adminWH Ireland, a stockbroking firm in the United Kingdom.
LonZim Plc is a Zimbabwe-focused investment company with a diverse portfolio of investments in Zimbabwe and the Beira Corridor in Mozambique.
The broker maintained a “speculative buy” rating on the LonZim stock in a recent note following the release of the firm’s final results last week. In a similar note last year, WH Ireland gave the company the same rating.
WH Ireland analyst Ms Anne Margaret Crow said in a note that LonZim appeared to effectively streamlining its businesses to take advantage of the anticipated growth in the local economy.
“(LonZim is) establishing a base of companies which are able to benefit from continued economic recovery in Zimbabwe, while minimising the ongoing costs of those investments,” she said.
Equity research analyst with the same broker Mr Derren Nathan concedes that the asset-backed valuation is attractive, however, conjecturing that the geopolitical and economic outlook is subject to volatility.
For its half-year interims, all of LonZim’s divisions, except aviation, showed revenue growth and group turnover increased 21 percent to £5,9 million (US$9,1 million). LonZim’s revenues improved 14,4 percent to £3,1 million (US$4,8 million) while its operating loss reduced to £2,5 million (US$3,8 million), compared to £3,1 million in the parallel period last year.
“The Zimbabwe economy is experiencing strong growth, albeit from a weak base, and Gross Domestic Product grew 8,1 percent in 2010.
“Government forecasts project growth of up to 9 percent in 2012 but the global outlook and a heavy reliance on imports are among the key risks to future growth,” added Mr Nathan.
The company’s core investments include the Leopard Rock Hotel, a commercial and security printing company and ForgetMeNot Africa, which provides “message optimiser” applications for mobile phones.
There is also Paynet, which provides financial software and services and the aviation division which is yet to start operating its own routes.
“The divisions are all positively geared to a continuing recovery.
“LonZim has invested in the appropriate infrastructure and management teams to optimise performance,” said WH Ireland.
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