Listed firms trading under caution

A handful of listed companies on the Zimbabwe Stock Exchange (ZSE) are trading under caution as they align their operations to strategies that could allow them to offer higher return on investment in response to disruptions by Covid-19.

The strategies are also in response to high inflation and shortage of foreign currency to procure raw materials and service machines to increase production.

Last month, diversified agro-industrial group, Zimplow Holdings advised shareholders of a pending transaction that will result in a disposal of one of their assets.

“Further to the cautionary announcements issued by the Board on 17 December 2021, the directors of Zimplow Holdings Limited (“the Company”), advise shareholders that Zimplow Holdings Limited is in negotiations for a potential transaction involving the disposal of an asset, which if successfully concluded, may have an impact on the price of the Company’s shares,” Charles Chaibva, the company’s Group company secretary said.

“Accordingly, shareholders are advised to exercise caution and should consult their professional advisors before dealing in the shares of the Company until a full announcement is made,” he said.

Cautionary statements are announcements warning/advising shareholders to exercise caution when dealing in securities of the company they invested in until details regarding the announcement are either complete or abandoned.

They are therefore forward-looking statements regarding a company’s likely outlook, expectations, forecast, estimates, targets, business plans and other statements of future events.

In January, cement maker, Lafarge Cement Zimbabwe issued a profit warning to shareholders on the company’s financial results for the first quarter to March due to production disruptions caused by the roof collapse at one of its cement mills.

“Further to the cautionary announcement dated 17 November 2021, shareholders are advised of the completion of the investigations and assessment of the damage caused by the collapse of the roof on one of the company’s mills on 11 October 2021. The company is still working diligently on the restorative works necessary so that normal operations may resume as soon as possible,” Faithful Sithole the company’s secretary said.

“Therefore, shareholders are advised that the disruption of cement production as well as the cost of the ongoing repairs will have a negative effect on the financial results of the company for quarter 1, 2022. In the circumstances, shareholders should continue exercising caution when dealing in the company’s securities until a further announcement is made,” she said.

The collapse of the roof is also expected to have a negative impact on the group’s overall business performance for their financial results for the year to December 31, 2021. There were no fatalities or injuries after the accident though.

In December, health and hygiene products manufacturing and distribution group, MedTech Holdings, which has traded under cautionary statements over the last 12 months, reiterated its intention to transform into an investment holding company.

“ . . . shareholders are advised that discussions which involve a potential series of transactions at holding company level to transform MedTech into an investment holding company with economic rights to separate investments or portfolios of investments belonging to different owners of classes of shares are on-going. Accordingly, shareholders are advised to exercise caution when dealing in the company’s securities until a full announcement is made,” the company said in a recent statement.

The group’s restructuring also entails acquisition of minority shareholding in a yet unnamed private entity.

Hospitality firm, African Sun Limited (ASL) is also trading under a cautionary with regards to one of its hotel leases

“Further to the cautionary statements dated 24 September, 21 October and 24 November 2021, Shareholders are advised that the tender process that was initiated by one of our Lessors in respect of one of our current hotel leases is still ongoing. The outcome of the tender process may have a material effect on the price of the Company’s securities. Accordingly, shareholders are advised to continue exercising caution when dealing with the Company’s securities until advised of the conclusion of the said ongoing process,” Venon Musimbe, ASL company secretary said last month. Zim Morning Post