Business / Companies
Pioneer revenue to increase by $21m in 2014
31 Mar 2014 at 15:17hrs | Views
Pioneer Corporation's revenue is expected to increase by at least $21 million in 2014 after the incorporation of the business assets and liabilities of Unifreight Limited in December 2013, group acting CE Gary Smith told analysts today, ZFN reported.
"Since the final approval required was only received in late December 2013 no trading results of those businesses were able to be reflected but there was a gain on purchase of the business which shows as an income line on our consolidated statement of comprehensive income," he said.
He noted that this resulted from an increase of the net asset value of the business since 2011 (when the transaction was meant to be finalised) compared to a reduction in the group's share price considering the issue of shares contributed largely to the consideration.
"This share issue was noted in the press recently and is included on our consolidated statement of financial position under current liabilities. The revenue of the group will now increase by at least $21 million in 2014 and the combination of businesses will also result in improved profits as Unifreight has consistently produced profits in recent years," said Smith.
Smith said that they're very excited and confident that this will provide them a greater platform to achieving a larger market share, improve their synergies within the group, share costs and produce better results for years to come.
Pioneer recorded an 11% drop in revenue to $23.68 million and an operating profit of $3.214 million against $37 000 in 2012.
He indicated that 2013 was a tough year for industry in general in Zimbabwe and as a group they felt the impact of this too.
"This was particularly noted in our flagship transport company, Pioneer Transport where revenues eased and operating losses were incurred resulting in poorer results than those achieved in the previous year," said Smith.
Furthermore, he told analysts that as management they have reacted to that and have installed a new management team in late 2013.
He said they are already seeing a turnaround in fortunes in that business with both Pioneer Transport and Coaches recording profits in January 2014.
Their other major flagship being pioneer Coaches has seen a 7% increase in revenue from 2012 and this has been aided by the acquisition of 15 new buses in late 2013.
"Further it needs to be said that the businesses continue to make net cash inflows from operations as noted on the consolidated statement of cash flows which is positive," he added.
Smith pointed out that they recognise that in the transport and passenger industries margins are very slim and that they need to pay very close attention to the cost of fuel, which is 30% of revenue, and administrative expenses especially.
There is a huge need, said Smith, as reflected in the results, that in 2014 these particular cost drivers are reduced and managed better and we intend to achieve that.
'We will naturally look to grow our top line too to levels in excess of 2012 numbers but we want to make profits and pay dividends so reducing costs is fundamental to achieving this and we are hugely committed to ensuring that happens," he noted.
The group recorded a $574 000 loss for the year against a $562 000 loss achieved last year. Meanwhile, the group's total assets improved to $35.30 million versus FY12's $17.87 million.
"Our consolidated statement of financial position has doubled in value compared to 2012 due to the inclusion of the Unifreight assets allied to the increased fleet of buses and other fleet additions in Botswana and Pioneer Transport,' said Smith.
Another point highlighted by the acting CE is the acquisition at the beginning of 2013 of the remaining shares in a couple of their foreign subsidiaries and hence bringing them all 100% into their Pioneer Corporation Africa stable.
He said 2014 promises to be a "watershed year for the group", considering the combination of the Unifreight businesses into Pioneer Corporation Africa and the various initiatives they are considering for the group.
Smith noted that they are very interested in creating a footprint in Zambia and increasing what they have in Botswana as they consider both countries to have potential to increase their transport options and routes.
"We have now re-entered the local passenger market to great success. We have established our highly sought after and respected brand on various routes across the country and intend to continue expanding our fleet to service our customers, as only we at Pioneer know how to do," he added.
As indicated by Smith they consistently recognise the need to improve their fleet, as not only does it improve efficiencies in costs but also market perception is driven by robust and identifiable assets.
He said they understand that the economy and liquidity in Zimbabwe is tight and "that will not change in 2014."
However, Smith stated that as a crucial service provider to both industry and the people of Zimbabwe as a whole they will strive to improve their efficiencies, offer better service throughout their network of facilities and depots and produce results they will be proud of and satisfy their stakeholders and shareholders alike.
"Since the final approval required was only received in late December 2013 no trading results of those businesses were able to be reflected but there was a gain on purchase of the business which shows as an income line on our consolidated statement of comprehensive income," he said.
He noted that this resulted from an increase of the net asset value of the business since 2011 (when the transaction was meant to be finalised) compared to a reduction in the group's share price considering the issue of shares contributed largely to the consideration.
"This share issue was noted in the press recently and is included on our consolidated statement of financial position under current liabilities. The revenue of the group will now increase by at least $21 million in 2014 and the combination of businesses will also result in improved profits as Unifreight has consistently produced profits in recent years," said Smith.
Smith said that they're very excited and confident that this will provide them a greater platform to achieving a larger market share, improve their synergies within the group, share costs and produce better results for years to come.
Pioneer recorded an 11% drop in revenue to $23.68 million and an operating profit of $3.214 million against $37 000 in 2012.
He indicated that 2013 was a tough year for industry in general in Zimbabwe and as a group they felt the impact of this too.
"This was particularly noted in our flagship transport company, Pioneer Transport where revenues eased and operating losses were incurred resulting in poorer results than those achieved in the previous year," said Smith.
Furthermore, he told analysts that as management they have reacted to that and have installed a new management team in late 2013.
He said they are already seeing a turnaround in fortunes in that business with both Pioneer Transport and Coaches recording profits in January 2014.
Their other major flagship being pioneer Coaches has seen a 7% increase in revenue from 2012 and this has been aided by the acquisition of 15 new buses in late 2013.
"Further it needs to be said that the businesses continue to make net cash inflows from operations as noted on the consolidated statement of cash flows which is positive," he added.
Smith pointed out that they recognise that in the transport and passenger industries margins are very slim and that they need to pay very close attention to the cost of fuel, which is 30% of revenue, and administrative expenses especially.
There is a huge need, said Smith, as reflected in the results, that in 2014 these particular cost drivers are reduced and managed better and we intend to achieve that.
'We will naturally look to grow our top line too to levels in excess of 2012 numbers but we want to make profits and pay dividends so reducing costs is fundamental to achieving this and we are hugely committed to ensuring that happens," he noted.
The group recorded a $574 000 loss for the year against a $562 000 loss achieved last year. Meanwhile, the group's total assets improved to $35.30 million versus FY12's $17.87 million.
"Our consolidated statement of financial position has doubled in value compared to 2012 due to the inclusion of the Unifreight assets allied to the increased fleet of buses and other fleet additions in Botswana and Pioneer Transport,' said Smith.
Another point highlighted by the acting CE is the acquisition at the beginning of 2013 of the remaining shares in a couple of their foreign subsidiaries and hence bringing them all 100% into their Pioneer Corporation Africa stable.
He said 2014 promises to be a "watershed year for the group", considering the combination of the Unifreight businesses into Pioneer Corporation Africa and the various initiatives they are considering for the group.
Smith noted that they are very interested in creating a footprint in Zambia and increasing what they have in Botswana as they consider both countries to have potential to increase their transport options and routes.
"We have now re-entered the local passenger market to great success. We have established our highly sought after and respected brand on various routes across the country and intend to continue expanding our fleet to service our customers, as only we at Pioneer know how to do," he added.
As indicated by Smith they consistently recognise the need to improve their fleet, as not only does it improve efficiencies in costs but also market perception is driven by robust and identifiable assets.
He said they understand that the economy and liquidity in Zimbabwe is tight and "that will not change in 2014."
However, Smith stated that as a crucial service provider to both industry and the people of Zimbabwe as a whole they will strive to improve their efficiencies, offer better service throughout their network of facilities and depots and produce results they will be proud of and satisfy their stakeholders and shareholders alike.
Source - zfn
