Strong order book steers Masimba to profitability

Strong order book steers Masimba to profitability
Published: 21 September 2017
MASIMBA Holdings has an active order book of $38,4 million for 2017 which is expected to grow the group's profitability this year.

In an update for the first half of 2017, Masimba Holdings chief executive officer Canada Malunga said infrastructure accounted for $16,8 million including housing, water reticulations, commercial and industrial building accounted for $10,8 million, agriculture ($5,8 million) and mining ($5 million) of the order book.

Masimba recorded an after tax profit of $137 422 for the half year ended June 30 2017 from $111 477 on the same period last year on the back of a firm order book.

In the period under review, revenue grew by 35% to $$11,5 million from $8,5 million in 2016.

"The business environment has continued to be challenging and shortage of cash and foreign currency constraints have hampered the ongoing operations during the period under review. We are now beginning to experience emerging inflationary pressures," Malunga said.

Gross profit margins deteriorated in the period to 12% from 15% in 2016 largely due to significantly compromised productivity emanating from excessive rainfall received in the first quarter of the financial year.

In the period under review, overheads efficiencies improved to 13% from 16% in 2016 mainly driven by growth in the top line and continued cost containment strategies, resulting in an improved earnings before interest, tax, depreciation and amortisation of $713 649 from $633 561 in 2016.

"Despite the economic difficulties, the last eighteen months period has seen a significant increase in tendering act an indication of the opportunities that still exist within the built environment.

"The board has put in place strategies to follow up, monitor and convert these opportunities to order book. The current order book has improved significantly in terms of both value and tenure, spanning beyond the December 31 2017 financial year," he said

During the period under review, the group generated cash from operations of $1,6 million from $ 321 150 in 2016 due to stringent cash collection measures implemented in the period.

Cash and cash equivalents increased by $458 431 to close off the period at $1,2 million .

Capital expenditure incurred in the period amounted to $914 166 from $727 497.
- newsday
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