News / Local
National Tyre Services to re-open their Bulawayo factory
23 Aug 2011 at 05:57hrs | Views
National Tire Services (NTS) had an analyst briefing on Monday 22 August 2011.
In a brief trading update management advised that revenue grew 40% year on year during Q1 2012.
New tyre unit sales declined as a result of a deliberate focus towards higher value products given the limited credit and working capital constraints.
Nonetheless, retreading units increased significantly. The Company is in line to meet its FY 2012 target of 25% growth in revenue.
Capacity utilisation at Bandag factory is over 75% and plans to reopen the Bulawayo factory. Volumes are expected to grow by 20% with the reopening of the Bulawayo factory and not much capital expenditure is required for the reopening since the factory was moth balled.
NTS received generous trading terms from suppliers which should result in improved stock availability. Approximately 65% of group sales are cash sales. Although margins remain under pressure due to increased competition, a firm rand and rising oil and rubber prices management believe net margins can be enhanced from the 5.5% achieved in FY 2011.
With a branch network of eight and plans to reopen other branches, NTS is well poised to take advantage of the economic recovery. Estimates indicate that there are approximately 1 million vehicles in Zimbabwe of which more than 65% are in and around Harare.
In a brief trading update management advised that revenue grew 40% year on year during Q1 2012.
New tyre unit sales declined as a result of a deliberate focus towards higher value products given the limited credit and working capital constraints.
Capacity utilisation at Bandag factory is over 75% and plans to reopen the Bulawayo factory. Volumes are expected to grow by 20% with the reopening of the Bulawayo factory and not much capital expenditure is required for the reopening since the factory was moth balled.
NTS received generous trading terms from suppliers which should result in improved stock availability. Approximately 65% of group sales are cash sales. Although margins remain under pressure due to increased competition, a firm rand and rising oil and rubber prices management believe net margins can be enhanced from the 5.5% achieved in FY 2011.
With a branch network of eight and plans to reopen other branches, NTS is well poised to take advantage of the economic recovery. Estimates indicate that there are approximately 1 million vehicles in Zimbabwe of which more than 65% are in and around Harare.
Source - Byo24News
