Results for the Year Ended 30 September 2014

RNS Number : 9929X
Zambeef Products PLC
26 November 2014
 



For Immediate Release                                                                                                                                      26 November 2014

 

 

 

 

Zambeef Products plc

("Zambeef" or the "Group")

 

Results for the Year Ended 30 September 2014

 

Zambeef (AIM: ZAM), the fully integrated agri-business with operations in Zambia, Nigeria and Ghana, is pleased to announce its results for the year ended 30 September 2014.

 

Financial Performance Summary

 

Revenue

Down 7% to USD 279.5m

(2013: USD 300.4m)

 

Gross Profit

Down 9% to USD 94.4m

(2013: USD 104.1m)

 

Pre Tax Profit/Loss

USD 3.6m loss

(2013: USD 4.1m profit)




Adjusted Pre Tax

Profit/Loss

USD 0.3m* loss

(2013: USD 6.0m* profit)

 

 

Net Cash Inflow from

Operating Activities

 

USD 13.8m inflow

(2013: USD 20.5m inflow)

* adjusted to exclude unrealised foreign exchange differences

 

Key Points

·    2014 financial year has been a year two very different halves.

·    In H1 2014, the Group recorded a loss before tax of USD6.3 million; however, in H2 2014, the Group recorded a profit before tax of USD2.7 million.

·    H1 2014 performance adversely impacted by macro-economic challenges and external influences, however, H2 2014 saw a strong turnaround of the business, led by the Group's core cold chain food product divisions.

·    Gross margin decreased from 34.7 per cent. for September 2013 to 33.8 per cent. for September 2014; however, robust cost control measures resulted in the cost/income ratio improving from 26.6 per cent. (2013) to 26.3 per cent. (2014).

·    Net cash inflow from operating activities was a creditable USD13.8 million.

·    The two JVs with Rainbow (Zam Chick and Zamhatch) are progressing smoothly and we expect to see the full benefits over the next 12 months, when Zamhatch becomes operational.

·    Acceleration of our strategic priorities, which include: the retailing of cold chain food products; forging strategic alliances and partnerships with acknowledged industry players; unlocking value and capital gains from within the Group (and to reduce debt/gearing); and developing the business into a regional food supplier.

 

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

 

"We are pleased to say  that following a difficult year in 2013, which continued into the first half of the current financial year, the business has moved forward strongly in the second half of 2014, and we are hopeful that this situation will continue throughout the 2015 financial year.

 

We believe that the continued execution of our strategy will position us strongly to take advantage of the growth opportunities available. There remain a number of key long-term growth drivers for our business which present significant and tangible opportunities: a rapidly expanding consumer base, fuelled by an emerging middle class, increasing per capita income, rapid population growth and high levels of urbanisation. 

 

Therefore we look forward to making continued progress towards our aim of becoming a leading regional food supplier."

 

 

For further information, please contact:

 

Zambeef Products plc


Carl Irwin, Joint Chief Executive Officer

Tel:  +260 (0) 977 999002

Francis Grogan, Joint Chief Executive Officer

Tel:  +260 (0) 211 369000



Strand Hanson Limited

Tel:  +44 (0) 20 7409 3494

Angela Hallett


James Spinney




Panmure Gordon (UK) Limited

Tel:  +44 (0) 20 7886 2500

Hugh Morgan


Tom Salvesen 


Peter Steel




Buchanan

Tel: +44 (0) 20 7466 5000

Mark Edwards


Sophie McNulty


Robbie Ceiriog-Hughes


 

 

Notes to Editors

The Zambeef Group is one of the largest integrated agri-businesses in Zambia, involved in the primary production, processing, distribution and retailing of beef, chickens, pork, milk, eggs, dairy products, fish, flour, edible oils and stock feed, throughout Zambia and the surrounding region, as well as Nigeria and Ghana.  The Group is also one of the largest cereal row cropping operations in Zambia, with approximately 8,120 Ha of irrigated land and approximately 8,480 Ha of rain-fed/dry land, available for planting each year.

 

The Group employed an average of 5,861 employees in the period.

 

Further information can be found on www.zambeefplc.com

 

This publication is in line with standard practice for London Stock Exchange.

 


 

Chairman's Report

 

Overview

Overall, the year under review has been challenging. The Group recorded a loss before tax of USD3.6 million (ZMW21.2 million). Adjusting for unrealised foreign exchange losses, this translates to a loss before tax of USD0.3 million (ZMW1.8 million).

 

The 2014 financial year has been a year of two very different halves for Zambeef.

 

As previously reported, our performance during H1 2014 was adversely impacted by macro-economic challenges and external  influences, which included the depreciation of the Zambian Kwacha by over 15 per cent. versus the US Dollar, the outbreak of African Swine Fever ("ASF"), lower soya bean prices and a reduction in sales of Zambeef's cold chain food products through its retail network.

 

As a result, in H1 2014, the Group recorded a loss before tax of USD6.3 million (ZMW36.8 million).

 

However, during H2 2014, the Group recorded a profit before tax of USD2.7 million (ZMW15.6 million). Factors contributing to an improved second half performance include the relatively stable exchange rate, resolution of the ASF outbreak by the Zambian government, a good wheat harvest and strong growth in sales of our cold chain food products through Zambeef's retail network. The relatively stable exchange rate has resulted in reduced foreign exchange losses (compared with H1 2014) and has also contributed to an improvement in the Group's gross profit margin from 32.7 per cent. in H1 2014 to 34.8 per cent. in H2 2014. It is encouraging that the trend from the improved second half has continued into the current financial year.

 

In addition, it is pleasing to note that net cash inflow from operating activities was a creditable USD13.8 million (ZMW81.6 million) (2013: USD20.5 million; ZMW108.7 million).

 

Strategic priorities

Zambeef has an established and proven strategy of providing high quality end products to its customers. Over the past ten years, we have built the Group into a broad, vertically integrated retail and agricultural business with a robust supply chain which creates added value and reduces financial volatility.

 

Our priorities, continue to be focused on:

·     the retailing of cold chain meat and dairy products;

·     where appropriate, forging strategic alliances and partnerships with acknowledged industry players;

·     unlocking value and capital gains from within the Group and reducing debt/gearing; and

·     developing the business into a regional food supplier.

 

Retailing of cold chain meat and dairy products

The retailing of cold chain meat and dairy products (beef, chickens, pork, milk, dairy and eggs), directly to the end consumer, in a value added form, has always been at the heart of Zambeef's growth strategy, delivered through the Group's extensive retailing and distribution network. These core divisions are also less capital intensive, have a shorter working capital cycle and are less prone to exchange rate fluctuations.

 

Our retail presence is a key differentiator for our business, both through our own network of stores and wholesale outlets or through our long-standing partnership with Shoprite. We have built this network to total 146 stores, not only in Zambia but also Nigeria and Ghana.

 

Our emphasis will be on growing this segment of our business, as there continues to be significant opportunities, underpinned by the increasing urbanisation and improving prosperity, in our markets. A key focus will be keeping pace with consumer demand and further enhancing the profitability of our retail outlets.

 

Strategic partnerships/alliances

In order to drive forward our growth plan, we continue to believe that it will be beneficial to form strategic alliances and partnerships with acknowledged industry players, who can provide both the financial support and technical expertise in areas that would otherwise require significant time and cost commitments by the Group.

 

This process started in 2013, when we partnered with RCL Foods Limited ("Rainbow"), one of the largest chicken producers in Sub-Saharan Africa ("SSA"), through two joint ventures ("JV"), Zam Chick Limited ("Zam Chick") and Zamhatch Limited ("Zamhatch").

 

The Zam Chick JV is allowing Zambeef to leverage Rainbow's vast experience and impressive track record in the poultry industry, with a key focus on value added and processed chicken products, where Rainbow has demonstrated significant capabilities in the South African market.

 

Similarly, the Zamhatch JV, to establish a broiler parent stock rearing, laying and hatching operation for the supply of day old chicks, will enable Zambeef to manage the quality and quantity of supply of day old chicks to its broiler division as well as create opportunities to generate revenue from their sale to third parties.

 

Both JVs are progressing smoothly. The support from Rainbow is proving valuable in helping us to launch new products and improve efficiencies and we expect to see the full benefits of both JVs being reflected in Zambeef's performance over the next financial year as the Zamhatch operations come on stream.

 

Our partnership with Shoprite also continues to perform well. Shoprite is Africa's largest retailer and has chosen Zambeef as its strategic partner to run and manage its own in-house butcheries in Zambia, Nigeria and Ghana.

 

In this vein, we will continue to explore further strategic alliances and partnerships where we consider that they will be value enhancing for the Group.

 

Realising value

In our 2013 audited accounts, we announced significant capital gains resulting from the revaluation of our assets. This was a pleasing reflection of the investment we have made in recent years to establish Zambeef as a leading agricultural producer and we are continually looking at ways of realising some of this value, in order to achieve a cash inflow. This will allow us, inter alia, to reduce USD denominated debt, thereby reducing exchange rate exposure and interest costs.

 

Our position as a leading Zambian agricultural business represents an attractive proposition for establishing strategic partnerships and as part of this process, there is an opportunity for us to unlock some of this value in order to strengthen our financial position.

 

Feeding the region

Our longer term strategic ambition, as previously indicated, is to build on the Group's sound domestic business in order to make Zambeef a regional food player within the Sub-Saharan Africa ("SSA") region, and, specifically, within the 15 member states that make up the Southern Africa Development Community ("SADC") region, as trade within the SADC region benefits from a number of tax, customs and excise duty benefits, as well as a fast growing population offering an expanding consumer base.

 

Zambia is ideally and centrally located within the SADC region and has the potential to expand agricultural production, given its considerable resources in terms of land, labour and water. We believe that Zambeef is well placed to become a regional food player, in particular, thanks to our strong existing distribution network and footprint. By building our position as a regional food player, we will have access to significant growth opportunities across a broader geographical footprint, generate geographically diversified revenue streams and enable valuable foreign exchange earnings to be realised, potentially mitigating exchange rate risks.

 

Dividend

The Board of Directors does not anticipate paying a dividend in respect of 2014. We are hopeful that the business will continue to progress to a stage where it is able to pay dividends and we intend to keep the dividend policy under review with the aim of achieving a balance between providing returns to shareholders and maintaining suitable levels of investment in the business.

 

Senior management changes

On 23 September 2014, the Board approved the appointment of Carl Irwin (previously Director of Strategy and Development) to the position of Joint Chief Executive Officer. Carl, as well as retaining his existing responsibilities, will oversee Zambeef's Head Office function, whilst Francis Grogan will retain responsibility for the operational aspects of the Group. This senior management change was made on the basis of the Board wishing to re-align the organisational structure of the Group with that which drove the period of strongest growth in the business and will free up Francis to concentrate on driving the operational growth of Zambeef's core business divisions.

 

Conclusion and outlook

We are pleased to say that following a difficult year in 2013, which continued into the first half of the current financial year, Zambia's macro-economic conditions recently stabilised and we are hopeful that this situation will continue throughout the 2015 financial year.

 

We believe that the continued execution of our strategy will position us strongly to take advantage of the growth opportunities available. In the short term our focus will be on maintaining the improvement in performance in Zambia, with our aspiration to become a regional player supporting our longer term growth ambitions. In addition, our decision to grow and develop our business through partnerships with acknowledged industry leaders is a further step forward in the Board's strategy of managed growth.

 

There remains a number of key long-term growth drivers for our business which present significant and tangible opportunities: a rapidly expanding consumer base, fuelled by an emerging middle class, increasing per capita income, rapid population growth and high levels of urbanisation.

 

The operational platform which we have established over the last few years, our focus on developing our offering generally, and value added products in particular, and our geographic footprint will all help to underpin our longer term performance as we take advantage of the opportunities that exist.

 

Therefore we look forward to making continued progress towards our aim of becoming a leading regional food supplier.

 

 

Dr. Jacob Mwanza

Chairman

24 November 2014

 

 

 

Joint Chief Executive Officers' Review

 

Overview

After a difficult start to the financial year, as discussed in the Chairman's Statement, it is pleasing to report that H2 2014 saw a strong rebound in our business. The improved operational performance during H2 2014 was driven by Zambeef's traditional core cold chain food products business and we achieved significant percentage increases in gross profit in USD terms versus H1 2014 in a number of these divisions including beef, chicken, pork, dairy and eggs.

 

The percentage increase in gross profit in USD, H2 2014 versus H1 2014, for these divisions was as follows:

 

Beef:

52.7%

Chicken:

12.2%

Pork:

108.7%

Dairy:

22.0%

Eggs:     

21.5%

 

In addition, the Group's gross profit margin increased from 32.7 per cent. in H1 2014 to 34.8 per cent. in H2 2014, the highest half-yearly gross margin recorded on a Group-wide basis since 2008.

 

The focus will remain on driving growth in Zambeef's traditional core cold chain food products business, which is the foundation on which the Company was originally built and from which it has continued to grow. Although the overall loss for the year is disappointing, it is pleasing to report that the results for the second half show that the business is firmly back on track.

 

Key operational drivers

Retail sales

It is pleasing to report that the focus and effort that has been placed on the traditional Zambeef core cold chain food products business and the retail and distribution network which Zambeef operates to market these products, has shown profitable growth. In H2 2014, revenues from the core cold chain food products of beef, chicken, pork, dairy and eggs were up in USD terms by 13.4 per cent. from USD57.8 million (ZMW339.9 million) in H1 2014 to USD65.5 million (ZMW385.3 million) in H2 2014, while the related gross profit was up 41.5 per cent. from USD14.9 million (ZMW87.9 million) to USD21.1 million (ZMW124.2 million).

 

 

The table below shows retail gross profit increasing by 19.9 per cent. (USD) and 32.7 per cent. (ZMW) between 2013 and 2014.

 


H1 2014

USD'M

H2 2014

USD'M

H1 2014

ZMW'M

H2 2014 %

ZMW'M

%

Change

Total

2014

USD'M

Total

2013

USD'M

%

Change

Total

2014

ZMW'M

Total

2013

ZMW'M

%

Change

Turnover

83.8

90.9

492.6

534.4

7.8%

174.6

175.4

-0.4%

1,026.9

931.3

10.3%

Gross profit

6.8

7.4

40.1

43.3

7.4%

14.2

11.8

19.9%

83.5

62.9

32.7%

 

The public has responded positively to Zambeef's commitment to sell only Zambian beef in its outlets in a market which has seen a continuing influx of foreign products. Zambeef will remain committed to supporting Zambian farmers in their efforts to breed and rear quality cattle, develop their animal husbandry and buy their animals.

 

The Zambeef Group's retail network is currently is follows:

 

Zambia

Nigeria

Ghana

92 Zambeef outlets

11 Shoprite butcheries

4 Shoprite outlets

22 Shoprite butcheries

6 Zambeef outlets


7 Zamchick Inns



4 Wholesale depots



 

This retail network remains the engine room that drives the sales of Zambeef's core cold chain food products. It allows Zambeef to add value via its primary production before branding these products and selling them to the end consumer in a value added form. This will remain a key focus area for the business in the future.

 

Exports

We continue to expand exports in the region. Export earnings have increased from USD5.4 million (ZMW25.7 million) in 2011 to USD30.2 million (ZMW177.5 million) in 2014, and now account for 10.8 per cent. of total revenues, with most of this growth being exports into the SADC region.

 

In addition, our West Africa operations continue to grow with revenues increasing from USD16.1 million (ZMW85.4 million) in 2013 to USD19.8 million (ZMW116.2 million) during the year and now represents  six per cent. of the Group's revenue.

 

Our expanding regional reach helps position the Group for continuing growth and to achieve our longer term ambition of making Zambeef a regional food player.

 

African Swine Fever

Following the outbreak of African Swine Fever in Zambia from mid-November 2013, the Zambian government imposed restrictions on the movement of pigs and the sale of pork products for a three month period to February 2014. Whilst the Group's animals were not affected by this outbreak, the ban significantly impacted the performance of Master Pork during H1 2014. Despite this setback, the pork division's gross profit for the year improved by 36 per cent. (USD0.88 million) compared with 2013. This division is seen as a core part of Zambeef's future plans and its performance is expected to continue to show strong growth.

 

Market overview

The Zambeef platform in Africa

Zambeef operates in some of the fastest growing parts of the world where demand for food continues to increase rapidly.

 

Zambia

Zambia remains one of the fastest growing economies in Sub-Saharan Africa. GDP growth has averaged more than 6.5 per cent. per annum over the last five years and is forecast to grow at around six per cent. per annum over the next three years. It has one of the fastest growing populations in the world at around 2.5 per cent. per annum. These factors have contributed to a rapidly expanding consumer base, driven by an emerging middle class and high levels of urbanisation.

 

Nigeria

This is the largest economy in Africa and has recorded average GDP growth exceeding six per cent. per annum over the last three years and is forecast to grow by around 6.5 per cent. per annum for the next three years. GDP per capita has doubled from USD1,400 in 2000 to USD2,800 in 2012. Nigeria is Africa's most populous country (160 million) and it also has a rapidly expanding consumer base.

 

Ghana

Ghana is also one of the fastest growing economies in Sub-Saharan Africa and is West Africa's second largest economy after Nigeria. GDP has grown on average by more than six per cent. per annum over the last five years and is expected to grow at around six per cent. per annum over the next three years.

 

As this demonstrates, Zambeef is operating in areas of the continent where the demand for food is expected to continue to grow at a rapid rate. The challenge for Zambeef will be to continue to expand its core operations in line with this increased demand and we believe that our business priorities will support our ability to take advantage of the considerable opportunities which exist for the Group.

 

Staff and Board of Directors

Zambeef is committed to attract, retain and motivate top quality staff in all of the areas in which it operates. We would like to thank all our staff in Zambia, Nigeria and Ghana for their contribution to the Company in the last year.

 

We would also like to thank our Board for its continued advice, guidance and encouragement. We are fortunate to have a Board with a wide range of experience both in the private and public sector both within Zambia and internationally.

 

Conclusion and outlook

After a difficult first six months to the year, the business has moved forward strongly and we have confidence that this trend will continue into the future. In particular, significant attention will be paid to the ongoing organic growth of Zambeef's core cold chain food product divisions and the marketing of their products through the Group's distribution and retail network which remains the Group's engine room.

 

Mpongwe Farm ("Mpongwe") continues to provide Zambeef with a competitive advantage over its peers and, in 2014, continued the trend of increasing yields as it has done annually since its acquisition in 2011. Mpongwe has been established as a consistent low cost producer of staples such as maize, wheat and soya and these will continue to flow through Zambeef's vertically integrated model into its core cold chain value added food products in the future.

 

Additionally, Mpongwe is now providing the base for all further poultry expansion, maximising the use of previously unused land.

 

Zambeef can look forward to the future with confidence. We have an experienced management team with a proven track record for doing business in Africa. We are operating in parts of the continent where the demand for its products is increasing at a rapid rate. The strategic focus on growing the sales of its traditional core cold chain food products, namely beef, chicken, pork, dairy and eggs, through its own retail network, and continuing to control overheads, we are confident that Zambeef will achieve its goal of becoming one of the leading food suppliers in Sub Saharan Africa.

 

 

Carl Irwin/Francis Grogan

Joint CEOs

24 November 2014

 

  

Financial Review

 

Overview

After a difficult start to the financial year, it has been encouraging to see the strong turnaround of the business in H2 2014, led by Zambeef's traditional core cold chain food product businesses. The chicken, pork, dairy and eggs divisions all increased gross profitability in both USD and ZMW terms when comparing 2014 with 2013, whilst the beef division was up in Kwacha terms but down in USD terms. Other divisions have reported decreasing gross profits in both USD and ZMW, with our edible oils business Zamanita showing the biggest decrease in gross profit followed by stockfeed, milling and cropping, where strong competition is reducing margins.

 

Revenue

Revenue increased by three per cent. in ZMW terms from ZMW1,595.1 million in 2013 to ZMW1,643.3 million in 2014. However, in USD terms, the revenue reduced by seven per cent. from USD300.4 million in 2013 to USD279.5 million in 2014. The main contributors to the reduction in revenue in USD were the 17.9 per cent. depreciation of the ZMW against the USD and reduced revenue from Zamanita and our milling and cropping operations. The fastest growing divisions were Nigeria, dairy, leather and eggs. The segmental revenues are shown below and are discussed in more detail by division.

 

Turnover

2014
(USD'000)

2013
(USD'000)

Percentage change
(USD)

increase/

(decrease)

2014
(ZMW'000)

2013
(ZMW'000)

Percentage change

(ZMW)

increase/

(decrease)

Cropping

51,636

78,173

(33.9)

303,617

415,101

(26.9)

Edible oils

53,859

69,764

(22.8)

316,688

370,445

(14.5)

Beef

58,806

60,998

(3.6)

345,778

323,897

6.8

Stock feed

57,699

49,757

16.0

339,268

264,208

28.4

Chicken

24,082

25,437

(5.3)

141,603

135,070

4.8

Eggs

5,496

4,638

18.5

32,318

24,630

31.2

Pork

20,935

21,749

(3.7)

123,096

115,485

6.6

Milk and dairy

14,011

11,563

21.2

82,386

61,402

34.2

Mill and bakery

12,201

14,840

(17.8)

71,741

78,798

(9.0)

Leather

4,983

4,159

19.8

29,303

22,085

32.7

Nigeria

16,449

13,047

26.1

96,725

69,277

39.6

Ghana

3,316

3,040

9.1

19,502

16,141

20.8

Fish

3,646

4,428

(17.7)

21,437

23,512

(8.8)

Zamchick Inn

1,812

2,263

(19.9)

10,653

12,018

(11.4)

Total

328,931

363,856

(9.6)

1,934,115

1,932,069

0.1

Less: intra-Group sales

(49,466)

(63,468)


(290,862)

(337,007)


Group total

279,465

300,388

(7.0)

1,643,253

1,595,062

3.0

 

Exchange rate volatility

The ZMW depreciated against the USD by 15 per cent. in H1 2014 versus 2.9 per cent. in H2 2014. Consequently, the business incurred an exchange loss for the year of USD5.8 million (2013: USD3.0 million), of which USD3.3 million is unrealised (2013: USD1.6 million). Over USD5.0 million (85 per cent.) of this year's exchange loss arose in the first half of the year.

 

It is pleasing to see the ZMW having returned to relative stability and we hope this will continue into the future.

 

Gross profit

Gross profit increased by 0.4 per cent. in ZMW terms from ZMW552.8 million in 2013 to ZMW555 million in 2014 and reduced by nine per cent. in USD terms from USD104.1 million in 2013 to USD94.4 million in 2014. The picture is similar to that for revenue with gross profits having increased in both USD and ZMW terms for chicken, pork, dairy and eggs whilst in our beef and cropping divisions there was an increase in ZMW terms but a decrease in USD terms. The largest decrease was represented by performance at Zamanita followed by stockfeed and milling.

 

Although, overall, the gross profit margin decreased from 34.7 per cent. in 2013 to 33.8 per cent. in 2014, it is pleasing to report that there was an increase from 32.7 per cent. in H1 2014 to 34.8 per cent. in H2 2014. The strong second half performance is further demonstrated by the fact that it accounted for more than 68 per cent. of the Group's EBITDA for the year.

 

The gross profit by division is shown in the table below.

 

Gross profit

2014

USD'000s

2013

USD'000s

Percentage change

USD

2014

ZMW'000s

2013

ZMW'000s

Percentage change

ZMW

Gross

profit %

2014

Gross

profit %

2013

Percentage change

Cropping

26,411

29,125

(9.3)

155,295

154,655

0.4

51.1

37.3

37.3

Edible oils

11,076

19,202

(42.3)

65,131

101,965

(36.1)

20.6

27.5

(25.3)

Beef

18,233

19,633

(7.1)

107,210

104,254

2.8

31.0

32.2

(3.7)

Stock feed

9,301

11,120

(16.4)

54,690

59,049

(7.4)

16.1

22.4

(27.9)

Chicken

5,313

5,080

4.6

31,238

26,973

15.8

22.1

20.0

10.5

Eggs

2,041

1,687

21.0

12,003

8,957

34.0

37.1

36.4

2.1

Pork

3,341

2,458

35.9

19,646

13,050

50.5

16.0

11.3

41.2

Milk and dairy

7,150

4,962

44.1

42,042

26,346

59.6

51.0

42.9

18.9

Mill and bakery

2,560

3,002

(14.7)

15,051

15,939

(5.6)

21.0

20.2

3.7

Leather

1,970

1,298

51.7

11,581

6,892

68.0

39.5

31.2

26.6

Nigeria

3,976

2,921

36.1

23,382

15,511

50.7

24.2

22.4

8.0

Ghana

904

860

5.1

5,314

4,567

16.4

27.2

28.3

(3.7)

Fish

1,277

1,672

(23.6)

7,511

8,878

(15.4)

35.0

37.8

(7.2)

Zamchick Inn

836

1,082

(22.7)

4,916

5,745

(14.4)

46.2

47.8

(3.5)

Total

94,389

104,102

(9.3)

555,010

552,781

0.4

33.8

34.7

(2.5)

 

Administration costs

Another key focus during the year has been cost control and it is encouraging to report that administration costs, excluding depreciation, reduced by USD6.3 million or 7.8 per cent. from 2013 to 2014 (an increase of ZMW8.7 million or 2.1 per cent. in Kwacha terms). This resulted in the cost to income ratio reducing marginally from 26.6 per cent. to 26.3 per cent. in USD terms.

 

With the strong growth in the second half of the year expected to continue into 2015, these cost saving measures are expected to flow into net profit as revenue increases.

 

Finance costs and exchange losses

Finance costs increased by 23.8 per cent. in ZMW terms largely due to the Board's decision to convert some of the Group's USD denominated working capital facilities to Kwacha. Interest costs on Kwacha facilities are approximately 10 per cent. more expensive than for USD facilities, and during the first half of the financial year, local Kwacha interest rates (Bank of Zambia Policy Rate) increased from 9.75 per cent. to 12.0 per cent. However, this decision was taken to better balance the Group's debt portfolio between USD and Kwacha facilities, representing a reasonable trade-off between higher interest costs and lower exchange rate risks.

 

Capital expenditure

During the year, we invested USD13.7 million of capital in the business mainly in the hatchery project, upgrading the stock feed plant, Zamanita soya crushing plant and the palm project. We anticipate further investment of USD14.0 million in the new financial year.

 

We will continue to make targeted investments in infrastructure and plant and equipment to keep pace with consumer demand, drive revenue, enhance margins and generate cash. Long-term investment will also be aimed at reducing, wherever desirable, costs of production and processing.

 

Below we provide a more detailed overview of the Group's operational performance.

 

 

Cropping

 

USD'm

Year to 30 Sep 2014

Year to 30 Sep 2013

% change

% of Group (2014)

Revenue

51.6

78.2

(34)

16

Gross profit

26.4

29.1

(9)

28

 

 

ZMW'm

 

 

 

 

Revenue

303.6

415.1

(27)

16

Gross profit

155.3

154.7

0.4

28

 

Zambeef's cropping division has had a credible year despite gross profit reducing in 2014 by 9.3 per cent. in USD (an increase of 0.4 per cent. in ZMW). This result was impacted by lower commodity prices which were only partially offset by higher yields.

 

Cropping performed below expectations in H1 2014 with soya bean prices falling by around USD100 per ton (to USD500 per ton) while H2 2014 performance was ahead of expectations with wheat prices slightly ahead of budget and excellent yields.

 

This division has consolidated Zambeef's position as one of the largest row cropping operations on the continent with a total of 23,515 Ha being planted over the summer and winter cropping seasons, producing, in aggregate, around 120,000 M.T. of maize, soya beans, barley and wheat.

 

This division capitalises on Zambia's fertile soils, excellent cropping climate and its abundant water reserves.

 

Edible oils

 

USD'm

Year to 30 Sep 2014

Year to 30 Sep 2013

% change

% of Group (2014)

Revenue

53.9

69.8

(23)

16

Gross profit

11.1

19.2

(42)

 

 

ZMW'm

 

 

 

 

Revenue

316.7

370.4

(15)

16

Gross profit

65.1

102.0

(36)

 

Zamanita's gross profit was down USD8.1 million (42 per cent.) and ZMW36.9 million (36 per cent.). Revenue was lower by USD15.9 million and ZMW53.7 million due to reducing the crush of soya beans from 86,495 M.T. (2013) to 58,747 M.T. (2014).

 

During 2014, we stopped all crushing in third party plants, as soya meal and edible oil prices were reducing and hence toll crushing ceased to be a sufficiently profitable activity.

 

Since August, we have upgraded the crushing plant to its working capacity of 8,500 M.T. per month. This will allow Zamanita to increase its crushing up to 100,000 M.T. per annum over the next two years. However the short-term effect was a large reduction in sales in 2014.

 

The decrease in gross profit was due to the decrease in revenue and the high price of soya beans in the 2013 buying season compared to the decrease in prices in 2014. The expensive beans were all crushed out by August 2014 and hence Zamanita had only two months in this year crushing the 2014 soya crop.

 

As a result of having cheaper beans to crush for the 2015 year and increased crushing capacity, Zamanita can look forward to a better 2015.

 

Beef

 

USD'm

Year to 30 Sep 2014

Year to 30 Sep 2013

% change

% of Group (2014)

Revenue

58.8

61.0

(4)

18

Gross profit

18.2

19.6

(7)

 

 

ZMW'm

 

 

 

 

Revenue

345.8

323.9

7

18

Gross profit

107.2

104.3

3

 

 

Beef revenue and gross profits were down in USD terms by four per cent. and seven per cent. respectively while up in Kwacha terms by seven per cent. and three per cent. respectively.

 

The division recorded an excellent performance over the last six months with gross profits increasing by USD3.8 million and by ZMW22.4 million compared with H1 2014. This represented a 53 per cent. increase in gross profit, which was made up of volume and margin increases, with gross profit margins increasing from 25 per cent. to 37 per cent. between the first and second six months.

 

Total cattle slaughtered increased from 50,600 in 2013 to 59,000 in 2014, representing a 17 per cent. increase.

 

Zambeef's commitment to buying only Zambian beef has been well received and, with the increased focus being given to the beef division, as the largest contributor to cold chain food products, this division is expected to continue to grow in 2015.

 

Stock feed (Novatek)

 

USD'm

Year to 30 Sep 2014

Year to 30 Sep 2013

% change

% of Group (2014)

Revenue

57.7

49.8

16

18

Gross profit

9.3

11.1

(16)

 

 

ZMW'm

 

 

 

 

Revenue

339.3

264.2

28

18

Gross profit

54.7

59.0

(7)

 

 

Novatek increased sales volumes and market share, following the addition of a second pelleting line commissioned in May 2014. This year, Novatek produced 118,885 M.T. of animal feed, compared to 89,701 M.T. last year, which represents 33 per cent. volume growth. This resulted in revenue increasing by 16 per cent. in USD and 28 per cent. in Kwacha. However this increased revenue was on lower margins with the gross profit percentage decreasing from 22 per cent. in 2013 to 16 per cent. in 2014.

 

This drop in margin can largely be attributed to the lag in passing on the increase in input costs following the rapid devaluation of the Kwacha in the first half of the year. The main inputs are maize and soya meal, which are USD based, whilst sales are in Zambian Kwacha.

 

Novatek continues to increase its exports which now account for 8 per cent. of revenue and with the economies of scale from the increase in production Novatek expects to continue to increase its market share both within Zambia and regionally.

 

With the exchange rate having stabilised, margins have improved and this division can look forward to 2015 with renewed confidence.

 

Chicken and egg

 

USD'm

Year to 30 Sep 2014

Year to 30 Sep 2013

% change

% of Group (2014)

Revenue

29.6

30.1

(2)

9

Gross profit

7.4

6.8

9

 

 

ZMW'm

 

 

 

 

Revenue

173.9

159.7

9

9

Gross profit

43.2

35.9

20

 

 

The chicken and egg operations have performed well during the year, with broiler production increasing from 5.1 million birds in 2013 to 6.2 million birds in 2014, representing a 21 per cent. volume increase.

 

Egg production volumes increased by 15 per cent. from 40 million eggs in 2013 to 46 million eggs in 2014.

 

This has resulted in gross profit increasing in USD by USD0.6 million, representing an increase of 8.7 per cent. and increasing in Zambian Kwacha by ZMW7.3 million, representing an increase of 20.3 per cent.

 

It is pleasing to see that these operations increased, in gross profit terms, in H2 2014 by 15 per cent. versus H1 2014.

 

Zamhatch has started the construction phase of a breeder farm and hatchery at Mpongwe and is targeting the commencement of supply of day old chicks in H2 2015.

 

These operations are a core part of Zambeef's operations and as a result these operations will continue to grow in 2015.

 

Pork

 

USD'm

Year to 30 Sep 2014

Year to 30 Sep 2013

% change

% of Group (2014)

Revenue

20.9

21.7

(4)

6

Gross profit

3.3

2.5

36

 

 

ZMW'm

 

 

 

 

Revenue

123.1

115.5

7

6

Gross profit

19.6

13.1

51

 

 

The pork division's performance this year was adversely affected by the outbreak of ASF in Zambia, which lasted for three months from November 2013 to February 2014.

 

Whilst Master Pork's animals were not affected by this outbreak, the government imposed restrictions on the movement of pigs and the sale of pork products during this three month period, which significantly impacted performance at Master Pork during the first half of the financial year.

 

Since the lifting of the ASF ban, we have seen a significant improvement in the demand for all our pork products, such that in spite of the ASF outbreak, the gross profit for the whole year improved in USD by 36 per cent. (USD 0.88 million) compared to 2013 and in Zambian Kwacha by 51 per cent. (ZMW6.5 million).

 

This division is considered a core part of Zambeef's operations and focus will be given to increasing volumes and margins during 2015.

 

Milk and dairy

 

USD'm

Year to 30 Sep 2014

Year to 30 Sep 2013

% change

% of Group (2014)

Revenue

14.0

11.6

21

4

Gross profit

7.2

5.0

44

 

 

ZMW'm

 

 

 

 

Revenue

82.4

61.4

34

4

Gross profit

42.0

26.3

60

 

 

This division has delivered another excellent year, with gross profit up in USD by 44 per cent. (USD2.2 million) and in Kwacha by 60 per cent. (ZMK15.7 million).

 

Our dairy produced 6.5 million litres of milk this year, compared to 6 million last year and milk sourced from the small scale dairy sector increased significantly, from 952,000 litres (2013) to more than 2.4 million litres (2014).

 

Cows in-milk now average 850 (2013: 800) and the average daily yield per cow has increased from 21 litres (2013) to 27 litres (2014).

 

The factors contributing to these results include improved feed efficiencies and fodder quality, strong partnerships with small scale outgrowers, improved herd management and investment in a new feeding shed.

 

The new milk processing plant (commissioned in November 2013) has increased daily milk processing capacity from 25,000 litres to 65,000 litres and is currently running at 35,000 litres per day. The new plant has allowed Zambeef to target supply growth more aggressively and increase the number of value added products, which now include 40 product lines, and which earn better margins.

 

This division will continue to be a key focus area and continued growth is expected in 2015.

 

Mill and bakery

 

USD'm

Year to 30 Sep 2014

Year to 30 Sep 2013

% change

% of Group (2014)

Revenue

12.2

14.8

(18)

3

Gross profit

2.6

3.0

(15)

 

 

ZMW'm

 

 

 

 

Revenue

71.7

78.8

(9)

3

Gross profit

15.1

15.9

(6)

 

 

Wheat milled during the year under review amounted to approximately 22,550 M.T. as opposed to 26,400 M.T. in 2013. This reduction in milling resulted in both revenue and gross profits reducing in both Zambian Kwacha and USD.

 

This year saw a strategic shift away from competitive, high volume, low margin biscuit flour sales towards higher margin retail bread flour sales through our internal retailing and distribution channels, as well as through Shoprite. It is pleasing that more than 50 per cent. of flour sales are now through our own retailing network.

 

During the year, we also made a strategic decision to close the bread division, as this division was low-margin and non-core. During 2015 the focus will remain on selling flour through our own retail network.

 

Leather and shoe

 

USD'm

Year to 30 Sep 2014

Year to 30 Sep 2013

% change

% of Group (2014)

Revenue

5.0

4.2

20

2

Gross profit

2.0

1.3

52

 

 

ZMW'm

 

 

 

 

Revenue

29.3

22.1

33

2

Gross profit

11.6

6.9

68

 

Although this division is small it has been one of our top performing divisions in terms of growth in 2014 and the management of this operation must be complimented on an outstanding year.

 

The wet blue unit processed 100,510 hides in 2014 compared to 79,851 in 2013 (over 25 per cent. volume growth), achieved largely through running our own tannery at full capacity (6,000 hides per month), with the balance being contract/toll tanning.

 

Wet blue production was ramped up in 2014 due to an improvement in the wet blue market; as a result, we purchased more third party hides (40,977 in 2014 versus 28,792 in 2013) for processing.

 

The finished leather and shoe units have continued to perform steadily with local demand for our leather and shoes remaining strong.

 

Zamleather provides an important market for Zambeef's hides and is now the only operational tannery in Zambia.

 

West Africa

 

USD'm

Year to 30 Sep 2014

Year to 30 Sep 2013

% change

% of Group (2014)

Revenue

19.8

16.1

23

6

Gross profit

4.9

3.8

29

 

 

ZMW'm

 

 

 

 

Revenue

116.2

85.4

36

6

Gross profit

28.7

20.1

43

 

 

Zambeef's West Africa operations are gaining momentum in line with Shoprite's increasing footprint in the region, driven largely by the roll out of Shoprite stores. During the year, revenue increased in USD by 22.9 per cent. (USD3.7 million) and in Kwacha by 36.1 per cent. (ZMW30.8 million) and gross profit increased in USD by 29.0 per cent. (USD1.1 million) and in Kwacha by 43.0 per cent (ZMW8.6m).

 

During 2014, four new Shoprite stores were opened in Nigeria and a further store in Ghana. We now have 11 Shoprite stores and six self-operated outlets in Nigeria, and four Shoprite stores in Ghana.

 

In Nigeria, Shoprite expects to open three new stores in 2015 and a further eight in 2016. In Ghana, Shoprite plan a further two stores in 2015.

 

The abattoir and processing plant in Ikenne (Lagos) and the processing plant in Accra, Ghana, have provided the Group with an enormous advantage and range of value add higher margin products. In Nigeria, we have now successfully started the feedlotting of cattle, goats and lamb. This has improved the quality and consistency of supply of meat products.

 

As a result, continued growth is expected in Zambeef's West African operations.

 

 

 

 

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

 

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 SEPTEMBER 2014

 

Group

Notes

2014
ZMW'000s

2014
USD'000s

2013
ZMW'000s

2013
USD'000s

Revenue

5

1,643,253

279,465

1,595,062

300,388

Net gain arising from price changes in fair value of biological assets

16

770

131

2,377

448

Cost of sales


(1,089,013)

(185,207)

(1,044,658)

(196,734)

Gross profit


555,010

94,389

552,781

104,102

Administrative expenses


(494,116)

(84,033)

(474,179)

(89,300)

Other income


2,848

484

514

97

Operating profit

6

63,742

10,840

79,116

14,899

Exchange losses on translating foreign currency transactions and balances


(34,302)

(5,834)

(15,689)

(2,955)

Impairment


-

-

(714)

(134)

Finance costs

8

(50,599)

(8,604)

(40,884)

(7,699)

(Loss)/profit before taxation


(21,159)

(3,598)

21,829

4,111

Taxation credit /( charge)

9

959

163

(5,794)

(1,091)

Group (loss)/ profit for the year


(20,200)

(3,435)

16,035

3,020



 

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

 

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 SEPTEMBER 2014 (CONTINUED)

 


Notes

2014

 ZMW'000s

2014
USD'000s

2013
ZMW'000s

2013
USD'000s

Group profit attributable to:


ZMW'000s

USD'000s

ZMW'000s

USD'000s

Equity holders of the parent


(24,609)

(4,185)

13,766

2,593

Non-controlling interest


4,409

750

2,269

427



(20,200)

(3,435)

16,035

3,020

Other comprehensive income:






Exchange gains/ (losses) on translating presentational currency


10,408

(36,664)

(7,993)

(7,816)

Total comprehensive income for the year


(9,792)

(40,099)

8,042

(4,796)

Total comprehensive income for the year attributable to:






Equity holders of the parent


(13,747)

(40,178)

8,262

(4,755)

Non-controlling interest


3,955

79

(220)

(41)



(9,792)

(40,099)

8,042

(4,796)



Kwacha

Cents

Kwacha

Cents

Earnings per share






Basic and diluted earnings per share

11

(0.0992)

(1.69)

0.0555

1.05

 

                                                     

 

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 SEPTEMBER 2014 

(i) In Zambian Kwacha

Issued share capital

 

 

 ZMW'000s

Share premium

 

 

 

ZMW'000s

Foreign exchange reserve

 

 

ZMW'000s

Revaluation reserve

 

 

 

ZMW'000s

Retained earnings

 

 

 

ZMW'000s

Total attributable to owners of the parent ZMW'000s

Non- controlling interest

 

 

ZMW'000s

Total equity

 

 

 

 

ZMW'000s

At 1 October 2012

248

506,277

(1,852)

62,226

185,942

752,841

(821)

752,020

Gain on disposal of non controlling interest (i)

-

-

-

-

69,040

69,040

-

69,040

Transactions with owners

-

-

-

-

69,040

69,040

-

69,040

Profit for the year

-

-

-

-

13,766

13,766

2,269

16,035

Arising during the period (ii)

-

-

-

503,601

-

503,601

20,427

524,028

Transfer of surplus depreciation

-

-

-

(46,065)

46,065

-

-

-

Other comprehensive income:









Exchange losses on translating presentational currency

-

-

(5,504)

-

-

(5,504)

(2,489)

(7,993)

Total comprehensive income

-

-

(5,504)

457,536

59,831

511,863

20,207

532,070

At 30 September 2013

248

506,277

(7,356)

519,762

314,813

1,333,744

19,386

1,353,130

Shares issued

2,232

-

-

-

(2,232)

-

-

-

Transactions with owners

2,232

-

-

-

(2,232)

-

-

-

Loss for the year

-

-

-

-

(24,609)

(24,609)

4,409

(20,200)

Transfer of surplus depreciation

-

-

-

(6,142)

6,142

-

-

-

Other comprehensive income:









Exchange gain/( losses) on translating presentational currency

-

-

10,862

-

-

10,862

(454)

10,408

Total comprehensive income

-

-

10,862

(6,142)

(18,467)

(13,747)

3,955

(9,792)

At 30 September 2014

2,480

506,277

3,506

513,620

294,114

1,319,997

23,341

1,343,338

 

 



 

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 SEPTEMBER 2014 (CONTINUED)

 

 

(i)         During the previous year ended 30 September 2013 Zambeef Products PLC disposed of 49 per cent. of its shareholding in Zam Chick Limited to Rainbow for a sum of USD14.25 million. At 30 September 2012, the book value of Zam Chick's assets was ZMW14.3 million (USD2.8 million). The assets were revalued in Zam Chick Limited during the previous period to ZMW39.6 million (USD7.5 million) resulting in a revaluation reserve of ZMW25.3 million (USD4.7 million). The profit on the sale of 49 per cent recognised in the Statement of movements in equity during the previous period was ZMW69 million (USD13 million).

 

(ii)         An independent valuation of the group's property, plant and equipment situated in Zambia was performed by Messrs. Fairworld Properties Limited, a firm of registered valuation surveyors, to determine their market value. The effective date of the valuation was 31 December 2012 for Zam Chick Limited and 30 September 2013 for the rest of the group. The surplus on valuation totalling ZMW524 million (USD98.7 million) was transferred to a revaluation reserve.

 



 

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 SEPTEMBER 2014 (CONTINUED)

 

(ii) In US Dollar

Issued share capital

 

 

 USD'000s

Share premium

 

 

 

USD'000s

Foreign exchange reserve

 

 

USD'000

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 2012

61

123,283

(36,755)

16,657

44,370

147,616

(161)

147,455

Gain on disposal of non controlling interest

-

-

-

-

13,002

13,002

-

13,002

Transactions with owners

-

-

-

-

13,002

13,002

-

13,002

Profit for the year

-

-

-

-

2,593

2,593

427

3,020

Arising during the period

-

-

-

94,840

-

94,840

3,847

98,687

Transfer of surplus depreciation

-

-


(8,675)

8,675

-

-

-

Other comprehensive income:









Exchange losses on translating presentational currency

-

-

(7,347)

                          -  

                          -  

(7,347)

(469)

(7,816)

Total comprehensive income

-

-

(7,347)

86,165

11,268

90,086

3,805

93,891

At 30 September 2013

61

123,283

(44,102)

102,822

68,640

250,704

3,644

254,348

Shares issued

335

-

-

-

(335)

-

-

-

Transactions with owners

335

-

-

-

(335)

-

-

-

Loss  for the year

-

-

-

-

(4,185)

(4,185)

750

(3,435)

Transfer of surplus depreciation

-

-

-

(1,045)

1,045

-

-

-

Shares issued

335

-

-

-

(335)

-

-

-

Other comprehensive income:









Exchange losses on translating presentational currency

-

-

(35,993)

-

-

(35,993)

(671)

(36,664)

Total comprehensive income

-

-

(35,993)

(1,045)

(3,140)

(40,178)

79

(40,099)

At 30 September 2014

396

123,283

(80,095)

101,777

65,165

210,526

3,723

214,249

 



 

ZAMBEEF PRODUCTS PLC

 

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 SEPTEMBER 2014

 

(i) In Zambian Kwacha

Issued share capital ZMW'000s

Share premium ZMW'000s

Revaluation reserve ZMW'000s

Retained earnings ZMW'000s

Total equity

 

ZMW'000s

At 1 October 2012

248

506,277

44,109

198,571

749,205

Gain on disposal of non controlling interest

-

-

-

69,040

69,040

Transactions with owners

-

-

-

69,040

69,040

Loss for the year




(12,242)

(12,242)

Arising during the period

-

-

309,622

-

309,622

Transfer of surplus depreciation

-

-

(44,109)

44,109

-

Other comprehensive income






Exchange losses on translating presentational currency

-

-

-

(6,380)

(6,380)

Total comprehensive income

-

-

265,513

25,487

291,000

At 30 September 2013

248

506,277

309,622

293,098

1,109,245

Shares issued

2,232

-

-

(2,232)

-

Transactions with owners

2,232

-

-

(2,232)

-

Loss for the year

-

-

-

(457)

(457)

Transfer of surplus depreciation

-

-

(3,139)

3,139

-

Other comprehensive income:






Exchange gains on translating presentational currency

-

-

-

14,885

14,885

Total comprehensive income

-

-

(3,139)

17,567

14,428

At 30 September 2014

2,480

506,277

306,483

308,433

1,123,673

 



 

ZAMBEEF PRODUCTS PLC

 

COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 SEPTEMBER 2014 (CONTINUED)

 

(ii) In US Dollar

Issued 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 2012

61

123,283

9,359

(27,005)

41,205

146,903

Gain on disposal of non controlling interest

-

-

-

-

13,002

13,002

Transactions with owners

-

-

-

-

13,002

13,002

Loss for the year

-

-

-

-

(2,305)

(2,305)

Arising during the period

-

-

58,309

-

-

58,309

Transfer of surplus depreciation

-

-

(9,359)

-

9,359

-

Other comprehensive income:







Exchange losses on translating presentational currency

-

-

-

(7,404)

-

(7,404)

Total comprehensive income

-

-

48,950

(7,404)

7,054

48,600

At 30 September 2013

61

123,283

58,309

(34,409)

61,261

208,505

Shares issued

335

-

-

-

(335)

-

Transactions with owners

335

-

-

-

(335)

-

Loss for the year

-

-

-

-

(78)

(78)

Transfer of surplus depreciation

-

-

(534)

-

534

-

Other comprehensive income:







Exchange losses on translating presentational currency

-

-

-

(29,213)

-

(29,213)

Total comprehensive income

-

-

(534)

(29,213)

456

(29,291)

At 30 September 2014

396

123,283

57,775

(63,622)

61,382

179,214



 

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION ‑ 30 SEPTEMBER 2014

 

ASSETS

Notes

2014
ZMW'000s

2014
USD'000s

2013
ZMW'000s

2013
USD'000s

Non-current assets

Goodwill

12

15,699

2,504

15,699

2,951

Property, plant and equipment

13

1,456,087

232,231

1,395,815

262,371

Plantation development expenditure

13

67,913

10,831

51,357

9,654

Investment in Associate

14

23,827

3,800

-

-

Biological assets

16

20,202

3,222

11,859

2,229

Deferred tax asset

9(e)

28,802

4,594

16,385

3,080



1,612,530

257,182

1,491,115

280,285

Current assets






Biological assets

16

142,001

22,648

113,827

21,396

Inventories

17

444,453

70,886

473,093

88,927

Trade and other receivables

18

122,343

19,511

61,787

11,614

Amounts due from related companies

19

11,533

1,839

1,810

340

Income tax recoverable

9(c)

4,098

654

1,535

289



724,428

115,538

652,052

122,566

Total assets


2,336,958

372,720

2,143,167

402,851

EQUITY AND LIABILITIES

Capital and reserves

Share capital

21

2,480

396

248

61

Share premium

22

506,277

123,283

506,277

123,283

Reserves


811,240

86,847

827,219

127,360



1,319,997

210,526

1,333,744

250,704

Non-controlling interest


23,341

3,723

19,386

3,644



1,343,338

214,249

1,353,130

254,348

 



 

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION ‑ 30 SEPTEMBER 2014 (CONTINUED)

 

 


Notes

2014
ZMW'000s

2014
USD'000s

2013
ZMW'000s

2013
USD'000s

Non-current liabilities

Interest bearing liabilities

23

353,209

56,333

335,124

62,993

Obligations under finance leases

24

14,602

2,329

8,447

1,588

Deferred liability

25

7,473

1,192

6,793

1,277

Deferred tax liability

9(e)

22,073

3,520

15,257

2,868



397,357

63,374

365,621

68,726

Current liabilities

Interest bearing liabilities

23

66,416

10,593

90,398

16,992

Collateral management agreement

23

155,677

24,829

119,966

22,550

Obligations under finance leases

24

4,974

793

9,189

1,727

Trade and other payables

26

218,297

34,816

155,398

29,210

Amounts due to related companies

27

-

-

1,573

296

Taxation payable

9(c)

3,031

483

3,676

691

Cash and cash equivalents

20

147,868

23,583

44,216

8,311



596,263

95,097

424,416

79,777

Total equity and liabilities


2,336,958

372,720

2,143,167

402,851

 



 

ZAMBEEF PRODUCTS PLC

 

COMPANY STATEMENT OF FINANCIAL POSITION ‑ 30 SEPTEMBER 2014

 

ASSETS

Notes

2014
ZMW'000s

2014
USD'000s

2013
ZMW'000s

2013
USD'000s

Non-current assets






Property, plant and equipment

13

935,866

149,261

884,249

166,212

Investment in Associate

14

23,827

3,800

-

-

Investment in subsidiaries

15

157,582

25,133

154,514

29,044

Deferred tax asset

9(e)

16,913

2,697

7,765

1,460



1,134,188

180,891

1,046,528

196,716

Current assets






Biological assets

16

136,948

21,842

109,741

20,628

Inventories

17

185,915

29,652

193,274

36,330

Trade and other receivables

18

53,692

8,562

17,601

3,308

Amounts due from related companies

19

318,307

50,767

269,436

50,646

Income tax recoverable

9(c)

4,098

654

731

137



698,960

111,477

590,783

111,049

Total assets


1,833,148

292,368

1,637,311

307,765







EQUITY AND LIABILITIES






Capital and reserves






Share capital

21

2,480

396

248

61

Share premium

22

506,277

123,283

506,277

123,283

Reserves


614,916

55,535

602,720

85,161



1,123,673

179,214

1,109,245

208,505

 



 

ZAMBEEF PRODUCTS PLC

 

COMPANY STATEMENT OF FINANCIAL POSITION ‑ 30 SEPTEMBER 2014 (CONTINUED)

 

 


Notes

2014
ZMW'000s

2014
USD'000s

2013
ZMW'000s

2013
USD'000s

Non-current liabilities






Interest bearing liabilities

23

329,365

52,530

295,136

55,477

Obligations under finance leases

24

13,342

2,128

3,538

665

Deferred liability

25

1,572

251

1,504

283

Deferred tax liability

9(e)

5,476

873

-

-



349,755

55,782

300,178

56,425

Current liabilities






Interest bearing liabilities

23

109,433

17,453

133,563

25,106

Obligations under finance leases

24

1,399

223

4,736

890

Trade and other payables

26

75,976

12,119

47,654

8,957

Amounts due to related companies

27

60,797

9,696

18,222

3,425

Taxation payable

9(c)

-

-

-

-

Cash and cash equivalents

20

112,115

17,881

23,713

4,457



359,720

57,372

227,888

42,835

Total equity and liabilities


1,833,148

292,368

1,637,311

307,765

 

The financial statements on pages 11 to 111 were approved by the Board of Directors on 24 November 2014 and were signed on its behalf by:

                                                        )

                                                        )

                                                        )   DIRECTORS

                                                        )

                                                        )



 

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

 

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 SEPTEMBER 2014

 


Notes

2014
ZMW'000s

2014
USD'000s

2013
ZMW'000s

2013
USD'000s

 Cash inflow from  operating activities

( Loss) / profit before taxation


(21,159)

(3,598)

21,829

4,111

Finance costs

8

50,599

8,605

40,884

7,699

Loss on disposal of property, plant and equipment


(2,144)

(365)

(44)

(8)

Depreciation

13

61,470

10,454

50,264

9,465

Impairment of property, plant and equipment


-

-

714

134

Fair value price adjustment

16

(770)

(131)

(2,377)

(448)

Net unrealised foreign exchange losses


19,369

3,294

8,204

1,545

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


107,365

18,259

119,474

22,498

(Increase)/decrease  in biological assets


(36,517)

(6,210)

426

80

Decrease in inventory


28,640

4,871

32,163

6,057

( Increase)/Decrease in trade and other receivables


(60,557)

(10,299)

1,645

310

(Increase)/Decrease in amounts due from related companies


(11,533)

(1,961)

527

99

Increase/(Decrease) in trade and other payables


62,898

10,697

(36,792)

(6,929)

( Decrease)/Increase in amounts due to related companies


(1,573)

(268)

1,164

219

Increase/(Decrease) in deferred liability


683

116

(944)

(178)

Income tax paid

9(c)

(7,850)

(1,402)

(8,956)

(1,687)

Net cash inflow from  operating activities


81,556

13,803

108,707

20,469

Investing activities






Purchase of property, plant and equipment

13

(64,124)

(10,905)

(61,736)

(11,626)

Expenditure on plantation development

13

(15,306)

(2,603)

(12,095)

(2,278)

Movement in investments


(23,827)

(4,052)

75,668

14,250

Proceeds from sale of assets


3,337

568

1,295

244

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


(99,920)

(16,992)

3,132

590



 

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

 

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 SEPTEMBER 2014 (CONTINUED)

 

 



2014
ZMW'000s

2014
USD'000s

2013
ZMW'000s

2013
USD'000s

Net cash (outflow)/ inflow before financing activities


(18,364)

(3,189)

111,839

21,059

Financing activities






Long term loans repaid


(49,800)

(8,469)

(30,500)

(5,744)

Receipt from long term loans


23,520

4,000

37,273

7,019

Receipt of short term funding


13,400

2,279

6,476

1,220

Lease finance obtained /(repayment)


4,267

726

(6,227)

(1,173)

Finance costs

8

(50,599)

(8,605)

(40,884)

(7,699)

Net cash outflow on financing activities


(59,212)

(10,069)

(33,862)

(6,377)

Increase/ (decrease) in cash and cash equivalents


(77,576)

(13,258)

77,977

14,682

Cash and cash equivalents at beginning of year


(44,216)

(8,311)

(98,553)

(19,324)

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


(26,076)

(2,014)

(23,640)

(3,669)

Cash and cash equivalents at end of year

20

(147,868)

(23,583)

(44,216)

(8,311)

Represented by:






Cash in hand and at bank


65,599

10,463

106,935

20,101

Bank overdrafts


(213,467)

(34,046)

(151,151)

(28,412)


20

(147,868)

(23,583)

(44,216)

(8,311)

 

 

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

 

http://www.rns-pdf.londonstockexchange.com/rns/9929X_-2014-11-25.pdf 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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