You are on page 1of 6


25 Birmingham Road, Southerton, Harare P.O. Box 647 Harare


Profitability Phoenix incurred a loss of $228 000 which included net finance charges of $330 000 and depreciation of $249 000. This compares to a loss of $477 000 for the equivalent prior year period. Sales for the remaining units increased marginally over the equivalent period. Demand for product remains strong but sales have been restricted by stringent credit control. The major hardware outlets have been unable to purchase significant volumes within their credit terms. Major contractual customer spending remains low, especially affecting sales at William Smith & Gourock. As a consequence of the liquidity crunch, pricing has become increasingly competitive resulting in reduced margins. Operations Plastics & Allied (incorporating William Smith & Gourock and Phoenix Brushware) Both units were profitable with William Smith & Gourock maintaining its position as the most profitable unit. Sales at Phoenix Brushware remained static, whilst William Smith & Gourock experienced a reduction. Steel & Allied (incorporating Scandia Steel & Wire, J W Searcy) Turnover at both units increased over the equivalent period but at reduced margins. Liquidity problems at the major hardware outlets and mining concerns have led to reduced sales despite potential demand. Scandia has maintained its export market but the depreciation of the Rand has further reduced margins. These units have the capacity to significantly increase sales without additional overhead costs and consequently will benefit most from any upturn in the economy. Financial Position The net worth of the company reduced by $228 000 due to the loss incurred. The company is marginally in a net current asset position.

Corporate Governance Phoenix continues to be committed to the principles of good Corporate Governance and best practice. The Companys policies and procedures are continually reviewed for compliance with accepted standards. The main board comprises a majority of nonexecutive directors and it and its sub committees meet on a quarterly basis. Outlook Phoenix has the capacity to benefit from the expected upturn in the economy. The company has been approached regarding the potential purchase of one of its operating units. It is envisaged that any such transaction could reduce borrowings by up to $2 million. Shareholders will be advised as and when these negotiations become more concrete. Declaration of Dividend In view of the loss incurred, a dividend will not be declared. HARARE 25 JULY 2013 BY ORDER OF THE BOARD Phoenix Consolidated Industries Limited

Directors M.D. Frudd (Chairman), F.J. Rodrigues (Chief Executive), T. Chiganze, W.G. Khumalo, T.N. Sibanda