Innscor Africa – Audited Abridged Group Financial Results For the Year Ended 30 June 2022

By Published On: October 28th, 2022Categories: Corporate announcement, Earnings



The Holding Company’s Directors are responsible for the preparation and fair presentation of the Group’s consolidated inflation-adjusted financial statements, of which this press release represents an extract. These abridged Group financial statements are presented in accordance with the disclosure requirements of the Zimbabwe Stock Exchange (“ZSE”) Listing Requirements, and in accordance with the measurement and recognition principles of International Financial Reporting Standards (“IFRS”) and in the manner required by the Companies and Other Business Entities Act (Chapter 24:31).

The principal accounting policies applied in the preparation of these inflation-adjusted financial statements are consistent with those applied in the previous annual financial statements.

There is no impact arising from revised IFRS, which became effective for the reporting period commencing on or after the 1st of January 2021 on the Group’s abridged inflation-adjusted financial statements.


The Directors would like to advise users to exercise caution in their use of these Group abridged inflation-adjusted financial statements due to the material and pervasive impact of the technicalities brought about by the change in functional currency in February 2019 and its consequent effect on the usefulness of financial statements from 2019 through to 2021, and which have resulted in carry-over effects into the 2022 financial year reporting period.

Whilst the Directors have always exercised reasonable due care, and applied judgements that they felt were appropriate in the preparation and presentation of the Group’s annual inflation-adjusted financial statements, certain distortions may arise due to various specific economic factors that may affect the relevance and reliability of the information that is presented in economies that are experiencing hyperinflation, as well as technicalities regarding the change in functional and reporting currency.


As in the prior year, due to the existing foreign exchange market complexities, the inability to source any meaningful amounts of foreign currency from the Reserve Bank of Zimbabwe (“RBZ”) Foreign Exchange Auction System, and in order to provide users with what was considered to be the best possible and practical reflection of the Group’s performance and financial position, the Group utilised estimated exchange rates in order to translate its foreign currency transactions and balances in its annual inflation- adjusted financial statements for the year ended 30 June 2022 prepared under the historical cost convention.

The principles utilised in estimating the exchange rates applied for the current year under review were identical to those applied in the prior year.

In the prior year, Deloitte was in agreement with the Group that there was a long-term lack of exchangeability of the foreign exchange within the Zimbabwean market. Accordingly, Deloitte accepted the use of an estimated exchange rate as an appropriate rate to use for translation of foreign exchange transactions. In the current year, as the RBZ has continued to make foreign exchange available on the auction system and introduced the willing buyer willing seller rate, Deloitte has concluded that there is a temporary lack of exchangeability of foreign exchange and therefore the official published rate (official spot rate) should be used to translate these foreign exchange transactions.

As noted above, the Board believes that the estimated exchange rates utilised at the time a foreign currency transaction occurred or in the foreign currency translation process provides users with the best possible and practical reflection of the Group’s performance and financial position for the year ended 30 June 2022, and were it to follow the external auditor’s interpretation of IAS 21, then the Group’s performance and financial position would have been materially mis-stated.

The external auditors, Deloitte, have therefore issued an adverse audit opinion due to the fact that the Group did not utilise the RBZ published interbank rate of exchange prevailing at the time the foreign exchange transaction occurred or at the time that the foreign balance was translated. It is worth noting, in this context, the 72% devaluation in the RBZ interbank rate from US$ 1 = ZW$366.26 at 30 June 2022 to US$ 1 = ZW$629.52 at 21 October 2022.


IAS 29 provides that inflation-adjusted financial statements are the entity’s primary financial statements, and the Group has complied with this requirement for these abridged inflation-adjusted financial statements. The Consumer Price Index (“CPI”) was applied in the preparation of the hyperinflation financial statements in accordance with IAS 29, and under the direction of the Public Accountants and Auditors Board (“PAAB”).

Due to the prevailing distortions in the economy, and the material and pervasive effects that these can have in the application of the methodologies inherent in IAS 29, the Directors advise users to exercise caution in the interpretation and use of these Group annual inflation-adjusted financial statements. Due to the foregoing, financial statements prepared under the historical cost convention have been presented as supplementary information.


These abridged Group annual inflation-adjusted financial statements should be read in conjunction with the complete set of the Group annual inflation-adjusted financial statements for the year ended 30 June 2022. The Group’s annual inflation-adjusted financial statements have been audited by Deloitte, who have issued an adverse opinion as a result of their view that the Group has not complied with the requirements of IAS 21 as noted above. The Auditor’s Report on the Group’s annual inflation-adjusted financial statements, from which these abridged Group annual inflation-adjusted financial statements are extracted, is available for inspection at the Company’s registered office. The external auditors have not audited this Press Release.


As part of our commitment to ensuring the sustainability of our business and stakeholders, the Group is utilising ISO 26000 as guidance for Social Responsibility and continues to apply the Global Reporting Initiative (“GRI”) protocol for overall sustainability. Over the years, the Group has aligned its sustainability reporting with Sustainable Development Goals (“SDGs”), demonstrating the Group’s commitment and contribution to sustainable development within the environments in which it operates. The Group continues to strengthen its practices and values across its operations to ensure that long-term business success is achieved in a sustainable manner.


The operating environment became increasingly turbulent during the financial year under review with the second half, in particular, being characterised by significant inflationary pressure and currency instability. The uncertainty felt across international commodity markets, a consequence of the ongoing conflict in Eastern Europe, also negatively affected local business sentiment, with supply-side disruptions giving rise to imported inflation across many commodity classes.

In response to the unfolding inflationary pressures, several monetary policy interventions, particularly in respect of local currency interest rates and money-supply management, were introduced at the end of the financial year under review, and despite the resultant short-term softening of consumer demand, these interventions have, for now, achieved the desired result of stabilising the local trading environment. The Board encourages the Authorities to “stay the course” and remove the remaining legal and practical distortions in the area of corporate taxation;- including addressing the confusing and unnecessarily punitive Tax regime which has the undesired impact of unfairly punishing formal businesses both in terms of transaction costs and effective taxation levels.

Notwithstanding the challenging trading conditions, the Group registered positive, and extremely pleasing, volume growth across all core businesses versus the comparative year. This was achieved on the back of a sustained focus on diversifying and expanding product portfolios, implementing affordable pricing policies, and employing efficient route-to market strategies; all of which were further supported by ongoing investment into enhanced manufacturing capacity and capabilities.

As previously reported, the erratic rainfall patterns experienced during the 2021 summer agricultural season impacted negatively on local production levels of key commodities such as maize and soya. Shortfalls in local production of these key raw materials will need to be made up with imported product in the financial year ahead; the Group has implemented appropriate strategies to manage both logistics and product input costs in this regard.

The current winter wheat plantings are indicated to be of record proportions, which should position the country favourably as regards sustainable flour supply, and a reduced import burden on the fiscus. The Group’s considerable contract growing schemes remain a critical focus area in securing raw material input, and in support of Government’s ongoing endeavours to rebuild local agricultural capacity.


In terms of IFRS and ZSE regulatory directives, the Group is required to provide financial commentary on the Group’s annual inflation-adjusted financial statements; users are once again advised to exercise caution in the interpretation and use of these Group annual inflation-adjusted financial statements as noted earlier in this Statement.

The Group recorded revenue of ZW$290.780bn during the financial year under review, representing a 49% increase on the comparative year. Revenue growth was underpinned by strong sales volumes across all core categories as the Group’s business units achieved improved capacity utilisation, introduced new products, and expanded product offerings across existing categories; this combined with optimal pricing strategies and growing demand from the informal market drove the Group to achieve a pleasing result.

Inflation-induced distortions became increasingly prevalent during the latter part of the year, reflected in the profit percentages increasing significantly.

The Group’s improved sales volumes and product mix, coupled with a well-priced strategic raw material investment and enhanced production and overhead efficiencies, combined to deliver an operating profit of ZW$87.833bn for the year under review, representing a growth of 251% over the comparative year.

The net gains from the continued disposal of the Group’s non-core businesses were recognised under financial income, whilst fair value adjustments on biological assets were also reflective of the inflationary distortions prevalent in the market during the year under review, with fair value adjustments on listed equities following a similar trend.

The net interest charge for the year of ZW$7.579bn was 75% above that of the comparative year, and representative of elevated interest rates and higher ZW$-denominated loan values.

The Group’s equity accounted earnings of ZW$8.167bn continued to contribute positively to the overall Group results and showed growth of 43% against the comparative year.

After accounting for a monetary loss of ZW$23.230bn, consolidated profit before tax for the year of ZW$70.272bn was recorded; this represented a growth of 250% against the comparative year.

The Group’s Statement of Financial Position remained robust, with a strong asset base supported by fixed assets and inventory positions and minimal net gearing at year-end. The Group’s free cash generation was good, following strong operational cash flows during the latter part of the year to support the ongoing expansion capital expenditure programme.



This reporting segment contains the Group’s Bakery Division, National Foods, and the Group’s non-controlling interest in Profeeds.

A pleasing growth in annual loaf volumes of 19% over the comparative year was recorded in the Bakery Division, on the back of improved loaf quality, and a renewed focus on the sales and distribution functions. e operation was re-structured in the final quarter of the financial year into its core components of manufacturing, sales, and distribution, and the Group is confident that this will further improve loaf quality, enhance production efficiencies, and allow for significantly improved market-reach.

Investment is well underway at a US$25mn, new world-class, fully automated manufacturing facility in Bulawayo, and this site is expected to be operational before the end of the 2022 calendar year, whilst further plant automation enhancements will follow in the Harare plant; additionally, a distribution vehicle re-fleeting programme is now also in progress.

At National Foods, volumes grew by 13% on an overall basis over the comparative year, driven by solid performances in the Stockfeeds, Down-Packed, Traded Goods, Snacks and Biscuit divisions.

Within the Flour Milling division, volume growth was muted against the comparative year, primarily as a result of constrained local wheat supply and cost-push pressure emanating from higher international wheat pricing.

The Group continues with its considerable local contract farming schemes, and in support of this, a new flour mill is currently being installed in Bulawayo, with final commissioning expected to occur early in the new calendar year. This investment will result in increased production capacity, enhanced product quality and a significant improvement in overall manufacturing efficiencies.

Volumes within the Maize Milling division closed largely in line with the comparative year, although there was some improved momentum toward the final quarter; demand in this division remains largely influenced by the preceding local maize harvest.

In the Stockfeeds division, volumes increased by 12% over the comparative year, bolstered by firm demand across the poultry sector, although improved pasture availability negatively affected some of the smaller beef feed categories. The operation continues to invest in various plant automations in pursuit of further manufacturing optimisation.

Volumes in the Down-Packed division, primarily constituting rice and salt, saw encouraging growth of 31% over the comparative year. Rice volume growth was driven by the informal sector, whilst Red Seal salt remained the brand of choice for consumers.

The Traded Goods division recorded volume growth of 34% versus the comparative year driven largely by the pasta category. This product is fully imported and, in response to growing local demand, board approval has been granted for an exciting new investment into a pasta manufacturing line which will see production being localised; it is expected that this project will commission late in 2023.

Volumes improved in the Snacks division, with a 24% increase recorded over the comparative year, on the back of the commissioning of increased production capacity during the year under review. Further production capacity enhancements will continue into the new financial year, whilst work to broaden the product portfolio continues, with the recent launch of the new “Sesame Snax” range under the increasingly popular “Allegros” brand.

In the Biscuit division, volumes were similar to those recorded in the comparative year, with demand being impacted by higher flour pricing in the latter part of the period under review. Investment into a new, state-of-the-art biscuit line has been approved, and this will provide considerable production capacity increases, a significant improvement in product quality and operating efficiencies, and will allow for an extension of the product portfolio; this plant is expected to be commissioned within the next twelve months.

Volumes in the Cereals division grew by 35% against the comparative year driven by the ever-popular “Pearlenta NutriActive” range of instant maize porridge; other exciting product additions introduced during the period included “Better Buy Soya Delights” as well as the “Smart Carbs” range of instant breakfast cereals, developed with the health- conscious consumer in mind. An additional production line has recently been commissioned; this line will provide both additional capacity and capability, and will allow for product extension into the full breakfast cereal range.

At Profeeds, stock feed volume performance closed 15% ahead of the comparative year, whilst sales of day-old chicks grew 39% over the same period, driven by sustained demand, particularly across the poultry sector. Expansion of the manufacturing platform is currently underway through the establishment of a new plant in Bulawayo; this project will be completed during the course of the new financial year, and is expected to enhance production and distribution efficiencies to the Country’s southern markets.

The fertiliser category, operating under the “Nutrimaster” brand, recorded excellent volume growth of 152% over the comparative year as the business executed on a firm order book ahead of the 2021 summer cropping season, and further supported via the recent 2022 winter wheat plantings. Initiatives continue in the business to further enhance manufacturing capacity and capability, whilst a number of innovative complementary products will also be added to the product range.

The popular “Profarmer” retail network has now grown to 47 outlets countrywide, and recorded firm volume growth across its core range of products during the year under review.

As previously reported, in May 2020, the Competitions and Tariff Commission (“CTC”) directed that the Group’s non-controlling investment in Profeeds be disallowed, and that the Group disinvest from the business; additionally, it levied a fine against the Group in the amount of ZW$40.594m for late notification of the investment. The Group appealed to the Administrative Court against the CTC directives. In January 2022, the Administrative Court overturned the CTC’s directive for the Group to disinvest from Profeeds, and it further directed that the fine be withdrawn and replaced with a caution. The CTC has since appealed the judgement to the Supreme Court.


This reporting segment comprises the results of Colcom, Irvine’s and Associated Meat Packers (“AMP”), which includes the “Texas Meats”, “Texas Chicken” and “Texas Dairy” branded store networks.

The Colcom Division, comprising Triple C and Colcom Foods, recorded an 11% growth in volumes over the comparative year, driven by strong performances in all core fresh and processed product categories. Performance at Triple C continued to be outstanding following ongoing investment into improved genetics, diets and animal housing infrastructure; annual animal production presented the highest achieved so far in the history of the operation.

The Colcom Shop at Coventry Road was refurbished during the year under review, providing customers with an improved retail experience, access to the complete product range, and an increased offering in butchery pork cuts. Investments in new and upgraded equipment in the forthcoming year, combined with improvements in product manufacturing flow design will further enhance efficiencies and increase capacity in the processing facility.

Irvine’s recorded volume growth across all three core categories. In the table egg category, a 6% growth over the comparative year represented record production within this category. Frozen poultry demand remained firm, and volumes increased 17% versus the comparative year. Demand across the day-old chick market also improved, and volumes closed 25% ahead of the comparative year.

The medium-term facilities upgrade programme which covers all three core products continues, and will enable further capacity increases in the coming year, whilst the related equipment technology upgrades will continue to drive the individual operations to achieve lowest cost of production.

At AMP, sustained protein demand combined with further expansion of the product portfolio and improved market-reach, drove overall volume growth of 16% over the comparative year.

Notwithstanding constrained raw material supplies at times, the beef category experienced a pleasing recovery, with volumes closing 21% ahead of the comparative year. The chicken category achieved volume growth of 10% against the comparative year; another solid result.

Expansion of the “Texas” retail network continued, with the opening of the third flagship “Texas Meat Market” situated at Harare’s Westgate shopping centre during the financial year under review. A further seven other “Texas” stores were opened throughout the period under review to bring the total retail footprint to 53 stores by year-end.


This reporting segment comprises Natpak, Prodairy, Probottlers and the Group’s non- controlling interests in Probrands.

Natpak recorded pleasing aggregate volume growth of 19% over the comparative financial year.

Volumes within the Rigids division closed 46% ahead of the comparative year, driven by the recent investment into increased production capacity and an extension of the product range.

The Flexibles division delivered volumes 12% ahead of the comparative year, while the Corrugated division, having diversified its production capabilities, also delivered volumes ahead of the comparative year. Notwithstanding subdued maize meal demand across the market, the Sacks division operated near capacity for much of the financial year under review.

The business continues to investigate opportunities in additional, and adjacent packaging categories, with further expansion investment planned for the coming year.

Prodairy continued its positive growth trajectory, as volumes closed 31% ahead of the comparative year, with strong performances across all of the major product categories. Most notably, the Milk category delivered volume growth of 28% ahead of the comparative year, supported by Dairy Blend under the “Revive” brand increasing volumes by 40% over the same period. The popular “Life” branded butter and cream products continue to experience firm demand with aggregate volumes in the category increasing 38% over the comparative year.

The business introduced exciting new 1 litre and 500ml product formats to the market during the year under review, allowing for further product diversification and more efficient targeting of multiple market segments.

Raw milk supplies improved during the year under review as significant investment continued through the Mafuro Farming operation into the growing milking herd, and this was complemented by further expansion of the contract producer base.

Probottlers recorded overall volume growth of 23% over the comparative year, this performance was driven mainly by the carbonated soft drink category operating under the “Fizzi” brand, following investment during the financial year under review into a new dedicated 500ml bottling line. The established cordial category, operating under the “Bally House” brand, also continued to experience favourable volume growth during the period.

At Probrands, overall volumes closed marginally behind the comparative year, although this was largely a result of the operation placing more focus on lower volume, higher-margin specialised categories. The business continues its focus on creating innovative household and condiment products.


The Group has delivered an extremely positive set of results for the financial year under review. The performance achieved has been driven by a continued focus on broadening product ranges, significant investment into modern manufacturing processes and technologies, extending production capabilities, and ensuring product and pricing relevance across the market spectrum.

The complexities in the trading and economic environment have required management to continually innovate, by creating simplistic management reporting tools and techniques that can be applied in understanding and measuring real business performance. Significant emphasis has also been placed on identifying and analysing the core functional business models within each operation, with the aim of achieving operational excellence and deeper accountability across the entire Group; this initiative will remain a key focus area in the period ahead.

The Group embarked on an ambitious US$70m investment programme in 2021, with this initiative having reached completion during the year, a further US$56mn of additional investment is planned for the forthcoming financial year. As highlighted earlier in this Statement, the 2023 financial year will see a considerable number of these projects being commissioned across the Group, enabling production capacity increases, adding new product categories, significantly improving product quality and further enhancing production efficiencies; all enabled via the introduction of world-class technologies and plant automations.

Given its size and the nature of the manufacturing cycle, the Group is reliant on both shareholders’ equity and debt funding which it deploys, collectively, in the considerable working capital pipelines it needs to establish in order to ensure consistent supply of product to the market, and to ensure that its vast capital maintenance and expansion projects can be executed on. The recent monetary policy interventions have resulted in local debt funding becoming unviable from a business model perspective, and having a pervasive impact on the Group’s cost of capital. As a result, the Group has taken firm action to re-arrange its debt facilities as well as revise its working capital strategies in order to adapt to current market conditions; this will remain a key area of focus in the short to medium term.

Careful consideration of monetary policy interventions in respect of money supply and currency stability, along with practical fiscal taxation policy, remain key determinants in fostering the necessary market confidence conducive for growth. The Group remains hopeful that consistent, pro-business measures and policies will be employed, which in turn will encourage further expansion investment into local manufacturing initiatives, reduce the country’s reliance on imported goods in the long-term, and result in increased local job creation.

The prevailing economic conditions remain complex and challenging; however, the Group retains its positive outlook as regards macro growth prospects and a medium-term recovery for the economy. Our management teams will continue to adapt and optimise business trading models, with focus being directed to balancing pricing and volume objectives, achieving appropriate levels of margin return, ensuring that overheads are contained, creating bespoke working capital solutions relevant to current market conditions, and, most importantly, ensuring maximum free cash generation.

Management will look to capitalise on the tremendous learnings and gains experienced and achieved over the past year and we remain positive that the excellent growth trajectory achieved will be sustained into the coming year.


The Board is pleased to declare a final dividend of US$1.56 cents per share payable in respect of all ordinary shares of the Company.  This final dividend will be payable to all the shareholders of the Company registered at the close of business on 11th November 2022.

The payment of this final dividend will take place on or around 25th of November 2022. The shares of the Company will be traded cum-dividend on the Zimbabwe Stock Exchange up to the market day of 8th November 2022 and ex-dividend from 9th November 2022.

The Board has also declared a final dividend totalling US$453 588 to Innscor Africa Employee Share Trust (Private) Limited. The Innscor Africa Employee Share Trust supports all qualifying beneficiaries with dividend flow and access to various loan schemes.


I wish to record my appreciation to the Executive Directors, Management and Staff for their effort during the year under review. I also wish to thank the Non-Executive Directors for their wise counsel and the Group’s customers, suppliers and other stakeholders for their continued support and loyalty.

Independent, Non-Executive Chairman
28 October 2022

Related Downloads

Innscor Africa Limited Audited Abridged Group Financial Results FYE 30 June 2022


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