Zambeef Products PLC Year End Trading Update (0042Q)
September 06 2017 - 8:00AM
UK Regulatory
TIDMZAM
RNS Number : 0042Q
Zambeef Products PLC
06 September 2017
6 September 2017
Zambeef Products plc
("Zambeef" or the "Group")
Year End Trading Update
Zambeef (AIM: ZAM), the fully integrated agribusiness with
operations in Zambia, Nigeria and Ghana, provides an update on its
expected performance for the year ending 30 September 2017, which
fluctuates across divisions. The audited annual results are
expected to be announced on or around 15 November 2017.
Whilst it is pleasing to report a good trading performance in
the Retailing, Cold Chain Food Products and Stock Feed divisions,
it is disappointing to report that largely external factors
affecting the Cropping division are likely to have a material
adverse impact on Group reported results for the financial year
ending 30 September 2017.
Retailing and Cold Chain Food Products Division
Continued management focus on the Retailing and Cold Chain Food
Products division and the opening of additional retail macro stores
have driven continued strong performance in this division and the
Board expects it to deliver results above market expectations for
the full year. During FY 2017, we have had a successful roll out
with eight new retail macro stores and seven new Shoprite
concessions opened during the year (three in Zambia, three in
Nigeria and one in Ghana).
Stock Feed Division
Following a challenging H1/2017 performance, the Stock Feed
division has performed well during H2/2017 as a result of falling
input prices. Accordingly, we are also expecting this division to
deliver results above market expectations for the full year. The
new stock feed plant in Mpongwe has now also been commissioned in
August 2017, which will significantly increase capacity and volumes
moving forward.
Cropping Division
Our Cropping division has experienced a number of serious
challenges during FY 2017, largely external and outside of
management control, which will result in our Cropping division
results being materially below market expectations for the full
year.
During H1/2017, despite an excellent operational and yield
performance of the summer soya crop, where Zambeef harvested a
record soya crop of 42,800 M.T., the price of soya beans dropped
significantly from USD535/M.T. (March 2016) to USD360/M.T. (March
2017).
Since the publication of the interim results on 7 June 2017, the
price of maize has also dropped significantly by more than
USD65/M.T. over the last four months. Current levels are around
USD160/M.T.
We have now started harvesting the winter wheat crop, and it
appears that yields will be well below expectations due to the
adverse impact of a fungal disease known as Septoria. This disease
has always been present in Zambia and is part of the target of our
fungicide spray programme. The strain this year appears to be more
virulent and the first pivots harvested suggest Zambeef may have a
reduction in the budgeted wheat yield in the region of 20 per cent.
however, this cannot be accurately quantified yet due to the early
stage of harvesting.
In view of the above, and noting the significance of the
Cropping division to the Group, the Group expects reported profits
for the year to 30 September 2017 to be materially below current
market expectations. At this stage, it is expected that the Group
is likely to publish results which range from a net profit before
tax of USD0.5 million (ZMW4.5 million) to a net loss before tax of
up to USD2.5 million (ZMW22.5 million) for the year to September
2017.
Dr. Jacob Mwanza, Chairman of Zambeef, commented:
"Earlier today, we announced positive news of the disposal of 90
per cent. of Zambeef's shareholding in Zampalm Limited to the
Industrial Development Corporation of Zambia Limited ("IDC") for a
total cash consideration of USD16 million to be paid on completion,
with a further performance amount of up to USD2 million dependent
on performance milestones over the three years from 2018 to 2020.
This disposal is aligned with the Group's strategy of focusing on
its core business of the production and retailing of cold chain
meat and dairy products, cropping and stock feed. The proceeds will
be used to further pay down the Group's debt and thus reduce
gearing and interest costs.
"Whilst it is pleasing to report a good trading performance in
the Retailing, Cold Chain Food Products and Stock Feed divisions,
it is disappointing to report that largely external factors
affecting the Cropping division are likely to have a material
adverse impact on Group reported results for the financial year
ending 30 September 2017."
For further information, please contact:
Zambeef Products plc Tel: +260 (0)
211 369003
Carl Irwin, Joint Chief Executive Officer
Francis Grogan, Joint Chief Executive Officer
Strand Hanson Limited Tel: +44 (0)
20 7409 3494
James Spinney
Ritchie Balmer
Frederick Twist
finnCap Tel: +44 (0)
20 7220 0500
Emily Morris
Christopher Raggett
Powerscourt Tel: +44 (0)20
7250 1446
Nick Dibden
Nick Brown
Notes to editors
Information on Zambeef
The Zambeef Group is one of the largest integrated cold chain
food producers in Zambia, involved in the production, processing,
distribution and retailing of beef, chicken, pork, milk, eggs,
dairy products, fish, flour and stock feed. The Group also has
large cereal row cropping operations (principally maize, soya beans
and wheat), with approximately 7,971 hectares of row crops under
irrigation, which are planted twice a year and a further 8,623
hectares of rain-fed/dry-land crops available for planting each
year.
Further information can be found on www.zambeefplc.com
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 ("MAR").
-Ends-
This information is provided by RNS
The company news service from the London Stock Exchange
END
TSTSSWFEMFWSELU
(END) Dow Jones Newswires
September 06, 2017 09:00 ET (13:00 GMT)
Zambeef Products (LSE:ZAM)
Historical Stock Chart
From Apr 2024 to May 2024
Zambeef Products (LSE:ZAM)
Historical Stock Chart
From May 2023 to May 2024