CONSTRUCTION materials producer Turnall Holdings Limited secured additional loan facilities from shareholders and a financial institution during the half-year ended June 30, 2025, as part of efforts to stabilise operations and return to profitability.
The financing move follows a June announcement that the company was resizing its operations to improve cash flows and restore profitability after a turbulent 2024.
Turnall’s losses had nearly doubled to US$2,92 million in the financial year to December 31, 2024, largely driven by inflation-induced operating costs.
Losses continued into the first half of 2025, amounting to US$244 884, although this was a marked improvement from the US$1,2 million loss in the comparative period last year.
“Financing costs went up from US$16 307 last year to US$66 768 this year,” Turnall chairperson Grenville Hampshire said.
“The business accessed additional loan facilities from shareholders and a financial institution during the period under review, resulting in an increase in finance costs.”
Despite the higher borrowing costs, Turnall posted stronger cash generation.
Operating cash flows before working capital changes reached US$406 529, compared to an outflow of US$677 682 last year.
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“The cash was partly used to pay trade and other payables, resulting in the latter decreasing by US$2 million,” Hampshire said.
“The balance of the amount paid to creditors was financed by a loan received from the shareholders in December 2024.”
He said trade and other receivables also declined by US$1,96 million, mainly due to the receipt of fibre-cement plant components that had been prepaid in the previous year.
The group is pressing ahead with its capital expenditure programme, having spent US$16 million on civil works for a new fibre-cement sheeting plant at its Harare factory.
It also took delivery of plant components worth US$1,5 million during the period.
“Cash and bank balances declined by US$3,2 million due to the utilisation of the shareholders' loan proceeds for working capital and civil works on the new sheeting plant,” Hampshire said.
He said management had crafted a robust turnaround plan, which the board believes will return the company to profitability.
“The plan addresses revenue growth, production efficiencies, business diversification, working capital management, and cost containment, amongst other initiatives,” Hampshire said.
