Published: 14 October 2013

MedTech released an improved set of financials, showing a 10% growth in revenue to $7m on the back of a 44% increase in the Medical segment revenue as well as a 5% sales growth in the FMCG segment.

The FMCG Distribution business recorded a meek growth in profitability. GP margins improved to 27.1% from 26.6% on improved sales mix. Nonetheless, working capital constraints continued to bedevil the Medical segment.

Cashflows improved as cash generated from operations increased to $0.4m. Although net gearing reduced, it remained high at 54.4% from 73.6% at year-end.

The Group has commenced the distribution of bottled beverage products which are bottled in Zambia and Mozambique. The Group is in the process of investing in an associate company, MedTech Food and Beverages.

In an investment to shareholders, Kudakwashe Mundowozi of Imara Edward Securities wrote: "In our view, the stiff competition in the Distribution and Trading businesses coupled with working capital constrains will continue to bedevil the group. Margins are likely to remain under pressure."

Mundowanzi advised shareholders to sell the stock.
- businessdaily

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