turnall f2012 presentation

7/28/2019 Turnall F2012 Presentation

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AUDITED RESULTS

Year ended 31 December 2012

Royal Harare Sports Club20 March 2013


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22

Agenda

Section Presenter

About Turnall J . J ere - Managing Director

Operational review J . J ere - Managing Director

Financial Performance R. Dube - Finance Director

Strategic outlook J . J ere - Managing Director


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ABOUT TURNALL

33


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Operational structure

Turnall operates through two divisions:

Turnall Building Products - 1943

Turnall Piping Products - 1972

Sole shareholder of four dormant companies namely:

Acacia Holdings Limited

Hastt Corporation Limited

Hastt Discs [Private] Limited

Tractor and Equipment

44


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Directorate

55

H. Nkala Non-Executive Chairman

J . P. Mutizwa Non-Executive Deputy Chairman

J J ere Executive

R. S. Dube Executive

J . Mushayavanhu Non Executive

R. Likukuma Non Executive

C. E. Dhlembeu Non Executive

L. Manyenga Non Executive

P. C. C. Moyo Non Executive

C. M. Gadzikwa Non Executive

K. Naik Non Executive

R. Dhliwayo Non Executive


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Executive management

66

J J ere Managing DirectorR. S. Dube Finance Director

E. Mwamuka Human Resources Director

F. Chigwedere Technical Director


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77

Mission and Vision


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Strategic themes

88


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Market segmentation

99


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Product offering

1010

Three broad lines:

Building products

Piping

Turnallware


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Building products

1111

Slates

Pantile

Endurite

Trafford Tile

Ceiling Boards

Fascia & Barge Board

Concrete Tile (new product)

Pavers (new product)


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Slates


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Pantile roofing


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Lowcostmarket

Endurite roofing


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Low/mediumincomemarket

Trafford tile roofing


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Concrete ti les

Medium tohigh market


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Lowlowcostmarket

GCIS


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Pipes

1818

Sewer pipes

Pressure pipes

Localauthoritiesmarket


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Turnallware

1919

Flower pots

Garden benches

Office/Homemarket


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Export markets

2020

South Africa

Namibia

Botswana

Mozambique

Malawi

Angola

Zambia


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Main raw materials

2121

Cement

Chrysotile fibre (continued importation)

New technology fibres:

Imported from China, Chile, Poland, Turkey Cellulose, PVA, Silica FumeAdditives

Average Cost : USD3 500/T 4 500/T


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2 0 1 2 O p e ra t i o n a l p e r f o rm a n c e

r e v i ew

2222


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2323

Key factors affecting performance

Growth in mining sectorPositivefactors Growth in financial services sector

Cash flow constraints / Liquidity crunch

Delays in customer payments

Low FDI inflows Impacting Pipe SalesHigh interest rates 18 - 25%

Subdued demand

Increased competition

Negativefactors

GDP growth 4.4% lower than projection of 9.3%


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2424

Strategic re-alignment of operations

Drive towards working capital management

Reduced emphasis on volume growth

Cost control

Strategic positioning through capacity building

Quality control and efficiencies


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2525

Competitive Environment

[Turnall vulnerable]


[Strong/vulnerable]



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2626

Competitor activity

Price based competitor activity intensified in:

Roofing sheets [Everite and Eddington]

Pricing

Iron Sheets [Import and Local]

PVC Piping in the small diameter pipes


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2727

Capacity utilisation

0

2 0 0 0 0

4 0 0 0 0

6 0 0 0 0

8 0 0 0 0

1 0 0 0 0 0

1 2 0 0 0 0

1 4 0 0 0 0

1 6 0 0 0 0

2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2

I n s t a l l e d C a p a c i t y


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Sales Volumes commentary

2012 Actual(Tonnes)

2011Actual

(Tonnes)% Growth

%Contribution

Bu i l d i n g

P r o d u c t s 6 9 2 0 2 7 3 8 1 1 -6 9 4

E x p o r t s 2 2 8 5 3 3 1 2 -3 1 3

GC IS4 6 9 2 0 8 8 -7 8 1

P i p e s 1 6 0 9 4 6 9 9 -6 6 2

T o t a l 7 3 5 6 5 8 3 9 1 0 -1 2 1 0 0


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2929

Sales Values commentary

2012 ActualUS$000

2011Actual

US$000% Growth

%Contribution

Bu i l d i n g

P r o d u c t s 3 9 . 5 1 4 3 .2 0 -9 9 3

E x p o r t s 0 .9 9 1 .6 0 -3 8 2

GC IS0 .6 0 3 .1 0 -8 1 1

P i p e s 1 .4 0 3 .9 0 -6 4 4

T o t a l 4 2 .5 0 5 1 .8 0 -1 8 1 0 0


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2 0 1 2 F i n a n c i a l r e v i e w

3030

f f f


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3131

Basis of financial information

T h e s e f i n a n c i a l r e s u l t s r e f l e c t em p h a s i s b y m a n a g em e n t o n :

St r a t e g i c p o s i t i o n i n g Wo rk i n g c a p i t a l m a n a g em e n t r a t h e r t h a n v o lu m e

g r o w t h

Ra t i o n a l i s a t i o n o f d i s t r i b u t o r s h i p n e t w o r k s

Co s t c o n t r o l

Qu a l i t y o f p r o d u c t s o f f e r i n g a n d s e r v i c e

Fi i l Hi hli ht


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Financial Highlights

y Turnover = $42.5 million

y

Exports = $1.0 million [2% of T/O]y Gross profit margin = 29.11% [2011:30%]

y Admin. expenses = $6.6 million [15.5% of T/O]

y

Selling & Distr expenses = $1.7 million [4% of T/O]y Profit from operations = $4.3 million [10% return]

y Net finance costs = $3.1 million

y Profit before tax = $1.2 million

y Attributable profit = $1.1 million

y Earnings per share = 0.21 cents

EBITDA


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EBITDA

2012 2011US$ US$

Total comprehensive income for the year 1 059 914 3 968 057

Add back:Add Interest 3 114 517 2 229 437Add taxation 149 974 1 154 223Add Depreciation 2 428 465 1 862 767Amortisation - -

Earnings Before Interest, Taxes, Depreciationand Amortisation (EBIDTA) 6 752 870 9 214 484

3333

Add i th b i t


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Addressing the borrowing costs

Re-aligning of borrowings [short term Vs long term]

Repayments

Accelerating PTA [access to long term funding]

St t t f h i i


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2012 2011US$ US$

Revenue - local 41,516,549 50,206,738- export 991,892 1,658,522

42,508,441 51,865,260

Cost of sales (30,133,932) (36,265,512)

Gross profit 12,374,509 15,599,748

Other income 253,761 172,836

Selling and distributionexpenses (1,711,288) (1,987,399)

Adminstrative expenses (6,592,576) (6 ,433,469)

Profit from operations 4,324,406 7,351,716

Statement of comprehensive income

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Statement of comprehensive income


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Statement of comprehensive income (continued)

2012 2011US$ US$

Finance Costs (3,114,517) (2,229,437)

Profit before taxation 1,209,889 5,122,280

Taxation (149,974) (1,154,223)

Profit for the year attributable toequity holders 1,059,914 3,968,057

Number of shares in issue (000s) 493,040 493,040Basic earnings per share(cents) 0.21 0.81

3636

Financial position


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Financial position

Capital employed = $36.1 million.

Capital expenditure = $2.6 million.

Stock days = 175 days [2011 - 149 days]

Debtors days = 128 days [2011 - 86 days]

Gearing ratio = 27% [2011 - 32%] Current ratio = 1.13:1 [2011 - 1.15:1]

Quick ratio = 0.5:1 [2011 - 0.6:1]

Return on Equity = 4% [2011 - 14%] Cash = $1.0 million

Short-term borrowings = $10.8 million

Statement of financial position


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Statement of financial position

2012 2011

ASSETS US$ US$

Property, plant and equipment 31,685,103 31,509,622

Investment property 291,325 297,550Inventories 18,757,112 14,812,361

Short term investments 19,958 19,585

Trade and other receivables 16,233,953 16,217,424

Cash and cash equivalents 993,390 759,848

Total assets 67,980,841 63,616,390

EQUITY

Share capital 4,930,403 4,930,403

Share premium 181,908 181,908Non- distributable reserve 7,655,239 7,655,239

Revaluation reserve 7,639,504 7,639,504

Retained earnings 9,128,346 8,068,431

Total 29,535,400 28,475,485

Statement of financial position ( ti d)


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Statement of financial position (continued)

2012 2011

LIABILITIES US$ US$

Loans and borrowings (long term) - 1,138,295

Loans and borrowings (short term) 10,779,318 12 ,455,545

Deferred tax liability 6,604,513 6,454,677

Trade and other payables 18,472,944 12,149,775

Provisions 605,494 584,343Taxation 1,488,267 2,126,818

Bank overdraft 494,906 231 452

Total 38,445,442 35,140,905

Inventories


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Inventories

2012 2011US$000 US$000

Raw materials 2,736 6,245

Finished good 12,455 7,058

Work in progress 2,057 69Consumables 1,509 1,440

Total 18,757 14,812

Receivables


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Receivables

2012 2011

US$000 US$000

Trade 14,763 15,034

Prepayments 180 384Other 1,291 800

Total 16,234 16,218

Loans and Borrowings


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Loans and Borrowings

2012 2011US$ US$

Total 10,779,318 13, 593,840

Share performance


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Share performance

Dividend


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Dividend

The Board, considering the need to retain resources for

working capital, resolved not to declare a final dividend forthe year ended 31 December 2012


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St r a t e g i c f o c u s a n d o u t l o o k

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Key Macro-economic factors


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4646

Key Macro economic factors

High interest rates

Low liquidity

GDP Growth 5%

Agriculture 6.4%

Mining 17% Financial Sector 6%

Manufacturing 1.5%

Increased Government expenditure on sewer and waterreticulation

2013 strategic focus


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0 3 s a eg c ocus

Nutec plant

GCIS

Concrete tile

Pavers

2013 Operational focus


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p

Working capital management rather than volume growth;

Rationalisation of distributorship networks;

Cost control; and

Quality of products and service.

Business growth expectation


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4949

g p

Forecast growth 20%

Local building products - minimum growth

Thus growth underpinned by: Concrete tile

Pavers

Pipes Exports

Pipes (current projects)


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p ( p j )

Sewer and water reticulation:

Zimbabwe

Harare;

Bulawayo; and

Masvingo.

Zambia:

Lusaka; and

Nkana Water Board

Exports


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5151

p

Export volumes to grow to 7 100 tonnes

Mozambique

Zambia

Botswana

South Africa (SBLC and guarantees).

Fibre supply


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Key threat to the business

Usage expected at 9 000 tonnes

US$3-4m tied in fibre stocks.

Local mines (resumption of supply?)


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V o l um e s Ou t l o o k B e y o n d 2 0 1 3

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Challenges for developing countries


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Affordable Housing - safe shelter

Access to Safe Drinking Water - about 30% of developingnations population do not have access

Effective Sanitation - less than 50% of developing nationspopulation have access

Zimbabwe specific factors


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5555

Water and sanitation backlog in Zimbabwe

Land redistribution infrastructure

Building Society Housing delivery schemes [USAID]

These in the light of millennium developmental goals

Low Cost Housing Demand Profile


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5656

5 YEAR PERIOD SPREAD

Backlog(units)

2013 2014 2015 2016 2017

High density 488 367 85 000 95 000 97 673 100 000 111 367Total demand(tonnes)

398 741 69 400 77 565 79 748 81 648 90 928


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Qu e s t i o n s&A n sw e r s


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T H AN K YOU

turnall f2012 presentation

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