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Business Reporter
Art Corporation says its turnover for the first quarter to January 2018, was up 39 percent on the back of increased sales volumes across all units.

In a trading update at the company’s AGM held yesterday, chief executive officer Milton Macheka, said the group has seen its turnover grow to $14,5 million up from $10,4 million prior year comparative.

“The increase is mostly due to higher volumes across all units with volumes at the paper business increasing by 10 percent to 1,622 tonnes,” said Mr Macheka.

Volumes at Softex were 20 percent positive at 855 tonnes, while volumes at Eversharp, Batteries, and Chloride were up 5 percent, 28 percent and 28 percent respectively.

The growth in volumes helped grow profitability with gross profit margins now at 45 percent up from 40 percent prior year comparative.

This resulted in the Group recording increased profits to $3,6 million against $1,4 million for the comparative prior year.

Mr Macheka said cash generation had improved and this has enabled the Group not to only sustain operations, but to also increase capacity utilisation and meet debt repayment commitments.

The company’s debt was reduced to $5,454 from $6,481 as at September 2017.

Mr Macheka said capacity utilisation at most of its businesses were on the high side with the paper business utilizing 86 percent of its capacity.

The batteries business is operating at 79 percent capacity, Chloride Zambia at 75 percent while capacity utilisation at Softex was the lowest at 51 percent.

The Group is now forecasting revenue to reach $39 million by FY2018 (FY2017: $33 million) as it is already ahead of revenue targets for the first quarter.

The Group is also on projecting profits for both half year and full year  2018.

In its last set of results for the year ended September 31, 2017, Art’s revenue increased by 13 percent to $33,5 million while gross margins were up by 5 percent with gross profit sitting at $14,1 million from $11,1 million.

An operating profit of $5 million was achieved for the year compared to $3,7 million posted in 2016 representing an increase of 36 percent.

In turn, operating expenses increased by 23 percent mostly due to increased marketing and distribution spend.

Overally, the Group achieved a profit after tax of $2,7 million compared to $1,9 million in the prior year.

The balance sheet grew by 25 percent due to increased profitability.

Cash generated from operations decreased by 38 percent to $3,4 million as significant cash generated was used to pay creditor obligations and correct working capital levels in the divisions.