TIDMZAM

RNS Number : 0236W

Zambeef Products PLC

07 December 2023

07 December 2023

Zambeef Products plc

("Zambeef" or the "Group")

Full-year results for the year ended 30 September 2023

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 2023.

Financial Highlights

 
 Figures in 000's                 2023          2022         %        2023        2022        % 
                                   ZMW           ZMW                   USD         USD 
                              ------------  ------------           ----------  ---------- 
 Revenue                        6,046,157     5,394,761     12%      331,478     314,014      6% 
 Change in fair value 
  of biological assets           643,198       349,462      84%      35,263      18,567      90% 
 Cost of sales                 (4,846,092)   (4,111,037)    18%     (265,685)   (237,518)    12% 
 Gross profit                   1,843,263     1,633,186     13%      101,056     95,063       6% 
 Administrative expenses       (1,336,488)   (1,236,762)     8%     (73,272)    (71,989)      2% 
 Distribution Expenses          (96,287)      (65,596)      47%      (5,279)     (3,818)     38% 
 Net impairment losses 
  on financial assets            (2,713)      (17,869)      -85%      (149)      (1,040)     -86% 
 Impairment of goodwill         -             (141,786)      -          -        (8,253)      - 
 Other (expenses)/ 
  income                        (46,419)        2,491      -1963%    (2,545)       145      -1855% 
 Operating profit                361,357       173,664      108%     19,811      10,108      96% 
 Share of loss equity 
  accounted investment           (2,595)       (3,503)      -26%      (142)       (204)      -30% 
 Finance costs                  (155,088)     (118,538)     31%      (8,503)     (6,900)     23% 
 Finance income                 -               3,541      -100%        -          206      -100% 
 Profit before taxation          203,673       55,164       269%     11,166       3,210      248% 
 Taxation charge                (72,851)      (63,283)      15%      (3,994)     (3,684)      8% 
 Group income for 
  the year from continuing 
  operations                     130,822       (8,119)     1711%      7,172       (474)     1613% 
 (Loss)/Profit from 
  asset held for sale 
  after tax                     (10,604)       39,697      -127%      (581)       2,311     -125% 
 Group income for 
  the period                     120,218       31,578       281%      6,591       1,837      259% 
 
 EBITDA                          554,662       514,791       8%      30,409      29,965       1% 
 Gross Profit Margin              30.5%         30.3%                 30.5%       30.3% 
 EBITDA Margin                    9.2%          9.5%                  9.2%        9.5% 
 Debt/Equity (Gearing)            30.2%         20.2%                 30.2%       20.2% 
 Debt-To-EBITDA                   2.54          1.45        76%       2.21        1.57       40% 
                              ------------  ------------  -------  ----------  ----------  ------- 
 
 

PERFORMANCE OVERVIEW

The Zambian economy grappled with significant challenges, creating a difficult operational and economic environment. Longer than planned sovereign debt restructuring, subdued mining production of copper, and the impact of climate change; affecting crop yields and rainfall patterns, were primary drivers of this adversity. High energy prices and currency depreciation further impacted and worsened the operating conditions.

The local currency experienced notable volatility against the US Dollar, with fluctuations of up to 35%. This fluctuation was primarily driven by heightened demand for the USD, uncertainties surrounding debt restructuring, and a sustained increase in global interest rates, which affected offshore investor participation in local bond auctions. The ZMW/USD exchange rate commenced at K15.9 and concluded at K21.31, representing a 35% surge. Inflation, a critical economic indicator, concluded the financial year at 12%, as opposed to the previous year's 9.9%. This was attributed to the depreciation of the currency, along with escalating food and energy prices, despite the persistent implementation of a stringent monetary policy by the central bank.

However, despite a tough operating environment, demand for the Group's products grew, bolstered by a customer focused approach to pricing. The Group's management team, through a concerted effort, prioritized both revenue maximisation, volume growth and cost management, thereby, positioning the Group on the path to actualise its strategic goals.

The Group's performance underscores its resilience within an ever-evolving market and highlights the robustness of the vertically integrated business model, the cornerstone in creating enduring value for its shareholders.

KEY FINANCIAL HIGHLIGHTS

The Group achieved a revenue of ZMW 6.0 billion (USD 331.5 million), along with a gross profit of ZMW 1.8 billion (USD 101.0 million). This represents a year-on-year increase of 12.1% and 12.9% in kwacha terms, and 5.6% and 6.3% in US dollar terms, respectively. The Group's performance was achieved on the back of strong volumes performance in Stock feed and Cold Chain Food Products.

Finance costs increased by 31% which can be attributed to the extended utilisation of the overdraft and term loan facilities to supplement business growth and financing escalating working capital requirements.

Additionally, the Group delivered an operating profit of ZMW 361.4 million (USD 19.8 million), a significant increase of 108.1% in kwacha terms (96.0% in US dollar terms) compared to the prior year's ZMW 173.7 million (USD 10.1 million). Although prior year was impacted by a one off impairment cost of ZMW 141.8 million, this growth underscores the effectiveness of the Group's commercial strategy and the successful execution of the key cropping project.

The Group ultimately recorded a profit of ZMW120.2 million (USD 6.6 million) for 2023 compared to ZMW31.6 million (USD 1.8 million) of value generated in the previous corresponding period.

The bottom line profitability was mainly driven by increased volumes and margins in the Stock feed and Cold Chain Food products segments.

Management continued to optimize top-line growth through effective revenue management while upholding stringent cost control measures, positioning the Group on the trajectory to actualize its short to medium-term strategy.

The Group remains dedicated to fortifying its brand equity and providing customers with high quality products. With its diversified and vertically integrated business model, robust brands, and effective management, the Group is well-equipped to seize future opportunities and navigate potential threats.

   Commenting on these results, Chairman Michael Mundashi   said: 

"Despite a tough operating environment, demand for our products grew, bolstered by a customer focused approach to pricing. Our management team, through a concerted effort, prioritized both revenue maximisation, volume growth and cost management, thereby, positioning the Group on the path to actualise its strategic goals."

"The Group's performance underscores our resilience within an ever-evolving market and highlights the robustness of our vertically integrated business model, the cornerstone in creating enduring value for our esteemed shareholders."

"The enduring stability of the economy hinges on the successful resolution of the government's debt restructuring negotiations. We foresee a positive trajectory for copper prices, a vital contributor to our foreign exchange earnings, fuelled by a rising global demand, notably from China and the burgeoning electric vehicle market. The recently unveiled 2024 budget has instilled optimism, as it signals an increase in government expenditure, anticipated to infuse much-needed liquidity into the economy. This, in turn, is expected to bolster consumer spending and subsequently drive economic growth."

"Zambeef is strategically positioned to seize the forthcoming opportunities and demonstrates adaptability in the face of an otherwise challenging operating environment. This resilience and strategic foresight underscore our commitment to navigating through complexities and thriving in the ever-evolving economic landscape."

Copies of Zambeef's Annual Report and Accounts for the year ended 30 September 2023 and Notice of AGM will shortly be sent to shareholders and made available on the Group's website and a further announcement will be made at this time.

 
 For further information, please visit www.zambeefplc.com 
  or contact: 
 
 Zambeef Products plc                       Tel: +260 (0) 211 
                                             369003 
 Faith Mukutu, Chief Executive Officer 
  M'boo Mumba, Chief Financial Officer 
 
 Cavendish Capital Markets Ltd (Nominated   Tel: +44 (0) 20 7220 
  Adviser and Broker)                        0500 
 Ed Frisby/Abigail Kelly (Corporate Finance) 
 Tim Redfern (ECM) 
 
 Autus Securities Limited                   Tel: +260 (0) 761 
                                             002 002 
 Mataka Nkhoma 
 

About Zambeef Products PLC

Zambeef Products plc is the largest integrated cold chain food products and agribusiness company in Zambia and one of the largest in the region, involved in the primary production, processing, distribution and retailing of beef, chicken, pork, milk, dairy products, fish, flour and stockfeed, throughout Zambia and the surrounding region, as well as Nigeria and Ghana.

It has 269 retail outlets throughout Zambia and West Africa.

The Company is one of the largest suppliers of beef in Zambia. Five beef abattoirs and five feedlots are located throughout Zambia, with a capacity to slaughter 230,000 cattle a year. It is also one of the largest chicken producers in Zambia, with a capacity of 9.4m broilers and 25 million-day-old chicks a year. It is one of the largest pig abattoirs and pork processing plants in Zambia, with a capacity to slaughter 102,000 pigs a year, while it's dairy has a capacity of 120,000 litres per day.

The Group is also one of the largest cereal row cropping operations in Zambia, with approximately 7,265 hectares of row crops under irrigation, which are planted twice a year, and a further 7,924 hectares of rainfed/dry-land crops available for planting each year.

CHAIRMAN'S REVIEW

Dear Shareholder,

Over the past financial year, we navigated an extremely challenging operational landscape. The primary drivers midst the ongoing economic headwinds in Zambia were other factors such as the longer-than-planned foreign debt restructuring, subdued copper mining activities, and the impact of climate change affecting crop yields and rainfall patterns.

At the back of these adversities, the 2023 Government GDP growth projection of 4.2% was revised downwards to 2.7%. Consequently, the country saw a tightened monetary policy coupled with food and energy inflation which led to a reduced liquidity situation and limited consumer expenditure. The depreciation of the Kwacha against major foreign currencies led to escalated costs in critical inputs such as fuel and agricultural inputs, further putting pressure on margins.

Despite the tough operating environment, our management team remained focused on our strategy and through a concerted effort, prioritising revenue maximisation, volume growth and cost management, which positioned the group for the commendable results achieved.

The Group's performance underscores our resilience within an ever-evolving market and highlights the robustness of our vertically integrated business model, the cornerstone in creating enduring value for our esteemed shareholders.

Strategy

The Board maintains its unwavering commitment to realizing the Group's strategic objectives, even in the face of seasonal market dynamics and economic fluctuations. The five-year strategy focuses on:

-- Strengthening our core business through targeted investments and expanding market share.

-- Crafting a tailored human capital strategy to meet the organizational needs.

-- Enhancing strategic partnerships to bolster our competitive edge and market position.

-- Divestiture of non-core assets to allocate resources effectively.

The three to five-year US$100 million expansion program, announced last year, is poised to bolster various value chain capacities within the Group. This initiative is anticipated to have a transformative impact on the Zambian economy, fostering job creation, augmenting tax revenues, and providing essential support to ancillary enterprises, including small-scale farmers and medium-sized businesses. The expansion of the Mpongwe Farm row cropping capacity is advancing, with the inaugural 7,168 metric tonnes of wheat crop harvested in the financial year under review. This milestone is expected to bring about a substantial enhancement in production efficiency and capacity throughout the downstream food value chains. Concurrently, upgrades to the milling and processing facilities are also making significant progress.

During the year, we had the honour of hosting His Excellency Hakainde Hichilema, the President of the Republic of Zambia, who inspected some of our strategic projects in Mpongwe. These include the Cropping expansion, Hatchery expansion, and the new wheat mill. This event also marked the official launch of the 2023 Wheat harvest season.

The Economic Environment

Throughout the fiscal year, the local currency experienced notable volatility against the US Dollar, with fluctuations of up to 35%. This fluctuation was primarily driven by heightened demand for the USD, uncertainties surrounding debt restructuring, and a sustained increase in global interest rates, which affected offshore investor participation in local bond auctions. The ZMW/USD exchange rate commenced at K15.9 and concluded at K21.31, representing a 35% surge. Inflation, a critical economic indicator, concluded the financial year at 12%, as opposed to the previous year's 9.9%. This was attributed to the depreciation of the currency, along with escalating food and energy prices, despite the persistent implementation of a stringent monetary policy by the central bank.

Noteworthy was the resurgence in copper prices, which peaked at USD 8,230/MT, fuelled by China's copper consumption. However, subdued production levels continued to impede the realization of full value, consequently impacting the economy's foreign exchange earnings potential. These dynamics underscore the delicate balance between global market forces and domestic production capacities.

Outlook

The enduring stability of the economy hinges on the successful resolution of the government's debt restructuring negotiations. We foresee a positive trajectory for copper prices, a vital contributor to our foreign exchange earnings, fuelled by rising global demand, notably from China and the burgeoning electric vehicle market. The recently unveiled 2024 National budget has instilled optimism, as it signals an increase in government expenditure, anticipated to infuse much-needed liquidity into the economy. We are optimistic, that this will bolster consumer spending and subsequently drive economic growth.

Zambeef is strategically positioned to seize the opportunities ahead and demonstrates adaptability in the face of an otherwise challenging operating environment. This resilience and strategic foresight underscore our commitment to navigating through complexities and thriving in the ever-evolving economic landscape.

16 September 2024 will be the eighth anniversary of British International Investment plc's (BII) investment in the Company. After this date BII's conversion rights on their convertible redeemable preference shareholding ("Preference Shares") will increase materially, from currently one-for-one new ordinary share, to one for 3.0833 (recurring) new ordinary shares. BII is the Company's largest ordinary shareholder and also holds all Preference Shares. The Company has the right to redeem all or part of the Preference Shares at the redemption price, which would give BII a 12% compounded annual return on their investment, subject to a minimum of USD 0.77 per Preference Share (less dividends received). However, the likelihood of such a repayment by the Company in this new financial year, or in the medium term, is currently considered by the Board to be extremely unlikely.

Acknowledgement

Since my last report, we welcomed two additional Non-Executive Directors of the Board; Mr. Muyangwa Muyangwa and Dr. John Clifford Rich. Their respective appointments and subsequent announcements were on 21 April and 21 June 2023 respectively. We are confident that their extensive experience will be instrumental in driving our business forward, in line with our strategic objectives.

I am indebted to my fellow Board members for their devoted leadership throughout the year and I convey my sincere appreciation to our diligent management and staff for yet another year of commendable performance. The steadfast tenacity and fortitude shown in the face of challenges is a testament to the team. I take great pride in our collective achievements thus far and I am eager for the promising opportunities that will shape our future progress. Together, we will continue to build upon this foundation of success.

Michael Mundashi

Chairman

Chief Executive Officer's Report

Overview

During the financial year ending on September 30, 2023, Zambeef exhibited agility resulting in strong financial performance. Management continued to optimise top-line growth through effective revenue management while upholding stringent cost control measures, positioning the Group on the trajectory to actualize its short to medium-term strategy.

Our achievements stand as a testament to the talent within our organization and the enduring partnerships we've established with customers, suppliers, and the communities in which we operate. Reflecting on the past year, it is evident that our unwavering dedication to commercial objectives, along with our commitment to operational excellence and cost optimization, has not only spurred us forward but also solidified our position in some of the sectors in which we operate. This report offers a comprehensive overview of our performance, spotlighting significant milestones, financial performance, and ongoing initiatives aimed at sustaining growth and creating long-term value.

Financial Performance

Despite a challenging trading environment marked by constrained consumer spending and a tight monetary policy, the Group achieved strong results for the year ending September 30, 2023. Escalating costs of vital inputs and commodities, including fuel, electricity, agricultural supplies, and grain, led to increased production costs for our livestock and cropping divisions. Nevertheless, the Group demonstrated volume growth in most divisions, capitalizing on the momentum from the latter half of 2022. This was facilitated by a meticulous approach to revenue management and effective sales and operational execution.

The Group achieved a revenue of ZMW 6.0 billion (USD 331.5 million), along with a gross profit of ZMW 1.8 billion (USD 101.1 million). This represents a year-on-year increase of 12.1% and 12.9% in kwacha terms, and 5.6% and 6.3% in US dollar terms, respectively.

Additionally, the Group delivered an operating profit of ZMW 361.4 million (USD 19.8 million), a significant increase of 108.1% in kwacha terms (96.0% in US dollar terms) compared to the prior year's ZMW 173.7 million (USD 10.1 million). Although the prior year was impacted by a one-off impairment cost of ZMW 141.8 million, this growth underscores the effectiveness of our commercial strategy and the successful execution of the cropping expansion project.

The Group remains dedicated to fortifying its brand equity and providing customers with high-quality products. With our diversified and vertically integrated business model, robust brands, and effective management, we are well-equipped to seize future opportunities and navigate potential threats.

Strategic Focus

Our strategic focus remains to optimise our existing asset utilisation and maximise returns. We remain committed to our strategy of focussing on our core businesses, in which we strive to be the best in class. The continued investment in key strategic assets and divestiture of non-core assets will enable us to increase cash generation and profitability and therefore continue to deliver shareholder value. I am pleased to report that our $100 million medium-term expansion plans are proceeding as scheduled. We have maintained our dedication to enhancing capacity and efficiency in Cropping, Milling, Stockfeed, Dairy, and Poultry.

Our strategic focus in optimising costs and rationalising the Group's operations continued throughout the financial year. Management's proposal to restructure the Group was approved and an announcement was made in September 2023. The Company is expected to benefit from the restructuring as it will eliminate unnecessary complexities and duplications of its business processes across the six different entities, which have the same key decision-makers, processes, ownership and senior Executive team. I am particularly gratified that all the Executive positions have been filled, positioning the Group for navigating forthcoming business growth with a leadership team with the necessary ability to drive the Group's future success.

Outlook

Looking ahead, our strong brand presence will continue to be a cornerstone in maintaining customer loyalty. Additionally, our vertically integrated business model places us in a favourable position, ensuring a reliable supply chain and a market for our products. We anticipate a stabilisation in the economic environment once the process of debt restructuring concludes and there is an upswing in Copper production. With these factors in mind, the Group is poised to leverage the opportunities arising from a positive economic outlook, strategically investing for the future in anticipation of an upturn in consumer spending.

Our ongoing commitment to consolidating our balance sheet through the disposal of low returning assets, optimising existing assets and the expansion of capacity remains a central focus. These measures are geared towards enhancing shareholder value, a goal we remain dedicated to achieving. By fortifying our financial foundation and strengthening our operational capabilities, we are poised for sustained growth and prosperity in the years ahead.

Divisional Performance

Table 1 (ZMW) and Table 2 (USD) below provide a summary of the consolidated performance of the key business divisions reported at an operating profit level.

Table 1: Divisional financial summary in ZMW'000

Table 2: Divisional financial summary in USD'000

Retailing & Cold Chain Food Products

The year was marked with good sales volumes across all protein categories, despite operating within a competitive and financially constrained environment. Our ability to retain and increase volumes was driven by meticulous sales execution and price optimization, all of which had a direct impact on the overall revenue growth.

However, it's worth noting that despite achieving double-digit volume growth, the beef division reported a decline in gross profit, primarily attributed to expenses resulting from the outbreak of Contagious Bovine Pleuropneumonia (CBPP), a disease affecting cattle, whose effect continued from the previous financial year into the current one. In addition, rising input costs, specifically the high price of buying animals and increased feeding costs, put pressure on profitability.

In the first half of the year, there was a sluggish demand for chicken, which picked up in the latter half. This was largely due to other protein categories becoming relatively more expensive. This shift in consumer preference helped bolster sales of both feed and Day-old chicks, contributing to the division's overall performance and demonstrating the dynamic consumer behaviour and the importance of adapting to market trends.

The Dairy segment's revenue realisation was on the back of strong volume growth and is well positioned to capitalise on further growth opportunities in the coming periods.

Despite the challenges, the division experienced a moderate growth of 1.4% growth in gross profit in USD terms and 7.7% in Kwacha terms over the prior year. This growth can be attributed to effective pricing strategies, operational efficiency improvements, and a favourable product mix.

The Retailing and Cold Chain Food Production segment is well poised to build upon these achievements and continue its trajectory of growth and profitability in the upcoming fiscal year. Through strategic initiatives and a customer-centric approach, we aim to further strengthen our position in the market.

Cropping and Milling

The Cropping segment delivered a notable revenue performance, achieving a growth of 17.7% in Kwacha (10.9% in USD) compared to the previous year. However, operating profit ended with a significant reduction, primarily attributed to lower prices and yields in the summer soya bean crop which was further compounded by the escalating costs of critical inputs such as fertilizer and fuel.

In the Stock Feed segment, there was an increase in demand during the latter half of the year which translated into revenue and volume maximization, ultimately contributing to profitability. The positive performance underscores our capability to adapt to changing market dynamics and meet customer needs effectively.

The Flour segment experienced double-digit growth in volumes attributed to the implementation of good sales strategies and the introduction of new product lines. This performance highlights our commitment to innovation and our ability to execute sales initiatives effectively, thereby driving growth in this segment.

Acknowledgements

I would like to extend my gratitude to our Board of Directors for their guidance and support. I am also indebted, to all our dedicated staff and partners, for their invaluable contributions to the ongoing success of the Group.

I eagerly anticipate what we will achieve in the coming year as we continue to implement and execute our growth strategy.

Faith Mukutu

Chief Executive Officer

6 December 2023

Zambeef Products Plc and its Subsidiaries

Statement of profit or loss and other comprehensive income

 
                                       Notes              Group                      Company 
 Continuing operations                                 2023          2022          2023          2022 
                                                      K'000         K'000         K'000         K'000 
 Revenue from contracts with 
  customers                            5(ii)      6,046,157     5,394,761     3,384,408     3,361,428 
 Change in fair value of biological 
  assets                                 16         643,197       349,462       568,975       338,052 
 Cost of sales of goods                  7      (4,846,092)   (4,111,037)   (3,046,883)   (2,826,242) 
                                               ------------  ------------  ------------  ------------ 
 
 Gross profit                                     1,843,262     1,633,186       906,500       873,238 
 
 Other (expenses)/income                 6         (46,419)         2,491      (18,064)        17,325 
 Net impairment losses on financial 
  assets                                4(b)        (2,713)      (17,869)       (1,768)       (7,876) 
 Impairment of goodwill                  13               -     (141,786)             -     (141,786) 
 Distribution expenses                   7         (96,287)      (65,596)       (1,302)      (67,118) 
 Administrative expenses                 7      (1,336,486)   (1,236,762)     (741,469)     (658,635) 
                                               ------------  ------------  ------------  ------------ 
 
 Operating profit                                   361,357       173,664       143,897        15,148 
 
 Net Finance costs and income            8        (155,089)     (114,997)     (123,921)      (87,475) 
 Share of loss from equity 
  investment                           15(ii)       (2,595)       (3,503)       (2,595)       (3,503) 
                                               ------------  ------------  ------------  ------------ 
 
 Profit/(loss) before income 
  tax                                               203,673        55,164        17,381      (75,830) 
 
 Income tax expense - continuing 
  operations                             10        (72,851)      (63,283)      (15,704)      (27,799) 
                                               ------------  ------------  ------------  ------------ 
 
 Profit/(loss) from continuing 
  operations                                        130,822       (8,119)         1,677     (103,629) 
 (Loss)/profit from discontinued 
  operations after tax                 20(i)       (10,604)        39,697      (10,604)        39,697 
 
 Profit/(loss) from continued 
  and discontinued operations                       120,218        31,578       (8,927)      (63,932) 
 
 Profit/(loss) attributable 
  to: 
 Owners of Zambeef Products 
  PLC                                               118,612        29,152       (8,927)      (63,932) 
 Non-controlling interests                            1,606         2,426             -             - 
                                               ------------  ------------  ------------  ------------ 
                                                    120,218        31,578       (8,927)      (63,932) 
                                               ------------  ------------  ------------  ------------ 
 Other comprehensive income: 
 Items that maybe reclassified 
  to profit or loss 
 Translation differences - 
  foreign operations                     22        (40,617)      (16,320)             -             - 
 Translation differences - 
  Mpongwe Farms                          22               -      (10,847)             -      (10,847) 
 Items not reclassified to 
  profit or loss 
 Revaluation surplus                     23       1,003,412             -       977,426             - 
 Actuarial remeasurement losses        26(i)          (768)       (3,150)         (425)       (1,058) 
 Deferred income tax                     25        (98,516)         6,394      (97,751)         3,018 
                                               ------------  ------------ 
 Other comprehensive income 
  for the year                                      863,511      (23,923)       879,250       (8,887) 
                                               ------------  ------------  ------------  ------------ 
 
 Total comprehensive income 
  for the year                                      983,729         7,655       870,323      (72,819) 
                                               ============  ============  ============  ============ 
 

Statement of profit or loss and other comprehensive income (continued)

 
                                   Notes        Group              Company 
                                              2023     2022      2023       2022 
                                             K'000    K'000     K'000      K'000 
 Total comprehensive income 
  for the year is attributable 
  to: 
 Owners of Zambeef Products 
  Plc                                      990,425    4,970   870,323   (72,819) 
 Non-controlling interests                 (6,696)    2,685         -          - 
                                          --------  -------  --------  --------- 
                                           983,729    7,655   870,323   (72,819) 
                                          --------  -------  --------  --------- 
 
 Basic earnings per share                    Ngwee    Ngwee     Ngwee      Ngwee 
 Continuing operations              30       42.99   (3.51)      0.56    (34.46) 
 Discontinued operations            30      (3.53)    13.21    (3.53)      13.21 
                                          --------  -------  --------  --------- 
 Total basic earnings per share              39.46     9.70    (2.97)    (21.25) 
                                          --------  -------  --------  --------- 
 
 Diluted earnings per share 
 Continuing operations              30       32.25   (2.63)      0.42    (25.85) 
 Discontinued operations            30      (2.65)     9.91    (2.65)       9.91 
                                          --------  -------  --------  --------- 
 Total diluted earnings per 
  share                                      29.60     7.28    (2.23)    (15.94) 
                                          --------  -------  --------  --------- 
 

Consolidated Statement of financial position

 
                                                   30-Sept-23   30-Sept-22 
 ASSETS                                   Notes         K'000        K'000 
 Non-current assets 
 Property, plant and equipment             11       4,818,533    3,167,000 
 Goodwill                                  13          25,015       25,015 
 Investment in associate                   15          34,370       36,965 
 Biological assets                         16         123,359       86,592 
                                                  -----------  ----------- 
                                                    5,001,277    3,315,572 
                                                  -----------  ----------- 
 Current assets 
 Biological assets                         16         285,039      234,104 
 Inventories                               17       1,656,487    1,441,912 
 Trade and other receivables               18         332,703      289,300 
 Cash and cash equivalents                 19         271,222      223,972 
 Assets classified as held for sale      20(iii)      157,640      170,091 
 Current income tax asset                  10               -            - 
                                                  -----------  ----------- 
                                                    2,703,091    2,359,379 
                                                  -----------  ----------- 
 Total assets                                       7,704,368    5,674,951 
                                                  ===========  =========== 
 
 EQUITY 
 Share capital                             21           3,006        3,006 
 Share premium                             21       1,125,012    1,125,012 
 Preference share capital                  21           1,000        1,000 
 Foreign currency translation reserve      22         660,390      692,705 
 Revaluation reserve                       23       1,964,087    1,113,119 
 Retained earnings                                    930,262      758,489 
                                                  -----------  ----------- 
 Attributable to owners of parent 
  entity                                            4,683,757    3,693,331 
 Non-controlling interests (NCI)                      (6,630)           66 
                                                  -----------  ----------- 
                                                    4,677,127    3,693,397 
                                                  -----------  ----------- 
 LIABILITIES 
 Non-current liabilities 
 Lease liabilities                        12(b)        15,622       12,597 
 Borrowings                                24         687,679      426,222 
 Deferred income tax                       25         302,017      223,217 
 Defined benefit obligations               26           1,631        3,654 
                                                    1,006,949      665,690 
                                                  -----------  ----------- 
 Current liabilities 
 Lease liabilities                        12(b)         6,448        5,046 
 Borrowings                                24         972,827      525,325 
 Trade and other payables                  27         834,190      649,573 
 Contract liabilities                      28         164,063       97,400 
 Current income tax                        10          42,764       38,520 
                                                  -----------  ----------- 
                                                    2,020,292    1,315,864 
                                                  -----------  ----------- 
 Total equity and liabilities                       7,704,368    5,674,951 
                                                  ===========  =========== 
 

Consolidated statement of changes in equity

 
                                                                                                   Total 
                                                         Foreign                            attributable 
                                        Preference      currency                               to owners 
                    Share       Share        share   translation   Revaluation   Retained      of parent   Non-controlling 
                  Capital     premium      capital       reserve       reserve   earnings         entity         interests       Total 
 Year ended 30      K'000       K'000        K'000         K'000         K'000      K'000          K'000             K'000 
 September 
 2022 
 At start of 
  year              3,006   1,125,012        1,000       720,131     1,160,653    678,559      3,688,361           (2,619)   3,685,742 
 Profit for the 
  year                  -           -            -             -             -     29,152         29,152             2,426      31,578 
 Other 
 comprehensive 
 income: 
 Transfer of 
  excess 
  depreciation          -           -            -             -      (53,928)     53,928              -                 -           - 
 Actuarial 
  remeasurement 
  losses                -           -            -             -             -    (3,150)        (3,150)                 -     (3,150) 
 Deferred 
  income tax 
  (Note 
  25)                   -           -            -             -         6,394          -          6,394                 -       6,394 
 Translation 
  differences 
  (Note 22)             -           -            -      (27,426)             -          -       (27,426)               259    (27,167) 
                 --------  ----------  -----------  ------------  ------------  ---------  -------------  ----------------  ---------- 
                        -           -            -      (27,426)      (47,534)     50,778       (24,182)               259    (23,923) 
                 --------  ----------  -----------  ------------  ------------  ---------  -------------  ----------------  ---------- 
 Total 
  comprehensive 
  income 
  for the year          -           -            -      (27,426)      (47,534)     79,930          4,970             2,685       7,655 
 
 At end of year     3,006   1,125,012        1,000       692,705     1,113,119    758,489      3,693,331                66   3,693,397 
                 ========  ==========  ===========  ============  ============  =========  =============  ================  ========== 
 
 Year ended 30 
 September 
 2023 
 At start of 
  year              3,006   1,125,012        1,000       692,705     1,113,119    758,489      3,693,331                66   3,693,397 
 Profit for the 
  year                  -           -            -             -             -    118,612        118,612             1,606     120,218 
 Other 
 comprehensive 
 income: 
 Revaluation 
  surplus               -           -            -             -     1,003,412          -      1,003,412                 -   1,003,412 
 Transfer of 
  excess 
  depreciation          -           -            -             -      (53,928)     53,928              -                 -           - 
 Actuarial 
  remeasurement 
  losses                -           -            -             -             -      (768)          (768)                 -       (768) 
 Deferred 
  income tax 
  (Note 
  25)                   -           -            -             -      (98,516)          -       (98,516)                 -    (98,516) 
 Translation 
  differences 
  (Note 22)             -           -            -      (32,315)             -          -       (32,315)           (8,302)    (40,617) 
                 --------  ----------  -----------  ------------  ------------  ---------  -------------  ----------------  ---------- 
                        -           -            -      (32,315)       850,968     53,160        871,813           (8,302)     863,511 
 Total 
  comprehensive 
  income 
  for the year          -           -            -      (32,315)       850,968    171,772        990,425           (6,696)     983,729 
 
 At year end        3,006   1,125,012        1,000       660,390     1,964,087    930,262      4,683,757           (6,630)   4,677,127 
                 ========  ==========  ===========  ============  ============  =========  =============  ================  ========== 
 

Statement of cash flows

 
                                                        Group                  Company 
                                                     2023        2022        2023        2022 
                                       Notes        K'000       K'000       K'000       K'000 
 
 Cash generated from/(used 
  in) operations                       29(i)      316,758     308,323    (29,141)     153,025 
 Interest paid on borrowings           29(ii)    (44,646)    (53,473)    (44,646)    (53,473) 
 Interest paid on leases               29(ii)     (2,676)     (1,813)     (1,312)       (784) 
 Benefits paid                         26(i)      (3,422)     (9,672)       (238)     (3,247) 
 Income tax paid                         10      (88,323)    (44,877)    (34,233)     (9,828) 
                                                           ---------- 
 
 Net cash inflow from operating 
  activities                                      177,691     198,488   (109,570)      85,693 
                                               ----------  ----------  ----------  ---------- 
 
 Cash flows from investing 
  activities 
 Purchase of property, plant 
  and equipment                          11     (817,295)   (222,135)   (504,998)   (109,858) 
 Proceeds from disposal assets                      4,025       2,819       6,165           - 
                                                           ---------- 
 
 Net cash outflow from investing 
  activities                                    (813,270)   (219,316)   (498,833)   (109,858) 
                                               ----------  ----------  ----------  ---------- 
 
 Cash flows from financing 
  activities 
 Proceeds from borrowings              29(ii)     916,396     722,995     916,396     722,995 
 Principal repayments of borrowings    29(ii)   (526,257)   (526,205)   (526,257)   (526,205) 
 Principal elements of lease 
  payments                             29(ii)     (7,319)    (14,965)     (6,016)     (7,322) 
                                                           ---------- 
 
 Net cash inflow from financing 
  activities                                      382,820     181,825     384,123     189,468 
                                               ----------  ----------  ----------  ---------- 
 
 Net increase/(decrease) for 
  the year                                      (252,759)     160,997   (224,280)     165,303 
                                               ----------  ----------  ----------  ---------- 
 
 Movement in cash and cash 
  equivalents 
 At start of year                               (127,708)   (288,665)    (27,876)   (193,224) 
 Net increase /(decrease)                       (252,759)     160,997   (224,280)     165,303 
 Exchange differences                                   -        (40)           -          45 
                                                           ---------- 
 
 At year end                             19     (380,467)   (127,708)   (252,156)    (27,876) 
                                               ==========  ==========  ==========  ========== 
 

Extracted from the Supplementary Information within the 2023 Annual Report. This information presented in USD does not form part of the Financial Statements and is therefore unaudited

Statement of profit or loss and other comprehensive income

 
                                               Group                  Company 
                                            2023        2022        2023        2022 
                                         US$'000     US$'000     US$'000     US$'000 
 Revenue from contracts with 
  customers                              331,478     314,014     185,549     195,659 
 Change in fair value of biological 
  assets                                  35,263      18,567      31,194      17,903 
 Cost of sales of providing 
  goods                                (265,685)   (237,518)   (167,044)   (162,734) 
                                      ----------  ----------  ----------  ---------- 
 
 Gross profit                            101,056      95,063      49,699      50,828 
 
 Other income/(expenses)                 (2,545)         145     (1,892)       1,008 
 Net impairment losses on financial 
  assets                                   (149)     (1,040)        (97)       (458) 
 Impairment of goodwill                        -     (8,253)           -     (8,253) 
 Distribution expenses                   (5,279)     (3,818)        (71)     (3,907) 
 Administrative expenses                (73,272)    (71,989)    (40,651)    (38,337) 
                                      ----------  ----------  ----------  ---------- 
 
 Operating profit                         19,811      10,108       6,988         881 
 
 Share of loss from equity 
  investment                               (142)       (204)       (142)       (204) 
 Finance income/(expenses)               (1,133)         206       (222)         206 
 Finance costs                           (7,370)     (6,900)     (5,670)     (5,297) 
 
 Profit before income tax                 11,166       3,210         954     (4,414) 
 
 Income tax expense                      (3,994)     (3,684)       (861)     (1,618) 
                                      ----------  ----------  ----------  ---------- 
 
 (Loss)/profit from continuing 
  operation                                7,172       (474)          93     (6,032) 
 Profit from asset held for 
  sale                                     (581)       2,311       (581)       2,311 
                                      ----------  ----------  ----------  ---------- 
 Profit for the year                       6,591       1,837       (488)     (3,721) 
 
 Profit attributable to: 
 Owners of Zambeef Products 
  PLC                                      6,503       1,696       (488)     (3,721) 
 Non-controlling interests                    88         141           -           - 
                                      ----------  ----------  ----------  ---------- 
                                           6,591       1,837       (488)     (3,721) 
                                      ----------  ----------  ----------  ---------- 
 Other comprehensive income: 
 Items that maybe reclassified 
  to profit or loss 
 Translation losses on foreign 
  operations                             (2,227)       (946)           -           - 
 Translation losses on Mpongwe 
  Farms                                        -       (631)           -       (631) 
 Items not reclassified to 
  profit or loss 
 Revaluation surplus                      55,012           -      53,587           - 
 Actuarial remeasurement losses             (42)       (183)        (23)        (62) 
 Deferred income tax                     (5,401)         368     (5,359)         176 
                                      ----------  ---------- 
 Other comprehensive income 
  for the year                            47,342     (1,392)      48,205       (517) 
                                      ----------  ----------  ----------  ---------- 
 
 Total comprehensive income 
  for the year                            53,933         445      47,717     (4,238) 
                                      ==========  ==========  ==========  ========== 
 

Statement of profit or loss and other comprehensive income (continued)

 
                                          Group              Company 
                                       2023      2022      2023      2022 
                                    US$'000   US$'000   US$'000   US$'000 
 Total comprehensive income 
  for the period is attributable 
  to: 
 Owners of Zambeef Products 
  Plc                                54,300       289    47,717   (4,238) 
 Non-controlling interests            (367)       156         -         - 
                                   --------  --------  --------  -------- 
                                     53,933       445    47,717   (4,238) 
                                   --------  --------  --------  -------- 
 
 Basic earnings per share 
 Continued operations                  2.36    (0.19)      0.03    (2.01) 
 Discontinued operations             (0.19)      0.77    (0.19)      0.77 
                                   --------  --------  --------  -------- 
 Total basic earnings per share        2.16      0.58    (0.16)    (1.24) 
                                   --------  --------  --------  -------- 
 
 Diluted earnings per share 
 Continued operations                  1.77    (0.15)      0.02    (1.50) 
 Discontinued operations             (0.15)      0.58    (0.15)      0.58 
                                   --------  --------  --------  -------- 
 Total diluted earnings per 
  share                                1.62      0.43    (0.12)    (0.92) 
                                   --------  --------  --------  -------- 
 

Consolidated statement of financial position

 
                                     30-Sept-23   30-Sept-22 
 ASSETS                                 US$'000      US$'000 
 Non-current assets 
 Property, plant and equipment          229,236      198,393 
 Right of use assets                          -        2,050 
 Goodwill                                 1,190        1,583 
 Investment in associate                  1,635        2,340 
 Biological assets                        5,869        5,480 
                                    -----------  ----------- 
                                        237,930      209,846 
                                    -----------  ----------- 
 Current assets 
 Biological assets                       13,560       14,817 
 Inventories                             78,805       91,260 
 Trade and other receivables             15,828       18,310 
 Cash and cash equivalents               12,903       14,175 
 Assets classified as held for 
  sale                                    7,500       10,765 
 Current income tax asset                     -            - 
                                    -----------  ----------- 
                                        128,596      149,327 
                                    -----------  ----------- 
 Total assets                           366,526      359,173 
                                    ===========  =========== 
 
 EQUITY 
 Share capital                              449          449 
 Share premium                          185,095      185,095 
 Preference share capital                   100          100 
 Foreign currency translation 
  reserve                                49,843       42,945 
 Revaluation reserve                     51,360       65,256 
 Retained earnings                     (64,023)     (60,091) 
                                    -----------  ----------- 
 Attributable to owners of parent 
  entity                                222,824      233,754 
 Non-controlling interests                (315)            4 
                                    -----------  ----------- 
                                        222,509      233,758 
                                    -----------  ----------- 
 LIBILITIES 
 Non-current liabilities 
 Borrowings                              32,715       26,976 
 Lease liabilities                          743          797 
 Deferred income tax                     14,368       14,128 
 Defined benefit obligations                 78          231 
                                         47,904       42,132 
                                    -----------  ----------- 
 Current liabilities 
 Borrowings                              46,281       33,248 
 Lease liabilities                          307          319 
 Trade and other payables                39,686       41,113 
 Contract liabilities                     7,805        6,165 
 Current income tax                       2,034        2,438 
                                    -----------  ----------- 
                                         96,113       83,283 
                                    -----------  ----------- 
 Total equity and liabilities           366,526      359,173 
                                    ===========  =========== 
 
 
 Statement of cash flows                                 Group                    Company 
                                                      2023         2022          2023         2022 
                                                     $'000        $'000         $'000        $'000 
 
 Cash generated from/(used in) operations           17,366       17,947       (1,598)        8,907 
 Interest paid on borrowings                       (2,448)      (3,113)       (2,448)      (3,113) 
 Interest paid on leases                             (147)        (106)          (72)         (46) 
 Benefits paid                                       (188)        (563)          (13)        (189) 
 Income tax paid                                   (4,842)      (2,612)       (1,877)        (572) 
                                               -----------  -----------  ------------  ----------- 
 
 Net cash inflow from operating activities           9,742       11,553       (6,007)        4,988 
                                               -----------  -----------  ------------  ----------- 
 
 Cash flows from investing activities 
 Purchase of property, plant and equipment        (44,808)     (12,930)      (27,686)      (6,395) 
 Proceeds from disposal assets                         221          164           338            - 
                                               -----------  -----------  ------------  ----------- 
 
 Net cash outflow from investing activities       (44,587)     (12,766)      (27,348)      (6,395) 
                                               -----------  -----------  ------------  ----------- 
 
 Cash flows from financing activities 
 Proceeds from borrowings                           50,241       42,084        50,241       42,084 
 Principal repayments of borrowings               (28,852)     (30,629)      (28,852)     (30,629) 
 Principal elements of lease payments                (401)        (871)         (330)        (426) 
                                               -----------  -----------  ------------  ----------- 
 
 Net cash inflow from financing activities          20,988       10,584        21,059       11,028 
                                               -----------  -----------  ------------  ----------- 
 
 Net increase/(decrease) for the year             (13,857)        9,371      (12,296)        9,622 
                                               -----------  -----------  ------------  ----------- 
 
 Movement in cash and cash equivalents 
 At start of year                                  (8,083)     (17,244)       (1,764)     (11,543) 
 Net increase /(decrease)                         (13,857)        9,371      (12,296)        9,622 
 Exchange differences                                3,839        (210)         2,063          157 
                                               -----------  -----------  ------------  ----------- 
 
 At year end                                      (18,101)      (8,083)      (11,997)      (1,764) 
                                               -----------  -----------  ------------  ----------- 
 

The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

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FR UPGQPPUPWURM

(END) Dow Jones Newswires

December 07, 2023 04:00 ET (09:00 GMT)

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