eBusiness Weekly
Nelson Gahadza
Zimplow has its sights on listing on the Victoria Falls Stock Exchange (VFEX) with the Board having already approved de-listing the company from the Zimbabwe Stock Exchange (ZSE).
However, the transaction is subject to shareholder and regulatory approvals hence the group is advising shareholders and investing public to exercise caution when dealing with the shares.
“…the Board has approved the de-listing of the company from the Zimbabwe Stock Exchange, immediately followed by its listing on the Victoria Falls Stock Exchange,” reads part of the cautionary statement.
Zimplow is engaged in diversified mining, construction and infrastructure. The company is also an agricultural equipment manufacturer and distributor.
Migrating to VFEX, Zimplow will join companies such as Innscor Africa, National Foods, Simbisa Brands and Seed Co International which have since made the great trek to VFEX.
VFEX is a subsidiary of the ZSE, launched in 2020 as part of efforts to attract global capital, while also helping restore foreign investor confidence in Zimbabwe’s capital markets and help companies raise capital in foreign currency.
The usd-denominated bourse offers a raft of incentives including tax exemptions on capital gains and the ability to repatriate funds from a country where foreign exchange is in short supply to attract global capital.
VFEX also provides extended options for capital raising including debt listing in foreign currency which has been the largest pull factor for companies seeking to raise working capital.
The USD bourse also offers lower trading costs of 2,12 percent compared to 4,63 percent on the ZSE and this would enable shareholders to retain more value.
Group chairman, Godfrey Manhambara, commenting on the group’s 2022 financials, said the year started on a positive note, with strong demand being experienced across all group’s segments.
He said in the previous years, when the agricultural segment does not perform, the group has taken advantage of the diversified structure whereby the mining and construction equipment would perform.
He indicated whilst there was growth in the logistics and automotive segment, the performance recorded was not enough to cover the gap caused by the termination of the CAT dealership as initially projected.
Under the agricultural equipment cluster, Mealie Brand’s export sales performance anchored the business unit’s FY2022 volumes growth.
Implements sold in the export market were 36 percent ahead of prior year with the local market performing at 16 percent below prior year.
“The same trend was also observed on hoes and implements spares where sales volumes grew by 23 percent and 34 percent, respectively against prior year.
“Retooling and capacity expansion continues in earnest as the business unit seeks to expand its product range to cater for small to medium holder farmer mechanisation,” said Manhambara.
At Farmec, following the peak performance of FY2021, tractor volumes reduced by 15 percent with a shift towards the higher horsepower range.
Tractor implements volumes continued to grow with a 4 percent increase from prior year. Manhambara said engagement with key suppliers has been a priority in order to position Farmec’s offering to customers better.
“In addition, the efforts to have a better response rate and customer experience has seen the service hours growing during the period under review by 32 percent,” he said.
Under the logistics and automotive cluster, Scanlink Truck and bus volumes grew by 88 percent and 300 percent compared to prior year mostly driven by the improved supply chain as the business unit finally delivered on long outstanding orders.
“As a result of the fleet replacement, there was reduced fleet maintenance business compared to prior year, with parts and hours sold dropping by 11 percent and 5 percent respectively.
“With internal reorganisation complete, as well as improvements in supply chain, the business unit is poised to grow,” said Manhambara.
Trentyre Good Year new tyre sales improved by 2 percent during the year despite the internal reorganisation and supply chain gaps.
He said the business unit is expected to complete the facelifts and branding of its branches towards the end of H1 FY2023 to set Trentyre onto a new trajectory.
He added the optimisation of the retreading factory started to bear fruits with a 40 percent growth in retreads produced.
For the mining and infrastructure equipment, Barzem/ Tractive Power Solutions (TPS) has evolved from ZEMCO, Barzem and now TPS to cater for Zimbabwe’s earth moving requirements.
Manhambara said the group now has the capacity in terms of infrastructure, people and access to capital.
“Given the experience in CAT, the Group is committed to provide superior service from single unit owners to large fleet operators.
“During the transition from Barzem to TPS, the Group has secured affiliations and accreditations with key suppliers to be able to continue looking after our major customer’s huge fleet from an earth moving equipment perspective.
“This has assisted the business unit to secure service level agreements, repair and maintenance contracts with some of the huge fleet operators – amassing the scale in a short space of time, required to provide effective supply chain solutions and cost effective maintenance strategies,” he said.
At Powermec the instability of the grid has caused demand for alternative power, gensets from Powermec in particular, grow by 16 percent and service hours by 44 percent compared to the previous year.
“The business unit continues to provide solar power installations to complement the alternative power business for selected customers.
“During the year, solar power plants installed were 116 percent more than in the prior year.”
During the year under review, CT Bolts business matched prior year performance in terms of volumes.
However due to pressure on margins, operating profit was down 14 percent compared to prior year.
