Paul Nyakazeya
POWERSPEED Electrical Ltd sees its turnover growing to US$26 million and earnings rising in the year to end September 30 helped by increased capacity in the engineering division, CEO Hilton Macklin says.
In a trade update to the market at the company’s AGM this week, Macklin said the company’s strategy of thriving in an open and competitive environment would be maintained.
“We are targeting a turnover of US$26 million. I will stick to this projection despite the environment still being difficult to predict. The group’s industrial consumer side had however increased,” Macklin said.
PowerSpeed’s operations have been bundled into two main divisions –– Engineering and Trading.
Engineering operations have been re-structured away from commodity manufacturing to focus on niche products and service-based industry targeted at mining and agriculture.
The trading division operates under the brands Dixons, Electrocables, Electrosales, Industrial Electric, Relmo and Wire Systems Technology.
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“The engineering division generated substantial profits and this growth trend was consistent in all market segments and this is a good indicator for the coming year,” Macklin said.
PowerSpeed’s turnover grew from US$7,2 million in 2009 to US$18,8 million in the last financial year. An improved margin moved income from operations from a loss of US$1,0 million to a profit of US$1,1 million in the same period.
“Growth in the business has consumed working capital, which had to be funded in part from local borrowings at a cost of US$742 000 last year,” he said.
He said the group had access to lines of trade credit from South Africa, allowing stock to be funded in part by suppliers.
However, major indicators suggest that the Zimbabwean economy will grow over the next year.
The main drivers of this growth are expected to be mining, agriculture, tourism, distribution and retail.
“In this context, the group is well placed to take advantage of any such growth. We are, therefore, hopeful for further growth in turnover, and even greater growth in attributable earnings, over the next 12 months,” Macklin.
The group extended its special share buy-back. A total of 26 598 826 shares are up for grabs at a price not more than the prevailing market value. On Tuesday Powerspeed share price was trading at 2,6 cents.
