Online Reporter
Business Reporter
TURNALL Holdings Limited achieved improved financial performance for the year ended December 31, 2024, marked by a strong turnaround in cash generation, amid strong optimism for future growth.
The group recorded a positive net cash flow of US$1,5 million from operating activities, a substantial reversal from the net cash outflow of US$0,3 million posted in the prior year.
This resurgence in cash generation was largely driven by improved working capital management and improved collections from customers. Financing activities also yielded net cash inflows of US$0,8 million, compared to US$0,7 million in 2023.
The company has been implementing turnaround measures since new major shareholders, Mega Market and Zimbabwean Brands, took control of the company in July 2022.
Zimbabwean Brands in a statement at the time said, “Due to common interest between Mega Market and Zimbabwean Brands, the total common shareholding became 49,59 percent post-acquisition.”
In 2023, the struggling manufacturer initiated a rights offer to raise capital for investment and the offer closed at US$8 million.
The investments were meant to enable the group to retool and renovate its fibre cement sheeting lines and establish the Glass Reinforced Pipes (GRP) business after a number of trying years in which plant replacement and upgrading were not feasible due to numerous operational obstacles.
“The two investment projects will significantly improve the profitability and cashflows of the group and increase the manufacturing capacity to meet the growing local and regional demand for its core products,” the firm said in 2023.
“The investments will also result in reduced operational costs through improved key efficiencies such as reduced distribution costs locally and regionally due to Zimbabwe’s central location in Southern Africa.
“Turnall’s ability to reverse its cash position bodes well for its ongoing recovery and sustainability efforts.
Looking ahead, the company remains optimistic about maintaining this upward trajectory.
“The group will strive to maintain the momentum gained and implement initiatives that will drive growth as we head to profitability in the medium term,” said board chairman Grenville Hampshire in a statement accompanying results.
He added, “Current efforts to de-risk the factories will go a long way in ensuring production is not disrupted by power outages.”
Turnall’s leadership has adopted a forward-looking approach to economic challenges, with an emphasis on cost containment and operational efficiency.
“Efforts to realign cost structures with the current cost containment initiatives will bring marked improvements to the performance of the Group,” Mr Hampshire noted.
The group’s financial performance in 2024 reflects notable resilience against economic pressures. Turnover for the year was US$12,04 million, up from US$10,26 million in 2023, a 17 percent increase attributed to a 4 percent volume growth supported by increased production and improved sales mix.
However, challenges such as reduced aggregate demand, power supply disruptions, and elevated costs tempered some of the gains.
Despite these hurdles, the group’s gross margin improved to 19 percent, up from 17 percent in the prior year.
The operating expenditure to sales ratio also improved to 44 percent, down from 53 percent in 2023, showing better cost discipline and operational efficiencies, particularly in the last half of the year.
Raw material costs remained a pressure point, with the group spending US$7,01 million on inputs due to elevated prices of imported fibre and cement.
However, management successfully implemented efficiency initiatives to offset part of the impact, with improved production processes and plant performance.
Operating profit before interest and tax stood at US$2,87 million, including a provision for credit losses of US$271 770 and Monetary Transaction Tax (MTT) of US$111 700.
The group closed the year with a US$2,0 million net loss, narrower than in previous years, reflecting the underlying improvement in operational fundamentals.
On sustainability, Turnall has embedded a strategic approach to environmental, social, and governance (ESG) principles.
“Sustainability Reporting Frameworks are being developed to address and manage economic, environmental, social, and governance aspects critical to our business,” the chairman said.
Compliance remained strong, with continued alignment to ISO 14001 and ISO 9001 standards. The group also met statutory requirements in Occupational Health and Safety, Environmental Management, and Labour Act provisions.
As part of future plans, Turnall expects resumed export sales in 2025 following upgrades to its Bulawayo sheeting plant. Although no dividend was declared for the year under review, the chairman expressed optimism and gratitude.
“The directors have resolved that there will not be any dividend declared,” he said.
With improved cash generation, enhanced efficiencies, and strategic planning in place, Turnall appears poised for a more profitable and stable 2025.
