Zambeef ready for future growth - CNBC Africa

Zambeef ready for future growth


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Deputy Agriculture Minister Lackson Kasabu with Zambeef CEO Francis Grogan, Carl Irwin and David Shamulenge.

Zambeef Products Plc is poised for growth across a number of its divisions as it forges ahead with its goal of becoming one of the leading food producers in the region.

The company, which is listed on both the London and Lusaka stock exchanges, saw revenue rise by 24 per cent to 1,595 million kwacha during year, with gross profit up to 553 million kwacha.

“It is heartening to see revenues continue to increase at the same time as the directors prepare the business for future growth across a number of divisions. A key financial highlight has been to return the business to positive cash generation, which is in line with the strategy set out when Zambeef listed on the AIM market of the London Stock Exchange in June 2011,” said group chairman Jacob Mwanza.

Cropping also saw strong growth, with a 49 per cent increase in gross profit to 154 million kwacha during the year, while the group’s Novatek stockfeed business was up 21 per cent to 48.85 million kwacha.

Zambeef Chief Executive Officer Francis Grogan said, “The board is committed to unlocking value for its shareholders wherever it can. The deal announced earlier in the year to enter into a partnership with Rainbow involved a disposal to Rainbow of a 49 per cent equity interest in Zam Chick. The consideration paid by Rainbow included a profit of 69 million kwacha, a clear demonstration of the value that has been created in Zam Chick.”

While three out of four of Zambeef’s main divisions – edible oils, cropping and stockfeed – saw strong growth, the company experienced a downturn in sales of perishable products in the final four months of the financial year.

Crop yields continued to improve across Zambeef’s farms, led by Mpongwe Farm; and joint venture arrangements were put in place with Rainbow to facilitate future expansion of the group’s poultry operations.

“[This year] was a challenging year for Zambeef as the group sought to respond to, and address the consequences arising from concerns surrounding imported beef products together with upward pressure on general overhead expenditure,” said Mwanza. “The focus on managing controllable costs continues to drive efficiency savings where possible, leaving the business well positioned to target future bottom line growth.”