Zambeef Products PLC Half Year Trading Update (4574U)
March 29 2019 - 4:25AM
UK Regulatory
TIDMZAM
RNS Number : 4574U
Zambeef Products PLC
29 March 2019
29 March 2019
Zambeef Products plc
("Zambeef" or the "Group")
Half Year 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 6 months ending 31 March 2019, and
guidance for the financial year ending 30 September 2019.
Macro-Economic Environment
The Zambian economy has been under significant fiscal pressures,
which, combined with the shocks from the global economy and
continued depreciation of the local currency, has resulted in
higher food and fuel prices. This directly affects Zambeef's core
customers' disposable income.
Retailing and Cold Chain Food Products Division
Whilst it is pleasing to report that the Group continues to grow
revenue in the Retailing and Cold Chain Food Products, it is
disappointing to report that volumes are expected to be similar to
the prior period, and margins have come under pressure in difficult
market conditions as mentioned above. The depreciation of the
Kwacha has driven up input costs which we were unable to fully pass
on to the consumer in the first 6 months. Management have noted
that Zambeef has started to see margin improvements towards the end
of Q2, and expects margins to gradually improve in the second half
of the year.
Cropping Division
The Zambia national summer soya crop will start harvesting from
April to June. Zambeef expects that the yield performance of its
soya crop will be satisfactory, however, the wider Zambia
agricultural sector forecasts that the total harvest of soya beans
in the country is likely to be 20-30% higher than expected, putting
pressure on soya bean prices, which are likely to be 10% lower than
last year.
Stock Feed Division
The Stock Feed division has had good revenue growth; however,
margins are lower than the prior period due to higher input costs
related to the depreciation of the Kwacha.
Guidance
Taking into account the above information, the Group is likely
to report a trading loss for the six months ended 31 March 2019. As
mentioned above, Management is currently working on improving
margins and, assuming successful in achieving this, expects a
profitable second half of the year as a result. For the full year,
Management expects adjusted profit before tax to be 30 per cent. to
40 per cent. below market expectations and revenue to be in line
with market expectations.
Shareholders are advised that the information contained in this Trading
Statement has not been reviewed nor reported on by the external auditors
of the Company. Accordingly, shareholders are advised to exercise caution
when dealing in the Company's Securities until publication of the half
year results.
For further information, please contact:
Zambeef Products plc Tel: +260 (0) 211 369003
Francis Grogan, Chief Executive Officer
Walter Roodt, Chief Executive Officer designate
Strand Hanson Limited (Nominated & Tel: +44 (0) 20 7409 3494
Financial Adviser)
James Spinney
Ritchie Balmer
Eric Allan
finnCap (Broker) Tel: +44 (0) 20 7220 0500
Camille Gochez
Powerscourt (Financial PR) Tel: +44 (0)20 7250 1446
Nick Dibden
Jana Tsiligiannis
Notes to the 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. Upon the
publication of this announcement via Regulatory Information
Service, this inside information is now considered to be in the
public domain.
-Ends-
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END
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