to capital to fund growth and has been restructured and developed in the past two years with new equipment, resources and capabilities to be first back to market.

“LonZim continues to believe that Zimbabwe will recover to be a strong Southern African economy and will, in time, rebuild to become a centre for commerce for the region,” he said.
A recent report by analyst WH Ireland Securities noted the high growth potential of LonZim’s areas of investments, especially insofar as Zimbabwe’s rate of Gross Domestic Product is perceived as unreasonably low given the potential for economic recovery.

“The majority of LonZim’s investments are in sectors which have been the first to recover from the crisis and therefore enjoy higher than average growth,” read part of the report.
“Tourism is typically one of the first sectors to recover, as it attracts prosperous individuals from outside,” he said.

LonZim has seen strong growth in occupancy levels at its prestigious Leopard Rock Hotel.
As consumers regain confidence in the banking system, money begins to flow again, benefiting LonZim’s investments in payroll micro-finance, electronic funds transfer, ATMs and POS (point-of-sale) systems and security printing.

Communications also play a vital part in the resurgence of an economy, benefiting LonZim’s investment in e-mail messaging and Facebook access via mobile phones (cellular networks are preferred to landlines in Africa).

Interestingly, International Monetary Fund statistics show that it is not the mining or agricultural sectors which led economic growth in calendar 2009, but these “other” sectors.
As an internationally recognised investment vehicle focused on Zimbabwe the firm can play a critical role in improving external investors’ perception of the country’s economic state.

The company’s portfolio of Zimbabwe interests includes majority equities in Celsys Limited Zimbabwe, ForgetMeNot Africa Limited Zimbabwe, and Fly540 Zimbabwe (Pvt) Ltd.
The investment vehicle also has complete control of Paynet Zimbabwe (Pvt) Ltd, Leopard Rock Hotel Company (Pvt) Ltd, and Millpal Chemicals (Pvt) Ltd.

The firm incurred an operating loss of £2,5 million – down from £3,1 million – and gross profits rose to £1,6 million from £1,1 million in the half year to February this year.
Pre-tax losses rose to £3,01 million from £2,4 million and the loss attributable to owners of the company rose to £2,76 million from £2,05 million.