Zambeef sees 2014 losses

Zambeef sees 2014 losses

Agribusiness Zambeef swung to a full-year pre-tax loss in the 12 months to 30 September as a "strong turnaround" in the second half failed to offset a "difficult" first half.

In a regulatory filing today (26 November), UK-listed Zambeef revealed net losses of ZMW20.2m (US$3.4m) for fiscal 2014, compared to an income of ZMW16m last year. The company saw operating profit fall to ZMW63.7m in the period, down from ZMW79.1m in 2013.

The Zambian firm attributed the losses to a host of factors, including the macroeconomic environment, commodity prices, foreign exchange and a reduction in sales of Zambeef's cold chain food products through its retail network. Sales were down 7% to 1.64bn.

However, chairman Dr. Jacob Mwanza described the firm's performance as "a year of two halves" and stressed that the group's results improved significantly in the second half. "We are pleased to say  that following a difficult year in 2013, which continued into the first half of the current financial year, the business has moved forward strongly in the second half of 2014, and we are hopeful that this situation will continue throughout the 2015 financial year."

Show the press release

Zambeef Products plc

("Zambeef" or the "Group") 

Results for the Year Ended 30 September 2014 

Zambeef (AIM: ZAM), the fully integrated agri-business with operations in Zambia, Nigeria and Ghana, is pleased to announce its results for the year ended 30 September 2014.

Financial Performance Summary

Revenue

Down 7% to USD 279.5m

(2013: USD 300.4m)

 

Gross Profit

Down 9% to USD 94.4m

(2013: USD 104.1m)

 

Pre Tax Profit/Loss

USD 3.6m loss

(2013: USD 4.1m profit)

 

 

 

Adjusted Pre Tax

Profit/Loss

USD 0.3m* loss

(2013: USD 6.0m* profit)

 

 

Net Cash Inflow from

Operating Activities

 

USD 13.8m inflow

(2013: USD 20.5m inflow)

* adjusted to exclude unrealised foreign exchange differences

Key Points

·    2014 financial year has been a year two very different halves.

·    In H1 2014, the Group recorded a loss before tax of USD6.3 million; however, in H2 2014, the Group recorded a profit before tax of USD2.7 million.

·    H1 2014 performance adversely impacted by macro-economic challenges and external influences, however, H2 2014 saw a strong turnaround of the business, led by the Group's core cold chain food product divisions.

·    Gross margin decreased from 34.7 per cent. for September 2013 to 33.8 per cent. for September 2014; however, robust cost control measures resulted in the cost/income ratio improving from 26.6 per cent. (2013) to 26.3 per cent. (2014).

·    Net cash inflow from operating activities was a creditable USD13.8 million.

·    The two JVs with Rainbow (Zam Chick and Zamhatch) are progressing smoothly and we expect to see the full benefits over the next 12 months, when Zamhatch becomes operational.

·    Acceleration of our strategic priorities, which include: the retailing of cold chain food products; forging strategic alliances and partnerships with acknowledged industry players; unlocking value and capital gains from within the Group (and to reduce debt/gearing); and developing the business into a regional food supplier.

Commenting on the results, Chairman Dr. Jacob Mwanza, said:

"We are pleased to say  that following a difficult year in 2013, which continued into the first half of the current financial year, the business has moved forward strongly in the second half of 2014, and we are hopeful that this situation will continue throughout the 2015 financial year.

We believe that the continued execution of our strategy will position us strongly to take advantage of the growth opportunities available. There remain a number of key long-term growth drivers for our business which present significant and tangible opportunities: a rapidly expanding consumer base, fuelled by an emerging middle class, increasing per capita income, rapid population growth and high levels of urbanisation. 

 

Therefore we look forward to making continued progress towards our aim of becoming a leading regional food supplier.”

Original source: Zambeef