MEDTECH Holdings Ltd (Medtech)’s first quarter to March results have exceeded expectations compared with the same period last year, chief executive officer William Field has said
“The first quarter showed significant organic growth compared with the same period in 2002 despite the myriad of problems facing the country,” Field said.
He said the company was sitting on a full order book for all divisions going into the second quarter.
The past year had seen the launch of the holding company, MedTech Holdings, re-branding of the product range and the acquisition of Baines Imaging Group (Big).
The company said the successful rights issue resulted in a substantially debt-free balance sheet and enabled the group to increase stockholding of raw materials and essential items.
“We have succeeded in putting in place a reserve for expansion, both organic and through acquisition when opportunities arise,” he said.
Field said the acquisition of Big, the largest radiology practice in Zimbabwe, contributed significantly to the earnings and enabled the entry of the group into service provision.
The pay back of the investment would be reflected in this financial year.
He said the Big connection would enable the company to export excess production.
The chief executive said both manufacturing units, consumer and hospital products, achieved limited success in exporting, which partly assisted with the group’s foreign exchange needs.
“With the improved stock holding of raw materials and the launching of our brands, both units, have enjoyed a better year with consumer products being particularly successful,” Field said.
He said MedTech had recognised as essential the need to generate foreign currency and the setting up of a regional network, as critical to the organisation.
The rebranding of “Alpha” and “Life” brands had enabled an improved supply to the market with better utilisation of foreign currency as the importation of finished product by the group had stopped.
Analysts forecast earnings per share range of between 45 cents and 53 cents per share for six months to June 30.
“MedTech’s retail division will most likely drive the company’s performance in the last half of the year,” said Sheunesu Juru an investment analyst.
Juru said the Big connection would also enable the group to exploit the synergy created by the acquisition.
Analysts said the acquisition of the imaging group had brought in a strong management team with high value assets and a profitable business unit and its contribution to earnings would spur the group on.
He said the company’s turnaround strategy implemented following the re-listing had paid dividends.