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profits in the segment remained depressed in the half-year period to April 30, 2011.
Commenting in its half-year financial statement, TSL said the remaining retail outlets namely ABS, TS Timber and TSW would be reorganised.
“The remaining outlets will be reorganised in the second half of the financial year with a view to improving their contribution to the group,” TSL said.
Group revenue at US$22 million increased by 34 percent compared to the same period last year while profits only rose 9 percent to US$1,3 million.
Despite the lukewarm increase in profits the diversified group declared a dividend for the interim period to April 30 2011 of US2c per share.
Profit before tax had surged by 23 percent, but a 162 percent increase in finance costs and reduced profits from associates ate into the eventual income.
TSL also said the group’s effective tax rate increased from 28 percent to 36 percent due to depreciation on buildings for which there were no “corresponding capital allowances for tax purposes”.
The group incurred US$785 736 in income tax charges against US$489 089 in the first six months of the previous financial period.
In terms of segmental performance, the group saw volumes at packaging unit Hunyani increasing by 19 percent buoyed by high tobacco output.
But Hunyani remained borrowed throughout the period after it suffered a 92 percent increase in finance costs. It contributed 8 percent to group profits.
Agricura faced increased competition, affecting its revenue, which increased by a marginal 2 percent in the half-year period.
Production volumes at Agricura increased by 12 percent, but capacity utilisation remained below 20 percent as the unit recorded a loss.
Benefits of strategic alliances with key suppliers would be felt in the second half of the year, which should turnaround Agricura’s fortunes.
TSL said recpitalisation of car rental services provider Avis continued with the fleet size increasing by 30 percent compared to the same period last year. Its capacity utilisation now stands at 55 percent.
Although logistics concern Bak closed the year ahead of budget in terms of revenue the unit’s volumes only increased by 15 percent. Its capacity utilisation, however, remained high at 72 percent.
Tobacco sales unit Tobacco Sales Floor benefited from the early start to the selling season as it was the only operational auction floor.
TSL said its market share stood at 68 percent as at April 30 compared to 49 percent in the comparative period last year, but fears increased licensing of tobacco sales floors would affect its market share.
Contribution from associate Cut Rag Processors declined by 14 percent although regional demand for the firm’s products remains high. TSL said new markets were being explored in the Middle East. Local distribution has been kept low due to low profit margins.
Production at Luxaflor Roses dropped by 37 percent compared to the 2010 first half while revenue dropped by 23 percent in the period. Revenue was affected by US dollar/euro exchange rate changes.
Despite the possibility of stiffer competition in the tobacco sales sector TSL said business prospects were bright in the second half of the year considering the seasonal nature of some of the group’s operations.