Weizmann operates in the textile and financial services
segments.
The company undertook a restructuring exercise in the last
two years, spinning off its power and foreign exchange businesses – hence,
current financial position and performance is not directly comparable to the
prior year.
The company reported
marginal losses after depreciation in the six months ended 30th
September but operated with a moderate debt load.
The company also has several other associates operating in
the power sector.
The company processes textile fabrics on a job work
basis. Management stated that their
focus will on textiles, which exports to Europe/US and now to Africa via its
Malawi operation. This segment had grown
11.5% per annum in the recent past. The
financial services business, however, employs about 75% of net assets.
The textile business faces intensive competition from
neighbouring textile processing countries such as Bangladesh and Sri Lanka. Its African operations suffer from slow
realisations at the moment. It is also subject to government policies on
taxation, export benefits, interest relief etc.
Management appear to have a lack of focus by still operating
two unrelated businesses.
It ought to be noted that 25% of consolidated net assets are
unaudited and hence, require an extra pinch of salt during analysis.
Management haven’t provided any meaningful detail on the
financial services business or even the assets on the balance sheet. Most of this appears to be comprised of
substantial loans and advances to group power companies – with no details to
assess profitability or recoverability.
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