PG Industries sinks deeper into the red

In a statement, PG said the group had continued to face working capital constraints which had given rise to significant doubt over the company’s ability to continue as a going concern.

Consolidated net sales declined by 15,3 percent from US$39,6 million in 2011 to US$33,5 million during the period under review.
This was attributed to the fall in PG Merchandising volumes and the non-consolidation of the Manica Boards and Doors, a subsidiary in which PG Industries shareholding was reduced from 60 percent to 27,9 percent last year.

“The remaining investment was accounted for as an associate company. Share of loss of associate amounted to US$959 415,” the group said.
Shareholders approved the disposal of the associate company with a book value of US$2,4 million in December.

Net finance charges of US$2,7 million, although high, the loss before tax of US$7 million was US$485 846 lower than the prior year.
The group said the tax charge of US$935 473 compared to the credit of US$1 955 392 in 2011due to the capping of deferred tax asset that is expected to be recovered in the near future.

PG Merchandising gross sales declined by 9 percent from US$ 25 033 251 in the prior year to US$22 786 532 in 2012 due to the inadequate working capital at PG Building Supplies.

However, PG Timbers and PG Mozambique gross sales increased by 20 percent and 58 percent respectively.
Gross profit percentage improved from 26,8 percent to 29,4 percent as a result of better product mix.

The division incurred an operating loss of US$3 244 252 down from US$3 657 999 in the previous year.
The concrete division experienced a 16,7 percent increase in turnover from Us$7 644 469 in 2011 to US$8 921 801 in the period under review as a result of the successful commissioning of a new tile factory at Zimtile in 2011.

The division’s gross profit for the year improved from 15 percent to 24 percent through increased efficiency and higher productivity.
Operating profit of US$114 732 was realised compared to a loss of US$850 183 in 2011. The glass division of the group incurred an operating loss of US$117 258  while sales remained at US$2 870 047 in 2012.

The group said the board’s approval of rationalising and consolidating the existing group structures would result in a significant reduction in overheads.