Zimplow targets stronger agriculture, tighter cash control

DIVERSIFIED agro industrial group Zimplow Holdings Limited says its strategy for 2026 will focus on strengthening its agricultural segment, restoring healthy margins in underperforming units and tightening cash management.

This comes as the company builds on an improved financial performance recorded in the year ended December 31, 2025.

Group chief executive officer Mr Willem Swan said the priorities reflect a deliberate shift towards operational discipline and sustainable growth, following a year in which the group significantly narrowed losses despite operating in a constrained economic environment.

“Agriculture remains our most profitable and stable segment. We will continue to invest in product availability, after-sales support, regional expansion and cost-efficient procurement, whilst strengthening the infrastructure equipment repairs portfolio to reduce exposure to weather-related adverse conditions,” he said.

According to Mr Swan, the strategy is underpinned by strong performances in key agricultural businesses, notably Mealie Brand, which staged a turnaround in the second half of the year to post a profit before tax of US$275 165 after initially recording a loss in the first half.

“The recovery was driven by targeted interventions including the introduction of lower-priced product tiers, improved procurement efficiencies and enhanced factory performance,” he said.

The group’s 2025 financial results show volumes surged across major product lines, with implement sales rising by 88 percent locally and 81 percent in export markets.

Spares also recorded solid growth, increasing by 73 percent locally and 32 percent in export markets, while hoe volumes exceeded expectations on the back of improved availability and strong brand demand.

Two wheel tractor volumes grew by 39 percent, reflecting increased mechanisation among smallholder farmers, while the unit also began making inroads into the mining segment.

Farmec also delivered a positive contribution, recording 13 percent revenue growth and returning to profitability with a profit before tax of US$418 923.

“The performance was supported by consistent availability of MF200 series tractor units, which accounted for the bulk of sales, as well as strong growth in parts and service divisions. Parts revenue rose by 20 percent to US$2,16 million, while service hours increased by 47 percent, reflecting improved customer engagement and after-sales support,” said Mr Swan.

He noted, however, that inventory levels remain elevated, particularly high horsepower tractor stock, although liquidation plans have been put in place for early 2026, alongside strengthened debtor management measures.

Beyond agriculture, the group is prioritising the restoration of margins and operational discipline in its mining and logistics related businesses, some of which weighed on overall performance during the year.

Mr Swan said turnaround programmes at CT Bolts and Trentyre would be implemented with urgency, while Powermec and Scanlink are being repositioned for sustainable growth. At CT Bolts, revenue remained flat at US$1,2 million due to long lead times, although margins improved marginally to 53 percent.

Mr Swan said the business is focusing on improving stock availability, tightening debtor enforcement and refining pricing strategies to support growth.

During the period under review, Trentyre operated in a difficult environment, with revenue declining by 19 percent due to reduced tyre volumes, supply chain bottlenecks and heightened competition from informal market players.

Mr Swan said delays at Beira Port exacerbated stock shortages, while direct sourcing by informal traders intensified pricing pressures.

“In response, the business has adjusted its pricing model and is pivoting towards the off-the-road tyre segment, which began to show positive momentum towards year-end. The unit also reduced operating expenses by 28 percent, demonstrating improved cost discipline,” he said.

Powermec recorded a marginal two percent decline in turnover and a loss before tax of US$92 446, largely due to stock gaps arising from delayed generator shipments.

However, Mr Swan said the business is accelerating its transition towards renewable energy solutions, with solar revenue rising by 193 percent, positioning it for improved performance in 2026.

During the same period, Scanlink emerged as a strong performer, with profit before tax increasing to US$248 477 from US$65 533 in the prior year.

Vehicle volumes rose by 47 percent, driven by sustained demand for trucks and buses, while service hours increased by five percent due to enhanced after sales capabilities.

Mr Swan said that although parts revenue declined slightly due to competition from aftermarket suppliers, the unit maintained market presence through disciplined pricing and customer engagement.

He said the group also undertook portfolio rationalisation during the year, including the closure of Tractive Power Solutions following the termination of a key distribution agreement.

The unit recorded a significant revenue decline and a loss before tax of US$366 200 prior to being mothballed.

“Its FAW business was transferred within the group to ensure continuity of service, reflecting management’s focus on reallocating resources towards more viable operations,” said Mr Swan.

Overall, Zimplow reported a 13 percent increase in revenue to US$33,54 million from US$29,78 million in the previous year.

The group also posted a loss before tax of US$492 180, a marked improvement from the US$3,43 million loss recorded previously, as management tightened cost controls and drove efficiencies across its business units.