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Turnall revenues up 2pc, reach US$19m
25/08/2013 00:00:00
by Business Reporter
Turnall owes taxman US$9 million
Weak demand hits Turnall profits

TURNALL Holdings Limited last week revealed that revenues fort eh interim period to June 30 reached US$18,9 million which was about two percent better than the same period last year.

Group chairman, Herbert Nkala, said operating profit was US$1,38 million compared to US$2,48 million for the same period last year.

Nkala said a rebound in demand and an improvement in capacity utilisation in the second quarter of this year saw the business quickly re-align prices and margins in an effort to reverse the “poor first quarter performance”.

“Gross profit margin at 23 percent was lower than the 30 percent achieved in 2012 mainly because of lower than plan pricing during the first quarter this year,” Nkala said.

“The operating profit margin was as a result, affected and at seven percent against 16 percent for the same period last year, also reflected generally poor factory capacity utilisation levels especially during the first quarter of the year,” he said.

Going forward Nkala said the post-election era should usher in positive economic growth and that should see a growth in investment in infrastructure and housing will see the company benefiting from increased revenue streams unlike in the past.

“Pipes remain a key growth area for the business and any investment in water and sewer reticulation will see the company benefit from the implementation of a number of projects which have been on the cards,” said Nkala.

He said despite a slow start, exports represent another key growth area as the company has started supplying into Zambia.

The company has a robust plan to enter other neighbouring markets in the coming months and supply a full range of products including the new roofing tiles.

Turnall, which manufactures asbestos products and building materials, had been facing problems such as cash flow constraints, delays in payment by debtors and rising interest expense.

However, with a huge housing backlog estimated to be two million, there was a huge potential for revenue growth for Turnall going forward.


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