Online Reporter
Nelson Gahadza
ZIMPLOW Holdings reported mixed results for its quarter ended March 31, 2025, with the group registering a 14 percent increase in revenue to US$7,06 million.
However, it recorded a net loss before tax of US$513 000.
During the period under review, the agricultural equipment and service sector experienced challenges, with Mealie Brand revenue 11 percent below budget due to market liquidity and grey imports, although exports grew by 20 percent. Farmec registered a steady gross margin of 23 percent in the quarter under review and expects liquidity to improve in the second quarter, leveraging the tobacco sales season.
In the logistics and automotive sector, Scanlink recorded a year-to-date increase in revenue of 44 percent in comparison to the prior year’s performance and 40 percent above budget.
Group company secretary, Mrs Sharon Manangazira, in the trading update, said management is optimistic about the second quarter, banking on the agricultural season, while cost control will also be prioritised.
“Management is focusing on liquidating high-value and ageing stock such as tractors, implements, and parts across Farmec and Mealie Brand, and in terms of debt recovery, management is implementing stronger enforcement of payment terms,” she said.
She noted that administration and operating cost-saving initiatives successfully instituted at Farmec and Mealie Brand are being extended to other business units.
In terms of operational review, at Mealie Brand, local sales were down 27 per cent on a year-to-date basis, impacted by market liquidity and grey imports of competing products. Mrs Manangazira said the company implemented cost-saving measures that included following the National Employment Council (NEC) application for a three-day work week. The business also made reductions in non-critical staff and implemented energy-saving initiatives.
“The re-engineering of product manufacturing processes aims to reduce the cost of production with the expectation of increasing sales volumes as the business unit works towards eliminating the price differential between its products and grey imports. The results of these initiatives are expected to become evident in the second quarter and the second half of 2025. The outcomes of these initiatives are expected to become apparent in the second quarter and the latter half of 2025,” she said.
Farmec achieved a turnover of six per cent above budget for the quarter under review, driven primarily by increased tractor sales, with the MF200 series being the major contributor.
“The gross margin was steady at 23 percent, and liquidity is improving and is expected to further improve in the second quarter, leveraging the tobacco sales season,” said Mrs Manangazira.
In the logistics and automotive sector, Scanlink’s strong growth in parts and service hours drove performance.
“Buses and truck sales contributed significantly to this growth. Liquidity is stable, and growth is expected to continue through expanded aftermarket focus, service efficiencies, and part sales through workshops,” reads part of the trading update.
At Trentyre, the business unit recorded a 39 percent decline in sales in comparison to the prior year and a 32 percent underperformance against budget. The group said retread volumes were 43 percent up on the previous year, and management is actively undertaking debt restructuring and enhancing customer engagement efforts to boost recovery in the second quarter.
In the mining and infrastructure equipment and services sector, Tractive Power Solutions (TPS) first-quarter revenue increased by 174 per cent against the same period the prior year but was below budget by 37 percent. Mrs Manangazira said despite the revenue growth, margins were severely depressed. “Renewed focus on workshops as a profit centre will pull service hours and the associated revenue back into line. Management is working towards financial solutions for its medium-scale mining clients for heavy equipment,” she said.
At CT Bolts, whilst volume sales were 14 percent up on the same period the prior year, profitability was impacted by more expensive filler stock from South Africa as lead times from Asia were impacted during the quarter. The business unit is pursuing cost efficiency and the adoption of the wholesale model to regain volumes.
Powermec’s first-quarter revenue increased by 26 percent over the previous year and was one per cent above budget.
“Performance was driven by solar installations and engine overhaul projects, though generator set sales lagged due to stock constraints,” said Mrs Manangazira. She noted that operating expenses were contained within four per cent of budget, with savings on overtime, efficient technician routing, and associated operating costs.
Bongani Ndlovu