Rising costs which resulted in higher than expected overhead expenditure, labour unrest and the need to trim margins in order to compete saw Mashonaland Holdings’ profit at a standstill, declining marginally by 3 percent from $46.5 million to $45.2 million in the 12 months ending March.
But final results will only be known in October since the company has changed its financial year from March to October, thus having an 18- month reporting period. Turnover however increased by 28 percent from $519.7 million to $665.9 million but operating profit was down eight percent from $74.9 million to $69.2 million.
The construction division was the major contributor of both the group turnover and profits which stood at $449 million and $46.7 million respectively. Manufacturing brought in $104 million in turnover but profits of only $12.5 million while property which had a turnover of only $16.8 million had a profit of $4.7 million.
Trading brought in a profit of only $3.1 million from a turnover of $96.1 million. Airflo also seems to be doing well following the approval of a joint venture with Howden Africa Holdings of South Africa. Airflo Howden has already secured a $23 million order from Selibe Pikwe in Botswana. There are also potential sales in the Zambian Copper Belt, in Mozambique’s sugar mills and the power station project in Gokwe.
The group has, however, been reorganised and is now divided into Wildale, the brickmaking business which is undergoing massive expansion. Although the company has not disclosed the amount being used for the expansion project it says the project finance will be raised through a mixture of debentures, redeemable preference shares and other borrowings.
The group also hopes to float Wildale on the Zimbabwe Stock Exchange to ensure a sound capital base for the company. The second division is the Engineering and Electrical Holdings Limited which will trade as Powerco. Like Wildale, Powerco will have its own board of directors. The remainder of the operations will be consolidated into semi-autonomous units.