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HALF YEAR RESULTS JANUARY- JUNE 2010

27 SEPTEMBER, 2010
J.A. Jere 1 Managing Director

HISTORY
Turnall Holdings Limited, formerly the Building and Construction division of TH Zimbabwe Limited, operates through two divisions
Turnall Building Products Turnall Piping Products

- 1943 - 1972

Sole shareholder of four dormant companies namely

Acacia Holdings Limited

Hastt Corporation Limited Hastt Discs (Private) Limited Tractor and Equipment (Pvt) Ltd

OUR VISION
Turnall Holdings serves its Zimbabwe & Export Customer needs as the leading brand and manufacturer of quality shelter and pipe products. We will continue to grow and sustain our profitability to satisfy Stakeholders and ourselves by demonstrating our real commitment to our values, environment and the community.
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DIRECTORATE
H. Nkala J.P. Mutizwa J Jere R.S Dube J. Mushayavanhu R. Likukuma C.E Dhlembeu L. Manyenga P.C.C Moyo C. M. Gadzikwa -Non Executive Chairman -Non Executive Deputy Chairman -Executive -Executive -Non Executive -Non Executive -Non Executive -Non Executive -Non Executive -Non Executive

EXECUTIVE MANAGEMENT
John A. Jere - Managing Director Robert S. Dube - Finance Director Elizabeth Mamukwa - HR Director Edwin Kondo - Marketing Director Francis Chigwedere - Technical Director

BUILDING PRODUCTS
Leaders in Quality Domestic and Industrial Roofing

Building Products
Endurite Trafford Tile, Pantile Flat Sheet Slates Reeded Roof Tiles Fascia, Barge Boards, Tapboard Curved Huts Accessories , Rainwater Goods
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PANTILE

Endurite Roofing
Low Cost Market

Trafford Tile
Low / Medium Income Market

Turnallware
Office/Home Market

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PIPING PRODUCTS
Pipes
Pressure Sewer

(66%) (34%)

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RAW MATERIALS
Cement
Circle Cement P.P.C. Sino-Cement Imports

(70%)
(Harare) (Bulawayo) (Gweru)

Erratic supply of fibre Regional Pricing


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RAW MATERIALS
Cement (70%)

Chrysotile Fibre
Importation Brazil Russia High world demand

(10%)

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MANUFACTURING
Factories:
Harare - 2 sheeting lines Bulawayo - 1 sheeting line - 1 pipe plant

Personnel:
Permanent (500)

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TOTAL QUALITY
Quality Products (SABS / SAZ)

SAZ 113:1987

(Pipes) 195:1976 (Sewers)

SABS 1223:2000 (Pipes) 819:1985 (Sewers) SABS 685:1998 (Sheets) 803:1995 (Boards)

IS0 9000:2000 ISO 14001 ISO 18000

- Quality - Environmental - Health and Safety

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MARKETS
Local (94% of Sales) Building Products
B2B B2C

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MARKETS
Pipe Projects
Pressure Sewer Pipes

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MARKETS
Export
South Africa Namibia Botswana Mozambique Malawi / Angola U.S.A.

(6% of Sales)

(10%) (90%)

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OVERVIEW OF LOCAL OPERATING ENVIRONMENT


FAIRLY STABLE POLITICAL AND ECONOMIC ENVIRONMENT WHEN COMPARED TO 2008 & PRIOR YEARS.
INTRODUCTION OF A MULTI CURRENCY REGIME & PRICE STABILITY NECESSARY CONDITIONS ARE CREATED FOR ECONOMIC RECOVERY ECONOMY TO GROW 7.7%, 5.4% AND NOW 8.1%

HOWEVER NO MAJOR SIGNS OF FDI MARKET STILL EXPERIENCING TIGHT LIQUIDITY AS REFLECTED IN THE HIGH BORROWING RATES FOCUS IS ON SURVIVAL ISSUES FOOD, FEES ETC.
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OPERATING ENVIRONMENT

IMPACT OF SLUGGISH GROWTH FELT AT THE LEVEL OF


MORTGAGES, CAPCITY UTILIZATION LEVELS GENERAL SPENDING POWER

NO SIGN OF DONOR MONEY FOR THE LARGE INFRA-

STRUCTURAL PROJECTS DURING FIRST HALF 2010

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OPERATING ENVIRONMENT ON THE POSITIVE SIDE AND UNDERPINNING THE VOLUME SALES ACHIEVED THIS FAR WERE
PROCEEDS FROM TOBACCO 120M KG SOLD THIS FAR COTTON AND MAIZE WHICH HAVE SHOWN GROWTH USD SALARIES WHICH ARE DRIVING PRIVATE HOME CONSTRUCTION LOCAL AUTHORITIES UPGRADE OF SEWER AND WATER RETICULATION
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SALES VOLUMES (T)


EXPORT LOCAL TOTAL

JAN-JUNE 10 JAN-JUNE 09 JAN- JUNE 08

1 853 2 059 4 496

26 824 8 735 18 597

28 677

23 093
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SALES VOLUME COMMENTARY


TOTAL VOLUMES AT 28 677 T ARE 167% AHEAD OF SAME PERIOD LAST YEAR. 90% OF THESE CAME FROM LOCAL BUILDING PRODUCTS ( ENDURITE/CORRUGATED SHEETS)
PIPES DID NOT FEATURE STRONGLY DURING FIRST

HALF (MTSHABEZI PIPE LINE)

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EXPORT VOLUMES
ASBESTOS BAN OF JULY 2008 IN SOUTH AFRICA AND THE DOMINO EFFECT IN OTHER REGIONAL MARKETS -NEGATIVE IMPACT DIVERTED VOLUMES INTO MOZAMBIQUE AND BOTSWANA
LIMITED DISTRIBUTION CAPACITY (IN GROWTH PHASE) STRAIGHT SHEETING PRODUCT LINE IS LOW MARGIN MET STIFF COMPETITION FROM OTHER SUPPLIERS ( EFFECTS OF THE GLOBAL DOWNTURN)

COMPETITION FROM ALTERNATIVES

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FINANCIAL HIGHLIGHTS

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FINANCIAL HIGHLIGHTS Historical cost


Turnover = $13.6 million Exports = $ 0.5 million [ 4% of T/O]. Admin. Expenses = $2.1 million [ 15.3% of T/O]. Selling & Distribution Expenses = $0.72 million [5.3%] Profit from operations = $1.5 million [ 11 % return]. Attributable profit = $ 0.98 million. Earnings per share = 0.20 cents
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FINANCIAL POSITION Historical figures


Capital employed = $32.2 million. $ 1.4 million invested in Property, Plant and Equipment. Stock days = 57 days. Debtors days = 43 days Cash = $866 226 Short-term borrowings = $940 282

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INCOME STATEMENT
Continuing operations Revenue - local Turnover -export

HISTORICAL
Six months ended 30.06.2010 US$ 13,103,464 474,150 13,577,614 (9,314,812) 4,262,802 18,735 (718,056) (1,882,152) (203,664) 1,477,665 9,016 (103,309) 1,383,372 (398,846) (255,517) (143,329) 984,526 984,526 483,945 0.2034 Six months ended 30.06.2009 US$ 3,368,526 555,827 3,924,353 (1,932,566) 1,991,787 13,715 (239,090) (711,334) (50,035) 1,005,043 1,010 (114,164) 891,889 (585,680) (430,423) (155,257) 306,209 306,209 483,945 0.0633 Audited year ended 31.12.2009 US$ 15,481,191 1,012,090 16,493,281 (10,402,926) 6,090,355 15,662 (860,613) (2,425,249) (247,399) 2,572,756 4,030 (189,256) 2,387,530 (851,874) (1,245,805) 393,931 1,535,656 6,582,675 6,582,675 8,118,331 483,945 0.3173

Cost of sales Gross profit Other income Selling and distribution expenses Adminstrative expenses Management fees Profit from continuing operations Finance income Finance costs Profit before taxation Taxation Current Deferred Profit for the year from continuing operations attributable to equity holders Other comprehensive income for the year, after tax: Revaluation Net change in offair property, value of plant available-for-sale and equipment financial assets Other comprehensive income for the period, net of tax Total comprehensive income for the year Number of shares in issue (000s) Basic earnings per share (cents)

CONSOLIDATED STATEMENT of FINANCIAL POSITION


Six months ended 30.06.2010 US$ Six months ended 30.06.2009 US$

Audited year ended 31.12.2009 US$ 25,159,958 25,159,958 3,392,815 24,708 2,912,978 306,997 996,746 7,634,244 32,794,202

ASSETS Non- current assets Property, plant and equipment Current assets Inventories Short term investments Trade and other receivables Prepayments Cash and cash equivalents Total current assets Total assets EQUITY Capital and reserves Share capital Non- distributable reserve Revaluation reserve Reserve for share option granted Retained earnings Total capital and reserves LIABILITIES Non-current liabilities Loans and borrowings Deffered tax liability Total non-current liabilities Current liabilities Loans and borrowings Trade and other payables Provisions Taxation Bank overdraft Total current liabilities Total liabilities Total equity and liabilities

25,722,275 25,722,275 3,971,278 20,982 4,149,495 1,550,458 1,856,496 11,548,709 37,270,984

18,733,332 18,733,332 2,890,321 25,583 1,846,669 131,241 406,645 5,300,459 24,033,791

4,839,449 7,708,510 6,582,675 (27,000) 2,520,182 21,623,816

0 15,106,292 0 0 306,210 15,412,502

0 12,494,688 6,582,675 0 1,535,656 20,613,019

1,156,716 6,866,499 8,023,215 940,282 4,630,509 502,359 1,500,815 49,988 7,623,953 15,647,167 37,270,984

0 5,977,514 5,977,514 0 1,787,541 247,614 408,620 200,000 2,643,775 8,621,289 24,033,791

629,545 6,723,170 7,352,715 201,141 2,882,446 299,066 1,245,806 200,010 4,828,469 12,181,184 32,794,203

DIVIDENDS
The Board, considering the current economic environment and the need to conserve cash for working capital purposes, resolved not to declare an interim dividend for the half year to 30 June, 2010.

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OUTLOOK PERIOD

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LOCAL DEMAND OUTLOOK 2010


WE ARE OPTIMISTIC THE CURRENT VOLUME TRENDS WILL CONTINUE TO YEAR END. YTD SEPTEMBER SALES ARE AT 45 000T AGAINST FULL YEAR PLAN OF 50 000T WE CONTINUE TO BENEFIT FROM TOBACCO PROCEEDS- 120M KGs TOBACCO & COTTON AND MAIZE. LOCAL AUTHORITIES PROJECTS FOR SEWER AND WATER HAVE KICKED OFF
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LOCAL DEMAND OUTLOOK cont.


CAPACITY UTILIZATION NOW STANDS AT AROUND 75% FROM A FIRST HALF LEVEL OF 50-60% PIPE ORDER BOOK FULL ON THE BACK OF LOCAL AUTHORITY PIPE DEMAND PIPE PLANT ON CARE AND MAINTENANCE FOR TWO YEARS NOW RUNNING.

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FIBRE SUPPLY
PERTINENT TO HIGHLIGHT THAT THE THREAT ON THE BUSINESS DUE TO FIBRE SUPPLIES HAS BEEN DEALT WITH SECURED ADEQUATE SUPPLIES OF IMPORTED FIBRE REPRESENTING 6 MONTHS COVER. IMPACT THOUGH IS ON GROSS MARGINS GIVEN THAT IMPORTS ARE AT USD 1200/T AGAINST A LOCAL COST OF USD 690/T

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EXPORT VOLUME OUTLOOK


EXPORT VOLUME GROWTH WILL BE KEY BEYOND 2010 - THE NON ASBESTOS PLANT IS BEING DELIVERED AND COMMISSIONING WILL BE IN DECEMBER 2010.

-TECHNOLOGY TO ALLOW TURNALL TO PENETRATE THE LUCRATIVE SA & BOTSWANA MARKET AND OFFER A FULL RANGE OF FIBRE CEMENT PRODUCTS. - SEE A RETURN TO 20%-30% EXPORT VOLUME CONTRIBUTION

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3 CHALLENGES FOR DEVELOPING COUNTRIES


FOR OUR PEOPLE: Affordable Housing Safe shelter Access to Safe Drinking Water About 30% of developing nations population do not have access Effective Sanitation Less than 50% of developing nations population have access

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VOLUME OUTLOOK BEYOND 2010


WATER AND SANITATION BACKLOG IN ZIMBABWE LAND REDISTRIBUTION-INFRASTRUCTURE BUILDING SOCIETY HOUSING DELIVERY SCHEMES ( USAID) THESE IN THE LIGHT OF MILLENIUM DEVELOPMENTAL GOALS; MDGs ( WSSD ,RIO, 37 JHB,DOHA)

LOW COST HOUSING DEMAND PROFILE

BACKLO G

5 YEAR PERIOD SPREAD 2011* 2010 2011 2012


000

HIGH DENSITY TOTAL DEMAND TILES (000) TOTAL DEMAND TONNES

( UNITS 488 85000 95000 97673 100 )

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2013 111 367 2 004

8 790 398 741

1 530

1 710

1 758

1 800

69 400 77 565 79 748 81 648 90 928

Extract from The National Housing Policy Document 2009

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QUESTIONS

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