TPH profits plunge 59pc

which affected profits.
The plunge in profits saw basic and diluted earnings per share plummeting from US0,73 cents in the same period last year to US0,16c.
Headline earnings fell from US0,42c to US0,04c per share.
“Group profit after tax of US$0,69 million was 41 percent of the previous year comparative. Profit attributable to owners of the company amounted to US$0,25 million after deducting non-controlling interest of US$0,44 million,” chairman Mr Zed Rusike said in a statement accompanying the full-year financial results.
After-tax profit fell from US$1,7 million in the comparative period last year after the motor vehicles division posted a US$731 111 loss.
An 89,4 percent vault in interest charges to               US$855 057 seems to have also weighed down quite heavily on the group’s profitability.
Likewise, operating profit nosedived by 31 percent in the period under review, from the US$1,9 million achieved in the prior year comparative.
The PAT drop came against a 16 percent jump in revenues from US$36,8 million in the full year to August 30, 2011, to US$42,7 million.
The motor vehicles division unit sales were 2,2 times higher on the previous year, but still Puzey & Payne’s results were disappointing.
But besides the poor financial performance of Puzey & Payne, the dip in sales at other business divisions of TPH weighed down on profits.
Mr Rusike said lack of clarity on the indigenisation policy resulted in customers deferring capital expenditure on earthmoving machines. But despite this,  Barzem — which supplies earthmoving machinery — contributed significantly to group results.
Tractor and generator unit sales, Mr Rusike said, were 10 percent down on prior year, although its 50 percent-owned unit, Northmec Zimbabwe, managed to break even after sales jumped 47 percent.
While motor vehicle, property and administration suffered losses, both earthmoving and farm machinery segments achieved profits.
It is against this background that TPH is reportedly planning to spin off Puzey & Payne, ostensibly to brighten profitability prospects.
TPH would dispose of the loss-making vehicle subsidiary as the group seeks to streamline its operations, after the acquisition of a controlling 57,2 percent stake in TPH by fellow agricultural implements manufacturer Zimplow from the Reserve Bank of Zimbabwe.
The acquisition of a controlling stake resulted in the farm implements manufacturer appointing Mr Zondi Kumwenda as chief executive to replace Mr Charles Nhamo Nyambuya, who retires effective December 1,  2012.
Mr Kumwenda, a chartered accountant, has held several positions at Zimplow, including a stint as CEO.
Mr Nyambuya had served TPH for 24 years, the last five of which he was the group CEO. TPH said he leaves the group to pursue other business interests. Board changes of this nature are a common phenomenon in the corporate world after acquisition of controlling interest.
Mr Rusike said the set of financials reflected a challenging year for the group, in an economy hamstrung by tight liquidity constraints, high interest rates and subdued performance in key sectors: agriculture and manufacturing.