LonZim PLC (AIM: LZM), the Lonrho (AIM: LONR) affiliated investment company focused on the recovery of Zimbabwe, reported a rise in turnover to £2.68 million in the six months to end-February from £495,000 in the equivalent period in the prior year reflecting the benefits of acquisitions completed last year, the effects of dollarisation and continued economic growth.
The pretax loss for the period of £2.38 million, compared with a £746,000 loss previously, reflects the ongoing development of the group's investments and is in line with expectations. As at 28 February 28 2010, the company had net assets of £32.77 million.
Seeds of economic recovery are evident in Zimbabwe. However, the progress remains difficult and the market comparatively small in relation to its previous volume, LonZim said in its statement. Economic recovery from the chaos of hyperinflation will inevitably take time. Confidence needs to be rebuilt, stability in commercial transactions re-established and liquidity needs to be available once again in the banking sector for both commerce and individuals to drive the economy.
The company has, where necessary, invested in new plant and machinery during 2009 ahead of recovery which means that each division within LonZim is now operating to a highly professional standard and is not only capable of servicing old and existing business but also taking on new business.
LonZim has built a portfolio of businesses in Zimbabwe that it believes are well positioned to benefit from the country’s economic recovery. The company considers investments in the tourism, accommodation, infrastructure, transport, commercial and residential property, technology, communications, manufacturing, retail, services, leisure, agricultural and natural resources sectors.
In addition to the Leopard Rock Hotel it also owns the historic Don Carlos and the Estoril hotel sites on a 300,000 square metre plot of land, including 1.5 km of beach front. The company has a stake Zimbabwe Stock Exchange listed Celsys Ltd, it has invested in an Electronic Funds Transfer (EFT) operator Paynet and it owns the Fly540 Zimbabwe airline.
The Millpal business supplies the chemical industry with ethanol based products and also manufacturers a range of cleaning products. Through LonZim’s Medsure business, it is establishing a new company which will import, wholesale and distribute pharmaceutical products.
Lonrho holds a 24.61 percent stake in LonZim.