HomeBusiness DigestRadar to off-load engineering divisions

Radar to off-load engineering divisions

Ngoni Chanakira

RADAR Holdings Ltd (Radar) is off-loading its engineering divisions to concentrate on core business, says company chairman Kenneth Schofield.

al, Helvetica, sans-serif”>Analysts said the move would benefit the diversified firm tremendously as it was now risky to focus on too many sectors in business at a time when the country is facing a difficult operating environment.

Radar has asked shareholders to exercise caution when dealing in its shares.

The shares stood at $95 on the Zimbabwe Stock Exchange on Wednesday.

Schofield said more details would be released to the public when the deal was concluded with a major partner.

“Negotiations are in progress which, if successfully concluded, will result in the disposal of primarily, the engineering divisions within the group,” the company said.

“This proposed disposal is in line with the previously-stated intention of disposing of non-core businesses in order to create a better focussed and positioned company in the future. Shareholders will be advised of the outcome of the negotiations in due course and are advised to exercise caution and consult with their professional advisors in dealing in the company’s shares.”

Schofield, who took over from his outspoken father as company chairman, last week gave government a tongue-lashing, telling shareholders that the year ended June 30 had been characterised by “the continued wanton destruction in absolute terms of the social, economic and structural fabric of this country”.

“Seemingly no regard whatsoever for the desperate need to build on the promise of all that this economy has to offer the people of this country and indeed take our place as the central pivot for the development of the entire region in which we are so key but daily becoming less and less of a meaningful participant,” he said.

“In an environment of regulatory chaos, legal turmoil and a total lack of economic direction – if such a term can be applied to our situation – your company has, like many others reporting at present, turned out what would appear to be pretty acceptable results.”

Turnover for the period ending June 30 stood at $19,3 million up from $5,8 million during the previous year.

Income before interest and tax stood at $9,1 million, up from $792 033 in 2002.

Schofield said all divisions across the group performed reasonably strongly in nominal terms, although in a number of the major divisions, particularly Border Timbers Ltd and Macdonald Bricks, there was a significant reduction in unit volume that was massively disguised by rampant inflation.

“The local economy has remained driven by inflation which, in turn, has meant continued demand for most product,” Schofield said.

“The interest rate policy, which is completely nonsensical from a macro-economic point of view, has fuelled strong demand in the sectors in which we operate, and continues to lag far behind current inflation. While we lurch from one crisis to the next, as long as this interest rate policy continues there will be zero incentive to save, zero incentive to hold onto

Zimbabwe dollars and on the basis that the value of the currency unit – whether expressed in hard currency or simply in goods and services – will be impossible to hold, demand for real assets of whatever form will continue.”

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