Innscor Africa Limited (INN.zw) 2020 Half year Report

We have extracted the Chairman’s Statement from the 2020 interim report of Innscor Africa Limited (INN.zw), listed on the Zimbabwe Stock Exchange:

DIRECTORS’ RESPONSIBILITY
The Holding Company’s Directors are responsible for the preparation and fair presentation of the Group’s consolidated financial statements, of which this press release represents an extract. These abridged Group interim financial statements are presented in accordance with the disclosure requirements of the Zimbabwe Stock Exchange (ZSE) Listing Requirements for provisional interim financial statements (Preliminary Reports), 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) (COBE). The principal accounting policies applied in the preparation of these interim financial statements are consistent with those applied in the previous annual financial statements.

There is no significant impact arising from new and revised IFRS which became effective for reporting periods commencing on or after 1 January 2019.

CAUTIONARY STATEMENT- RELIANCE ON ALL FINANCIAL STATEMENTS PREPARED IN ZIMBABWE FOR 2019/2020

The Directors would like to advise users to exercise caution in their use of these interim financial statements due to the material and pervasive impact of the technicalities brought about by the change in functional currency in Zimbabwe in February 2019, its consequent impact on the usefulness of the financial statements for 2019/2020 financial periods and the adoption of International Accounting Standard (IAS) 29 (Financial Reporting in Hyperinflationary Economies), effective 1 July 2019.

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

The review conclusion on these interim financial statements has been modified by the independent auditors, Ernst & Young Chartered Accountants (Zimbabwe) as indicated in the review conclusion statement below.

FINANCIAL PERFORMANCE
As noted earlier in this report, the Group’s interim financial results have been prepared on an inflation-adjusted basis as required by IAS 29. Historical cost financial statements have not been presented due to the significant distortions arising from the hyperinflationary environment.

The Group posted revenue of ZWL4,268b during the period under review, representing a 16% increase versus the comparative period. Volume performance was generally mixed, whilst average selling prices increased, following the removal of subsidies on a number of products and the migration away from controlled pricing.

The Group’s sustained improvement in product mix reported in the last period, well-priced strategic raw material investments, and a well-controlled overhead structure, combined to give rise to an operating profit of ZWL675.404m for the period under review; this was a growth of 64% over the comparative period.

INTERIM DIVIDEND
In view of the prevailing environment, and given the need to maintain appropriate levels of working capital to support the Group’s role in national food security, the Board has adopted a prudent approach in determining the interim dividend.

The Board is pleased to declare an interim dividend of 13.73 ZWL cents per share payable in respect of all ordinary shares of the Company. This interim dividend is in respect of the financial year ending 30th June 2020 and will be payable in full to all the shareholders of the Company registered at the close of business on the 3rd of April 2020. The payment of this dividend will take place on or about the 17th of April 2020. The shares of the Company will be traded cum–dividend on the Zimbabwe Stock Exchange up to the market day of the 31st of March 2020 and ex-dividend as from the 1st of April 2020.

The Board has also declared an interim dividend totalling ZWL3.878m to Innscor Africa Employee Share Trust (Private) Limited.

APPRECIATION
I wish to record my appreciation to the Executive Directors, Management and Staff for their effort during the period under review.

I also wish to thank the Non-Executive Directors for their wise counsel as well as the Group’s customers, suppliers and other stakeholders for their continued support and loyalty.

A.B.C. CHINAKE
Independent, Non-Executive Chairman