Harare – Diversified light manufacturer, Innscor Africa Limited recorded $489.893 million revenue of for the six months ended December 31, 2018 which compared to $304.806 million on the comparative period is a 61 percent growth, largely driven by double-digit volumes growth across all categories.
In a statement accompanying the Group’s financial results, Chairman Addington Chinake said the consolidation of both Prodairy and Probottlers, following re-structures, also added to the growth in revenue, as did the improvement in the Irvine’s business as it continued its recovery from the Avian Influenza (AI) epidemic encountered in 2017.
The bakery division reported an 11% growth in loaves over the comparative period, National Foods reported a solid 18% growth, Profeeds an associate company of the Group recorded a 42% in feed volumes whilst the Colcom division comprising Triple C and Colcom Foods delivered a 27% growth in volumes compared to the prior period.
At NatPak volumes grew by 27%, Prodairy increased volumes by 70% and Probottlers grew volumes by 66%. At Probrands an associate company of the Group volumes were 38% ahead of the comparative period.
“The Group’s well-priced raw materials pipeline, distortions in margins arising from stock replacement policies, an improved sales mix, continually improving factory efficiencies, volume-driven conversion and distribution efficiencies, and the lag in inflation on operating expenditure, translated to improved margins and a satisfactory growth in operating profit over the comparative period.”
In the period under review, Chinake said financial income relates mainly to the profit arising from the disposal of non-core assets and the Group’s dilution in its interests in Capri, whilst the comparative period financial loss includes the final impairment charge arising from AI.
The Group’s overall headline earnings per share grew by 161 percent on the comparative period to 7.58 cents.
Chinake also added that the Group’s statement of financial position remained solid, and net gearing increased to 18.51 percent and this was in support of the strategy to invest into funding well-priced raw material positions and extinguishing foreign creditors, resulting in the Group utilising most of its opening cash holding.
Capital expenditure stood at $27.801 million, largely driven by significant increases in costs of imported items and deployed towards improving efficiencies, innovations and new capacity at National Foods, Natpak and Irvine’s.
However, the Group’s Chairman pointed out that the availability of foreign currency will continue to dictate the pace at which the Group executes its capital expenditure projects.
As previously reported, the Group still has an amount outstanding of $2.550m relating to the payment it has made into a trust as a result of its case with the Competitions and Tari ’s Commission (CTC).
“This amount is included in working capital. The High Court has ruled in favour of the Group, and the Group awaits repayment of this amount, although the CTC has taken the matter on appeal to the Supreme Court where judgement has been pending since May 2016.”
Equity Axis News
