REG - Zambeef Products PLC - Correction to Final Results
05/12/2018 07:05
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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) (13,261) (1,133) N/A
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:
o Good volume and margin growth in the Retail and Cold Chain Food Products
division and Stockfeed division
o Return to profitability at the Masterpork, Nigeria and Wheat Mill
operations
o 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:
o The expansion of the retail network
o The commissioning of the new Copperbelt processing and distribution hub to
improve efficiencies in the Copperbelt and North Western Province operations
o Completing the expansion of the breeding farm and hatcheries to increase
day-old chick production from 344,000 to 430,000 birds per week
o Completing the new stock feed plant at Mpongwe to ensure additional stock
feed capacity
· Strategic priorities for the Group in FY19 remain unchanged:
o 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
o Committed to employing EBITDA to fund working capital, capital expenditure
for financially viable projects and to service debt
o Further reducing gearing and dollar debt, in order to help to mitigate
foreign exchange and interest rate risk exposures
o Continue works on E&S/Food Safety strategies
o 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
(http://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 31(st)
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 Overheads 2017 EBITDA 2018 EBITDA 2017
USD'000 USD'000 USD'000 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 2018 2017 2017
ZMW'000s
USD'000s
ZMW'000s
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 2018 2017 2017
ZMW'000s USD'000s ZMW'000s USD'000s
ZMW'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 Total attributable to owners of the parent ZMW'000s
Foreign exchange reserve Non- controlling interest
Issued share capital Share premium Preference share capital ZMW'000s Revaluation reserve Retained earnings ZMW'000s
ZMW'000s ZMW'000s ZMW'000s ZMW'000s 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 Total attributable to owners of the parent USD'000s
Foreign exchange reserve Non- controlling interest
Issued share capital Preference share capital Share premium USD'000s Revaluation reserve Retained earnings USD'000s
USD'000s USD'000s USD'000s USD'000s 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 Foreign exchange reserve USD'000s
Issued share capital Preference share capital Share premium Revaluation reserve Retained earnings
USD'000s USD'000s USD'000s USD'000s 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 2018 2017 2017
ZMW'000s
USD'000s
ZMW'000s
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 2018 2017 2017
ZMW'000s
USD'000s
ZMW'000s
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 2018 2017 2017
ZMW'000s
USD'000s
ZMW'000s
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 2018 2017 2017
ZMW'000s
USD'000s
ZMW'000s
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 2018 2017 2017
ZMW'000s
USD'000s
ZMW'000s
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 294,390 29,677 173,629 18,239
adjustments and net unrealised foreign exchange losses
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 2018 2017 2017
ZMW'000s
USD'000s
ZMW'000s
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 19,156 4,089 (28,273) (2,749)
currencies
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 2018 2017 2017
ZMW'000s
USD'000s
ZMW'000s
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 2018 2017 2017
ZMW'000s
USD'000s
ZMW'000s
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 (98,234) (8,363) (38,481) (3,810)
currencies
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
(http://www.rns-pdf.londonstockexchange.com/rns/4928J_1-2018-12-5.pdf)
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