Those September year ends!

02 Mar, 2018 - 00:03 0 Views

eBusiness Weekly

Mamvura’s Market Minute
Companies that report their results in the year to September are a real mixed bag, and hold their AGMs around the same time as we see the initial wave of F17 results.

There have been three AGMs over the past week — Mash, Art and Ariston — and all draw some comment. Here we have a property company, a manufacturer and a horticulture group — they would seem to have nothing in common but their year end. They are in fact all “old economy” companies that are threatened by the challenges in “new economy”.

Mash’s greatest threat to its business is general voiding of properties in the city due to the hostile business climate that no party seems to have the political will to fix. Mawire (the acting chief executive officer) pointed them out again – congestion and vendors with their associated noise pollution. Vision is needed here.

Art, a classic Rhodesian import substitution operator, has had an extensive recapitalisation thanks to its South Korean investor Young Baik and its only threat will be imports.

The process started long before SI64 was in place, which in fact could be abandoned as shortage of forex mitigates imports anyway.

Then there is Ariston, which is involved in farming, on which our economy has its foundation. Ariston, after multiple recapitalisations and years and years of promises of the new dawn, might just about be about to get it right.

Tea production is way ahead of previous years and will be the Achilles Heel to a profit without biological revaluations this year. Stone and pome fruit production have continued to increase (Ariston has a unique six week harvesting period where it can command premium prices) and will finally come into their own in F19.

What are the threats to this business? At present, it is illegal buyers of macadamias by nationals from a country that is supposed to be our friend — how hard is it to spot these chaps? Will this continue to be tolerated? But the bigger threat is that of a looming labour shortage as many youths don’t think they should have to toil on a farm to receive a month’s wages.

Somehow they believe there are much faster ways to get money — the same thing exists in the cities. Imagine the outcry if we brought in migrant labourers from Malawi to do the job.

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