reports
Update: Growth in cold chain business drives turnaround
During H115, Zambeef has made significant progress in improving the profitability of its core cold chain food distribution businesses. Gross profits from the beef, chicken, pork, milk, eggs and fish operations rose by 29% year on year to $21.3m (48% in kwacha terms), resulting in the group generating $0.1m profit before tax (adjusted for unrealised forex) compared with a $3.2m loss in H114. Following the disposal of the non-core Zamanita business which completed earlier this month, we reinstate ...
Flash note: Disposal of Zamanita completed
Zambeef has sold its Zamanita subsidiary to Cargill for US$26.4m, payable in cash. Zamanita is one of the largest edible oil and soybean meal producers in Zambia, but is no longer a core business, is capital intensive, inherently lower margin than the cold store chain activities and exposed to fluctuations in global commodity prices and foreign exchange rates. The disposal is in line with the group’s stated strategy of unlocking the value of its assets. It enables management to focus on the gr...
Update: Proposed disposal of Zamanita
Zambeef has entered into an agreement with Cargill to sell its Zamanita subsidiary for US$25.7m, payable in cash. Zamanita is one of the largest edible oil and soybean meal producers in Zambia, but is no longer a core business, is capital intensive, inherently lower margin than the cold-store chain activities and exposed to fluctuations in global commodity prices and foreign exchange rates. The disposal is in line with the group’s stated strategy of unlocking the value of its assets. It enable...
Update: External factors in H114 obscure progress
Zambeef continues to make progress towards becoming one of the largest food producers focusing on sub-Saharan Africa rather than only Zambia. This progress was slowed down by several adverse externally-driven effects that blighted H114 performance, resulting in a small pre-tax loss (after adjusting for unrealised forex losses) for the full year. Noting improved H2 profitability as the adverse effects have passed, we expect a return to pre-tax profit in FY15, although at lower levels than our pre...
Update: External factors improve during H214
Zambeef continues to make progress towards becoming one of the leading food producers across sub-Saharan Africa rather than solely in Zambia. The adverse events affecting H114 results seem to have passed. Given the resultant margin improvement, we adjust our FY14 adjusted loss estimate from $4.6m to $1.8m and our valuation range from 16-36p to 17-37p.
Update: Margins under pressure
Zambeef continues to make progress towards becoming one of the leading food producers across sub-Saharan Africa rather than solely Zambia. This progress is currently overshadowed by several adverse external effects, which have resulted in Zambeef posting a $3.2m adjusted pre-tax loss in H114. Our revised estimates look for a return to profitability in FY15. We revise our valuation range from 26-41p to 16-36p.
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