Zambeef (AIM: ZAM), the fully integrated cold chain foods and retail business with operations in Zambia, Nigeria and Ghana, today announces its audited results for the year ended 30 September 2019.
The financial year ended 30 September 2019 proved to be a challenging year amidst a regional drought and macroeconomic headwinds. The weakening of the Zambian Kwacha against the USD by approximately 24%, increase in the cost of fuel by 19%, together with constrained electricity supply that started in July 2019 due to reduced electricity generation arising from the low water levels in the Kariba Dam, impacted not only the Zambeef Group’s performance but also our customers spending power.
KEY FINANCIAL HIGHLIGHTS
Revenue for the Group increased by 13% in ZMW but decreased by 9% in USD as a result of the depreciation of the ZMW while Gross Profit also increased by 13% in ZMW from ZMW959m to ZMW1082m (USD88m vs USD97m). The ZMW performance has been adversely impacted by high input costs which could not be passed on to the consumer in full, whilst dollar performance has been further impacted by the depreciation of the kwacha.
Management continued to focus on bringing down the overheads, however administration expenses increased by 9% in ZMW from ZMW841m to ZMW920m. The Group achieved an operating profit of ZMW161m versus ZMW118m recorded in the previous financial year (USD13m vs USD12m) which represents a 36% increase in ZMW and an 8% increase in USD.
The profitability was mainly driven by cropping, increased volumes and margins in the stock feed division and Retail and Cold Chain Food Products which is in line with our strategic imperative of consistent revenue growth through expansion of our retail network.
Finance costs increased by 18% in ZMW and decreased by 5% in USD as a result of higher utilisation of working capital, ZMW interest rates increasing and the depreciation of the Zambian Kwacha against the USD.
As a result, Zambeef’s Group income for the year increased from ZMW10m to ZMW18m (USD1m to USD1.5m).
Zambeef’s management remains committed to focusing on core divisions to generate cash flow that will be channelled towards de-risking the business. Our plans are underpinned by:
- More Shoprite/Zambeef butchery counter concessions opened;
- Consistent revenue growth through expansion of our retail network, driving our CCFP and Stockfeed operations;
- Continued capital investment in the best performing areas of the business;
- Cash generation through improved margins, cost control, working capital management and prudent capital expenditure;
- Continued divestment of non-core assets; and
- Environmental and food safety improvement projects.
Copies of Zambeef’s Annual Report and Accounts for the year ended 30 September 2019 and Notice of AGM, together with a document setting out the proposed changes to the Company’s Articles of Association, will shortly be available on the Group’s website and posted to Shareholders.
The Group’s Annual General Meeting will be held on 30 December 2019 at Taj Pamodzi Hotel, Lusaka at 11:30 a.m. (Zambian time).
For further information, please visit www.zambeefplc.com or contact:
|Zambeef Products plc|
Francis Grogan, Chief Executive Officer
Faith Mukutu, Chief Financial Officer
|Tel: +260 (0) 211 369003|
|Strand Hanson Limited (Nominated & Financial Adviser)|
|Tel: +44 (0) 20 7409 3494|
|Tel: +44 (0) 20 7220 0500|
|Powerscourt (Financial PR)|
|Tel: +44 (0)20 7250 1446|