phoenix consolidated industries limited.pdf

7/27/2019 PHOENIX CONSOLIDATED INDUSTRIES LIMITED.pdf

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PHOENIX CONSOLIDATED INDUSTRIES LIMITED 25 Birmingham Road, Southerton, Harare P.O. Box 647 Harare

UNAUDITED FINANCIAL RESULTS FOR THE 6 MONTHS ENDED 30 TH APRIL 2013 COMMENTARY

Profitability

Phoenix incurred a loss of $228 000 which included net finance charges of $330 000 and

depreciation of $249 000. This compares to a loss of $477 000 for the equivalent prior year

period. Sales for the remaining units increased marginally over the equivalent period.

Demand for product remains strong but sales have been restricted by stringent credit

control. The major hardware outlets have been unable to purchase significant volumes

within their credit terms. Major contractual customer spending remains low, especially

affecting sales at William Smith & Gourock. As a consequence of the liquidity crunch,

pricing has become increasingly competitive resulting in reduced margins.

Operations

Plastics & Allied (incorporating William Smith & Gourock and Phoenix Brushware)

Both units were profitable with William Smith & Gourock maintaining its position as the most

profitable unit. Sales at Phoenix Brushware remained static, whilst William Smith & Gourock

experienced a reduction.

Steel & Allied (incorporating Scandia Steel & Wire, J W Searcy)

Turnover at both units increased over the equivalent period but at reduced margins.

Liquidity problems at the major hardware outlets and mining concerns have led to reduced

sales despite potential demand. Scandia has maintained its export market but the

depreciation of the Rand has further reduced margins. These units have the capacity to

significantly increase sales without additional overhead costs and consequently will benefit

most from any upturn in the economy.

Financial Position

The net worth of the company reduced by $228 000 due to the loss incurred. The company

is marginally in a net current asset position.


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Corporate Governance

Phoenix continues to be committed to the principles of good Corporate Governance andbest practice. The Company s policies and procedures are continually reviewed for

compliance with accepted standards. The main board comprises a majority of non-executive directors and it and its sub committees meet on a quarterly basis.

Outlook

Phoenix has the capacity to benefit from the expected upturn in the economy. The company

has been approached regarding the potential purchase of one of its operating units. It is

envisaged that any such transaction could reduce borrowings by up to $2 million.

Shareholders will be advised as and when these negotiations become more concrete.

Declaration of DividendIn view of the loss incurred, a dividend will not be declared.

HARARE BY ORDER OF THE BOARD

25 J ULY 2013 Phoenix Consolidated Industries Limited

DirectorsM.D. Frudd (Chairman), F.J. Rodrigues (Chief Executive), T. Chiganze, W.G. Khumalo, T.N. Sibanda


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phoenix consolidated industries limited.pdf

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