The reporting season has started with good news! Zimplow has posted an excellent set of results. I have always been a fan of cash businesses, and Zimplow falls into this category. In the 12months ended December 2009, Zimplow generated nearly $3m. By the end of the period it still had cash amounting to $1m. That is amazing isnt it? for a company that is in the manufacturing sector, making hoes, plows , bolts and nuts, to make a a cool $2.2 million after tax.
This shows you that there is still room for well run companies in the right sector. Zimbabwe's agricultural sector remains a key pillar of the economy with the right policies in place. The company actually saw an increase in its unit sales, even thogh exports were down. Volumes for Mealie Brand its plows and hoes division were up 18% during the year as local distributors started to rebuild their businesses.
These profits were achieved with very little borrowings. I was surprised to see that the company actually has a line on its income statement called Finance income with $57,362. You wont see this line on too many income statements for a long time to come yet Zimplow did it. What is their recipe.
Net Asset Value per share is actually 3 cents at a time the share price is trading at around 2 cents. This is one company that should really be trading above NAV. I wont hesitate to recommend Zimplow as a SOLID BUY.
Enough said!
Want to know more about this company. Visit their website @ http://www.zimplow.co.zw/index.asp
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