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Conrad Mwanawashe Business Reporter
MASIMBA Holdings saw mixed fortunes for its group companies in the period to April with Proplastics recording a 7 percent growth in volumes while turnover at the construction business shrunk by 35 percent.

The group’s chief executive officer, Mr Canada Malunga, told shareholders at the annual general meeting that second half performance is expected to be positive especially at Proplastics. Masimba Construction is sitting on a firm order which is, however, difficult to convert to cash.

“Turnover levels for the period to April shrunk by 17 percent while earnings before interest taxes depreciation and ammortisation percentage improved to 5 percent. Proplastics volumes in the period grew by 7 percent on the same period last year while the top line grew by 10 percent due to improved product mix,” said Mr Malunga.

“Traditionally this is the off-peak season for Proplastics and therefore as we head now towards the peak of the winter season and the start of the summer season we expect the volumes to continue to improve,” he said.

Mr Malunga said Masimba Construction turnover declined by 35 percent while EBITDA improved to negative 4 percent from negative 5 percent in 2014.

While Masimba has a strong order, a significant part of the order book could not take off or suffered significant

delays due to customer liquidity constraints. But the group’s financial position remains solid, according to Mr Malunga.

“The group’s financial position in the period remains firm and while short-term cash flows are under pressure, the group continued to operate satisfactorily. Liquidity constraints prevailing in the market has affected debtors’ turnaround period but we

have had no incidents of bad debts,” he said.

Government debt which constitutes a significant part of the book at construction was reduced in the period by $1,5 million and as a result external borrowings were reduced to $1,3 million or the equivalent of the debt to equity ratio of 5 percent. The debt is made up of $736 000 attributable to Proplastics and $500 000 to Masimba Construction.

The group sees further growth to come from the new reinforcement steel business which exceeded expectations in April.