• Innscor plans US$139 million of capital expenditure in the year to June 2027
• Cash from operations after interest and tax of US$121.8 million matched last year’s capital spending almost exactly
• Mill-Bake and Protein have earned their capital, and the next programme leans towards beverages and Tanganda, where the case for new money is weakest

Harare- Innscor Africa, Zimbabwe’s largest food processor plans to spend US$139 million on expansion and maintenance in the financial year ending June 2027, following US$121.2 million of capital expenditure in the year just completed according to the latest results for the year ended 30 June 2026.

The Victoria Falls Stock Exchange-listed manufacturer will concentrate spending in its Bakery Division, National Foods, Colcom Foods, Irvine’s and the beverage businesses inside Rutanhi Beverages. The new programme is about 15% larger than last year’s and follows US$73.9 million invested in the 2025 financial year, taking planned spending across three years to about US$334 million.

The spending follows the strongest year in Innscor’s recent history. Revenue rose 14% to US$1.24 billion for the full year, profit for the year doubled to US$102.1 million, and profit attributable to Innscor shareholders rose 82% to US$74.8 million. The total dividend rose 53% to 4.50 US cents per share.

Capital has gone where returns have been proven. Mill-Bake absorbed US$84.9 million, or 70% of last year’s spending, more than double the previous year, and its pre-tax profit rose to US$68.6 million from US$39.8 million. Protein lifted pre-tax profit to US$32.4 million from US$2.9 million on only US$13.4 million of new spending, a recovery built on earlier investment. The 2027 programme shifts weight towards Colcom, Irvine’s and the Rutanhi beverage businesses,  the next round of investment carries more execution risk than the last.

Part of the profit jump came from outside the factories. Livestock revaluation gains, investment income and earnings from associates together contributed about a quarter of pre-tax profit, and livestock gains account for roughly half of Protein’s profit. Outside shareholders in Innscor’s subsidiaries also took a larger share, receiving about 27% of group profit against about 20% a year earlier, so Innscor’s own shareholders captured less of each dollar the group earned.

Operations generated US$155.1 million, up 24%. After interest of US$11.8 million and tax payments of US$21.5 million, double the prior year, US$121.8 million remained, almost exactly the US$121.2 million spent on capital projects.

The 2027 arithmetic follows from that pattern, capital spending of US$139 million plus shareholder payouts at last year’s level of about US$34 million requires about US$173 million, against US$121.8 million of cash available from operations last year, a gap of about US$51 million. If operating cash grows at last year’s pace, the gap narrows to about US$30 million. On that basis borrowings rise to around US$160 million by June 2027.

The balance sheet can carry that load, and the pressure point is timing. Borrowings rose to US$129.9 million from US$86.9 million at an average interest rate of 11%, and just over half falls due within twelve months under local bank lines that are renewed as they mature. US$23.2 million is now secured over assets or export proceeds, against nothing a year earlier. Innscor is funding plant with a working life of decades from short-dated local bank loans, the same gap that longer-term development finance lines such as BII’s new facilities with NMB Bank and CABS are designed to close.

Stockpiling absorbed a further slice of cash. Inventories rose to US$189.4 million from US$119.4 million, with raw materials and packaging up US$43.6 million, as management extended raw material cover against supply disruption linked to the Middle East and a weak summer rainfall season. Suppliers funded most of the build, with trade and other payables up US$57.5 million. A return to normal supplier terms would draw on cash in 2027. The stock build also carries a message for the wider economy, since one of Zimbabwe’s largest food processors has pre-positioned grain and inputs against a poor season, and new rules on local grain procurement add a policy variable to its sourcing costs.

Demand differs sharply across the businesses receiving capital. Bakery loaf volumes rose 27% after a new Harare line entered production, a second automated Harare line and a solar plant were commissioned near year-end, and a Bulawayo line follows this year. Flour volumes rose 13% as Harare milling capacity expands. National Foods’ overall volumes fell 3%, including a 45% fall in maize as demand normalised after the drought. Snacks grew 50%, pasta 55%, and biscuits ended the year at full capacity. In Protein, Colcom volumes rose 28% and Irvine’s frozen poultry 17%, and Irvine’s has begun a broad expansion across feed milling, hatcheries, processing and rearing.

Beverages present the weakest case for new money. Probottlers’ volumes fell 11%, with Fizzi soft drinks down 15%. Innscor paid US$5.1 million in sugar tax during the year and US$15.2 million since the tax began in January 2024, and cites imported drinks priced below what compliant local producers can match.

Tanganda adds an ownership problem, Rutanhi, 60% owned by Innscor, underwrote an US$8 million rights offer and now holds 29% of Tanganda, which it consolidates because Innscor appointees run the board and management. Innscor’s real economic interest is about 17%, and management has already warned that the avocado and macadamia harvests due in the September quarter face exceptionally poor yield and quality. Capital directed at Tanganda’s recovery earns returns of which Innscor shareholders keep roughly one dollar in six.

Tax disputes remain an open exposure, ZIMRA has raised additional assessments of US$13.1 million against Innscor’s subsidiaries and US$5.2 million against associates for 2019 to 2021, which the group is contesting in court. Innscor has already paid US$11.9 million under the pay-now-argue-later rule, about 16% of last year’s attributable profit, and carries it as a prepayment in expectation of winning.

Innscor retains room to adjust, of its US$138.9 million in capital commitments, only US$45.9 million is contracted, so two-thirds of the programme can be slowed if cash or demand weakens. The message for investors is that Innscor has turned Zimbabwe’s stability since September 2024 into scale and doubled earnings, and the next phase depends on whether new capacity earns its keep and how it is financed.