• Farmec and Mealiebrand swung to profits, generating an agriculture segment operating profit of US$817,352, with Farmec's profit before tax reaching US$418,923
•  Tractive Power Solutions recorded a pre-tax loss of US$366,200, with revenue declining 35% due to the termination of the Develon distribution agreement.Post-period liabilities cloud outlook
• A US$1.4 million tax assessment from ZIMRA and contingent labour claims of up to US$1.49 million pose significant risks to Zimplow's 2026 financial performance
  

Harare- Zimplow Holdings Limited, Zimbabwe-based manufacturer and distributor of agricultural implements, mining and construction equipment, metal fasteners, and automotive products has trimmed its pre-tax loss by 85% to US$492,180 in the full year ended 31 December 2025, a result that flatters the group's underlying position considerably.

The improvement, against a prior-year loss of US$3,437,388, was achieved on the back of a 13% revenue increase to US$33,544,323 and a material reduction in administrative expenses, but it masks a structural fracture within the business, the group's agriculture segment carried virtually the entire recovery while its industrial and logistics arm recorded combined losses that consumed the gains.

Arriving alongside the results are a US$1.4 million tax assessment from the Zimbabwe Revenue Authority and contingent labour claims of up to US$1.49 million, both of which post-date the reporting period and whose resolution will significantly shape the earnings trajectory in 2026.
The two business units that anchored profitability were Farmec and Mealiebrand, both of which swung from losses in 2024 to profits in 2025. Farmec closed the year with a profit before tax of US$418,923, driven by a 13% revenue increase underpinned by the availability of Massey Ferguson MF200 series tractors, which accounted for 78% of total tractor volume sales.

A line of credit secured through a local financial institution ensured supply consistency, which proved decisive in a market where stock availability has repeatedly constrained sales. Parts revenue rose 20% above the prior year, and service hours increased by 47%, reflecting measurable improvements in aftersales execution.

Mealiebrand returned a profit before tax of US$275,165 after a loss-making first half was reversed in the second half through the introduction of lower-priced second-tier products, improved procurement efficiencies, and strengthened distribution discipline. Implement volumes grew 88% in local markets and 81% in export markets, while two-wheel tractor volumes rose 39% year-on-year, indicating that smallholder farmer mechanisation is translating into real commercial demand.
Together, Farmec and Mealiebrand generated an agriculture segment operating profit of US$817,352. Segment data shows the agriculture division contributed revenue of US$16,935,275 in 2025, up from US$13,632,183 in 2024, making it the single largest revenue segment in the group.

This is the most significant structural shift visible in the results, agriculture, which was not historically the dominant identity of a group built around industrial, mining, and logistics equipment, is now the engine of solvency.
The most consequential negative development in the results was the effective collapse of Tractive Power Solutions, the business unit responsible for mining and infrastructure equipment supply. TPS recorded a pre-tax loss of US$366,200 and a revenue decline of 35% after the termination of the Develon distribution agreement in December 2024.

Develon, the South Korean heavy equipment brand formerly known as Doosan, had been TPS's primary franchise, and its loss rendered the unit commercially unviable. Management subsequently mothballed TPS after failing to secure a replacement franchise, and the FAW commercial vehicle business previously housed within TPS was transferred to another group unit to preserve continuity.
The scale of the Develon loss is visible not only in TPS's direct performance but in its effect on the group's mining and infrastructure segment as a whole, which posted an operating loss of US$335,073 on revenue of US$5,975,576 in 2025 against revenue of US$6,833,691 in 2024. The segment shrank by 12.6% in revenue terms even as the rest of the group grew, and the trajectory implies that without a functioning heavy equipment franchise, the segment's revenue base will erode further in 2026.
The board has disclosed that a replacement franchise from a "renowned global brand" is under negotiation to reclaim the mining and infrastructure equipment supply segment, but no details of the brand or the terms have been provided. This opacity limits the market's ability to assess the timeline and cost of restoring TPS to operational status.

Given that the mining and infrastructure segment historically provided a counterweight to the seasonal variability of the agriculture business, its dormancy leaves the group exposed to weather-related agricultural performance in a way that carries real earnings risk.

Two further business units contributed to the loss position. Trentyre recorded a 19% revenue decline, driven by supply chain disruptions at Beira Port, rising competition from informal tyre market participants who gained direct access to manufacturers, and downward pressure on margins that forced a pricing realignment. The business has pivoted towards the Off-The-Road segment, and that strategy showed early positive momentum toward year-end, but the full-year performance reflected the weight of these structural headwinds.

Powermec recorded a pre-tax loss of US$92,446 on a 2% revenue decline, with stock gaps caused by delayed generator container shipments depressing volumes. The unit's solar revenue grew 193% from a low base, offering a genuine diversification path, but it was not large enough to offset the genset shortfall.

The combined pre-tax loss from TPS, Trentyre, and Powermec was US$866,962, which is the figure the chairman's statement identifies as the primary drag on the group result. Against agriculture's US$817,352 operating contribution, the arithmetic is clear, these three units functionally erased the profits generated by Farmec and Mealiebrand, and it was only through reductions in administrative expenses and a positive contribution from Scanlink, which posted a profit before tax of US$248,477 on a 47% increase in truck and bus volumes, that the group avoided a deeper loss.

The most immediate risk to the 2026 financial year is the ZIMRA assessment received in January 2026, after the reporting date. The Zimbabwe Revenue Authority has raised additional income tax and VAT assessments covering the period from January 2019 to December 2022, contending that taxes arising from foreign currency transactions should have been settled in foreign currency rather than in Zimbabwe dollars at the applicable conversion rates of the period. The total assessment amounts to US$1.4 million and ZWG231,616, inclusive of penalties and interest.

Zimplow disputes the basis of the assessment and has engaged ZIMRA through a formal appeal process currently under review by the ZIMRA Legal Office. In the interim, management has entered into a payment arrangement with the ZIMRA Debt Office to mitigate enforcement risk. The associated penalties and interest, once confirmed, will be recognised in the 2026 financial year.

Against a full-year pre-tax loss of US$492,180, a US$1.4 million charge would represent a liability roughly 2.8 times the magnitude of the loss the group just spent a year reducing. Even a partial settlement or a discounted resolution would constitute a material charge relative to the group's current earnings run-rate.

Separately, contingent labour claims against Tractive Power Solutions total up to US$1,985,359, comprising a US$985,359 salary underpayment claim that was dismissed by the Labour Court on 12 February 2026 and a US$500,000 retrenchment package claim that the court awarded in favour of former employees. The retrenchment ruling is under appeal at the Supreme Court, and management has lodged that appeal on 13 March 2026.

The group's balance sheet strengthened in some respects during the year. Equity attributable to owners of the parent rose from US$28,430,838 to US$30,379,472, supported by a revaluation surplus of US$2,438,338 on land, buildings, and plant, which is a non-cash improvement. Gearing fell to 2%, well below the group's 5% internal target, reflecting the repayment of US$1,027,483 in borrowings against new proceeds of US$650,069. The short-term borrowings balance of US$475,317 at year-end is manageable, and the facility secured against a building valued at approximately US$5 million provides headroom if additional drawdown is required.

Inventories remained elevated at US$10,022,358, marginally below the prior year's US$10,145,270, and the Farmec business specifically identified high horsepower tractor stock as a concern requiring liquidation plans in Q1 2026. Trade receivables of US$5,261,343 and customer deposits of US$3,563,725 round out a working capital position that is not distressed but requires close management given the group's limited cash position.

Assets held for sale of US$3,280,000 reflect properties including the Willowvale Dagenham stand, the sale of which was cancelled in February 2026 after the buyer, The Hailing Family Trust, could not conclude the transaction. The deposit was refunded and the property reinstated in the group's accounts, meaning the cash anticipated from that disposal is no longer available and the asset remains on the market.

What 2026 Requires

Zimplow enters 2026 with three structural requirements. The first is a successful agriculture performance, which the board projects with confidence on the basis of a normal to above-normal 2025/2026 weather pattern. Farmec and Mealiebrand are well-positioned if those conditions materialise, but weather-linked agriculture revenue is inherently variable and a return to drought conditions would eliminate the primary source of group profitability.

The second requirement is an accelerated resolution of the TPS vacancy. A group that generated 50.5% of its 2025 revenue from agriculture and which has no functioning mining and infrastructure equipment business is structurally concentrated in a segment that it cannot fully control. The unnamed replacement franchise is the key variable, and the market will attach significant value to a confirmed signing.

The third requirement is managing the 2026 cost of the ZIMRA assessment and the retrenchment liability without damaging the cash position. With US$794,572 in cash at year-end, even a partial ZIMRA settlement in 2026 will require careful working capital management, and the group's ability to service those obligations while funding inventory and operations will depend on the strength of the agriculture-driven cash conversion cycle.

The 85% loss reduction achieved in 2025 is a genuine operational improvement and reflects well on the management's cost discipline and the strength of Farmec and Mealiebrand in favourable agronomic conditions. It does not, however, represent a return to profitability, and the post-period liabilities arriving in 2026 mean the group's path to a positive earnings line is more complex than the headline improvement suggests.

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