Phoenix likely to report a loss

Published: 10 June 2013

Phoenix has had a tough 4-5 months and at this stage it looks like it will be making a smallish loss for the half year to April, group CEO Francis Rodrigues told the AGM this afternoon.

He said that the high level of borrowings remains a big challenge for Phoenix with borrowings currently at $2.5 million.

The tight liquidity situation in the country is also affecting the group's performance and coercing an increase in borrowings at high interest rates, Rodrigues added.

Rodrigues noted that their main aim is to look for long term funding at lower interest rates.

Looking at the group's individual units, he noted that Phoenix Brushware is profitable but to improve the unit's performance there is "need to put some money into capital equipment."

He highlighted that the major challenge faced by the unit is the depleting market for brushes. Rodrigues added that they are not planning on increasing capacity and will continue operating at the current levels due to low sales.

At Scandia Steel and Wire he pointed out that the unit was making losses for the first 3 months in 2013 but is now becoming profitable.

The major difficulty faced by the unit, according to Rodrigues is the restricted sales to some major hardware outlets arising from poor payment performance.

He said they are currently exporting Scandia's products to South Africa, Namibia, Zambia and are looking at entering the Mozambique market in the Tete area.

Rodrigues said William Smith and Gourock was the best performer last year and again is the best performer so far this year. J W Searcy performed well in the first 4 months of 2013 as stated by the CEO and made profits in excess compared with the prior period.

The group's directors were re-appointed and fees of $58 000 approved while auditors PricewaterhouseCoopers were re-elected with remuneration of $78 000 also approved.

- zfn