CAPS Holdings Ltd (Caps) has won a tender for its Autosterile division to export drips to the value of US$300 000.
The pharmaceutical concern, which had gone through a bad patch of late, had its share price rerated by stockbrokers.
The share price shot up from $150 to $600 in a move stockbrokers said was a clear indication that the company was heading for massive growth.
Caps had been planning to sell the division when times were hard, but the board decided to retain it in the stable and it is now operating profitably and struggling to keep up with demand.
The group is now exporting US$350 000 worth of goods a month with South Africa accounting for half of that.
Management said exports now accounted for 14% of the company’s turnover.
Caps ended the period ending June 30 with a performance where for the first time in many years all the subsidiaries were trading profitably.
Management said various new initiatives had been embarked upon in the period under review.
“Despite the economic environment, we have crystallised business strategy that will ensure the continuous relevance of the group,” Caps said.
“This will be particularly important in the future when we expect the trading environment to become more competitive. More resources have been allocated by the group towards development activities.”
According to the group’s unaudited results for the six months ended June 30 the company saw a solid performance during the second quarter, which saw it reverse its performance from the loss of the previous year.
“The company is now well poised for a strong second half performance which shall be driven by trading and structural innovation,” Caps said.
“New initiatives have been put into place that have seen the company overcome its working capital constraints. The company managed to generate sufficient foreign currency to help procure essential inputs for its products.”
Caps said it managed to generate sufficient foreign currency to enable Caps Rallis to go for the full six months under review without having to go to the market to procure foreign currency for raw materials.
The company said this represented a milestone in the group’s history.
“Of concern to the group is the declining disposable incomes of the Zimbabwean consumers who make up an important part of our customer base,” the company said.
“Inflation will continue to squeeze consumers. The high inflation rate has meant local input prices have gone up significantly and this challenges our margins. The unresolved fuel, coal and electricity positions of the country also cause ongoing concern for our business.”
Caps achieved a turnover of $10 billion during the first half of the year, representing an increase of 286% up from the previous year.
In line with the group emphasis of moving away from turnover to contribution, significant gains have been made as the group realised profit before interest and taxation of $4,2 billion representing 42% of turnover.
This compares with the previous period loss of $246 million.
Attributable profit for the first six months was $2 billion versus a loss in the previous period of $597 million.