Good day to all the readers I hope you have an amazing week in which you get closer to achieving your goals. My name is Martin Sithole a young farmer by profession having studied agronomy and graduated at Blackford by college of agriculture. A retail investor on the Zimbabwe stock exchange with years of experience. I will be giving you a recap on the previous weeks market performance as well as giving you an out look on what to expect in the coming week. We are currently in earnings season and most companies are publishing their financial results although some counters have pushed their publishing dates. We are going to try and analyze some of the results posted.
The market seems to have gained traction being pushed up by counters posting some good financial results. General beltings posted some amazing results to say the least. The groups revenue rose up by 52% which is attributed to growth in the rubber unit and also increase in prices for the chemical division. Operating margins retracted from 35% to 26% for the 2020 financial year. The market seems to be loving the counter as it has been on a rally ever since although it did end the week in the red.
MedTech is a bit of a shocker from analyzing the counter’s recently published financials you fail to see what’s pushing the counter on an upward trajectory. The group posted a 5% reduction in sales. Operating profit was 69% lower as compared with the previous year. The group still have a legacy debt of ZAR25.5million to foreign creditors. The failure to pay this legacy debt has reduced the groups’ ability to source foreign credit. This has resulted in cuts in supply and stockouts which is one of the contributing factors to the reduction in volumes. Insult to injury MedTech products which occupy shelf spaces in most retail outlets. After all is said and done the counter continues to sustain its value. Will the group recover from the deep hole that they are currently in only time will tell?
Moving on to Innscor this is an absolute behemoth in the country posted some good results as a group (what else would you expect from such blue-chip counter). The group witnessed a 54% increase in operating profit toZWL3.659 billion. Group revenue was up ZWL$ 23.938 billion.
Taking a closer look at its subsidiaries bakery sales volumes were 36% down owing to lockdown restrictions last year but as restrictions were slowly lifted they picked up. National foods a heavy weight in its own right delivered a solid performance but volumes were 25% lower and I don’t see them picking up soon because of the bumper harvest that the nation is anticipating. Profeeds volumes were 36% lower with the feed division and the day-old chick’s division was 25% lower. Colcom as a group experienced an 18% drop in sales although the pig production increased by 4% with 110 000 pigs being processed. Irvines saw 13% increase in table eggs sales although the frozen chickens saw 27% drop owing to Covid 19 travel restrictions.
The AMP Group and Natpak saw volumes grow by 7% and 18% respectively. The groups board the declared a final dividend of ZWL100 cents which takes the years dividend total to ZWL134 cents.
The market has not turned a blind eye with the counter picking up steam in the previous week to end the week at ZWL78.2539 at the prevailing black-market rate of ZWL110: USD 1 it works out to USD 0.7113 per share which represents good value. I envy anyone who is holding on to Innscor shares with subsidiaries performing so well you can only expect great nothing but positives as the year progresses.
What to look forward to in the coming week? I foresee a continuation of gains on the market in general and a big opportunity for Africa sun. following the announcement by Mackair that it will be running flights from Kansane to Victoria falls and lessening of lockdown restrictions around the work I can see it gaining steam in the coming month. General beltings I’m sure will continue gaining and as for MedTech I’m not too sure it will be able to pick its self-up from the red.
Things to expect to read in the month of may we talk about how to get into trading on the ZSE we talk about the 2 different platforms you can use for trading. We also talk about the basics of stock trading and many more business issues until then let’s continue to mask up to social distance and sanitize till then may the lord richly bless you.