Turnall share price poised to rise

plunged almost 73 percent since the second quarter last year, to about US4c, it has potential to spring up to about US6,5c.
The leading producer of chrysoytile fibre-based asbestos roofing material and piping products saw its share price plunging from US15c at dollarisation to around US4c now.
“The rally to US15c was spurred largely by the company’s ability to live up to the dollarisation hype, but this unfortunately came at a cost as a growing debtors’ book negatively impacted the company’s liquidity,” said Invictus.
Turnall’s share price started declining when management, in early 2012, took a decision to remedy the looming liquidity crisis with the strategy invariably leading to a decline in earnings.
Consequently, this drove the share price to the US4c lows.
“We are, nevertheless, of the opinion that the dip in profitability was brought about by measures that were necessary to strengthen the balance sheet, and hence is temporary.
“We thus expect Turnall to emerge out of 2012 a stronger, liquid and more profitable company with improved valuations reflecting its transformed fortunes,” said Invictus. 
The firm said the highlight for 2012 ought to be a balance sheet restructuring exercise, which is at the top of management’s priorities in a bid to improve liquidity.
Turnall has been proactive in managing the risk on further bans on chrysotile products, growing its non-chrysotile fibre production capacity, with the recently commissioned “Newtech” project in Bulawayo being a clear show of intent.
A concrete tile moulding plant is being delivered and management plans to venture into PVC pipes, concrete pavers and bricks.
Further, export markets are once more open to Turnall, courtesy of the firm’s investment in non-chrysotile fibre products.
Volumes are expected to grow significantly                            over the next two years, underpinned largely by a                contract acquired in Hamaarskraal, South Africa,                       to provide roofing material for 42 000 low-cost                    housing units projected over the next three                                years.
Turnall reported an 8 percent decline profits for the interim to June 30 2012 to US$2,5 million compared with the same period last year.
Management attributed the decline in profitability to depressed demand for the company’s products, which saw turnover falling to US$18,5 million, down 16,5 percent.