Correction to Final Results

RNS Number : 4928J
Zambeef Products PLC
05 December 2018
 

 

 

 

 

 

Following the completion of the post audit technical review by the external auditors, a number of changes were made to the 2018 Annual Financial Statements to ensure full compliance with IFRS. Although the Consolidated Statement of Comprehensive Income and the Consolidated Statement of Financial Position remain materially unchanged, the EBITDA figure included in the Consolidated Statement of Cash Flows increased by ZMW 65.5 million (US$ 6.6 million) as a result of revised disclosure. However, the Cash and Cash Equivalents amount as at the end of the financial year remains unchanged. The following announcement is otherwise unchanged from that published by the Company on 21 November 2018.

 

 

Zambeef Products plc

("Zambeef" or the "Group")

Full year results for the year ended 30 September 2018

 

ROBUST FIGURES AND STRONG MARGIN GROWTH AS GROUP EXECUTES ON STRATEGY

 

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 2018.

 

Financial Highlights 

 

 

 

 

 

 

 

 

(Figures in 000's)

 

2018

2017

%

 

2018

2017

%

 

 

USD

USD

Change

 

ZMW

ZMW

Change

 

 

 

 

 

 

 

 

 

Revenue

 

280,301

255,796

9.6%

 

2,780,589

2,435,182

14.2%

Gross Profit

 

96,689

83,889

15.3%

 

959,159

798,631

20.1%

Admin Expenses

 

(84,767)

(74,788)

(13.3%)

 

(840,889)

(711,978)

(18.1%)

Operating Profit

 

11,922

9,102

31.0%

 

118,270

86,653

36.5%

Share of loss equity accounted investment

 

(75)

-

N/A

 

(742)

-

N/A

Finance Costs

 

(7,078)

(9,234)

23.3%

 

(70,215)

(87,904)

20.1%

Exchange Gains/(Losses)

 

(1,946)

704

(376.3%)

 

(19,302)

6,701

(388.0%)

Profit/(Loss) Before Tax

 

2,823

572

393.5%

 

28,011

5,450

414%

Tax

 

(429)

(110)

(289.5%)

 

(4,257)

(1,049)

(305.8%)

Profit from Continuing Operations

 

2,394

462

418.2%

 

23,754

    4,401

439.7%

Profit/(Loss) from Discontinued Operations

 

(1,337)

(119)

 

N/A

 

(13,261)

(1,133)

N/A

Profit After Discontinued Operations

 

1,057

343

208.5%

 

10,493

3,268

221.1%

Adjusted Profit Before Tax (*)

 

5,075

109

NA

 

50,343

1,040

NA

EBITDA

 

29,677

18,239

62.7%

 

294,390

173,629

69.6%

Gross Profit Margin

 

34.5%

32.8%

 

 

34.5%

32.8%

 

EBITDA Margin

 

10.6%

7.1%

 

 

10.6%

7.1%

 

Debt/Equity (Gearing)

 

22.0%

21.8%

 

 

22.0%

21.8%

 

Debt-To-EBITDA

 

1.9

3.5

 

 

2.3

3.6

 

 

(*) adjusted to exclude unrealised foreign exchange differences and losses.

 

Performance Overview

·    The Group has delivered a solid financial performance, driven by:

Good volume and margin growth in the Retail and Cold Chain Food Products division and Stockfeed division

Return to profitability at the Masterpork, Nigeria and Wheat Mill operations

Continued divestment of non-core assets to reduce debt (as evidenced by the reduction in the Debt-To-EBITDA ratio) and provide for additional cash to invest in the Group's operations

 

·    As planned, 10 new Zambeef Macro retail stores were successfully opened across strategic locations in Zambia and three in-store Shoprite butcheries were opened

 

·    18 sites were purchased for development with plans to open 10 new Macro outlets each year over the next three years

 

·    The Group closed 14 small retail stores as part of its ongoing drive to optimise revenue and efficiencies across the division

 

·    Key capital expenditure operations throughout the period focused on:

The expansion of the retail network

The commissioning of the new Copperbelt processing and distribution hub to improve efficiencies in the Copperbelt and North Western Province operations

Completing the expansion of the breeding farm and hatcheries to increase day-old chick production from 344,000 to 430,000 birds per week

Completing the new stock feed plant at Mpongwe to ensure additional stock feed capacity

 

·    Strategic priorities for the Group in FY19 remain unchanged:

Continue the strong start to the year which has delivered revenue, margin and volume growth through expanding retail network and addressing supply constraints in the CCFP and stockfeed operations

Committed to employing EBITDA to fund working capital, capital expenditure for financially viable projects and to service debt

Further reducing gearing and dollar debt, in order to help to mitigate foreign exchange and interest rate risk exposures

Continue works on E&S/Food Safety strategies

Improving cash conversion from strong working capital control and tight control on Capex with effective managerial responsibility - no further debt is intended to be raised in the near future, and the Group expects to generate positive free cash flow in FY19

 

 

 

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

"Zambia's economy remained relatively stable for the majority of the financial year to September 30, 2018. However, September saw the Kwacha suffer significant depreciation as economic conditions weakened amid wide concerns for emerging markets. Notwithstanding this downturn the Group's results were encouraging, with revenue in Zambian Kwacha increasing by 14.2% year-on-year. The Group experienced robust volume and margin growth in the Retail and Cold Chain Food Products division and Stockfeed division, which together underpinned revenue growth."

 

"Despite these temporary macro concerns, which are now abating, the new financial year has started well for Zambeef with continued revenue, margin and volume growth.  The Group expects to continue to grow US$ earnings in 2019, and generate positive free cash in the financial year. It remains committed to employing EBITDA to fund working capital, capital expenditure for financially viable projects, and to service debt and, as a result, the Group does not intend to raise further debt in the near future. In line with its stated strategic objectives, it plans to continue to reduce its debt levels in the medium term, which will help to mitigate foreign exchange and interest rate risk exposures."

 

For further information, please contact:

 

Zambeef Products plc

Tel: +260 (0) 211 369003

Francis Grogan, Chief Executive Officer                

Craig Harris                                        

 

Strand Hanson Limited

Tel: +44 (0) 20 7409 3494

James Spinney

Ritchie Balmer

Frederick Twist

 

finnCap               

Tel: +44 (0) 20 7220 0500

Chris Raggett

 

Powerscourt

Tel: +44 (0)20 7250 1446

Nick Dibden

Jana Tsiligiannis

 

 

 

Notes to Editors

The Zambeef Group is one of the largest integrated cold chain food producers in Zambia, involved in the production, processing, distribution and retailing of beef, chicken, pork, milk, eggs, dairy products, fish, flour and stock feed. The Group also has large cereal row cropping operations (principally maize, soya beans and wheat), with approximately 7,971 hectares of row crops under irrigation, which are planted twice a year and a further 8,623 hectares of rain-fed/dry-land crops available for planting each year.

Further information can be found on www.zambeefplc.com

 

 

 

 

 

 

 

 

 

 

 

 

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

 

CHAIRMAN'S REPORT

Volume and margin growth in the Retail and Cold Chain Food Products division and Stockfeed division reflects continued success in the execution of the Group strategy.

 

THE ENVIRONMENT

Zambia's economy remained relatively stable for the majority of the financial year to September 30, 2018.

GDP grew by 3.9% in the 2017 calendar year (2016: 3.8%), helped by rising copper prices, a good crop harvest in the previous season, and moderating inflation. The economy is forecast to grow by 4% in 2019.

However, in September 2018 the Kwacha suffered significant depreciation as economic conditions weakened amid wide concerns for emerging markets. The Kwacha weakened during the period with the exchange rate ending the period at around ZMW 12.24/USD, having started the period under review at ZMW9.67/USD.

Notwithstanding the downturn in economic conditions in the second half of this financial year, the Group's results were encouraging, with revenue in Zambian Kwacha increasing by 14.2% year-on-year. The Group experienced robust volume and margin growth in the Retail and Cold Chain Food Products division and Stockfeed division, which together underpinned revenue growth.

As previously reported, Zambeef faced a number of external challenges during the year.

An outbreak of cholera during the rainy December and January months caused temporary closure of several Zambeef retail stores, along with those of other retailers, as part of the Zambian government's wider measures to control the disease. The financial impact on the Group was limited and Zambeef honoured its commitment to support local communities in partnering with the Ministry of Health donating chlorine, other disinfectants and cleaning materials to combat the spread of the disease.

In April 2018, an outbreak of Foot and Mouth Disease (FMD) was announced by the Ministry of Fisheries and Livestock. The Group's Kalundu Dairy was affected by the disease resulting in the loss of 175 cattle. The disease was contained and the herd declared FMD free on 12 July 2018. Zambeef confirmed at the time that the volume of milk being produced by the dairy herd had recovered to previous levels.

The financial impact of FMD was provided for in March 2018 and the Group received USD240,000 in insurance compensation for the 175 cattle lost.

In the second half of 2018, the common bacterial disease, Bacterial Leaf Streak (BLS), was detected in its winter wheat crop. As a result of the disease, wheat yields during the September 2018 harvest were lower than initial management expectation. However, commodity sales contracts during 2018 were concluded at higher than budgeted prices per ton, offsetting the financial losses resulting from BLS and resulting in the Cropping division's financial performance for the 2018 financial year exceeding original management expectation.   

TRADING RESULTS

The Group achieved a Profit After Tax (excluding discontinued operations) of ZMW23.8 million (USD2.4 million) versus ZMW4.4 million (USD0.5 million) in the prior corresponding financial period. Volumes and gross margins increased in our core divisions of Retail and Cold Chain Food Products (CCFP) and Stockfeed.

This performance was encouraging given the significant increase in overheads during the period as a result of the Government's move to eliminate subsidies on fuel and electricity. We have also seen an increase in labour costs and costs from road tolls, licence fees, and levies on livestock and crops.

 

 

Retail and Cold Chain Food Products (CCFP)

Zambeef's chain of 206 retail outlets - both own-brand and within Shoprite supermarkets - remain at the heart of the business, with demand from consumers driving supply.

During the period, 10 new Zambeef Macro retail stores were successfully opened across strategic locations in Zambia and the Group closed 14 small retail stores as part of its ongoing drive to optimise revenue and efficiencies across the division.

The Retail and Cold Chain Food Products division delivered a very satisfactory EBITDA of ZMW193.5 million (2017: ZMW132.7 million) or USD19.5 million (2018: USD13.9 million), generating an EBITDA margin of 9.7% (2017: 7.0%).

The growth of this division will remain a core focus for the Group and supports its strategic ambitions to drive Cold Chain Food Products and Stockfeed volumes through the expanding retail stores network.

The group is pleased to report a return to profitability for the Masterpork and Master Meats Nigeria divisions in the last quarter of the 2018 financial year following management and operational restructuring.

Stockfeed

Zambeef's stockfeed operations continued to grow during the year, and the division remains a significant contributor to Group performance.

The Stockfeed division produced 200,846 tons of feed in 2018 compared to 155,795 tons in 2017, representing a 28.9% increase.

The new Novatek stockfeed plant in Mpongwe, which opened in 2017, has reached 44.4% capacity, compared with a target of 30%.

The Stockfeed division Gross Profit margin reduced from 25.2% to 23.2% compared to the prior corresponding financial period which was largely caused by an increase in soft commodity prices in H2 of 2018. This resulted in a reduction in Gross Profit from ZMW166.9 million to ZMW163.4 million (USD17.5 million to USD16.5 million).

Cropping

The Cropping division finished the year ahead of management expectations, despite the Bacterial Leaf Streak outbreak.

The Group is one of the largest cereal row cropping operations in Zambia, with approximately 7,787 hectares of row crops under irrigation, which are planted twice a year, and a further 8,694 hectares of rainfed/dry-land crops available for planting each year.

The Cropping division Gross Profit margin increased from 26.6% to 36.8% compared to the prior period. This resulted in an increase in Gross Profit from ZMW134.6 million to ZMW189.6 million (USD14.1 million to USD19.1 million).

The Cropping division delivered a strong EBITDA margin increase from 3.2% to 13.7% compared to the prior period. This resulted in an increase in EBITDA from ZMW16.4 million to ZMW70.9 million (USD1.7 million to USD7.1 million). This was as a result of an improved gross profit performance as well as improved cost control.

Other

Zamleather and Zambeef's wheat mill were tracking behind management expectation during the year, however wheat mill production increased significantly in the fourth quarter with the introduction of new management.

 

 

INVESTMENT

Capital expenditure was under budget for the 2018 financial year, with USD14.5 million spent on continuing operations (The budget was USD16 million).

USD4.2 million was spent on the continued rollout of new modern Macro retail outlets across Zambia, with 10 new stores opened during the financial year.

These new world-class outlets are proving popular, with like-for-like sales increasing by 37.8% from the prior period. Their success has accelerated our review of legacy stores to phase out poorer performing outlets to optimise marginal contribution. This approach will help improve in both distribution and further cost efficiencies.

Outlets in border towns have continued to outperform, enabling the Company to realise its long-held strategy of meeting growing regional demand. One border town outlet opening is planned for the 2019 financial year.

In October 2017, Zambeef welcomed the Zambian President, H.E. Edgar Chagwa Lungu, to Mpongwe Farm on the Copperbelt to formally commission the Company's USD30 million hatchery and stockfeed mill which is now the largest agricultural investment in the province.

Zambeef completed the sale of 90% of Zambeef's shareholding in its wholly owned subsidiary Zampalm Limited, to the state-owned Industrial Development Corporation (IDC) for a cash consideration of USD16 million on 6 April 2018, in line with the Group's ongoing strategic focus on reducing Group debt. Zambeef continues to oversee the operation under a management agreement that includes a rollout of an outgrower scheme to develop further the remote rural communities of Muchinga, where the plantation is located.

DIVIDEND POLICY

It remains the Board's intention to return the Group to annual dividend payments once cash flow permits. Reducing Group debt levels as well as the cost of debt is an important prerequisite to achieving this objective. In particular, the redemption of the preference shares held by CDC is a significant consideration, as although they rank as equity, the redemption value of the shares escalates at an annual compounded rate of 12%, which is significantly higher than the average cost of the Group's US Dollar debt, which is approximately 7%. The Board is therefore considering, as a priority, various strategic options that would enable the preference shares to be redeemed.

 

LEADERSHIP SUCCESSION

Leadership of the Group will transition to a new management team by 31st December 2019, with the retirement of the current Chief Executive Officer, Mr Francis Grogan effective from that date.

 

Mr. Grogan, assisted by the Board's Remuneration and Succession Committee, is actively managing this transition process. Deputy Managing Director, Mr Walter Roodt, has been identified by the Board to succeed Mr Grogan, and is working closely with him to ensure a successful and smooth transition.  Furthermore, Mr. Grogan is working closely with Mike Lovett, the Group's Chief Operating Officer and Director of Agriculture, who will take over operational responsibilities from January 2019.

 

BOARD CHANGES

As we enter into a renewed period of growth for Zambeef, I would like to thank co-founder and former Joint Chief Executive Officer Dr Carl Irwin, who retired from the Group on 31 March, 2018, after 23 years of service, during which time he and Francis Grogan grew the Company to the impressive heights it has reached today.

On 24 May 2018, Tim Pollock, Joint Chief Executive Officer, announced his resignation from the Board for personal reasons. We wish to thank Tim for his contribution to the Company.

Frank Braeken joined the Board as a Non-Executive Director on July 27, 2018, as the second nominee of CDC Group. Frank is a Belgian national with extensive experience in the Fast Moving Consumer Goods ("FMCG") sector, including 26 years with Unilever where he lived and worked in nine countries on four continents.

 

OUTLOOK

The macro-economic climate is anticipated to be more challenging for Zambia in 2019, including high national debt levels and an increasingly volatile Kwacha exchange rate, which could impact on the growth of the Zambian economy. 

 

Despite these macro concerns, the new financial year has started well for Zambeef with continued revenue, margin and volume growth.  The Group expects to continue to grow US$ earnings in 2019, and generate positive free cash in the financial year. It remains committed to employing EBITDA to fund working capital, capital expenditure for financially viable projects, and to service debt and, as a result, the Group does not intend to raise further debt in the near future. In line with its stated strategic objectives, it plans to continue to reduce its debt levels in the medium term, which will help to mitigate foreign exchange and interest rate risk exposures.

 

In conclusion, I wish to thank all Management and Staff in the Group for their on-going commitment and professionalism during what has been another challenging year. Their contribution, at every level, is greatly appreciated, and helps make Zambeef one of the pre-eminent Zambian companies. I would also like to thank my Board colleagues for their wisdom and guidance, and look forward to working with them in the coming year.

 

Dr Jacob Mwanza

Chairman

20 November 2018

 

 

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

 

CHIEF EXECUTIVE OFFICER'S REVIEW

OVERVIEW

Zambeef's Retail and Cold Chain Food Products (CCFP) and Stockfeed divisions have consolidated their positions as the Group's core engines of growth.

These two focus areas remain at the heart of operations and continue to contribute strong cash flow to the Group, enabling management to focus on some of the underperforming divisions.

Our turnaround strategy at the Masterpork, Nigeria and wheat mill operations has resulted in a return to profitability for those divisions, increasing their contributions to the overall business.

The Group has achieved Profit After Tax (excluding discontinued operations) of ZMW23.8 million (USD2.4 million) (2017: ZMW4.4 million or USD0.5 million). Volumes and gross margins have increased in our core divisions of Retail and Cold Chain Food Products and Stockfeed.

This positive performance was achieved despite a significant increase in overheads during the period as a result of the Government's move to phase out subsidies on fuel and electricity, with overheads increasing by 16.9% in ZMW (12.2% in USD) during the period. We have also seen an increase in manpower costs and costs from road tolls, license fees, and levies on livestock and crops.

STRATEGIC FOCUS AREAS

Zambeef remains unwavering in its strategic focus on the core divisions that generate strong cash flows: Retail and Cold Chain Food Products, and Stockfeed.

During the period, we continued our divestment of non-core assets to reduce our debt further and generate additional cash, concluding the sale of our 90% shareholding in Zampalm Limited to the Industrial Development Corporation (IDC) for a cash consideration of USD16 million, as previously announced.

Retail and Cold Chain Food Products

The growth in market demand, and associated development of Zambeef's retail chain, continues to drive cold chain food production as we add value and provide linkages between small-scale, emerging and commercial farmers and end consumers.

During the period, 10 new Zambeef Macro retail stores were successfully opened across strategic locations in Zambia, along with three in-store Shoprite butcheries.

The new outlet in Nakonde is in line with our approach of targeting border towns to tap into the growing regional demand for our products.

This growth emphasises the Group's market-driven, vertically integrated approach, through which retail demand drives production along our value chain.

The Macro stores, which sell our full range of cold chain food products, including Zamhatch's day old chicks, Novatek stockfeed, and in some instances Zamleather's Zamshu brand footwear, are bringing world-class standards of hygiene, service, security and affordability to our traditional markets in low- and medium-density urban and peri-urban areas.

Revenue from Macro outlets grew 54.4% in Kwacha terms (48.2% in USD) compared with the previous year.

Our Zambeef-branded outlets account for 83% of retail sales, while our operation of in-store butcheries at all Shoprite supermarkets across Zambia accounts for 17% of retail turnover. This balance has remained relatively unchanged in recent years and ensures a diversification of exposure across retail segments.

The Group closed 14 small retail stores during the period to optimise efficiencies and concentrate on outlets with higher marginal contribution.

Cold Chain Food Product volume increased by 5.7%, driven by strong performances in the chicken and beef sectors.

Beef volumes increased by 7.6% from 16.8 million kgs to 18.1 million kgs.

Chicken volumes rose by 9.1% from 11.7 million kgs to 12.8 million kgs, with some 70% of chickens supplied by outgrower farmers. As demand outstrips supply, Zambeef continues to formalise a market that remains largely driven by the informal sector, presenting significant opportunities for growth.

Day Old Chick volumes increased by 34.6% from 12.6 thousand to 16.9 thousand.

Dairy volumes decreased by 3.9% from 20.0 million litres to 19.2 million litres.

Pork volumes decreased by 8.1% from 10.8 million kgs to 9.9 million kgs during the period under review.

In April 2018, an outbreak of Foot and Mouth Disease (FMD) was announced by the Ministry of Fisheries and Livestock. The Group's Kalundu Dairy was affected by the disease resulting in the biological value of the dairy cattle reducing by approximately USD690,000 and a loss of 175 cattle. The disease was rapidly contained and the herd declared FMD free on 12 July 2018.

The financial impact of FMD was provided for in March 2018 and the Group received USD240,000 in insurance compensation.

Zambeef is pleased to confirm that the volume of milk being produced by the dairy herd has recovered to previous levels.

Stockfeed

Zambeef's Stockfeed operation trades under the brand name Novatek. Its second stockfeed plant was commissioned at Mpongwe Farm in the Copperbelt in October, 2017. The second stockfeed plant has already produced 58,617 tons (44.4% of capacity) of the total of 200,846 tons.

Zambeef is one of the largest buyers of soyabeans and maize from local farmers. It bought 160,724 tons this year, which was used in the stockfeed operations.

Poultry feed accounts for three-quarters of stockfeed production, creating an opportunity for growth linked to the chicken segment.

Some 20.9% of Novatek's stockfeed production was sold through Zambeef outlets, compared with 8.3% in 2017. A further 27.4% of the stockfeed production is consumed in the Company's Cold Chain Food Products divisions. The remaining 51.7% is sold to third-party distributors.

The Mpongwe stockfeed mill continues to perform ahead of expectation. The stockfeed division is expected to continue to increase volumes and contribute materially to the Group.

Cropping

Zambeef's Mpongwe Farm continues to live up to its reputation as one of the most fertile and productive farms in the region, and remains at the heart of the Group's cropping operations.

However, in the second half of 2018, Bacterial Leaf Streak (BLS) was detected in our winter wheat crop and, as a result, wheat yields during the September harvest were approximately 44,300 tons, 15.8% lower than the 52,600 tonnes initially budgeted. However, commodity sales contracts were concluded at higher than budgeted prices per ton, offsetting some of the financial losses resulting from BLS.

The Group harvested approximately 44,730 tons of soybeans during the current financial period, compared with approximately 43,000 in the previous corresponding financial period.

Overall EBITDA in the division increased by 332% from ZMW16.4 million to ZMW70.9 million (USD1.7 million to USD7.1 million).

Zamhatch

Demand for day-old chicks produced by Zambeef's Zamhatch subsidiary is currently exceeding supply. This reinforces that Zambeef is an integral part of the nation's agricultural supply chain, with more than half of our chicks sold to small-scale farmers and entrepreneurs who then serve the traditional live-bird market, which still accounts for 75 % of the poultry industry.

Zamhatch incubates approximately 400,000 eggs a week, with an industry-standard 86 % success rate, producing 344,000 day-old chicks. We are working on increasing capacity to 500,000 eggs per week in 2019 and then 600,000 eggs per week in 2020 to meet demand. The cost of this expansion will be approximately USD2 million per year.

Outlook

Zambeef's management will continue to focus resources on the Group's profitable business divisions, while improving those divisions that need additional attention to ensure that all areas of the business contribute fully to Group profitability.

As part of its on-going process of divesting non-core assets, the Group is actively seeking buyers for its Chiawa and Sinazongwe Farms, proceeds of which will further reduce debt levels and supplement capital expenditure where returns are justified.

Zambeef's clear long-term strategy is translating into improved results. We will remain steadfast in our plans going forward, which include:

• Consistent revenue growth through expansion of our retail network, driving our cold chain food product and stockfeed operations;

• Margin improvements leveraged from continued capital investment in the most high-performing areas of the business, coupled with stringent control of administration costs;

• Cash generation through improved margins, cost control, working capital management and prudent capital expenditure;

• De-risking the business by reducing gearing levels; and

• Continued divestment of non-core assets.

The Group has ended the financial year with a renewed sense of optimism. The continued dedication of our management and staff, supported by a strong Board, remain key to this as we progress into an exciting new phase of growth.

 

Francis Grogan

Chief Executive Officer

20 November 2018

 

 

 

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

 

OPERATIONAL AND FINANCIAL REVIEW

 

The 2018 financial year has seen the Zambeef Group continue to grow. Robust revenue figures and strong margin growth have been the main contributors. Revenue for the Group increased by 14.2% in ZMW and 9.6% in USD, while Gross Profit margins increased from 32.8% to 34.5%, resulting in Gross Profit increasing by 20.1% in ZMW from ZMW798.6m to ZMW959.2m (15.3% in USD from USD83.9m to USD96.7m). Overheads increased by 16.9% in ZMW (12.2% in USD) from ZMW628.7m to ZMW735.1m (USD66.0m to USD74.1m). The strong Gross Profit performance enabled the Group to achieve Operating profits of ZMW118.3m versus ZMW86.7m (USD11.9m vs USD9.1m), which represents a 36.5% increase in ZMW and a 31.0% increase in USD.

 

Interest costs reduced by 20.1% in ZMW (23.3% in USD) as a result of lower interest rates, largely due to the reduction in the Bank of Zambia Policy Rate, which decreased our ZMW interest rates significantly compared with the prior period. As a result, Zambeef's PAT excluding discontinued operations increased from ZMW4.4m to ZMW23.8m (USD0.5m to USD2.4m).

 

The highlight of this period was the 6.5% (in ZMW) revenue growth in the Retail and Cold Chain Food Products (CCFP) division with a strong increase of 23.1% (in ZMW) in gross profits. Gross margins increased from 25.0% in 2017 to 28.9% in 2018. Zambeef continues to establish itself as best-in-class in terms of its production, distribution and retailing of the Cold Chain Food Products delivering a very satisfactory EBITDA margin of % compared to 7.0% in 2017. 

 

Strategic priorities FY19:

 

·    Consistent revenue growth through expanding the retail network and addressing supply constraints in the CCFP and Stockfeed operations;

·    De-risking the business through reducing gearing and dollar debt and E&S/Food Safety strategies; and

·    Improving cash conversion from strong working capital control and tight control on Capex with effective managerial responsibility.

 

Exchange rate movements

 

This period has seen a 26.6% depreciation of the ZMW with the exchange rate, starting the period at 9.67 ZMW/USD and closing the period at 12.24 ZMW/USD. The table below shows the comparative exchange rates over the periods:

 

 

ZMW/USD

 

 

 

 

Closing Rate 30th September 2017

 9.67

 

Closing Rate 30th September 2018

 12.24

 

 

 

 

 

 

 

Average Rate for year ended 30th September 2017

9.52

 

Average Rate for year ended 30th September 2018

9.92

 

 

 

The depreciating currency has resulted in the Group reporting exchange losses of ZMW19.3m (USD1.9m) for the year.

 

ADMINISTRATION AND OVERHEAD COSTS

 

As mentioned above, overheads have increased by 16.9% (in ZMW). The following are contributing factors:

·    Fuel prices increased from ZMW10.72/l in September 2017 to ZMW11.09/l and again to ZMW12.01/l in January 2018 representing a total increase of 12%;

·    Electricity tariffs were increased by 50% in May 2017 and a further 15% in September 2017;

·    With inflation at approximately 7%, an average increase of approximately 10% was agreed for all union workers resulting in higher payroll costs;

·    Levy and slaughter fees have continued to increase during the year;

·    Road toll fees, which were introduced in the previous financial period, are increasing as more toll gates are opened; and

·    Repairs and Maintenance costs were incurred in Zambeef Outlets as a result of the outbreak of Cholera in January 2018.

 

CAPITAL EXPENDITURE

 

Total capital expenditure on continuing operations during the period was ZMW144.0 million (USD14.5 million) against an anticipated capital expenditure of ZMW157.3 (USD16m) for the year.

 

The main capital expenditure during the period included:

·    USD4.2m on rollout of new Zambeef Macro outlets

·    USD2.5m on new Mpongwe stockfeed plant

·    USD1.5m on expansion of Zamhatch hatchery and breeder farm

·    USD1.2m for expansion of Zam Chick processing plant

·    USD1.8m for farming replacement Capex

·    USD0.8m on the new processing and distribution hub in Kitwe

 

The capex incurred in 2018 was focused on:

·    The expansion of the retail network (ten Zambeef Macros and three Shoprite stores opened in 2018);

·    The commissioning of the new Copperbelt processing and distribution hub which will increase capacity and improve efficiencies in the Copperbelt and North Western Province operations;

·    Completing the expansion of the breeding farm and hatchery to increase day-old chick production from 344,000 to 430,000 birds per week; and

·    Completing the new stock feed plant at Mpongwe to ensure additional stock feed capacity.

 

FINANCING

 

·    The finance costs for the Group decreased by 20.1% in ZMW from ZMW 87.9 million to ZMW 70.2 million (USD 9.2 million to USD 7.1 million). The reduction was a result of a reduction in net debt following the receipt of USD 15 million from IDC on the completion of the Zampalm transaction.

·    Net debt at the end of the 2018 financial year was USD 56 million compared to USD 64 million at the end of 2017.

·    No additional term finance was sourced in 2018.

 

 

 

 

 

 

DIVISIONAL PERFORMANCE

 

Table 1:  Segmental Financial summary in ZMW'000s

 

Division

Revenue 2018      ZMW'000

Revenue 2017       ZMW'000

Gross Profit 2018  ZMW'000

Gross Profit 2017  ZMW'000

Overheads 2018  ZMW'000

Overheads 2017 ZMW'000

EBITDA 2018  ZMW'000

EBITDA 2017  ZMW'000

Retail & Cold Chain Foods

 

2,004,711

 

1,882,955

 

578,987

 

470,417

 

(385,484)

 

(337,693)

 

193,503

 

132,724

 

 

 

 

 

 

 

 

 

Stock Feed

706,008

662,068

163,442

166,884

(82,460)

(50,300)

80,982

116,584

 

 

 

 

 

 

 

 

 

Cropping

515,585

505,738

189,601

134,556

(118,729)

(118,152)

70,872

16,404

 

 

 

 

 

 

 

 

 

Others

141,452

161,387

27,129

26,774

(18,521)

(15,014)

8,608

11,760

Total

3,367,756

3,212,148

959,159

798,631

(605,194)

(521,159)

353,965

277,472

 

 

 

 

 

 

 

 

 

Less: Intra/Inter Group Sales

     (587,167)

 

(776,966)

               

-  

           

   -  

             

  -  

            

   -  

           

    -  

            

   -  

less Central Overhead

          

   -  

      

      -  

         

      -  

        

      -  

        (129,907)

         (107,520)

        (129,907)

        (107,520)

Group Total

2,780,589

2,435,182

959,159

798,631

(735,101)

(628,679)

224,058

169,952

 

 

 

Table 2:  Segmental Financial summary in USD'000s

 

 

Division

Revenue 2018      USD'000

Revenue 2017         USD'000

Gross Profit 2018 USD'000

Gross Profit 2017 USD'000

Overheads 2018

USD'000

Overheads 2017

USD'000

EBITDA 2018

USD'000

EBITDA 2017

USD'000

Retail & Cold Chain Foods

        202,088

197,789

58,366

49,414

(38,859)

(35,472)

19,507

13,942

 

 

 

 

 

 

 

 

 

Stock Feed

        71,170

69,545

16,476

17,530

(8,313)

(5,284)

8,163

12,246

 

 

 

 

 

 

 

 

 

Crop-Row Crops

        51,974

53,124

19,113

14,134

(11,969)

(12,411)

7,144

1,723

 

 

 

 

 

 

 

 

 

Others

           14,259

16,952

2,735

2,812

(1,867)

(1,577)

868

1,235

 

 

 

 

 

 

 

 

 

Total

      339,491

337,410

96,690

83,890

(61,008)

(54,744)

35,682

29,146

 

 

 

 

 

 

 

 

 

Less: Intra/Inter Group Sales

      (59,190)

      (81,614)

                  -  

                  -  

                  -  

                  -  

 

 

less Central Overhead

                 -  

                 -  

                 -  

                 -  

        (13,095)

        (11,294)

        (13,095)

        (11,294)

Group Total

      280,301

255,796

96,689

83,890

(74,103)

(66,038)

22,587

17,852

 

 

 

RETAIL AND COLD CHAIN FOOD PRODUCTS

 

 

2018     ZMW'000

2017     ZMW'000

% Change

2018     USD'000

2017     USD'000

% Change

Revenue

2 004 711

1 882 955

6.5%

202 088

197 789

2.2%

Gross Profit

578 987

470 417

23.1%

58 366

49 414

18.1%

Overheads

(385 484)

(337 693)

14.2%

(38 859)

(35 472)

9.5%

EBITDA

193 503

132 724

45.8%

19 507

13 942

39.9%

 

Revenue in the Retail and Cold Chain Food Products division increased by 6.5% in ZMW and 2.2% in USD. Gross profit grew by 23.1% in ZMW and 18.1% in USD.

 

Overhead costs increased by 14.2% in ZMW and 9.5% in USD mainly due to rises in transport, energy and employment costs. 

 

EBITDA in ZMW rose 45.8% from ZMW132.7m to ZMW193.5m, whilst in USD it increased by 39.9% from USD13.9m to USD19.5m. The business has generated a pleasing EBITDA margin of 9.7 per cent. (compared to prior year period 7.0%).  

 

The Retail and Cold Chain Food Products division includes the beef, chicken, pork, dairy, egg and fish production and processing activities which primarily supply the Zambeef and Shoprite retail chains.

 

The division delivered strong volume growth of 5.7% while increasing gross profits. 

 

Highlights:

-     Good volume Growth

-     Strong GP Growth

-     Strong EBITDA growth

 

Challenges: An outbreak of Cholera in January 2018 led to a number of outlets being closed for a period due to their proximity to the epidemic. The epidemic had a negative effect on the sale of beef heads, bones and offal fat, but overall the financial impact on the Group was immaterial. 

 

  

RETAIL EXPANSION

 

During the period, Zambeef opened 10 Macro outlets.  The Group purchased a further 18 sites for development, and plans to open 10 new Macro outlets every year over the next 3 years.

 

 

                          

 

 

 

 

 

 

 

 

 

STOCK FEED (NOVATEK)

 

 

2018     ZMW'000

2017     ZMW'000

% Change

2018     USD'000

2017     USD'000

% Change

Revenue

 706 008

 662 068

6.6%

 71 170

 69 545

2.3%

Gross Profit

 163 442

 166 884

-2.1%

 16 476

 17 530

-6.0%

Overheads

 (82 460)

 (50 300)

63.9%

 (8 313)

 (5 284)

57.3%

EBITDA

 80 982

 116 584

-30.5%

 8 163

 12 246

-33.3%

Volume (Tons)

200 846

155 795

28.9%

 

 

 

 

The Stockfeed division has increased its market share and market leadership with volumes increasing by 28.9% from 155,795 M.T. to 200,846 M.T. Gross profit margins have decreased from 25.2% to 23.2%, due mainly to high raw material prices from the 2018 crop. The Mpongwe plant continues to perform ahead of expectation, while the Stockfeed division exceeded its budget for 2018.

 

Overheads increased by 63.9% due mainly to the new stockfeed plant in Mpongwe.

 

The Mpongwe plant produced 58,617 tons of 200,846 tons during the period. This represents approximately 44.4% of the capacity of the plant.

 

CROPPING

 

 

2018     ZMW'000

2017     ZMW'000

% Change

2018     USD'000

2017     USD'000

% Change

Revenue

 515 585

 505 738

1.9%

 51 974

 53 124

-2.2%

Gross Profit

 189 601

134 556

40.9%

 19 113

 14 134

35.2%

Overheads

 (118 729)

 (118 152)

0.5%

 (11 969)

 (12 411)

-3.6%

EBITDA

 70 872

 16 404

332.0%

 7 144

 1 723

314.6%

 

               

The Cropping division delivered improved results in 2018. Approximately 44,000 M.T. of Soya Beans were harvested from the summer crop compared to approximately 43,000 tons in 2017. Approximately 44,300 tons of wheat was harvested from the winter crop compared to approximately 41,700 tons in 2017. This is in spite of the fact that Bacteria Leaf Streak (BLS) reduced the budgeted tons of wheat of approximately 52,600 tons by 15.8%. Soya, wheat and maize prices increased from USD360/M.T., USD410/M.T. and USD115/M.T. respectively in September 2017 to USD410/M.T., USD430/M.T. and USD150/M.T. respectively in September 2018. 

 

Overheads remained similar to 2017, mainly as a result of reduced manpower costs. This resulted in EBITDA increasing from ZMW16.4 in 2017 to ZMW70.9 in 2018 (USD1.7m to USD7.1m).

 

 

OTHER BUSINESSES

 

 

2018     ZMW'000

2017     ZMW'000

% Change

2018     USD'000

2017     USD'000

% Change

Revenue

 141 452

 161 387

-12.4%

 14 259

 16 952

-15.9%

Gross Profit

 27 129

 26 774

1.3%

 2 735

 2 812

-2.8%

Overheads

 (18 521)

 (15 014)

23.4%

 (1 867)

 (1 577)

18.4%

EBITDA

 8 608

 11 760

-26.8%

 868

 1 235

-29.8%

 

The Other divisions delivered a decrease in EBITDA of 26.8% from ZMW11.8m to ZMW8.6m (USD1.2m to USD0.9m) compared to the prior period.

 

Flour Milling:

 

The mill performance was satisfactory with sale volumes stable as Zambeef continues to sell flour through its retail network.

 

Zamleather: 

 

The shoe division performed well over the period. However, there was a decrease in world-wide hide prices and the market for lower-grade hides is currently stagnant.

 

 

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 SEPTEMBER 2018

 

Group

Note

2018
ZMW'000s

2018
USD'000s

2017
ZMW'000s

2017
USD'000s

Revenue

5

2,780,589

280,301

2,435,182

255,796

Net gain/(loss) arising from price changes in fair value of biological assets

16

(15,245)

(1,537)

(3,491)

(367)

Cost of sales

 

(1,806,185)

(182,075)

(1,633,060)

(171,540)

Gross profit

 

959,159

96,689

798,631

83,889

Administrative expenses

 

(841,319)

(84,810)

(714,746)

(75,078)

Other income

6

430

43

2,768

291

Operating profit

7

118,270

11,922

86,653

9,102

Share of loss equity accounted for investment

 

(742)

(75)

-

-

Exchange gains on translating foreign currency transactions and balances

 

(19,302)

(1,946)

6,701

704

Finance costs

9

(70,215)

(7,078)

(87,904)

(9,234)

Profit before taxation

 

28,011

2,823

5,450

572

Taxation charge

10

(4,257)

(429)

(1,049)

(110)

Group income for the year from continuing operations

 

23,754

2,394

4,401

462

(Loss)/profit from discontinued operations

34

(13,261)

(1,337)

(1,133)

(119)

Group income for the year

 

10,493

1,057

3,268

343

Group income/(loss) attributable to:

 

 

 

 

 

Equity holders of the parent

 

10,601

1,068

4,037

424

Non-controlling interest

 

(108)

(11)

(769)

(81)

 

 

10,493

1,057

3,268

343

Other comprehensive income:

 

 

 

 

 

Exchange (losses)/gains on translating presentational currency

 

206,425

(46,089)

(31,190)

4,243

Revaluation

35

-

-

789,795

81,675

Total comprehensive (loss)/ income  for the year

 

216,918

(45,032)

761,873

84,769

 

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

 

Note

2018

ZMW'000s

 


ZMW'000s

2018

USD'000s

2017

ZMW'000s

2017

USD'000s

Total comprehensive (loss)/ income  for the year attributable to:

 

 

 

 

 

Equity holders of the parent

 

217,297

(45,021)

762,538

84,968

Non-controlling interest

 

(379)

(11)

(665)

(95)

 

 

216,918

(45,032)

761,873

84,769

 

 

Ngwee

Cents

Ngwee

Cents

Earnings per share

 

 

 

 

 

Basic earnings per share - continued operations

12

7.90

0.80

1.46

0.15

Basic earnings per share - discontinued operations

12

(4.41)

(0.44)

0.38)

(0.04)

Total Basic earnings per share

12

3.49

0.36

1.08

0.11

Diluted earnings per share

 

 

 

 

 

Basic earnings per share - continued operations

12

5.92

0.60

1.10

0.12

Basic earnings per share - discontinued operations

12

(3.31)

(0.33)

(0.28)

(0.03)

Total Basic earnings per share

12

2.61

0.27

0.82

0.09

 

                                                     

 

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 SEPTEMBER 2018

 

(i) In Zambian Kwacha

 

 

 

Issued share capital

ZMW'000s

 

 

 

Preference share capital

ZMW'000s

 

 

 

Revaluation reserve

ZMW'000s

 

 

 

Retained earnings

ZMW'000s

Total attributable to owners of the parent ZMW'000s

 

 

 

 

Total equity

ZMW'000s

At 1 October 2016

3,006

1,125,012

1,000

103,521

485,765

417,635

2,135,939

(7,616)

2,128,323

Profit for the year

-

-

--

-

-

4,037

4,037

(769)

3,268

Transfer of surplus depreciation

-

-

-

-

(23,418)

23,418

-

-

-

Other comprehensive income:

 

 

 

 

 

 

 

 

 

Exchange losses on translating presentational currency

-

-

-

(31,294)

-

-

(31,294)

104

(31,190)

Revaluation

-

-

-

-

789,795

-

789,795

-

789,795

Total comprehensive income

-

-

-

(31,294)

766,377

27,455

762,538

(665)

761,873

At 30 September 2017

3,006

1,125,012

1,000

72,227

1,252,142

445,090

2,898,477

(8,281)

2,890,196

Profit for the year

-

-

-

-

-

10,601

10,601

(108)

10,493

Transfer of surplus depreciation

-

-

-

-

(23,418)

23,418

 

 

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

Exchange (loss)/gain on translating presentational currency

 

 

 

206,696

-

-

206,696

(271)

206,425

Total comprehensive income

-

-

-

206,696

(23,418)

34,019

217,297

(379)

216,918

At 30 September 2018

3,006

1,125,012

1,000

278,923

1,228,724

479,109

3,115,774

(8,660)

3,107,114

 

 

 

 

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

(ii) In US Dollar

 

 

 

Issued share capital

USD'000s

 

 

 

Preference share capital

USD'000s

 

 

 

Share premium

USD'000s

 

 

Foreign exchange reserve

USD'000s

 

 

 

Revaluation reserve

USD'000s

 

 

 

Retained earnings

USD'000s

Total attributable to owners of the parent USD'000s

 

 

Non- controlling interest

USD'000s

 

 

 

 

Total equity

USD'000s

At 1 October 2016

449

100

185,095

(144,898)

98,763

73,875

213,384

(761)

212,623

Profit for the year

-

-

-

-

-

424

424

(81)

343

Transfer of surplus depreciation

-

-

-

-

(2,460)

2,460

-

-

-

Other comprehensive income:

 

 

 

 

 

 

 

 

 

Exchange gains on translating presentational currency

-

-

-

4,257

-

-

4,257

(14)

4,243

Revaluation

-

-

-

-

81,675

-

81,675

-

81,675

Total comprehensive income

-

-

-

4,257

79,215

2,884

86,356

(95)

86,261

At 30 September 2017

449

100

185,095

(140,641)

177,978

76,759

299,740

(856)

298,884

Profit for the year

 

 

 

 

 

1,068

1,068

(11)

1,057

Transfer of surplus depreciation

 

 

 

 

(2,361)

2,361

 

 

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

Exchange gains/ (losses) on translating presentational currency

 

 

 

(46,248)

 

 

(46,248)

159

(46,089)

Total comprehensive income

-

-

-

(46,248)

(2,361)

3,429

(45,180)

148

(45,032)

At 30 September 2018

449

100

185,095

(186,889)

175,617

80,188

254,560

(708)

253,852

 

 

 

 

 

 

 

 

 

 

 

ZAMBEEF PRODUCTS PLC

 

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 SEPTEMBER 2018

(i) In Zambian Kwacha

Issued share capital ZMW'000s

Preference share capital ZMW'000s

Share premium ZMW'000s

Revaluation reserve ZMW'000s

Retained earnings ZMW'000s

Total equity

ZMW'000s

At 1 October 2016

3,006

1,000

1,125,012

280,981

504,681

1,914,680

Profit for the year

-

-

-

-

24,003

24,003

Transfer of surplus depreciation

-

-

-

(14,605)

14,605

-

Other comprehensive income

 

 

 

 

 

 

Surplus on revaluation

-

-

-

651,521

-

651,521

Exchange gains on translating presentational currency

-

-

-

-

(31,682)

(31,682)

Total comprehensive income

-

-

-

636,916

6,926

643,842

At 30 September 2017

3,006

1,000

1,125,012

917,897

511,607

2,558,522

Profit for the year

-

-

-

 

-

14,413

14,413

Transfer of surplus depreciation

-

-

-

(27,562)

27,562

-

Other comprehensive income:

 

 

 

 

 

 

Exchange loss on translating presentational currency

-

 

-

-

217,367

217,367

Total comprehensive income

-

        -

-

(27,562)

259,342

231,780

At 30 September 2018

3,006

1,000

1,125,012

890,355

770,949

2,790,302

 

 

 

ZAMBEEF PRODUCTS PLC

 

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 SEPTEMBER 2018 (CONTINUED)

 

(ii) In US Dollar

 

Issued share capital

USD'000s

 

Preference share capital

USD'000s

 

Share premium

USD'000s

 

Revaluation reserve

USD'000s

Foreign exchange reserve USD'000s

 

Retained earnings

USD'000s

 

 

Total equity

USD'000s

At 1 October 2016

449

100

185,095

54,163

(122,706)

74,203

191,304

Profit for the year

-

-

-

-

-

2,522

2,522

Other comprehensive income:

 

 

 

 

 

 

 

Exchange losses on translating presentational currency

-

-

-

68,437

-

-

68,437

Transfer of Surplus depreciation

-

-

-

-

2,321

-

2,321

Total comprehensive income

-

-

-

68,437

2,321

2,522

73,280

At 30 September 2017

449

100

185,095

122,600

(120,385)

76,725

264,584

Profit for the year

 

 

 

 

 

1,453

1,453

Transfer of surplus depreciation

-

-

-

-

-

-

-

Other comprehensive income:

-

-

-

-

-

                   -

-

Transfer of surplus depreciation

-

-

-

(3,904)

-

3,904

 

Exchange gain on translating presentational currency

-

-

-

-

(38,071)

-

(38,071)

Total comprehensive income

-

-

-

(3,904)

(38,071)

5,357

(36,618)

At 30 September 2018

449

100

185,095

118,696

(158,456)

82,082

227,966

 

 

 

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION ‑ 30 SEPTEMBER 2018

ASSETS

Note

2018
ZMW'000s

2018
USD'000s

2017
ZMW'000s

2017
USD'000s

Non-current assets

Goodwill

13

166,801

13,628

166,801

17,249

Property, plant and equipment

14

2,902,221

237,110

2,610,488

269,958

Investment in associate

15

15,412

1,259

-

-

Assets held for disposal

34

-

-

221,087

22,863

Deferred tax asset

10(e)

47,854

3,910

43,368

4,485

 

 

3,132,288

255,907

3,041,744

314,555

Current assets

 

 

 

 

 

Biological assets

16

181,674

14,843

167,857

17,359

Inventories

17

639,811

52,272

516,418

53,404

Trade and other receivables

18

156,314

12,771

90,792

9,390

Assets held for disposal

34

-

-

91

9

Amounts due from related companies

19

50,272

4,107

11,422

1,181

Income tax recoverable

10(c)

3,885

317

1,376

142

 

 

1,031,956

84,310

787,956

81,485

Total assets

 

4,164,244

340,217

3,829,700

396,040

EQUITY AND LIABILITIES

Capital and reserves

Share capital

21

3,006

449

3,006

449

Preference share capital

21

1,000

100

1,000

100

Share premium

22

1,125,012

185,095

1,125,012

185,095

Other reserves

 

1,986,756

68,916

1,769,459

114,096

 

 

3,115,774

254,560

2,898,477

299,740

Non-controlling interest

 

(8,660)

(708)

(8,281)

(856)

 

 

3,107,114

253,852

2,890,196

298,884

 

 

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

 

 

 

Note

2018
ZMW'000s

2018
USD'000s

2017
ZMW'000s

2017
USD'000s

Non-current liabilities

Interest bearing liabilities

23

308,312

25,189

328,238

33,944

Obligations under finance leases

24

20,163

1,647

27,915

2,887

Deferred liability

25

22,611

1,847

16,756

1,733

Deferred tax liability

10(e)

6,909

565

7,212

746

 

 

357,995

29,248

380,121

39,310

Current liabilities

Interest bearing liabilities

23

95,247

7,782

78,080

8,074

Collateral management agreement

23

107,213

8,759

60,248

6,230

Obligations under finance leases

24

18,248

1,491

19,916

2,060

Trade and other payables

26

297,390

24,294

249,197

25,769

Provisions

26

42,137

3,443

42,646

4,410

Assets held for disposal

34

-

-

1,079

111

Amounts due to related companies

27

232

19

81

9

Taxation payable

10(c)

2,925

239

2,988

309

Cash and cash equivalents

20

135,743

11,090

105,148

10,874

 

 

699,135

57,117

559,383

57,846

Total equity and liabilities

 

4,164,244

340,217

3,829,700

396,040

 

 

 

ZAMBEEF PRODUCTS PLC

 

COMPANY STATEMENT OF FINANCIAL POSITION ‑ 30 SEPTEMBER 2018

 

ASSETS

Note

2018
ZMW'000s

2018
USD'000s

2017
ZMW'000s

2017
USD'000s

Non-current assets

 

 

 

 

 

Property, plant and equipment

14

2,154,822

176,048

1,915,760

198,114

Investments in subsidiaries

15

245,807

20,082

245,807

25,420

Investment in associates

15

15,412

1,259

-

-

Deferred tax asset

10(e)

24,792

2,025

26,566

2,747

 

 

2,440,833

199,414

2,188,133

226,281

Current assets

 

 

 

 

 

Biological assets

16

158,349

12,937

150,087

15,521

Inventories

17

481,319

39,324

411,841

42,590

Cash and cash equivalents

20

-

-

-

-

Asset held for disposal

 

-

-

56,835

5,877

Trade and other receivables

18

91,381

7,466

37,169

3,844

Amounts due from related companies

19

796,506

65,073

655,060

67,741

Income tax recoverable

10(c)

2,510

205

-

-

 

 

1,530,065

125,005

1,310,992

135,573

Total assets

 

3,970,898

324,419

3,499,125

361,854

 

 

 

 

 

 

EQUITY AND LIABILITIES

 

 

 

 

 

Capital and reserves

 

 

 

 

 

Share capital

21

3,006

449

3,006

449

Preference share capital

21

1,000

100

1,000

100

Share premium

22

1,125,012

185,095

1,125,012

185,095

Other reserves

 

1,661,284

42,322

1,429,504

78,940

 

 

2,790,302

227,966

2,558,522

264,584

 

 

 

ZAMBEEF PRODUCTS PLC

 

COMPANY STATEMENT OF FINANCIAL POSITION ‑ 30 SEPTEMBER 2018 (CONTINUED)

 

 

 

Note

2018
ZMW'000s

2018
USD'000s

2017
ZMW'000s

2017
USD'000s

Non-current liabilities

 

 

 

 

 

Interest bearing liabilities

23

308,312

25,189

328,238

33,945

Obligations under finance leases

24

12,503

1,022

17,195

1,778

Deferred liability

25

5,059

413

3,659

378

Deferred tax liability

10(e)

4,034

330

4,169

431

 

 

329,908

26,954

353,261

36,532

Current liabilities

 

 

 

 

 

Interest bearing liabilities

23

202,460

16,541

138,328

14,305

Obligations under finance leases

24

11,841

967

13,272

1,373

Trade and other payables

26

204,675

16,722

144,499

14,943

Provisions

26

26,108

2,132

20,344

2,103

Amounts due to related companies

27

328,633

26,849

243,876

25,220

Taxation payable

10(c)

-

-

1,588

164

Cash and cash equivalents

20

76,971

6,288

25,435

2,630

 

 

850,688

69,499

587,342

60,738

Total equity and liabilities

 

3,970,898

324,419

3,499,125

361,854

 

 

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

 

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 SEPTEMBER 2018

 

Note

2018
ZMW'000s

2018
USD'000s

2017
ZMW'000s

2017
USD'000s

 Cash inflow from operating activities

Profit before taxation

 

28,011

2,823

5,450

572

Finance costs

9

70,215

7,078

87,904

9,234

(Profit)/ loss on disposal of property, plant and equipment

 

(220)

(22)

(974)

(102)

Depreciation

14

105,789

10,665

83,301

8,750

Share of loss of equity accounted investment

 

742

75

-

-

(Loss)/ profit on discontinued operations

 

-

-

(1,133)

(119)

Loss on disposal of investment

 

52,265

5,269

-

-

Fair value price adjustment

16

15,245

1,537

3,491

367

Net unrealised foreign exchange losses

 

22,343

2,252

(4,410)

(463)

Earnings before interest, tax, depreciation and amortisation, fair value adjustments and net unrealised foreign exchange losses

 

294,390

29,677

173,629

18,239

Decrease/ (increase) in biological assets

 

(29,062)

(2,930)

19,169

2,014

Decrease/ (increase)/ in inventory

 

(123,393)

(12,439)

28,321

2,975

Decrease in trade and other receivables

 

(65,522)

(6,605)

22,503

2,363

Increase in amounts due from related companies

 

(38,850)

(3,916)

(1,158)

(122)

Decrease in trade and other payables

 

47,684

4,807

(33,308)

(3,499)

Increase/ (decrease)/ in amounts due to related companies

 

151

15

4,113

432

Increase in deferred liability

 

5,855

590

6,314

663

Cash outflow from assets held for disposal

 

-

-

(14,226)

(1,494)

Income tax paid

10(c)

(11,618)

(1,171)

(17,329)

(1,820)

Net cash inflow from operating activities

 

79,635

8,028

188,028

19,751

Investing activities

 

 

 

 

 

Purchase of property, plant and equipment

14

(144,022)

(14,518)

(195,610)

(20,547)

Expenditure on plantation development

14

-

-

(13,805)

(1,450)

Movement in investments

 

-

-

(8,879)

(933)

Proceeds from the sale of Zampalm

 

151,680

16,000

-

-

Net cash (outflow)/ inflow (on)/ from investing activities

 

7,658

1,482

(218,294)

(22,930)

 

 

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

 

CONSOLIDATED STATEMENT OF CASH FLOWS

 

 

 

Note

2018
ZMW'000s

2018
USD'000s

2017
ZMW'000s

2017
USD'000s

Net cash (outflow)/inflow before financing activities

 

87,293

9,510

(30,266)

(3,179)

Financing activities

 

 

 

 

 

Long term loans repaid

 

(79,873)

(8,052)

(104,768)

(11,005)

Receipt of long term loans

 

-

-

140,100

15,000

Receipt/(repayment) of short term funding

 

25,088

2,529

(55,292)

(5,808)

Lease finance (repayment)/ obtained

 

(12,044)

(1,214)

(3,551)

(373)

Finance costs

9

(70,215)

(7,078)

(87,904)

(9,234)

Net cash outflow on financing activities

 

(137,044)

(13,815)

(111,415)

(11,420)

(Decrease)/ increase in cash and cash equivalents

 

(49,751)

(4,305)

(141,681)

(14,599)

Cash and cash equivalents at beginning of the year

 

(105,148)

(10,874)

64,806

6,474

Effects of exchange rate changes on the balance of cash held in foreign currencies

 

19,156

4,089

(28,273)

(2,749)

Cash and cash equivalents at end of the year

20

(135,743)

(11,090)

(105,148)

(10,874)

Represented by:

 

 

 

 

 

Cash in hand and at bank

20

101,123

8,262

62,518

6,465

Bank overdrafts

20

(236,866)

(19,352)

(167,666)

(17,339)

 

 

(135,743)

(11,090)

(105,148)

(10,874)

 

 

ZAMBEEF PRODUCTS PLC

 

COMPANY STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 SEPTEMBER 2018

 

Note

2018
ZMW'000s

2018
USD'000s

2017
ZMW'000s

2017
USD'000s

Cash inflow from operating activities

 

 

 

 

 

Profit before taxation

 

22,877

2,307

37,735

3,964

Finance costs

 

54,900

5,534

67,744

7,116

Depreciation

14

61,376

6,187

41,706

4,381

Fair value price adjustment

16

15,299

1,542

3,452

363

(Profit)/ loss on disposal of property, plant and equipment

 

1,457

147

(825)

(87)

(Profit)/ loss on disposal of investment

 

1,431

144

-

-

Net unrealised foreign exchange differences

 

19,255

1,941

3,871

407

Earnings before interest, tax, depreciation and amortisation

 

176,595

17,802

153,683

16,144

Decrease/ (increase) in biological assets

 

(23,561)

(2,375)

20,424

2,144

Decrease/ (increase) in inventory

 

(69,478)

(7,004)

1,829

192

Decrease/( increase) in trade and other receivables

 

(54,212)

(5,465)

8,697

913

Increase in amounts due from related companies

 

(141,446)

(14,259)

(191,946))

(20,160)

Increase/ (decrease) in trade and other payables

 

65,940

6,647

376

39

Increase in amounts due to related companies

 

84,757

8,544

243,551

25,583

Increase in deferred liability

 

1,400

141

1,393

146

Income tax paid

10(c)

(10,182)

(1,026)

(13,484)

(1,416)

Net cash inflow/(outflow) from/ (on) operating activities

 

29,813

3,005

224,523

23,585

Investing activities

 

 

 

 

 

Purchase of property, plant and equipment

14

(49,415)

(4,982)

(154,880)

(16,269)

Proceeds from the issue of shares

 

-

-

-

-

Movements in investments

15

41,423

4,176

(8,879)

(933)

Proceeds from disposal of investment

 

144,161

14,532

-

-

Proceeds from sale of assets

 

345

35

1,239

130

Net cash inflow from investing activities

 

136,514

13,761

(162,520)

(17,072)

 

 

 

ZAMBEEF PRODUCTS PLC

 

COMPANY STATEMENT OF CASH FLOWS

 

 

Note

2018
ZMW'000s

2018
USD'000s

2017
ZMW'000s

2017
USD'000s

Net cash inflow before financing activities

 

166,327

16,766

62,003

6,513

Financing activities

 

 

 

 

 

Long term loans repaid

 

(79,873)

(8,052)

(99,663)

(10,468)

Receipt from term loans

 

-

-

140,100

14,716

Short term funding (repaid)/obtained

 

25,559

2,576

(55,292)

(5,808)

Lease finance (repayment)/ obtained

 

(10,415)

(1,050)

(3,551)

(374)

Interest paid

 

(54,900)

(5,534)

(67,744)

(7,116)

Net cash outflow on financing activities

 

(119,629)

(12,060)

(86,150)

(9,050)

(Decrease)/ increase in cash and cash equivalents

 

46,698

4,706

(24,147)

(2,537)

Cash and cash equivalents at beginning of the year

 

(25,435)

(2,631)

37,193

3,716

Effects of exchange rate changes on the balance of cash held in foreign currencies

 

(98,234)

(8,363)

(38,481)

(3,810)

Cash and cash equivalents at end of the year

20

(76,971)

(6,288)

(25,435)

(2,631)

Represented by:

 

 

 

 

 

Cash in hand and at bank

20

54,357

4,441

16,509

1,707

Bank overdrafts

20

(131,328)

(10,729)

(41,944)

(4,338)

 

 

(76,971)

(6,288)

(25,435)

(2,631)

 

 

 

NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2018

 

Notes can be read via the following link to the full Financial Statements:  

 

http://www.rns-pdf.londonstockexchange.com/rns/4928J_1-2018-12-5.pdf


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
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