eBusiness Weekly
Taurai Mangudhla
Listed buildings and associated industries concern Turnall Holdings, remains optimistic of successful balance sheet restructuring and earnings growth initiatives despite dwindling revenues and growing net liabilities.
Turnall owed the Zimbabwe Revenue Authority (Zimra) $4,8 million in outstanding tax obligations as of December 2016 and was granted eight years to clear the debt.
As of September, Turnall made good on an approved repayment plan, advancing $504 000 to the revenue collector, acting finance director Samson Mavende said.
“The total amount outstanding to Zimra is for the principal amount. Our payments are up to date in line with the payment plan. We have paid $504 000 towards the old debt for the nine months to September,” Mavende told the Business Weekly yesterday.
While Turnall’s ability to stick to the approved payment plan is encouraging, $500 000 is only about 10 percent of the principal debt. Furthermore, the outstanding tax obligations are merely 19 percent of the company’s total debt, which still needs to be restructured.
“The outstanding tax obligation is 19 percent of the company’s total debt (and) the monthly repayment is not significant to the overall cash flows generated by the business,” Mavende said.
In the company’s 2017 half year results, net current liabilities averaged $12 million, posing working capital constraints for the group. This is despite efforts to turnaround the situation and enhance production as well as achieve profitability.
Mavende yesterday said the net current liabilities position remains at $11 million.
“Our cash flows have since improved and we are now meeting the payment plans with our creditors. We have resolved all legal issues with our creditors.
“The company is currently working on a balance sheet restructuring programme to convert some current liabilities into medium and long term loans to address the net current liabilities position. The company is also working on a structure to provide working capital for the business,” Mavende added.
As reported by our sister publication the Herald Business earlier this month, Turnall’s balance sheet restructuring is expected to be completed this year as the group focuses on reversing earnings declines experienced in the half year to June 2017.
Turnall recorded a 12 percent decline in revenue to $7,7 million on the back of a 17 percent decrease in sales volumes to 15 557 tonnes.
Roofing products volumes were 32 percent weaker in the period under review while concrete products’ volumes fell by 10 percent.
