Diversified manufacturer, Phoenix Consolidated Industries, has bounced back to full production and profitability following an improvement in the operating environment and initiatives being implemented by the judicial manager.
Phoenix was delisted from the Zimbabwe Stock Exchange as part of the company’s strategy to sort out its financial problems away from public scrutiny.
As a result of the turnaround strategy, the company is now operating profitably on the back of a successful agricultural season and improved local demand of the company’s products.
“We are pleased to inform you that Phoenix has performed reasonably well, given the difficult operating environment.
“The good performance is attributed to initiatives such as command agriculture, which has seen demand for our products increase,” said Grant Thornton Camelsa advisory services manager Bulisa Mbano (the judicial managers).
The company recorded a turnover for the year 2017 of about $10 million, resulting in an operating profit of approximately $1,8 million.
“We are hopeful that performance will continue to improve in 2018. We foresee an upturn in the operating environment with Phoenix benefitting from Government initiatives as well as increased consumer spending,” said Mr Mbano.
The company recently paid a dividend of 10 percent to all creditors on a pro rata basis.
In addition, employees’ salaries and wages have since been reviewed given the improved performance.
“The company is not dormant and is operating profitably. In addition, employees’ salaries and wages have recently been reviewed given the improved performance.
“The company has turned around and operating profitably on the back of a successful agricultural season. In addition, local demand has been bolstered by Statutory Instrument 64 of 2017,” said Mr Mbano.
Ever since the turnaround, Phoenix has started exploring export markets in order to generate enough foreign currency. The company is now already exporting wire to South Africa and Zambia.
“We are now in the process of developing export markets to ensure that the company generates the required foreign currency to support its business operations,” said Mr Mbano.
This will mean the company will benefit from the Reserve Bank of Zimbabwe export incentive.
The company has been battling to remain afloat due to high levels of borrowings.
The company is also still pursuing the Zimbabwe Asset Management Corporation route to hive off loans which they are struggling with.
The ZAMCO route is still an option and will be perused once the company has secured immovable property as security to cover the ZAMCO facility.
Phoenix manufactures plastics and allied products as well as steel and allied products in Bulawayo and Harare.
Its subsidiaries are William Smith and Gourock, Phoenix Brushware, Scandia Wire, JW Searcy, Precision Grinders and McMeekan.
Apex Pension Fund is Phoenix’s major shareholder with a 46 percent stake.
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