adminTinashe Makichi : Business Reporter
Tile and building materials manufacturer, Turnall Holdings is bullish of a positive full year performance driven by the company’s intention to raise capital for the diversification of its product range and production output improvement. Forecast full year profitability will also be driven by the implementation of various options on imported raw materials payments which have since started bearing fruits.In a trading update for the first four months, Turnall Holdings managing director Caleb Musodza told the company’s annual general meeting yesterday that the building materials manufacturer faced challenges at the beginning of the year.
“The year 2016 did not start on a positive note due to challenges in payments of imported raw materials, but we have the issue under control now.
“We are projecting a significant recovery of our volumes and profitability at half year and a full year 2016 that is more profitable than 2015. Volumes and revenue are lagging behind last year, but we will fully recover as we accelerate our production output,” said Mr Musodza.
He said the company will continue to focus on its cost base, with revenue and production break even points now being significantly lower than last year.
Mr Musodza said the business continued with a cash skewed trading model to generate operating cash.
“Despite limited capital due to legacy issues in the business, our creditor relationships are under control allowing operations to run smoothly,” he said.
Going forward the company is pursuing material; opportunities in low cost housing, product formulation, piping projects and imported inputs substitution.
Turnall is also looking at increasing exports to fund its imported inputs while also exploring funding options to address balance sheet issues.
“The company is exploring for funding options to address balance sheet issues, capex for product range diversification and output improvement. This will improve profitability and accelerate our turnaround process,” said Mr Musodza.
Turnall’s main business involves the production of building and construction materials comprising corrugated sheeting, flat sheets, pantiles, pressure pipes, sewer pipes and related accessories.
The company’s operating subsidiary Turnall Fibre Cement is comprised of two main subdivisions which are Turnall Building Products and Turnall Piping Products.
Turnall mainly supplies chrysotile fibre and cement raw materials, which are produced at its production facilities in Bulawayo and Harare.
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