ASTRA Industries Ltd finance director Heritage Nhende sees the company doing better than last year.
Nhende says his company’s turnover is forecast to grow 38% to US$28 million in the financial year to August 31 2011 despite depression in its steel business.
Speaking to businessdigest after the company’s AGM on Wednesday, Nhende said the group was anticipating a 38% increase in turnover during the financial year ending August 31 to US$28 million from US$20,27 achieved during the same period last year. He said profit would be higher in the current year compared to the last financial year.
“In terms of profit we will perform better than last year. As a group we are forecasting a 38% rise in turnover to US$28 million. We anticipate our gross margin to be between 35%-40%.”
Astra’s share price traded at 4c on Wednesday.
During the AGM managing director MacKenzie Mazimbe said the biggest challenge the group was facing in its steel business was lack of construction and trading competition which has traditionally been strong on big projects.
Astra Industries’ nature of business includes making and selling of paints, surface coatings, chemicals and steel and engineering supplies.
Volumes were said to be 24% higher in the three months to November 30 2010 while turnover rose 30% in the same period.
Nhende said the group’s business in the current financial year has been “reasonable” with the exception of Astra Steel.
Collective volumes growth of 104% for the financial year ending August 31 2010 compared to the same period last year pushed Astra Industries’ revenue to reach US$20,2 million.
The company announced a mixed bag of how its divisions fared with traditional winners recording increased volumes while others that had been depressed since the economy was dollarised managed to throw some money into the group’s bag.
Issues that were discussed during the AGM include approving the company’s financial accounts, appointments of directors and auditors and endorsing directors’ fees.
Astra achieved an operating profit of US$997 527 during the financial year ending August 31 2010. Profit attributable to equity holders of parent company was US$863 535 while operating profit was US$20,2 million.
Commenting on the company’s outlook, Astra said: “While the business environment has been stable since the dollarisation of the economy, business activity has remained depressed and is likely to continue for at least the next 12 months. Given this background, the group forecasts a moderate growth in the 2010/11 financial year”.