7/30/2019 TURN Unaudited results for HY ended 30 Jun 13.pdf

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H O L D I N G SL I M I T E D

UNAUDITED RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2013

Directors : H. Nkala (Chairman), J. A. Jere*, R. S. Dube*, J. P. Mutizwa, P. C. C. Moyo, L. Manyenga, J. Mushayavanhu, C. E. Dhlembeu, R. Likukuma, C. M. Gadzikwa, K. Naik, R. Dhliwayo (* Executive Director)

Consolidated Statement of Financial PositionSix months Six months

ended ended30.06.2013 30.06.2012

US$ US$ US$

ASSETSNon-current assetsProperty, plant and equipment 33 109 121 31 189 563Investment property 288 627 294 852Total non-current assets 33 397 748 31 484 415

Current assetsInventories 17 560 016 18 530 058Short term investments 25 195 17 929Trade and other receivables 17 954 982 15 773 485Cash and cash equivalents 1 181 736 557 496Total current assets 36 721 929 34 878 968

Total assets 70 119 677 66 363 383

EQUITY

Capital and reserves

Share capital 4 930 403 4 930 403Share premium 181 908 181 908Non- distributable reserve 7 655 240 7 655 240Revaluation reserve 7 639 504 7 639 504Retained earnings 9 016 470 8 942 548Total capital and reserves 29 423 525 29 349 603

LIABILITIES

Non-current liabilitiesLoans and borrowings - 908 820Deffered tax liability 6 745 701 6 810 391Total non-current liabilit ies 6 745 701 7 719 211

Current liabilitiesLoans and borrowings 10 857 730 10 641 080Trade and other payables 20 532 517 13 710 741Provisions 659 215 580 238Taxation 1 488 267 1 674 365Bank overdraft 412 722 2 688 145Total current liabilities 33 950 451 29 294 569

Total liabilities 40 696 152 37 013 780

Total equity and liabilities 70 119 677 66 363 383

Six months Six monthsended ended

30.06.2013 30.06.2012US$ US$

CASH FLOWS FROM OPERATING ACTIVITIES

Prot for the year (111 875) 874 118Adjustment for:

Depreciation of property, plant and equipmement 1 240 098 1 197 818Depreciation of investment property 2 698 2 698Net interest costs 1 348 075 1 201 498Unrealised exchange losses (17 504) 1 656Gain on disposal of property,plant and equipment (3 283) -Net change in other investments (5 235) -Income tax expenses 141 195 401 881

Operating cash ows before reinvestment in working capital 2 594 169 3 679 669

Change in inventories 1 197 095 (3 717 697)Change in trade and other receivables (1 803 841) 592 776Change in prepayments 82 814 (148 837)Change in provisions, trade and other payables 2 113 295 1 556 861Cash generated from operating activities 4 183 532 1 962 772

Withholding tax paid (7) (72)Income tax paid - (498 550)Realised exchange losses (44 255) -

(44 262) (498 622)

Net cash ows from operating activities 4 139 270 1 464 150

CASH FLOWS FROM INVESTING ACTIVITIES

Interest received 3 609 1 329Proceeds from sale of property, plant and equipment 29 685 -Acquisition of property, plant and equipment (2 690 516) (877 755)Net cash ows from investing activities (2 657 222) (876 426)

NET CASH FLOWS FROM FINANCING ACTIVITIES

Loans raised 78 409 (2 043 942)Interest paid (1 289 925) (1 202 827)Net cash ows from nancing activities (1 211 516) (3 246 769)

INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 270 532 (2 659 045)

Notes on The Financial Statements

1 Accounting policiesThe principal accounting policies of the company have been consistently followed in all material respects.

2 Basis of preparationThe nancial statements have been prepared in conformity with International Financial Reporting Standards (IFRSs), promulgated by theInternational Accounting Standards Board (IASB), which includes standards and interpretations approved by the IASB as well as InternationalAccounting Standards (IASs) and Standing Interpretations Committee (SIC) interpretations issued under previous constitutions.

The nancial statements are based on statutory records that are maintained under the historical cost convention and expressed in UnitedStates dollars (US$).

3 Capital expenditure Six months Six months

ended ended30.06.2013 30.06.2012 31.12.2012

US$ US$

2 690 516 877 755

Consolidated Statement of Comprehensive Income

Six months Six monthsended ended ended30.06.2013 30.06.2012

US$ US$

Revenue - local 18 121 857 17 239 381- export 846 334 1 285 234

18 968 191 18 524 615

Cost of sales (14 795 919) (12 576 931)

Gross prot 4 172 272 5 947 684

Other income 514 794 45 821

Selling and distribution expenses (822 749) (673 338)

Adminstrative expenses (2 486 922) (2 842 669)

Prot from continuing operations 1 377 395 2 477 498

Net nance costs (1 348 075 ) (1 201 498)Finance income 3 610 1 329Finance costs (1 351 685) (1 202 827)

Prot before taxation 29 320 1 276 000

Taxation (141 195) (401 882)Current tax - (46 168)Deffered tax (141 195) (355 714)Prot for the year from attributable to equity holders

(111 875) 874 118Other comprehensive income for the period, net of tax - -

Total comprehensiv e (loss)/ income for the year (111 875) 874 118

Number of shares in issue (000s) 493 040 493 040Basic earnings per share (cents) (0.02) 0.18

Chairmans Statement

On behal o the Board o Directors, I present the Turnall Holdings Limited results or the hal year ended 30 June 2013.

Operating Environment

The operating and economic environment obtaining in the country in the rst hal o 2013 was largely characterised by liquidity constraints. Demandin the low cost housing segment, was, as a result, subdued especially in the rst three months o the year. The country s liquidity position was urtherworsened by a generally high interest rate regime and capacity limitations o nancial institutions to extend capital loans to individuals or homeconstruction. In addition, the statistics continued to show an over-reliance on imported goods as evidenced by the trade decit gures, which or therst six months had grown to $2.37 billion on imports o $3.92 billion.

The economy also saw its original growth orecast o 5% being revised downwards as signs o a generally weak economy. Agriculture, originallyorecast to grow by 6.4 % was revised downwards to 5.4% while mining saw its growth being revised rom a high o 17.1% to 5.3%. These statisticsurther dampened the overall economic outlook and negatively impacted demand. Capacity utilisation was in turn aected and ell to 35% duringrst quarter 2013.

Faced with a declining demand pattern and import pressure due to a weakening rand, t he company came under intense pricing competitive pressureand in an eort to retain market share, margins were lowered to refect the new reality. Margins during rst quarter 2013 were, as a result, lower thanplan.

In addition, our business plan or 2013 took a view that a number o pipe projects that were lined up by the Government or both sewer and waterreticulation would come through during rst hal 2013. Due to unding, these had to be temporarily suspended.

Financial perormance

The nancial results or the period under review refect two business approaches to dealing with an economic environment that to a large extentremained fuid. Pricing and margins during rst quarter 2013 were aligned to market in an eort to retain market share. With a high xed coststructure and lower than normal capacity utilisation, prot margins reduced signicantly against a generally high cost o production.

A rebound in demand and an improvement in capacity utilisation in second quarter 2013 saw the business quickly re-align prices and margins in aneort to reverse the poor rst quarter 2013 perormance.

The companys revenues o $18.9 million were 2% above last years $18.5 million or the same period.

Operating prot was $1.38 million compared to $2.48 million or the same period last year.

Gross prot margin at 23% was lower than the 30% achieved in 2012 mainly because o lower than plan pricing during rst quarter 2013. TheOperating prot margin was, as a result, aected and at 7% against 16% or the same period last year, also refected generally poor actory capacityutilization levels especially during rst quarter 2013.

Turnall generated an operaing prot o $0.03 million on revenue o $18.9 million representing a margin o 0.15%, compared with net income o $1.28million against revenue o $18.5 million. Net nance charges were $1.34 million compared to $1.20 in the previous year.

Roofng Tile Project

I am delighted to announce that the purchase and installation o the state o the art concrete roong tile machine has been completed and successullycommissioned. We expect the Standards Association o Zimbabwe (SAZ) and South Arican Bureau o Standards (SABS) accreditation o the productto be completed by end o third quarter 2013. Commercial production o the tiles has commenced and demand during the rst ew weeks atercommencement has been rm.

Your Board has always been o the view that the uture o the organisation largely revolved around the business capacity to innovate, expandits product oering and enter into new markets. The commissioning o the Roong Tile plant and the Non Asbestos plant in Bulawayo in 2012 istestimony o the companys desire to maintain a medium to long term market and business ocus. The new investment in roong tiles, is alreadydelivering a price competitive and a ar more environmentally riendly roong tile.

I am also pleased to announce that the commissioning o the paver plant is on track and the new pavers will be introduced to the market by the endo third quarter 2013.

These additions represent new revenue streams or the business and we believe that their contribution to business perormance will be strongly eltduring ourth quarter 2013.

Sustainability Perormance

We have moved towards an integrated approach in managing our sustainability impacts and opportunities. The company adopted the GlobalReporting Initiatives (GRI)s Sustainability Reporting Framework as a business model in addressing and managing our economic, environmental, andsocial and governance aspects o our operations.

To this eect, a core sustainability team established in 2011 continued to actively play a critical role in t he year under review in identiying andadvising management o our economic, environmental, and social impacts and opportunities, and their disclosure or accountability to public andour stakeholders.

As a ollow up to our rst sustainability report prepared using and meeting requirements o the Global Reporting Initiative (GRI) SustainabilityReporting Framework (G3.1: Level C), management has continued, through the sustainability team, to seek ways to improve their sustainabilityreporting and also working actively to move to level 2 o reporting. We have continued to document and communicate our sustainability perormancein material issues relating to our stakeholder engagement; economic, environmental and social perormance as well as our governance and ethicapproach during the year under review.

Your company is committed to upholding the best corporate governance practices, creating wealth or its stakeholders and enriching shareholdervalue. This is being achieved through a highly responsive strategy underpinned by maintaining healthy relations with business and trade partners,whilst ostering positive industrial relation within the company.

Outlook

The post-election era should usher in positive economic growth and that in turn should see a growth in investment in inrastructure and housing. Asa business, we believe that a growth trajectory or the economy will see us benet in the areas o housing construction, water and sewer reticulationand an introduction o export incentives.

With an expanded product oering that enables the company to compete in all roong market segments, a uture growth in housing will see thecompany benet rom increased revenue streams unlike in the past.

Pipes remain a key growth area or the business and any investment in water and sewer reticulation will see the company benet rom theimplementation o a number o projects which have been on the cards.

Exports, despite a slow start, represent another key growth area. The company has started supplying into Zambia and has a robust plan to enter intoneighbouring markets in the coming months and supply a ull range o products including the new roong tiles.

Appreciation

On behal o your Board o Directors, I would like to extend our sincere gratitude to all our stakeholders, employees and ellow Board members.

Herbert NkalaChairman21 August 2013

Dividend

At a meeting held on 15 August 2013 the Board o Directors resolved not to declare an interim dividend or the hal year to 30 June 2013 in view othe need to retain resources or working capital purpose.

By Order o the Board

Per R S DubeCompany secretary21 August 2013

www.turnall.co.zw

Six monthsended

30.06.2013US

Balances as at 01 January 2013 29 535 400Loss for the period (111 875 )Balances at 30 June 2013 29 423 525

Consolidated Statement of Cashows

Consolidated Statement of Changes in Equity