Home » Industry » Art Revenue Up 8 Percent

Art Corporation’s revenue for the period to January 2015 increased 8 percent to $11,4 million from $10,6 million recorded the same period last year as the company starts to feel the contribution of its investment in new machinery.

Art Corporation chief executive Mr Tapiwa Ameer told the company’s annual general meeting on Friday that the company is hopeful of meeting its $31 million turnover budget projection by end of this year.

“We are still on course to meet our full year projections and with the investment that was made in the group, there is hope for positive prospects in the year,” said Mr Ameer.

Capacity utilisation for the paper business was at 83 percent up from 50 percent recorded last year while Softex was up at 55 percent from 37 percent last year, translating to an 18 percent movement.

On the battery business, capacity utilisation was up 16 percent to 61 percent from 45 percent in prior year.

Gross profit margins for the period were sitting at 30 percent against a budget of 34 percent compared to 29 percent of the prior year.

“We had budgeted for higher profit margins in anticipation of high volumes. As a consequence to this, we recorded a small operating profit in the period under review, compared to a loss in the previous year,” said Mr Ameer.

He said cash flow remains tight and the company’s debt structure increased to $9,3 million for the period from $8,1 million of the previous period due to the investment in new machinery and equipment.

Mr Ameer said they have commissioned the machines at the chloride factory where the group has started drawing down on the $18 million facility offered by Taesung Chemical Company Limited that has enabled the company to purchase new equipment and machinery.

The investment on Eversharp will see the company increasing production by 100 percent this year.

The new machinery will see Eversharp doubling its current capacity to eight million pens by the end of this year from the current four million.

He said on the working capital facility for the period, the group has utilised $1 million and the capital expenditure of phase one has already been completed.

The company’s board approved facilities offered by Taesung Chemical of up to $3 million to finance raw material purchases and up to $15 million for capital expenditure over a period of five years.

The diversified group last year acquired new equipment and technology for Eversharp, Chloride and Kadoma Paper Mill.

Total upgrade of the phase one of Eversharp cost $400 000 the same as phase two.

Source : The Herald