M & R to increase earnings

Contracting and manufacturing firm Murray and Roberts (M&R) is forecasted to double revenue to $70 million in 2012 buoyed by a growth in mining and increased government activity, chief executive Stuart Mangoma said.

He said the company was currently sitting on a $30 million confirmed order book for the current financial year.

“Government constitutes around 40% of our order book for plastic products while we also benefit from business brought in by city councils. Government is also taking up 33 percent of our contracting business,” Magoma said.

“The rest of our business comes from mining and merchants who remain key players in our industry,” Mangoma said.

Mangoma said M&R had secured the Wenimbi water project in Marondera as well as the Beitbridge water project — through a joint venture with the Zimbabwe National Water Authority.

In its full year results ended June 30, 2011 ,M&R posted a profit after tax of $1, 1 million up from a $522 000 loss prior year.

The groups revenue went up to $35,7 million from $20,8 million on the back of increased activity during the period under review.

“Business activity in the second half of the financial year improved as 64 percent of total revenue for the year, but the operating margins continued to be under pressure due to low activity in the first half of the year, especially in contracting as well as restructuring and retrenchment costs which amounted $231 000,” he said.

Investment in capital equipment amounted to $2,6 million, the bulk of which was for the replacement the company’s Proplastic plant.

The new plastic plant was commissioned in July 2011. The firm’s contracting arm recorded a $20 million revenue and a loss after tax of $192 000 whilst the manufacturing division recorded $15 million in revenue and a subsequent $1,8 million profit after tax.

Manufacturing volumes traded at 4,9 million tonnes, 40 percent above prior production year. The Zimbabwean government is set to complete construction projects that had been stalled following a decade of hyperinflation and liquidity challenges, which crippled the entire economy.

Some of the government runs projects include upgrading Joshua Nkomo International Airport in Bulawayo and construction of the Tokwe-Mukosi Dam.

The country’s mining sector is projected to grow by 47% growth with construction activity at the mines set to benefit the group.

The company in 2010 streamlined its operations to focus on core business which resulted in the disposal of Caridorn Abrasives (Caridon) and Malawi based Promat Limited (Promat).

Caridorn and Promat were declared going concerns after recording acombined loss of US$452 160 in 2010 and the discontinuing total assets of US$ 1 061 203 represented 4,6 percent of the group position.

Caridorn was sold in September last year at a loss of US$30 434 to the Caridorn Operations Director and employees, while Promat was sold to Malawi’s Kays Holdings at a loss of US$270 987.

The total loss on disposal of these businesses was fully provided for in the books at the end of the financial year ended June 2010.

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