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Email ArticleCELSYS Limited has announced a $1 million loss for the half year to August 2011, compared to $1,4 million prior year.
The company attributed the loss trading position to increased operating and financing cost.
“The company continues to operate under challenging conditions as the Zimbabwean economy recovers,” company chairman, David Lenigas said.
The company said its borrowings during the period under review increased as it continued with its restructuring exercise which resulted in its exit of airtime sales.
“As a result of a strategic review of operations and to allow focus on growth opportunities, a decision was made to exit the air time resale business and Celsys Comm division was subsequently closed on 31 March 2011,” Lenigas said.
“Interest cost rose as a result of increased borrowings from Lonzim Plc as new equipment and working capital loans were provided to Celsys to rebuild the company infrastructure,” he said.
The Celsys chairman said the company’s overheads were reduced to 94 percent of turnover compared to 192 percent prior year following a review of its administration cost structure.
The company has streamlined its operations to focus on commercial and security printing.
“The cash flow implications of the new strategy were immediately felt as the Comms division business model was based on higher turnover with low margins and extended credit facilities being offered to dealers,” Lenigas said.
The group recorded a 53 percent increase in revenues to $1,1 million while margins were maintained at 20 percent with Celsys Print accounting for 84 percent of the groups revenues while Celsys Technical contributed 16 percent.
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