The restructuring also included retrenchment of staff. It reduced overheads across the group, with a target of an average annual saving of $1.7 million annually.
Two non-core operating divisions, Puzey&Payne and Tassburg were disposed of.
Resultantly operating expenses started to fall.
But revenue also continued to fall and in 2016, turnover declined by 21 percent to $24.2 million as the El Nino after effects continued.
Notwithstanding this material reduction in turnover, the group’s operating loss more than halved from $5.4 million in 2015 to $2.5 million in 2016 due to greater cost discipline across most of the business units as well impact of the restructuring efforts undertaken in 2015 and early 2016.
Management countered liquidity conditions and depressed demand by prioritising trading for cash as well as liquidating excess assets.
Such restructuring activities together with continued reduction in debt brought positive results in 2017.
In 2017, revenue rose 60 percent to $39.1 million from $24.2 million in the prior year after a good agriculture season.
Operating profit came in at $4.8 million from a loss of $2.6 million previously.
This was a great improvement since in 2014 and 2015, the company reported an operating loss of $3.98 million and $4.78 million respectively.
Finance costs dropped from $1.4 million in 2014 to $275 375 in 2017.
The group’s performance was anchored on a significant reduction in debt, cost containment initiatives and disposal of non core assets, all with the effect of significantly reducing finance costs and improving the group’s cash position.
However, the shortages of hard currency remain critical as the group continues to face challenges in paying foreign suppliers.
Subject to the vagaries of the weather, Zimplow faces a profitable future.-The Source
(126 VIEWS)
0 Comments