Zambeef (AIM: ZAM), the fully integrated agri-business with operations in Zambia, Nigeria and Ghana, is pleased to provide an update on its performance for the year ended 30 September 2011.
The Company anticipates announcing its final results in November 2011 and expects turnover and net profit performance for the full year to be in line withmarket expectations.
Trading conditions over the financial year have continued to improve, with demand for all product lines increasing, driven largely by the continued expansion of the Zambian economy, which is currently growing at more than 7 per cent. per annum.
In June 2011, the Group was admitted to trading on AIM, raising $55m via a placing and simultaneous rights issue on the LuSE and concurrently it successfully concluded the acquisition of the Mpongwe farms* in Zambia.
The Group is delighted to report that Zamanita, the edible oils division, has performed strongly during theyear. This has been achieved despite the plant running at half capacity due to a severe shortage of soya beans in Zambia and the surrounding region. The primary motivation in acquiring the Mpongwe farms in June 2011 was to supplement soya bean production from the Group'sexisting farms by an additional25,000 tons. This is in line with the Group's strategy of focusing on increasing the soya bean crushing at Zamanita, due to thehigher margins achieved on crushing compared to those from imported palm oil.
The Group's Nigerian subsidiary drew down US$1.8m of the US$3m International Financial Corporation loan in June 2011details of which were included in the AIM admission document published on 20 June 2011 (the "Admission Document"), in order to finance the development of the farm in Ogun State (60 km north of Lagos), where the Group is in the process of constructing a feedlot, abattoir, processing plant and cold room facilities. This will enable it to control the quality and consistency of supply of meat and to satisfy the increased demand for meat products to the Shoprite** butcheries.
Zambeef anticipates that significant benefits will be derived from the continued roll out of new Shoprite stores in the country. Shoprite Nigeria opened one new store in Enugu in September 2011 and expects to open another three stores during the next 12 months.
During the period under review, Zambeef also opened seven new retail outlets and two wholesale depots in Zambia, as well as refurbishing another eight outlets; all of which are performing very well.
On the political front, Zambia recently witnessed one of the most peaceful transitions of power and presidency on the African continent. Since independence in 1964, Zambia has had five presidents, six general elections and three different political parties in power, all of which have been peaceful, a proud testament to Zambia's political stability and maturing multi-party democracy.
The macro-economic fundamentals remain positive, with strong broad-based economic growth, single digit inflation, a relatively stable exchange rate, rising foreign currency reserves and a sustainable level of external debt.
Francis Grogan, Chief Executive Officer of Zambeef, commented:
"The last 12 months have been very exciting for Zambeef as the business has continued to grow and develop in line with our strategy of increasing our levels of vertical integration and securing an internal supply of raw products to maximise the operating efficiency and margin generation across the Group. I look forward to updating the market with our full results in due course."
*Mpongwe farms comprise three estates totalling 46,876 hectares of land in the Copperbelt province of Zambia, details of which were included in the Admission Document.
**Shoprite is Africa's largest food retailer with 1,246 stores and 274 franchise outlets in 16 countries across Africa and the Indian Ocean Islands.
Yusuf Koya, Executive Director Tel: +260 (0)9 7799 9100
Strand Hanson Limited Tel: +44(0)20 7409 3494
Mark Edwards Tel: +44 (0) 207466 5000
Notes to Editors
The Zambeef Group is one of the largest integrated agri-businesses in Zambia, involved in the primary production, processing, distribution and retailing of beef, chickens, pork, milk, eggs, dairy products, fish, flour, bread, edible oils and stock feed, throughout Zambia and the surrounding region, as well as Nigeria and Ghana. The Group is also one of the largest cereal row cropping operations in Zambia, with approximately 8,000 hectares of irrigated land and approximately 9,000 hectares of dry land, available for planting each year.
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