Zambeef has said underlying annual losses will be lower than market expectations after factors that hit the the Zambia-based food group in its first half eased in the second part of its financial year.
The London-listed group, which sells products through Shoprite supermarkets as well as its own outlets, said adjusted losses before tax for the year to 30 September – excluding unrealised foreign exchange gains or losses – will be “better than market consensus”.
When Zambeef issued its half-year results, it said exchange rates, the effects of the African swine fever virus and the aftermath of last year’s concerns over its imported beef products were affecting the business.
Last summer, Zambeef recalled imported beef lines from its own retail outlets amid allegations the products contained the chemical aromatic aldehyde. Government tests subsequently confirmed the presence of the chemical in samples. Zambeef ended contracts with external storage providers following a review of its operations.
However, Zambeef said today (29 September) the exchange rate had “returned to relative stability”, while the Zambian government had “resolved” the swine fever outbreak of last year, which had hindered the movement of livestock. Retail sales had also recovered to levels prior to the issue with its imported beef products.
Zambeef said reported revenues would be lower than market expectations when translated into US dollars. Nevertheless, an improvement in margins would help the company’s profitability.
Alongside the trading update, Zambeef said Carl Irwin, its director of strategy and development, had been named its joint CEO.
Irwin will keep his existing responsibilities but will also now oversee finance and administration at Zambeef. Francis Grogan, the company’s CEO, will oversee operations.
As joint MDs, two men have led the group since 1994, with Irwin becoming director of strategy and development after the company’s IPO in 2011. A spokesperson said the position of joint CEO “better reflected their current roles”.
In a joint statement, they 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 macro-economic backdrop experienced in Zambia recently has been stable and more helpful to Zambeef both operationally and financially and we are hopeful that this situation will continue into the 2015 financial year.”