ARISTON Holdings Ltd is beginning to reap the rewards of its successful recapitalisation exercise after turnover increased by 83,4 percent to US$2 million over the six months to March this year on fair value adjustment.
The company said increased production had not been converted into sales adding the second half of the financial year would focus on converting the considerable stock into cash.
Traditionally, winter sees strong blended tea sales. Combined with improved focus, this should see trading contributing in the second half.
The company said during the period under review the management team had been reinforced with the appointment of Dr Anxious Masuka as chief operating officer and Martin Dzviti as finance director.
Ariston said adequate funding in the first half saw improvement across the board particularly in agricultural activity.
All of Ariston’s three units – Southdowns, Claremont Estate and Kent Estate – recorded profits in the interim period on fair value adjustment.
The listed agriculture-focused company had suffered a US$225,556 loss in the comparative period the prior year.
“Group revenue reduced to US$6,682 million. The operating profit was US$2,917 million after fair value adjustment,” said Ariston in a statement accompanying the group’s half- year financial results.
The company said full production capacity is still a prospect for the future and the ZSE- listed concern said “nevertheless significant strides have already been made in rehabilitating the group”.
“The introduction of a large potato crop will bring new balance to horticultural activities. Much remains to be done to reach full potential thus additional investment in the second half will be made into irrigation, plant material and factory equipment,” the firm said.
Ariston said Southdown reported a turnover of US$1,357 million, which was a slight reduction of 2 percent excluding inter-company sales of US$1,193 million to Fruits and Vegetable Company.
Favco turnover was slightly reduced by 2 percent to US$4,2 million, contributing 64 percent to group turnover and posting US$265,000 loss.
At Claremont Estate’s turnover was at US$759,000 was 11 percent of group turnover, representing 27 percent surge compared to 2012. The unit suffered an operating loss of US365 000 compared to US$67 000 in 2012. A US$1,332 million fair value adjustment pushed the Ariston subsidiary into US$968 000 before tax profit.Advertisement
Kent Estate posted US$318 000 turnover, representing a 24 percent decrease over the same period last year and 5 percent of group revenue. Profit before tax of US$502,000 was after fair value adjustment of US$1,096 million during the period under review.
The group posted a loss of US$531,648 for the full-year ended September, 2012 weighed down by control deficiencies at its trading division.
The loss was lower than the US$2 million that the company recorded in the previous year.
Company secretary Faith Musinga said turnover went up by 69 percent to US$14,8 million while operating loss stood at US$2,8 million.
Favco’s contribution to the group’s turnover was 58 percent due to increased activities.
“During the year under review, although performance has improved, the group did not achieve the anticipated levels of activity in all areas. This was largely due to the capital raise being finalised later than anticipated,” Musinga said.
“Sadly significant weaknesses in internal systems allowed margins to be eroded during the period. Corrective action has been implemented in both internal systems and product focus.”
Ariston said the group was now adequately funded such that operations would not be constrained.
“The capital projects already in place will start to yield returns in the year ahead with improvements in quality, output and cost reduction on all farms. Throughput is set to increase significantly in 2013 across all operations,” Musinga added.
“The improvements in operational capacity over the last six months combined with those improvements still to come will set the stage for Ariston’s return to profitability.”