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MedTech to return to profitability

MEDTECH sees a 60% growth in revenue and a return to profitability in the current financial year to around US$18 million, from US$11,2 million recorded last year when the group reported an operating loss of US$132 000.
CEO Afzal Motiwala told shareholders at an annual general meeting this week that revenue had grown 40% in the year to date, with the manufacturing unit now contributing 10% to turnover.
The group said strong demandfor its products was an indication that this financial year should see a return to profitability.
In the year to December 2011, revenue grew 53% from US$7,4 million following a US$1,58 million rights issue.The proceeds of the rights issue went towards financing working capital and retiring expensive short term debt. The group reported a profit after tax of US$4 223.
Motiwala said the group was working with an Indian pharmaceuticals company on a project for the local manufacture of petroleum jelly. This had, however, been put on hold until the second half. He said once this came on board, imports would be downsized. The group had also signed an agreement with an Indian company for the supply of raw materials to Zim Pharm and was now awaiting legal approval.
The malaria repellent unit’s debtors book on 90 days stood at US$1,8 million, which Motiwala said was high quality.
MedTech is divided into three operating units; MedTech distribution, Zimpharm and MMS. MedTech distribution imports popular branded products and is a leading supplier of hair care products, body lotions, body creams, toiletries and hair relaxers. Last year the division grew 54% year-on-year. Pharmaceutical operation  Zimpharm’s production resumed in March last year with focus on boosting output.
There was an agreement with a third party in a non-cash transaction in July last year, in terms of which, the group swapped a 40% equity interest in Zimpharm for capital and technical support.  — Staff Writer.

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