REG - Zambeef Products PLC - Full Year Results and Notice of AGM

Zambeef ProductsAnnouncement

09/12/2019 11:30

RNS Number : 2176W
Zambeef Products PLC
09 December 2019
 


9 December 2019
 
 
 
Zambeef Products plc
("Zambeef" or the "Group")
 
Full-year results for the year ended 30 September 2019 and Notice of AGM
 
Zambeef (AIM: ZAM), the fully integrated cold chain foods and retail business with operations in Zambia, Nigeria and Ghana, today announces its audited results for the year ended 30 September 2019.
 
Financial Highlights




Figures in 000's


 


2019


2018


%


 


2019


2018


%




 


 


ZMW


ZMW


 


USD


USD




 


 


 


 


 


 


 


 


 




Revenue


 


3,134,967


2,780,589


12.74%


 


254,462


280,301


-9.22%




Cost of sales


 


(2,063,704)


(1,806,185)


14.26%


 


(167,509)


(182,075)


-8.00%




Gross profit


 


1,081,547


959,159


12.76%


 


87,788


96,689


-9.21%




Administrative expenses


 


(920,771)


(841,319)


9.44%


 


(74,738)


(84,810)


-11.88%




Operating profit


 


161,209


118,270


36.31%


 


13,085


11,922


9.76%




Finance costs


 


(82,790)


(70,215)


17.91%


 


(6,720)


(7,078)


-5.06%




Exchange gains


 


(36,730)


(19,302)


90.29%


 


(2,981)


(1,946)


53.19%




Profit before taxation


 


38,653


28,011


37.99%


 


3,138


2,823


11.16%




Taxation charge


 


(2,780)


(4,257)


-34.70%


 


(226)


(429)


-47.32%




Group income for the year from continuing operations


 


35,873


23,754


51.02%


 


2,912


2,394


21.64%




(Loss)/profit from discontinued operations


 


(17,379)


(13,261)


31.05%


 


(1,411)


(1,337)


5.53%




Group income for the year


 


18,494


10,493


76.25%


 


1,501


1,057


42.01%




 


 


 


 


 


 


 


 


 




EBITDA


 


283,130


224,059


26.4%


 


22,981


22,587


1.7%




Gross Profit Margin


 


34.5%


34.5%


 


 


34.5%


34.5%


 




EBITDA Margin


 


9.03%


8.06%


 


 


9.03%


8.06%


 




Debt/Equity (Gearing)


 


27.3%


22.0%


 


 


27.3%


22.0%


 




Debt-To-EBITDA


 


3.13


3.06


 


 


2.92


2.48


 



 
 
 
 
 
 
 
 
 
 



 
PERFORMAMCE OVERVIEW
 
The financial year ended 30 September 2019 proved to be a challenging year amidst a regional drought and macroeconomic headwinds. The weakening of the Zambian Kwacha against the USD by approximately 24%, increase in the cost of fuel by 19%, together with constrained electricity supply that started in July 2019 due to reduced electricity generation arising from the low water levels in the Kariba Dam, impacted not only the Zambeef Group's performance but also our customers spending power.
 
Against these headwinds, the Group's results were nonetheless, reassuring, especially in the second half of the year as management took proactive steps to deal with these challenges in both the long and short term underpinned by continued focus on the key strategic initiatives.
 
Despite the odds being heavily stacked against Cropping, driven by a severe drought in the summer, inadequate electricity supply and water shortages in the winter, the Farms produced exceptionally good yields. Maize contributed 19,233 tons of grain together with 22,000 tons of silage for the dairy and beef operations. A 14% increase in the wheat winter crop resulted in a harvest of 50,398 tons (2018:44,300 tons).
 
Zambeef' s chain of 226 retail outlets - both own-brand and within Shoprite supermarkets - remain at the heart of the business, with demand from consumers driving supply. However, disposable income for our consumers was constrained during the financial year driven by the tough economic climate which resulted in subdued performance. In addition, the inability to pass on the extra costs of inputs such as feed prices and other escalating costs also negatively impacted profitability.
 
The stockfeed operations continued to grow during the year against the backdrop of a drought. The division's volumes grew by 9% with Mpongwe producing 24.5% more than the previous year.
 
 
KEY FINANCIAL HIGHLIGHTS
 
Revenue for the Group increased by 13% in ZMW but decreased by 9% in USD as a result of the depreciation of the ZMW while Gross Profit also increased by 13% in ZMW from ZMW959m to ZMW1082m (USD88m vs USD97m). The ZMW performance has been adversely impacted by high input costs which could not be passed on to the consumer in full, whilst dollar performance has been further impacted by the depreciation of the kwacha.
 
Management continued to focus on bringing down the overheads, however administration expenses increased by 9% in ZMW from ZMW841m to ZMW920m. The Group achieved an operating profit of ZMW161m versus ZMW118m recorded in the previous financial year (USD13m vs USD12m) which represents a 36% increase in ZMW and a 8% increase in USD.
 
The profitability was mainly driven by cropping, increased volumes and margins in the stock feed division and Retail and Cold Chain Food Products which is in line with our strategic imperative of consistent revenue growth through expansion of our retail network.
 
Finance costs increased by 18% in ZMW and decreased by 5% in USD as a result of higher utilisation of working capital, ZMW interest rates increasing and the depreciation of the Zambian Kwacha against the USD.
 
As a result, Zambeef's Group income for the year increased from ZMW10m to ZMW18m (USD1m to USD1.5m).
 
Zambeef's management remains committed to focusing on core divisions to generate cash flow that will be channelled towards de-risking the business. Our plans are underpinned by:
 




·     


More Shoprite/Zambeef butchery counter concessions opened;




·     


Consistent revenue growth through expansion of our retail network, driving our CCFP and Stockfeed operations;




·     


Continued capital investment in the best performing areas of the business;




·     


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




·     


Continued divestment of non-core assets; and




·     


Environmental and food safety improvement projects.




 
 
Zambeef's management will continue to focus resources on improving the performance across all of the Group's business divisions and ensure that the integrated business model operates at maximum effectiveness with all areas contributing fully to Group profitability.
 
Commenting on these results, Chairman Dr Jacob Mwanza said:
 
"As we had anticipated, 2019 proved a challenging year for the Group, driven by difficult economic and market conditions that impacted negatively on financial performance, particularly in the first half of the year. Despite these challenges, the Group still managed to generate a profit after tax of ZMW18.5 million (USD1.5 million) compared to ZMW10.5 million (USD1.1 million) achieved in the prior financial year. This achievement, in the face of such economic and market difficulties, illustrates the Group's fundamental strengths as a diversified and resilient business.
 
"The Board remains committed to achieving the strategic priorities that we set out in 2014, with a key focus on the core divisions that generate sustainable and strong cashflows, particularly through our Retail and Cold Chain Food Products and Stockfeed divisions. Another significant cornerstone of our strategy is our divestment of non-core assets, with realised proceeds used to reduce debt levels.
 
"The macro-economic climate is expected to remain challenging for Zambia in 2020, characterised by high national debt levels, a volatile Kwacha and continued electricity supply constraints, negatively affecting business activity across the economy which could impact the growth of the Zambian economy and have a significant knock-on effect on our customers' disposable incomes.
 
"In spite of these continued problems, the Group is committed to strengthening its earnings potential and unlocking value through reducing debt levels in the medium term, which will mitigate foreign exchange and interest rate risk exposures."
 
 
Copies of Zambeef's Annual Report and Accounts for the year ended 30 September 2019 and Notice of AGM, together with a document setting out the proposed changes to the Company's Articles of Association, will shortly be available on the Group's website and posted to Shareholders.
 
The Group's Annual General Meeting will be held on 30 December 2019 at Taj Pamodzi Hotel, Lusaka at 11:30 a.m. (Zambian time).
 
 




For further information, please visit www.zambeefplc.com or contact:




 




Zambeef Products plc


Tel: +260 (0) 211 369003




Francis Grogan, Chief Executive Officer         
Faith Mukutu, Chief Financial Officer                                              




 




Strand Hanson Limited       (Nominated & Financial Adviser)


Tel: +44 (0) 20 7409 3494




James Spinney




Ritchie Balmer




Eric Allan




 




FinnCap (Broker)


Tel: +44 (0) 20 7220 0500




Chris Raggett
 




Powerscourt (Financial PR)


Tel: +44 (0)20 7250 1446




Nick Dibden




Bethany Johannsen
 




 
About Zambeef Products PLC
The Zambeef Products PLC is the largest integrated cold chain food products and agribusiness in Zambia and one of the largest in the region, involved in the production, processing, distribution and retailing of beef, chicken, pork, dairy, eggs, fish, flour and stockfeed; throughout Zambia and the surrounding region, as well as Nigeria and Ghana. The Group also has large cereal row cropping operations (principally maize, soya beans and wheat), with approximately 7,972 hectares of row crops under irrigation, which are planted twice a year and a further 8,776 hectares of rain-fed crops available for planting each year.
 
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement via Regulatory Information Service, this inside information is now considered to be in the public domain.
 
 
CHAIRMAN'S REPORT
 
I am pleased to present to you the Chairman's Report with respect to the financial year ended 30 September, 2019.  As we had anticipated, 2019 proved a challenging year for the Group, driven by difficult economic and market conditions that impacted negatively on the Group's financial performance, particularly in the first half of the year. Despite these challenges, the Group still generated a profit after tax of ZMW18.5 million (USD1.5million) compared to ZMW10.5 million (USD1.1 million) in the prior financial year. This achievement, in the face of such economic and market difficulties, illustrates the Group's fundamental strengths as a diversified and resilient business. The Board remains committed to achieving the priorities set out in 2014, with a key focus on the core divisions that generate sustainable and strong cashflows, particularly through our Retail and Cold Chain Food Products and Stockfeed divisions. Another significant cornerstone of our strategy is our divestment of non-core assets, with realised proceeds used to reduce debt levels. Much progress has been made on this, with the disposal of Zamanita Ltd to Cargill Holdings BV in 2015, followed by the sale of our 90% shareholding in Zampalm Ltd to the Industrial Development Corporation in 2018. During the year we entered into a binding sale and purchase agreement with Chenguang Biotech (Zambia) Agri-Dev Limited for the disposal of Sinazongwe Farm.
 
The Economic Environment
Zambia experienced a challenging macroeconomic climate during the course of the Group's 2019 financial year, which impacted on consumer spending power. The Minister of Finance stated, when delivering his National Budget speech, that economic growth was expected to slow down to 2% by the end of 2019, compared with a target of 4% and growth of 3.7% in 2018. The slowdown in economic growth was primarily attributed to the severe drought the region was experiencing, and debt servicing challenges. The previous poor 2018/2019 rainy season led to poor agricultural production and constrained electricity generation. The Kwacha weakened during the period, with the exchange rate ending the period at around ZMW13.20/USD, having started the period under review at ZMW12.24/USD.
 
Trading Results
Set against this challenging macro economic backdrop, the Group's results were reassuring, especially in the second half of the year, as management took proactive steps to deal with these challenges in both the short and long term, underpinned by continued focus on key strategic initiatives. The Group achieved profit after tax (from continuing operations) of ZMW35.9 million (USD2.9 million), compared with ZMW23.8 million (USD2.4 million) for the same period in the previous year. The increase in profitability was mainly driven by cropping, increased volumes and margins in the Stockfeed division and Retail and Cold Chain Food Products, in line with our strategic imperative of consistent revenue growth through expansion of our retail network. Net debt at the end of the period was ZMW886.3 million (USD67.1 million) compared with ZMW684.9 million (USD55.9million).
 
Stockfeed
The stockfeed operations continued to grow during the year, against the backdrop of the drought, and the division remains a significant contributor to the Group. The division produced 218,762 tonnes of feed in 2019, compared to 200,846 tonnes in 2018, with Mpongwe producing 24.5% more than the previous year.
 
Retail and Cold Chain Food Products
Zambeef's chain of 226 retail outlets - both own-brand and within Shoprite supermarkets - remain at the heart of the business, with demand from consumers driving supply. The Group's focus continued with the successful roll out of seven new Macro outlets in strategic locations across Zambia and the closure of seven small retail stores as part of its ongoing drive to optimise revenue and efficiencies across the division.
 
Cropping
The Cropping division performed exceptionally well, despite the severe drought in summer, constrained electricity supply and water shortages in the winter. Yields for all crops were above management expectations, and thus the division contributed positively to profitability.
 
Disposal of non-core assets
The Group has entered into a binding sale and purchase agreement with Chenguang Biotech (Zambia) Agri-Dev Limited for the sale of Sinazongwe Farm, subject to the fulfilment of certain conditions precedent. This disposal is expected to complete by March 2020 for a cash consideration of USD10 million.
 
DIVIDEND
While we are steadfast in our dedication to enhance shareholder value, in view of the financial performance and debt levels of the Group, no dividend will be paid in respect of this financial year. We will continue to monitor and review our dividend policy.
 
OUTLOOK
The macro-economic climate is expected to remain challenging for Zambia in 2020, characterised by high national debt levels, a volatile Kwacha and continued electricity supply constraints, affecting business activity across the economy and in all sectors. This will impact growth of the Zambian economy and have a significant knock-on effect on our customers' disposable incomes. Despite these continued problems, the Group is committed to strengthening its earnings potential and unlocking value through reducing debt levels in the medium term, which will mitigate foreign exchange and interest rate risk exposures.
 
ACKNOWLEDGEMENT
I express my sincere thanks to my fellow Board members for leading the Group through this challenging year. To our management and staff, I express our utmost appreciation for your dedicated efforts. As a Board we would like to express our deepest gratitude to the Chief Executive Officer, Mr Francis Grogan, who will be retiring effective 31st December 2019. His leadership and profound business acumen have enabled the Zambeef Group to grow by leaps and bounds during his tenure. He has played a significant role in the Group and we all wish him all the very best. Mr. Grogan will be succeeded from 1 January 2020 by Mr Walter Roodt, who was appointed to the Zambeef Board on 5 February 2019. Mr Grogan has been working closely with Mr Roodt and Mr Mike Lovett, the Group's Chief Operating Officer, since January 2018 in a well-planned succession to ensure a successful and smooth transition. On behalf of the Group, a warm welcome to our newest Board members, Mr Michael Mundashi, who was appointed as an Independent Non-Executive Director effective 11 September 2019, and Ms Faith Mukutu, the Chief Financial Officer, as an Executive Director of the Board. Their established professional backgrounds and valuable expertise will be an asset to the Group. We would also like to thank our shareholders, for their continued support of the Group. Our appreciation goes as well to our other stakeholders such as financiers, business associates and consultants for all their support.
 
 
Chief Executive Officer's Review
Overview

The financial year ended 30 September 2019 proved to be a challenging year amidst a regional drought and macroeconomic headwinds. The weakening of the Zambian Kwacha against the USD by approximately 24% over the period, an increase in the cost of fuel by 19% together with constrained electricity supply, due to reduced electricity generation arising from low water levels in the country's major water reservoirs, impacted not only on Zambeef's performance but also on our customers' spending power. The inadequate supply of electricity has resulted in Zambeef running diesel powered generators, significantly increasing operational costs.
 
Despite the challenges noted above, Zambeef achieved a Profit After Tax (from continuing operations) of ZMW35.9 million (USD2.9 million), compared with ZMW23.8 million (USD2.4 million), for the same period last year driven by good performance from the Cropping and Stockfeed divisions. Our revenue ended at ZMW3.1 billion (USD254.5 million), whilst we achieved a gross profit of ZMW1.1 billion (USD87.8 million), which were respectively 12.7% and 12.8% above prior year in Kwacha terms, but both down by 9.2% in USD terms.
 
Zambeef continued to be one of the largest employers in Zambia with our total headcount averaging 7,407 per month at an average wage bill of ZMW38 million (USD3.5 million) per month.
 
Strategic focus
Zambeef's management remains committed in focusing on core divisions to generate cash flow that will be channelled towards de-risking the business. Our plans are underpinned by:
 




·     


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




·     


Continued capital investment in the highest performing areas of the business;




·     


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




·     


Continued divestment of non-core assets; and




·     


Environmental and food safety improvement projects.




 
During the year, Zambeef entered into a binding sale and purchase agreement with Chenguang Biotech (Zambia) Agri-Dev Limited for the sale of Sinazongwe Farm for a consideration of USD 10 million. This disposal is expected to be completed by March 2020 and the funds will be used to reduce our debt levels.
 
Whilst Zambeef recorded a loss after tax in the first half of the year, the second half was particularly pleasing as management managed to stabilise operations and the Group ended the year on a positive note. The cost to income ratio decreased from 26.4% (2018) to 25.1% (2019). However, due to the cash flow pressure arising from the steep increase in input costs, our net debt increased from ZMW685 million (USD56 million) to ZMW886 million (USD67 million).
 
Cropping
The Zambeef cropping division had an exceptional year despite operating in a challenging business environment owing to a severe drought in the summer, inadequate electricity supply and water shortages in the winter. Despite this, the Farms produced exceptionally good yields.
 
The Farms increased the production of fodder by 34% (25,490 tons) and grains by 7% (119,830 tons) this year compared to 16,736 tons of fodder and 112,027 tons of grains in the prior comparable period.
 
Zambia had a large soya bean crop which was in excess of local solvent extracted soya cake requirements, which resulted in a 4% reduction in soya bean prices. Wheat prices on the other hand were 3% higher than the previous year thus contributing positively to our profitability.
 
Stockfeed
Zambeef's Stockfeed division trades under the brand names Novatek and Zamfeed, with a 300,000 tons annual manufacturing capacity based in Lusaka and Mpongwe. Approximately 50% of all sales are generated through Zambeef macros and Zambeef internal livestock operations. The balance is sold through Novatek's 132 branded external agency outlets (2018: 119) throughout Zambia and direct accounts held by livestock farmers.
 
A major drought in Southern Africa during the 2018 summer rain season resulted in maize prices in USD terms increasing by 28% and solvent extracted cake also increased by 22%. These materials represent the highest inclusions in stockfeed which led to the feed prices in Kwacha terms increasing on average by 34% for pig and broiler feeds, and 42% for layer feeds.
 
The division performed pleasingly in spite of the very difficult operatingop environment.
 
Retail and Cold Chain Food Products
The disposable income of our customers was constrained during the financial year driven by the tough economic climate which resulted in a subdued performance. The constrained ability of the livestock production divisions to pass on the extra costs of inputs, such as feed prices and the cost of production, to the Zambian consumer was evident in the stagnant market selling prices of products in Kwacha terms.
 
Broiler day old chick prices reduced by 7% due to the pressure on the poultry value chain caused by the steep increase in feed prices. The chicken live market sales prices increased only 6% and whole frozen chicken prices increased by 7%. Market retail prices for a tray of 30 eggs increased by only 8%.
 
Beef prices remained under pressure due to the regional drought and escalating costs of feed forced farmers to sell more cattle. The prohibitive cost of finishing cattle for marketing due to shortages of maize bran, the main feed ingredient, and a 109% increase in its price impacted negatively on performance - the sales price for mixed beef increased by a mere 2%.
 
Outlook for 2020
Zambeef's management will continue to focus its efforts on de-risking the business, cost control, and margin enhancement. Zambeef's performance will be under pressure from escalating costs emanating from inadequate electricity supply resulting in higher diesel usage costs, pending increase in electricity tariffs as well as the constrained disposable income of our customers.
 
However, despite the negative effects of the challenges noted above, the likelihood of a normal summer rain season is considered high, which will result in higher crop yields of maize and soya beans in the region. This expected higher harvested yield should result in a reduction in the commodity prices which will cascade through the food value chain, impacting Zambeef positively.
 
As part of Zambeef's on-going process to de-risk the business, CAPEX will be restricted to high performing areas of the business.
 
Capital Expenditure
The capital expenditure for 2019 was at a record low of ZMW113.8 million (USD 9.2 million) with a focus on completing expansion projects started in previous reporting periods;
 




·     


USD5.02 million on Retail and Cold Chain Food Products with the addition of:




 


·      Retail: 7 new Macro outlets and the expansion of the logistics fleet.




 


·      Zamhatch: completion of the expansion of the hatchery and breeding farm capacity from 400,000 to 500,000 hatching eggs per week.
 




 


·      Zamchick: completion of 2 ton/hour gyro freezer to double Individually Quick Frozen (IQF) chicken production.
 




·     


USD1.03 million on Stock Feed logistics, material storage and replacement of equipment.




·     


USD0.76 million on Cropping equipment replacement.




·     


USD0.72 million on milling and leather, doubling the shoe manufacturing capacity from 500 to 1,000 pairs per day.




·     


USD1.67 million on environmental & safety improvements and contingency spending.




 
 
Key market indicators
 




Reporting period market comparatives


2019


2018


Change




Economy


 


 


 




ROE (ZMW/USD)


12.32


9.92


-24%




Copper ($/Ton)


6102


6726


-9%




Breakfast Maize meal (K/25kg)


101.8


73.7


38%




Annual Inflation rate (%)


8.4


7.1


18%




Overhead Costs


 


 


 




TBS 364day (Yield %)


24.7


17.4


42%




Fuel Pump Price - Diesel ZMW/Litre


13.9


11.7


19%




Commodities


 


 


 




Maize ($/ton)


207


161


28%




Wheat ($/ton)


447


433


3%




Soya Beans ($/Ton)


400


417


-4%




Solvent Extracted Soya Cake ($/ton)


442


363


22%




Input Prices


 


 


 




Maize Bran (K/ton)


1434


686


109%




Broiler Grower feed (K/50kg)


242


181


34%




Pig Grower feed (K/50kg)


200


149


34%




Layer feed (K/50kg)


175


123


42%




Day-old Chick (K/DOC)


5.9


6.4


-7%




Selling Prices


 


 


 




Beef Mixed Cut (K/Kg)


35.8


35.0


2%




Chicken Frozen (K/Kg)


28.9


26.9


8%




Chicken Live Market (K/Chicken)


38.2


35.9


6%




Egg Tray (K/Tray of 30 Eggs)


28.0


25.8


8%




 
 
 
DIVISIONAL SUMMARY
Table 1 (ZMW) and Table 2 (USD) below provide a summary of the consolidated performance of the key business divisions reported to OPERATING PROFIT level.
 
Table 1: Divisional financial summary in ZMW'000




 
DIVISION


REVENUE


GROSS PROFIT


OVERHEADS


OPERATING PROFIT




2019 ZMW'000


2018 ZMW'000


2019 ZMW'000


2018 ZMW'000


2019
ZMW'000


2018
ZMW'000


2019
ZMW'000


2018
ZMW'000




Retailing


2 038 675


1 693 234


213 502


199 117


 


 


 


 




CCFP


1 388 492


1 313 052


367 657


379 870


 


 


 


 




Less Interco


(1 303 519)


(1 001 575)


 


 


 


 


 


 




Combined Retail & CCFP


2 123 648


2 004 711


581 159


578 987


(419 417)


(385 484)


107 744


146 215




Stock Feed


986 075


706 008


191 011


163 442


(103 751)


(82 460)


73 092


68 264




Cropping


474 202


515 585


270,116


189 601


(126 413)


(118 729)


101 082


29 380




Others


210 348


141 452


39 261


27 129


(21 930)


(18 521)


15 361


6 885




Total


3 794 273


3 367 756


1 081 547


959 159


(671 511)


(605 194)


297 279


250 744




Less: Intra/Inter Group Sales


(659 306)


(587 167)


 


 


 


 


 


 




Central Overhead


 


 


 


 


(136,070)


(129 907)


(136 070)


(132 474)




Group Total


3 134 967


2 780 589


1 081 547


959 159


(807 581)


(735 101)


161 209


118 270




 
Table 2: Divisional financial summary in USD'000




 
DIVISION


REVENUE


GROSS PROFIT


OVERHEADS


OPERATING PROFIT




2019 USD'000


2018 USD'000


2019 USD'000


2018 USD'000


2019
USD'000


2018
USD'000


2019
USD'000


2018
USD'000




Retailing


165 477


170 689


17 330


20 072


 


 


 


 




CCFP


112 702


132 364


29 842


38 293


 


 


 


 




Less Interco


(105 805)


(100 965)


 


 


 


 


 


 




Combined Retail & CCFP


172 374


202 088


47 172


58 365


(34 043)


(38 859)


8 745


14 739




Stock Feed


80 39


71 170


15 503


16 476


(8 421)


(8 313)


5 933


6,881




Cropping


38 490


51 974


21 925


19 113


(10 262)


(11 969)


8 205


2 962




Others


17 074


14 259


3 187


2 735


(1 780)


(1 867)


1 247


694




Total


307 977


339 491


87 788


96 689


(54 506)


(61 008)


24 130


25 276




Less: Intra/Inter Group Sales


(53 515)


(59 190)


 


 


 


 


 


 




Central Overhead


 


 


 


 


(11 045)


(13 095)


(11 045)


(13 354)




Group Total


254 462


280 301


87 788


96 689


(65 551)


(74 103)


13,085


11 922




 
 
DIVISIONAL REVIEW
Taking each of our key business areas performance in turn as follows:
 
Retail and Cold Chain Food Products
Table 3 (ZMW) and Table 4 (USD) below provides each key business area performance of the combined Retail and Cold Chain Food Products divisions.
Table 3: Retail and Cold Chain Food Products ZMW'000




 


REVENUE


GROSS PROFIT


OVERHEADS


OPERATING PROFIT




DIVISION


2019
ZMW'000


2018
ZMW'000


2019
ZMW'000


2018
ZMW'000


2019
ZMW'000


2018
ZMW'000


2019
ZMW'000


2018
ZMW'000




Retailing Zambia


1 853 721


1 548 421


 


 


 


 


 


 




Retailing West Africa


184 954


144 813


 


 


 


 


 


 




Total Retailing


2 038 675


1 693 234


 


 


 


 


 


 




CCFP


1 388 492


1 313 052


 


 


 


 


 


 




Less Interco


(1 303 519)


(1 001 575)


 


 


 


 


 


 




Combined Retail & CCFP


2 123 648


2 004 711


581 159


578 987


(419 417)


(385 484)


107 744


146 215




 
Table 3: Retail and Cold Chain Food Products USD'000




 


REVENUE


GROSS PROFIT


OVERHEADS


OPERATING PROFIT




DIVISION


2019
USD'000


2018
USD'000


2019
USD'000


2018
USD'000


2019
USD'000


2018
USD'000


2019
USD'000


2018
USD'000




Retailing Zambia


150 464


156 091


 


 


 


 


 


 




Retailing West Africa


15 013


14 598


 


 


 


 


 


 




Total Retailing


165,477


170 689


 


 


 


 


 


 




CCFP


112 703


132 364


 


 


 


 


 


 




Less Interco


(105 806)


(100 965)


 


 


 


 


 


 




Combined Retail & CCFP


172 374


202 088


47 173


58 364


(34 043)


(38 859)


8 745


14 739




 
We continued with the successful roll out of 7 new Macro outlets across Zambia in strategic locations and the closure of 2 retail outlets as part of our ongoing drive to optimise revenue and efficiencies across the Retail division. Shoprite also expanded their footprint with another 4 outlets in Zambia.
 
Net sales in the combined Retail and Cold Chain Food Products ("CCFP") divisions increased by 6% to ZMW2,124 million (2018: ZMW2,005 million) and decreased by 15% to USD172 million (2018: USD 202 million), the difference owing to the weakening of the Kwacha. The Gross Profit margin decreased slightly in Kwacha terms to 27.4% (2018: 28.9%), with a 9% increase in overheads to ZMW419 million (2018: ZMW385 million) or a 12% reduction to USD34 million (2018: USD39 million).
 
The combined Retail and CCFP divisions have still generated a satisfactory 5.1% Operating Profit margin (2018: 7.3%). The weak economy and the increase in costs from the inputs into the livestock divisions and the fuel costs used in transport and electricity generation could not be passed on to our customers through the retail network. The Operating Profit decreased by 27% to ZMW107 million (2018: ZMW146 million) in Kwacha terms and 41% to USD8.8 million (2018: USD14.7 million) in USD terms.
 
Zambia Retail
Zambia Retail revenue increased 20% to ZMW1,854 million (2018: ZMW1,548 million) whilst the Gross Profit increased by 4%. However, due to the depreciation in the Kwacha relative to the USD, the revenue decreased by 3% to USD165 million (2018: USD171 million).
 
Strong revenue growth of 82% in the stockfeed, flour, cooking oil and other dry goods increased this segments contribution to 17% in the retailing sales mix from the previous two years contributions of 11%. Difficult trading conditions saw a decline in revenue growth on CCFP for most of the year, with a good comeback on CCFP revenue growth in the last quarter of the year.  CCFP increased its revenue by 12% from the previous year. This change in the mix of products had degraded the average Gross Profit margin by 1.4%. 
 
West Africa Retail
Sales in West Africa (via the Nigeria and Ghana Shoprite concessions) have increased 28% from ZMW145 Million to ZMW185 million. The turnaround of the Group's operations in the region started showing positive results in the latter part of the previous reporting period and continued through this year. During the current period the overhead costs in Kwacha were reduced by a further 14%, although this was negatively impacted by the recent xenophobic attacks that were directed at South African businesses in Nigeria towards the end of the financial year (Shoprite has its origins in South Africa). Stock losses and the shutdown of the majority of the outlets during September detracted from the positive anticipated results from this business for the year. West African retail only contributes 9% to the retail revenue, it has however turned cash flow positive and marginally contributed to the Operating Profit in the division.
 
Beef
Beef is the largest contributor to revenue in the CCFP. Beef sales volumes increased by 4% compared to the financial year 2018, with the number of cattle slaughtered reducing 4% due to foot and mouth disease outbreaks restricting the movement of cattle from affected areas in Zambia to our slaughter facilities, but the average slaughter weight increased by 5%. Revenue increased by 4% whilst the Gross Profit only marginally increased by 2% from ZMW125 million in 2018 to ZMW128 million in 2019.     
 
Poultry (Zamchick, Zamhatch and ZamEgg)
Revenue of the poultry business increased by 3% in 2019. It is the second largest revenue contributor to the CCFP business. Gross profits decreased by 12% from ZMW143 million in 2018 to ZMW126 million in 2019, mainly due to the higher input costs which could not be passed on to the customers.
 
The Zamhatch Breeder Farm and Hatchery, based on the Mpongwe Farms in the north of Zambia, continued its expansion programme, with a further investment of USD2 million during the period, ramping up the production capacity to 430,000-day-old chicks per week by year end. The day-old chick sales increased by 13% as a result of further investments into the logistics fleet as well as expansion of the Zambeef retail network which allowed for the Zamhatch distribution footprint to expand to all provinces of the country. Zamhatch continued to excel in its production efficiency and was the proud recipient of the Cobb Champion Awards for best Breeder Performance for 2018 for the EMEA region (Europe, Middle East and Africa).
 
Increased stockfeed prices were cushioned somewhat by a reduction in day-old chick prices, with the Novatek stockfeeds and Zamhatch day-old chick basket continuing to offer an attractive opportunity for growth in this important sector of the market. The informal and small scale chicken farming sector was much more resilient and competitive than the formal poultry sector as the cost and availability of electricity had a lower impact on this sector. This positively contributed to the volumes of sales for Zamhatch and Novatek stockfeeds that are receiving the bulk of their sales from the informal sector.
 
The year under review was a challenging one for Zamchick with volumes increasing by 1% compared to the prior year. Multiple stockfeed price increases had a significant negative impact on margins. Operational challenges were also experienced during the 2018/2019 summer rain season as the industry faced widespread dysbacteriosis, which negatively impacted broiler growth performance. Despite a challenging economic climate, Zamchick continued its investment into production infrastructure, with commissioning of an additional spiral freezer which allowed for increased production of Individually Quick-Frozen chicken portions, to meet the increasing demand for these products.
 
Demand for eggs remained relatively constant during the year, while egg production dropped marginally by 3% in 2019 compared to 2018.
 
Pork (Masterpork)
The pork division has seen a number of improvements during the year with a focus on merchandising and brand building activities undertaken. The Kwacha overhead costs were held flat (with only a 1.6% increase) together with a 5% increase in sales volumes being recorded. The revenue increased 13% and the Gross Profit increased 12% from ZMW35 million to ZMW39 million. The division was turned around from a loss-making position in 2018 to a marginal Operating Profit in 2019.
 
Management focus was on passing on input costs effectively to its customers by ensuring cost reflective prices of its goods. Improving the carcass quality of pigs slaughtered through advances in the grading and pricing system, resulted in 3% fewer pigs being slaughtered and increased the average pig weight by 4%, with an 8% increase in slaughtered carcass prices.
 
Milk (ZamMilk)
Milk revenue increased 16% with the Gross Profit remaining flat at ZMW67 million (2018: ZMW66 million. Sales volumes increased 8% from 19 million litres (2018) to 21 million litres processed.
 
The Kalundu dairy herd has had a very good year in contrast to the previous year's challenge with a foot and mouth disease outbreak. The average milk production increased by 12% from 23.7 litres/day in 2018, to 26.6 litres/day, with 1,222 cows daily being milked at the year end. The feedcost of the milking herd increased by 48% due to the price increase in maize ingredients (maize meal, maize bran and maize silage) included in the dairy feeds.
 
Stockfeed (Novatek)
 




REVENUE


GROSS PROFIT


OVERHEADS


OPERATING PROFIT




2019
ZMW'000


2018
ZMW'000


2019
ZMW'000


2018
ZMW'000


2019
ZMW'000


2018
ZMW'000


2019
ZMW'000


2018
ZMW'000




986,075


706,008


191,011


163,442


(103,751)


(82,460)


73,092


68,264




USD'000


USD'000


USD'000


USD'000


USD'000


USD'000


USD'000


USD'000




80,039


71,170


15,503


16,476


(8,421)


(8,313)


5,933


6,881




 
Stockfeed increased sales volumes by 9%, producing 218,762 tons of stock feed compared to 200,846 tons in 2018. The sales volumes have again grown ahead of expectations at the Mpongwe Mill with an increase of 25% year on year.
 
Although revenue in Kwacha terms grew by 40% (12% in USD terms), the Operating Profit was only able to slightly increase by 7% to ZMW73 million (2018: ZMW68 million), or stated in USD terms, a decrease of 14% to USD6 million (2018: USD7 million). The Gross Margin reduced to 19% from 23% in the previous reporting period. Increased production costs due to running backup diesel generators for prolonged periods to generate electricity and the 19% increase in diesel costs also impacted on the logistics fleet.
 
The large and growing poultry sector in Zambia consumes 75% of the feed sales generated by Zambeef. The stockfeed division recorded a 46% increase in export sales with 12,718 tons having been exported to 11 neighbouring and other African countries, generating revenues in hard currencies. Although a small part of the total sales mix, the aquaculture feed sales segment recorded an impressive increase of 39% in sales volumes.
 
Cropping
 




REVENUE


GROSS PROFIT


OVERHEADS


OPERATING PROFIT




2019
ZMW'000


2018
ZMW'000


2019
ZMW'000


2018
ZMW'000


2019
ZMW'000


2018
ZMW'000


2019
ZMW'000


2018
ZMW'000




474,202


515,585


270,116


189,601


(126,413)


(118,729)


101,082


29,380




USD'000


USD'000


USD'000


USD'000


USD'000


USD'000


USD'000


USD'000




38,490


51,974


21,925


19,113


(10,261)


(11,969)


8,205


2,962




 
Zambeef's cropping division provides a currency risk hedge against the depreciation of the Kwacha, due to the crops being traded and financed in USD terms. It is pleasing to report that this division produced company record yields whilst the region experienced a devastating drought.
 
The revenue decreased 8% to ZMW474 million (2018: ZMW516 million) with an increase in overheads of 6% to ZMW126 million (2018: ZMW119 million). Pleasingly the Gross Profit was up 42% to ZMW270 million (2018: ZMW190 million) and the resulting Operating Profit increased 248% to ZMW101 million (2018: ZMW29 million) due to the exceptional wheat yield.
 
Due to the ZMW weakening to the USD the revenue decreased 27% to USD38 million (2018: USD52 million) and the overheads decreased 16% to USD10 million (2018: USD12 million). The Gross Profit was up 16% to USD22 million (2018: USD 19 million) and the resulting Operating Profit increased 166% to USD8 million (2018: USD3 million).
 
The summer harvest for soya beans totalled 44,982 tons versus 44,730 tons in 2018. Maize contributed 19,233 tons of grain together with 22,000 tons of silage for the dairy and beef operations. A 14% increase in the wheat winter crop resulted in a harvest of 50,398 tons (2018: 44,300 tons) which had been planted on 7,047 hectares, which represents a yield of 7.15 tons/hectare and a new Zambeef record in both total tonnage and yield for the crop.
 
Other businesses
 




REVENUE


GROSS PROFIT


OVERHEADS


OPERATING PROFIT




2019
ZMW'000


2018
ZMW'000


2019
ZMW'000


2018
ZMW'000


2019
ZMW'000


2018
ZMW'000


2019
ZMW'000


2018
ZMW'000




210,348


141,452


39,261


27,129


(21,930)


(18,521)


15,361


6,885




USD'000


USD'000


USD'000


USD'000


USD'000


USD'000


USD'000


USD'000




17,074


14,259


3,187


2,736


(1,780)


(1,867)


1,247


694




 
Total revenue from the other business units increased by 49% from ZMW141 million in 2018, to ZMW210 million this financial year. The Gross Profit increased by 45% and Operating Profit increased by 123% in ZMW terms.
 
Flour Milling
The milling division performed above expectations, increasing sales volumes by 30% from 13,165 tons in 2018 to 16,966 tons in 2019. The milling division had absorbed the weaker exchange rate with higher selling prices. Higher volumes were achieved by producing consistently high-quality flour.
 
Zamleather
2019 has been one of the toughest years in recent times for Zamleather. The global wet blue market, which is the main channel of revenue for Zamleather, continued a multi-year downward trend, weakening further during the financial year on the back of already record low prices. Only 84,657 hides were processed, a reduction of 31% from the prior year, with stricter focus on only sourcing higher quality grades of hides.
 
Shoe sales at 79,396 pairs were almost in-line with the prior year. The doubling of the shoe manufacturing factory capacity for Zamshu is in progress as part of the turnaround strategy for the Zamleather business. The Capacity of the shoe plant is being doubled from 500 pairs per day to 1,000 pairs per day to be able to value-add all the cattle hides being processed into leather at Zamleather, with a view of attaining higher margin shoe products.
 
The new shoe factory is expected to be commissioned in the 2020 financial period and will focus on increasing the supply of school shoes to the market.
 
ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2019
 




Group


Note


2019

ZMW'000s


2019

USD'000s


2018

ZMW'000s


2018

USD'000s




Revenue


5


3,134,967


254,462


2,780,589


280,301




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


16(a)


10,284


835


(15,245)


(1,537)




Cost of sales


 


(2,063,704)


(167,509)


(1,806,185)


(182,075)




Gross profit


 


1,081,547


87,788


959,159


96,689




Administrative expenses


 


(920,771)


(74,738)


(841,319)


(84,810)




Other income


6


433


35


430


43




Operating profit


7


161,209


13,085


118,270


11,922




Share of loss equity accounted investment


 


(3,036)


(246)


(742)


(75)




Exchange gains on translating foreign currency transactions and balances


 


(36,730)


(2,981)


(19,302)


(1,946)




Finance costs


9


(82,790)


(6,720)


(70,215)


(7,078)




Profit before taxation


 


38,653


3,138


28,011


2,823




Taxation charge


10


(2,780)


(226)


(4,257)


(429)




Group income for the year from continuing operations


 


35,873


2,912


23,754


2,394




(Loss)/profit from discontinued operations


34


(17,379)


(1,411)


(13,261)


(1,337)




Group income for the year


 


18,494


1,501


10,493


1,057




Group income/(loss) attributable to:


 


 


 


 


 


 




Equity holders of the parent


 


18,100


1,469


10,601


1,068


 




Non-controlling interest


 


394


32


(108)


(11)


 




 


 


18,494


1,501


10,493


1,057


 




Other comprehensive income:


 


 


 


 


 


 




Items that will not be reclassified
subsequently to profit or loss


 


 


 


 


 


 




Exchange (losses)/gains on translating presentational currency


 


106,391


(10,553)


206,425


(46,089)


 




Remeasurement of net defined benefit liability


 


8,829


717


-


-


 




Total comprehensive (loss)/ income for the year


 


133,714


(8,335)


216,918


(45,032)


 




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


 


 


 


 


 


 




Equity holders of the parent


 


129,935


(8,367)


217,297


(45,021)


 




Non-controlling interest


 


3,779


32


(379)


(11)


 




 


 


133,714


(8,335)


216,918


(45,032)


 




 


 


Ngwee


Cents


Ngwee


Cents


 




Earnings per share


 


 


 


 


 


 




Basic earnings per share - continued operations


12


11.80


0.96


7.90


0.80


 




Basic earnings per share - discontinued operations


12


(5.78)


(0.47)


(4.41)


(0.44)


 




Total Basic earnings per share


12


6.02


0.49


3.49


0.36


 




Diluted earnings per share


 


 


 


 


 


 




Diluted earnings per share - continued operations


12


8.86


0.72


5.92


0.60


 




Diluted earnings per share - discontinued operations


12


(4.34)


(0.35)


(3.31)


(0.33)


 




Total Diluted earnings per share


12


4.52


0.49


2.61


0.27


 




 
 
ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES
 
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2019
 




(i) In Zambian Kwacha


 
 
 
Issued share capital
ZMW'000s


 
 
 
Share premium
ZMW'000s


 
 
 
Preference share capital
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 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 gain/ (loss) 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


 




Profit for the year


-


-


-


-


-


18,100


18,100


394


18,494


 




Transfer of surplus depreciation


-


-


-


-


(29,666)


29,666


-


-


-


 




Other comprehensive income:


 


 


 


 


 


 


 


 


 


 




Exchange gain/ (loss) on translating presentational currency


-


-


-


103,006


-


-


103,006


3,385


106,391


 




Remeasurement of net defined benefit liability


 
-


 
-


 
-


-


 
-


 
8,829


8,829


-


8,829


 




Total comprehensive income


-


-


-


103,006


(29,666)


56,595


129,935


3,779


133,714


 




At 30 September 2019


3,006


1,125,012


1,000


381,929


1,199,058


535,704


3,245,709


(4,881)


3,240,828


 




(ii) In US Dollar


 
 
 
Issued share capital
USD'000s


 
 
 
Preference share capital
USD'000s


 
 
 
Share premium
USD'000s


 
 
Foreign exchange reserve
USD'000s


 
 
 
Revaluation reserve
USD'000s


 
 
 
Retained earnings
USD'000s


Total attributable to owners of the parent USD'000s


 
 
Non- controlling interest
USD'000s


 
 
 
 
Total equity
USD'000s




At 1 October 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 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




Profit for the year


-


-


-


-


-


1,496


1,496


32


1,501




Transfer of surplus depreciation


-


-


-


-


(2,408)


2,408


-


-


-




Other comprehensive income:


 


 


 


 


 


 


 


 


 




Exchange gains on translating presentational currency


-


-


-


(10,859)


-


-


(10,859)


306


(10,553)




Remeasurement of net defined benefit liability


-


-


-


-


-


717


717


-


717




Total comprehensive income


-


-


-


(10,859)


(2,408)


4,594


(8,673)


338


(8,335)




At 30 September 2019


449


100


185,095


(197,748)


173,209


84,782


245,887


(370)


245,517




 
 
ZAMBEEF PRODUCTS PLC
 
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2019




(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 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 gain 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


890,335


770,949


2,790,302




Profit for the year


-


-


-


-


4,225


4,225




Transfer of surplus depreciation


-


-


-


(28,183)


28,183


-




Other comprehensive income:


-


-


-


-


-


-




Exchange gain on translating presentational currency


-


-


-


-


92,385


92,385




Total comprehensive income


-


-


-


(28,183)


124,793


96,610




At 30 September 2019


3,006


1,000


1,125,012


862,152


895,742


2,886,912




 
ZAMBEEF PRODUCTS PLC
 
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2019 (CONTINUED)




(ii) In US Dollar


 
Issued share capital
USD'000s


 
Preference share capital
USD'000s


 
Share premium
USD'000s


 
Revaluation reserve
USD'000s


Foreign exchange reserve USD'000s


 
Retained earnings
USD'000s


 
 
Total equity
USD'000s




At 1 October 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




Profit for the year


-


-


-


-


-


342


342




Transfer of surplus depreciation


-


-


-


(2,288)


-


2,288


-




Other comprehensive income:


-


-


-


-


-


-


-




Exchange gain on translating presentational currency


-


-


-


-


(9,603)


-


(9,603)




Total comprehensive income


-


-


-


(2,288)


(9,603)


2,630


(9,261)




At 30 September 2019


449


100


185,095


116,408


(168,059)


84,712


218,705




 
 
ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ‑ 30 SEPTEMBER 2019




ASSETS


Note


2019

ZMW'000s


2019

USD'000s


2018

ZMW'000s


2018

USD'000s




Non-current assets




Goodwill


13


166,801


12,636


166,801


13,628




Property, plant and equipment


14


2,841,824


215,290


2,902,221


237,110




Investment in associate


15


12,376


938


15,412


1,259




Deferred tax asset


10(e)


56,525


4,282


47,854


3,910




 


 


3,077,526


233,146


3,132,288


255,907




Current assets


 


 


 


 


 




Biological assets


16


170,417


12,910


181,674


14,843




Inventories


17


941,159


71,300


639,811


52,272




Trade and other receivables


18


98,025


7,425


156,314


12,771




Assets held for disposal


34


135,357


10,254


-


-




Amounts due from related companies


19


41,554


3,148


50,272


4,107




Income tax recoverable


10(c)


2,767


210


3,885


317




 


 


1,389,279


105,248


1,031,956


84,310




Total assets


 


4,466,805


338,394


4,164,244


340,217




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


 


2,116,691


60,243


1,986,756


68,916




 


 


3,245,709


245,887


3,115,774


254,560




Non-controlling interest


 


(4,881)


(370)


(8,660)


(708)




 


 


3,240,828


245,517


3,107,114


253,852




 
 
ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ‑ 30 SEPTEMBER 2019 (CONTINUED)
 
 




 


Note


2019

ZMW'000s


2019

USD'000s


2018

ZMW'000s


2018

USD'000s




Non-current liabilities




Interest bearing liabilities


23


228,099


17,280


308,312


25,189




Obligations under finance leases


24


19,297


1,462


20,163


1,647




Deferred liability


25


16,362


1,240


22,611


1,847




Deferred tax liability


10(e)


9,138


692


6,909


565




 


 


272,896


20,674


357,995


29,248




Current liabilities




Interest bearing liabilities


23


130,661


9,899


95,247


7,782




Collateral management agreement


23


212,381


16,089


107,213


8,759




Obligations under finance leases


24


21,487


1,628


18,248


1,491




Trade and other payables


26


259,585


19,665


297,390


24,294




Provisions


27


52,914


4,009


42,137


3,443




Amounts due to related companies


28


251


19


232


19




Taxation payable


10(c)


1,377


104


2,925


239




Bank overdrafts


20


274,425


20,790


135,743


11,090




 


 


953,081


72,203


699,135


57,117




Total equity and liabilities


 


4,466,805


338,394


4,164,244


340,217




 
 
 
ZAMBEEF PRODUCTS PLC
COMPANY STATEMENT OF FINANCIAL POSITION ‑ 30 SEPTEMBER 2019
 




ASSETS


Note


2019

ZMW'000s


2019

USD'000s


2018

ZMW'000s


2018

USD'000s




Non-current assets


 


 


 


 


 




Property, plant and equipment


14


2,060,110


156,069


2,154,822


176,048




Investments in subsidiaries


15


245,807


18,622


245,807


20,082




Investment in associates


15(e)


12,376


938


15,412


1,259




Deferred tax asset


10(e)


-


-


24,792


2,025




 


 


2,318,293


175,629


2,440,833


199,414




Current assets


 


 


 


 


 




Biological assets


16


137,215


10,395


158,349


12,937




Inventories


17


683,600


51,788


481,319


39,324




Asset held for disposal


 


135,357


10,254


-


-




Trade and other receivables


18


28,153


2,133


91,381


7,466




Amounts due from related companies


19


1,078,745


81,722


796,506


65,073




Income tax recoverable


10(c)


1,529


115


2,510


205




 


 


2,064,599


156,407


1,530,065


125,005




Total assets


 


4,382,892


332,036


3,970,898


324,419




 


 


 


 


 


 




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


 


1,757,894


33,061


1,661,284


42,322




 


 


2,886,912


218,705


2,790,302


227,966




 
 
ZAMBEEF PRODUCTS PLC
COMPANY STATEMENT OF FINANCIAL POSITION ‑ 30 SEPTEMBER 2019 (CONTINUED)
 
 




 


Note


2019

ZMW'000s


2019

USD'000s


2018

ZMW'000s


2018

USD'000s




Non-current liabilities


 


 


 


 


 




Interest bearing liabilities


23


228,099


17,280


308,312


25,189




Obligations under finance leases


24


11,505


872


12,503


1,022




Deferred liability


25


3,655


277


5,059


413




Deferred tax liability


10(e)


6,630


502


4,034


330




 


 


249,889


18,931


329,908


26,954




Current liabilities


 


 


 


 


 




Interest bearing liabilities


23


343,042


25,988


202,460


16,541




Obligations under finance leases


24


18,266


1,384


11,841


967




Trade and other payables


26


158,504


12,008


204,675


16,722




Provisions


27


40,462


3,065


26,108


2,132




Amounts due to related companies


28


490,045


37,124


328,633


26,849




Bank overdrafts


20


195,772


14,831


76,971


6,288




 


 


1,246,091


94,400


850,688


69,499




Total equity and liabilities


 


4,382,892


332,036


3,970,898


324,419




 
 
ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES
 
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2019




 


Note


2019

ZMW'000s


2019

USD'000s


2018

ZMW'000s


2018

USD'000s




 Cash inflow from operating activities




Profit before taxation


 


38,653


3,138


28,011


2,823




Finance costs


9


82,790


6,720


70,215


7,078




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


 


(986)


(80)


(220)


(22)




Depreciation


14


121,921


9,896


105,789


10,665




Share of loss on equity accounted investment


 


3,036


246


742


75




Loss on discontinued operations


 


(17,379)


(1,411)


-


-




Loss on disposal of investment


 


-


-


52,265


5,269




Fair value price adjustment


16


(10,284)


(835)


15,245


1,537




Net unrealised foreign exchange losses


 


7,153


581


22,343


2,252




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


 


224,904


18,255


294,390


29,677




(Increase)/decrease in biological assets


 


21,541


1,748


(29,062)


(2,930)




Decrease/ (increase) in inventory


 


(301,348)


(24,460)


(123,393)


(12,439)




Decrease in trade and other receivables


 


58,289


4,731


(65,522)


(6,605)




Increase in amounts due from related companies


 


8,718


708


(38,850)


(3,916)




(Decrease)/ increase in trade and other payables


 


(27,028)


(2,194)


47,684


4,807




Increase/ (decrease) in amounts due to related companies


 


19


2


151


15




Increase/ (decrease) in deferred liability


 


(6,249)


(507)


5,855


590




Cash outflow from assets held for disposal


 


-


-


-


-




Income tax paid


10(c)


(9,652)


(783)


(11,618)


(1,171)




Net cash inflow from operating activities


 


(30,806)


(2,500)


79,635


8,028




Investing activities


 


 


 


 


 




Purchase of property, plant and equipment


14


(113,825)


(9,239)


(144,022)


(14,518)




Proceeds from the sale of assets


 


11,776


956


 


 




Proceeds from the sale of Zampalm


 


-


-


151,680


16,000




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


 


(102,049)


(8,283)


7,658


1,482




 
 
ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES
 
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2019 (CONTINUED)
 
 




 


Note


2019

ZMW'000s


2019

USD'000s


2018

ZMW'000s


2018

USD'000s




Net cash (outflow)/inflow before financing activities


 


(132,855)


(10,783)


87,293


9,510




Financing activities


 


 


 


 


 




Long term loans repaid


 


(96,913)


(7,866)


(79,873)


(8,052)




Receipt of long term loans


 


-


-


-


-




Receipt/(repayment) of short term funding


 


119,456


9,696


25,088


2,529




Lease finance (repayment)/ obtained


 


707


57


(12,044)


(1,214)




Finance costs


9


(82,790)


(6,720)


(70,215)


(7,078)




Net cash outflow on financing activities


 


(59,540)


(4,833)


(137,044)


(13,815)




(Decrease)/ increase in cash and cash equivalents


 


(192,395)


(15,616)


(49,751)


(4,305)




Cash and cash equivalents at beginning of the year


 


(135,743)


(11,090)


(105,148)


(10,874)




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


 


53,713


5,916


19,156


4,089




Cash and cash equivalents at end of the year


20


(274,425)


(20,790)


(135,743)


(11,090)




Represented by:


 


 


 


 


 




Cash in hand and at bank


20


56,753


4,299


101,123


8,262




Bank overdrafts


20


(331,178)


(25,089)


(236,866)


(19,352)




 


 


(274,425)


(20,790)


(135,743)


(11,090)




 
 
ZAMBEEF PRODUCTS PLC
 
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2019




 


Note


2019

ZMW'000s


2019

USD'000s


2018

ZMW'000s


2018

USD'000s




Cash inflow from operating activities


 


 


 


 


 




Profit before taxation


 


55,795


4,529


22,877


2,307




Finance costs


 


67,371


5,469


54,900


5,534




Depreciation


14


71,049


5,767


61,376


6,187




Fair value price adjustment


16


(10,162)


(825)


15,299


1,542




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


 


1,821


148


1,457


147




Share of loss on equity accounted investment


 


3,036


246


-


-




(Profit)/ loss on disposal of investment


 


-


-


1,431


144




Loss on discontinued operations


 


(17,379)


(1,411)


 


 




Net unrealised foreign exchange differences


 


6,223


505


19,255


1,941




Earnings before interest, tax, depreciation and amortisation


 


177,754


14,428


176,595


17,802




Decrease/ (increase) in biological assets


 


31,296


2,541


(23,561)


(2,375)




Decrease/ (increase) in inventory


 


(202,281)


(16,419)


(69,478)


(7,004)




Decrease/( increase) in trade and other receivables


 


63,228


5,133


(54,212)


(5,465)




Increase in amounts due from related companies


 


(282,239)


(22,910)


(141,446)


(14,259)




Increase/ (decrease) in trade and other payables


 


(31,817)


(2,583)


65,940


6,647




Increase in amounts due to related companies


 


161,412


13,102


84,757


8,544




Increase/ (decrease) in deferred liability


 


(1,404)


(114)


1,400


141




Income tax paid


10(c)


(5,822)


(473)


(10,182)


(1,026)




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


 


(89,873)


(7,295)


29,813


3,005




Investing activities


 


 


 


 


 




Purchase of property, plant and equipment


14


(23,743)


(1,927)


(49,415)


(4,982)




Movements in investments


15


-


-


41,423


4,176




Proceeds from disposal of investment


 


-


-


144,161


14,532




Proceeds from sale of assets


 


1,120


91


345


35




Net cash inflow from investing activities


 


(22,623)


(1,836)


136,514


13,761




 
ZAMBEEF PRODUCTS PLC
 
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2019 (CONTINUED)
 




 


Note


2019

ZMW'000s


2019

USD'000s


2018

ZMW'000s


2018

USD'000s




Net cash inflow before financing activities


 


(112,496)


(9,131)


166,327


16,766




Financing activities


 


 


 


 


 




Long term loans repaid


 


(96,913)


(7,866)


(79,873)


(8,052)




Receipt from term loans


 


-


-


-


-




Short term funding (repaid)/obtained


 


119,456


9,696


25,559


2,576




Lease finance (repayment)/ obtained


 


3,761


305


(10,415)


(1,050)




Interest paid


 


(67,371)


(5,469)


(54,900)


(5,534)




Net cash outflow on financing activities


 


(41,067)


(3,334)


(119,629)


(12,060)




(Decrease)/ increase in cash and cash equivalents


 


(153,563)


(12,465)


46,698


4,706




Cash and cash equivalents at beginning of the year


 


(76,971)


(6,288)


(25,435)


(2,631)




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


 


34,762


3,922


(98,234)


(8,363)




Cash and cash equivalents at end of the year


20


(195,772)


(14,831)


(76,971)


(6,288)




Represented by:


 


 


 


 


 




Cash in hand and at bank


20


11,844


897


54,357


4,441




Bank overdrafts


20


(207,616)


(15,728)


(131,328)


(10,729)




 


 


(195,772)


(14,831)


(76,971)


(6,288)




 
 
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2019
 Notes can be read via the following link to the full Financial Statements:  
http://www.rns-pdf.londonstockexchange.com/rns/2176W_1-2019-12-9.pdf




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