Turnall registers strong turnaround in cash generation

Published: 01 May 2025

Turnall Holdings Limited has posted a significantly improved financial performance for the year ended December 31, 2024, marking a key milestone in its recovery journey with a robust turnaround in cash generation and renewed optimism for future growth.

The company recorded a net positive cash flow of US$1.5 million from operating activities, a major rebound from the US$0.3 million outflow posted in the previous year. The turnaround was largely driven by better working capital management and enhanced customer collections. Financing activities also contributed positively, with net inflows rising to US$0.8 million, up from US$0.7 million in 2023.

Turnall's progress follows a strategic shift that began in July 2022 after major shareholders Mega Market and Zimbabwean Brands acquired a combined 49.59 percent stake in the company. The new ownership has since steered the business through a crucial recovery phase.

To support its revival, Turnall launched a rights offer in 2023, raising US$8 million for capital investment. These funds were earmarked for retooling its fibre cement sheeting lines and launching the Glass Reinforced Pipes (GRP) business, both of which are now driving capacity expansion and cost-efficiency.

"These two investment projects will significantly improve profitability and cashflows, allowing the group to meet increasing local and regional demand for its core products," the company said in a statement. "They will also reduce operational costs through improved efficiencies and take advantage of Zimbabwe's central location in Southern Africa."

Turnall's chairman, Grenville Hampshire, said the company aims to sustain this positive momentum, citing ongoing efforts to de-risk production from power disruptions and enhance factory resilience.

"The group will strive to maintain the momentum gained and implement initiatives that will drive growth as we head towards profitability in the medium term," Hampshire said.

Turnover for the year climbed 17 percent to US$12.04 million, up from US$10.26 million in 2023, buoyed by a four percent increase in volumes and a better sales mix. Despite headwinds such as reduced aggregate demand, power outages, and rising costs, Turnall saw its gross margin improve to 19 percent from 17 percent in the prior year.

Cost control measures bore fruit as the operating expenditure-to-sales ratio fell to 44 percent, compared to 53 percent in 2023. The group reported operating profit before interest and tax of US$2.87 million, even after accounting for a credit loss provision of US$271,770 and a Monetary Transaction Tax (MTT) of US$111,700.

Raw material costs remained a challenge, with US$7.01 million spent on inputs due to elevated import prices for fibre and cement. However, production efficiencies helped cushion the impact.

Despite closing the year with a net loss of US$2 million, the deficit was notably narrower than in past years, reflecting a strengthening operational base and improved fundamentals.

On the sustainability front, Turnall is developing reporting frameworks aligned with environmental, social and governance (ESG) priorities, while continuing to meet ISO 14001 and ISO 9001 standards. The group remained fully compliant with occupational health and safety, environmental, and labour regulations.

Looking ahead, Turnall plans to resume exports in 2025 following upgrades to its Bulawayo sheeting plant. While no dividend was declared for the reporting period, Hampshire expressed appreciation for the progress made and confidence in the company's strategic path.

With stronger cash flows, a leaner cost structure, and renewed production capabilities, Turnall is positioning itself for a more profitable and stable 2025.
- chronicle

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