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A bit of a push me pull me influence on ZAM at present. The cholera outbreak is fading, exchange rates are not up to now exercising a baleful influence, commodity prices have actually come back up somewhat and the retail expansion around SHOPRITE continues; on the other hand economic activity was certainly held back by the Cholera scarea nd there is concern about the intensity of the annual rains. The North of Zambia has had good rains so Mpongwe should be OK but Central Province ( Chisamba has had only 50% of its normal rainfall), Lusaka and Southern Province have not. Unless an improvement takes hold both agricultural and pastoral yields will be impacted. SOme positiveness can be taken from the appearence of heavy rain squalls this week and to continue until the middle of February according to the BBC. Still expecting an improved performance but a few more known unknowns to bear in mind
If the lack of interest carries on much longer.....best delist and go private. Drawback will be no MBS, so pis will be unable to trade their shares thanx to some Eurocrat directive. Not the best of options but the div policy could make up for this and getting out of Europe could free us from MIFID!
The momentum of the epidemic does seem to be subsiding. 60 new cases and no deaths over the past.couple of days with mass vaccination of 2 million residents. Looks like the situation is moving towards.normality.
Well....despite the impact on Zam a couple of large buys go through sub 13. Fingers crossed back to normal in Feb.
Thanks Rufiji, always good to get an understanding on the ground. I must admit I feared/fear worse and I’m not so optimistic about this year, expect it will be better but not massively so after this outbreak. I’ll keep my fingers crossed
DD Yes it is impacted in a number of ways. 1 at least one Zambeef outlet has been closed by the authorities 2 a number of supermarkets have been closed including the very busy Shoprite at Twin Palms which houses a high turnover Zambeef outlet 3 movement of agricultural commodities into Lusaka is being curtailed 4 There is a general fading away of economic activity as people move around less and a more sober attitude is present as bars must close at 19. These outlet closures are temporary as the real problem is not the premises but staff bringing in the bacterium and a casual attitude to food handling. I guess needs are as needs must and the government is right on its approach. It seems as if the momentum of the epidemic is levelling off and if this is the case then we should be back to normal sometime in February. I would guess $ 500 k could be culled from the bottom line but not near the figure for the usual Zambeef annual disaster. Last year there was a trading update in April and, if repeated we should learn more then. I still remain optimistic we will see a significant improvement in 2018
Hi Rufiji, Rather worrying times in general. What impact do you think this will have on ZAM? Is this Zambeef butchery liable to any of this? cheers
Another 170 cases overnight with 3 more deaths. Strict control over all gatherings with even weddings and funerals suspended. Inspection of all food outlets has resulted in at least one Zambeef butchery being closed. That having been stated awareness of the issue has grown, all customers to restaurants and fast food outlets have to wash hands with sanitiser and epicentre of outbreak has been uncovered in two compounds. Unless there is serious dereliction of duty by a.critical percentage of the population I would hope that the January 31 date for review of restrictions will show the outbreak under control. Still people are certainly movimg around far less than usual.
Not sure that a £6k purchase by a Director will 'encourager les autres'.... being an Agri stock in Southern Africa and all but you never know. Whats more worrying is the cholera outbreak which if not stamped on pronto....well best not even think about the consequences. I read schools have not re-opened and to date 50 deaths have been recorded in about 2000+ cases. No doubt Rufiji will update us on the Ministry of Public Health actions.
Looks like everyone missed this small yet significant investment. No urgent requirement to support a falling share and not just a new appointment to a faceless big company board where it might be expected. I see this as a thumbs up from the newish guy having gotten to know the company, likes what he sees, doesn�t anticipate downside risk and taking advantage of an open period. Have seen previously that a mid-week director deal is only recognised after a weekend where newbies who follow directors dealings have had a chance to understand the books and prospects here.
There has been a major outbreak of Cholera in Lusaka ( 60 dead over 2000 infected) and the Government has had to resort to extreme measure s to control. These have started to impact food retail and restaurants with 3 Hungry Lion outlets closed until further notice on account of infected food having been found, and the possibility of supermarkets being forced to close. One major Pick N Pay store was closed today. The probelm is not so much the hygeine standards of the stores, but staff bringing in the baacterium from infected areas. Hopefully the epidemic will be brouht under control by the measures taken.If not, it is likely that additional Hungry Lions could be closed and such action could sread to Shoprite Supermarkets and stand alone Zambeef sites.
I agree with your insights. Copper price = Zambian disposable income = improvement in diet and demand for ZAM products. Would be great to hear more from the management to be honest regarding updates.
Best of all to Zampis for '18. I don't expect fireworks this year and having reduced by c.80% I'll wait for H1 nos on whether to run the balance of my (loss) holding. Luckily losses here have been made up elsewhere but can still see a decent future for Zambeef but whether the markt sees it?.....
Copper prices rallied to their highest level in almost four years on Wednesday, putting the metal on track for its best year since 2010, in what was a welcome development for some of the world’s largest mining companies following years of oversupply. The red metal is set to end the year up more than 39 per cent, helped by strong global economic growth and robust demand in China, the world’s biggest consumer. This might ease the pressure off the Zambian government, and ultimately ZAM. It should also settle the kwacha. Here's to 2018, good luck and all the best
Best wishes to all for 2018. Assuming no one off disasters, as has been the case on a regular basis, maybe the half year will see PAT of $5 million - $ 7 million and the base for further upward moment. The rains look like being reasonable and the exchange rate has even retraced some of its recent fall so if it can hold its position to end March, hopefully no significant foreign exchange adjustment. The main brands Zambeef, Zamchick, Master Pork and Novatek ( animal feeds) seem to be doing well with a big push coming from an accelerating and expanding Shoprite expansion.Zamhatch holds potential but Zammilk , which distributes through the retail estate and Shoprite, remains a modest third in market share. I have no idea how Zamflour is performing but I would hazard not well while Zamshu seems to exist only to use the animal hides that otherwise would have no local use and presumably covers some costs. The commodity picture is blurred with wheat prices moving upwards but soya falling back to their lows. Overall, there does seem enough evidence to hope for.some share price recovery, but this is ZAMBEEF .........
Happy Xmas all! Another frustrating year in the life of Zambeef draws to a close, so here's to a good '18 for the remaining few posters and any newcomers, hic...I've started early! GLA..
Nice!!
Two new Shoprite.developments; Chirundu on the ZimZam border to open shortly and the ground cleared for a large store next to Woodlands Stadium in Lusaka on the border of high income Woodlands and middle income,Chilala/ Lubala. Back in the 1990s.we had to trek monthly to Harare to,stock up on essential groceries. Now the shoe is on the other foot and plenty of Zimbos shopping in Zambia.. So I am expecting Chirundu to be a great success.
DD77 Yes, we seem to watching from the same grandstand. Rumours locally that Grogan could also be looking to exit. I do not begrudge him his big bucks and he deserves the accolades for having the vision and drive to get ZAMBEEF up adn running and I think the link with SHOPRITE was inspired. But he did let his ego get captured by the profile of the deal rtger than the reality of the operation, and he was well turned over by Casili over Amanita. By luck or crook we managed to exit that matter at better bucks than I expected, but he the focus is on operational efficieny then a different set of skills are needed at executive level. Dear Old Jacob, the Chairman, is an ex Bank of Zambia Governor from the mid 1990's and one of the local "great and the good". Unfortunately he has no real understanding of business and is not the man to challenge Grogan. He merely adds respectability to the board rather than competence.
Thanks for your thoughts, as ever Rufiji. I remain positive about the medium-long term prospects for this company. My prediction of 14p was merely a short term indication as things stand, in my opinion. It could easily hit 20p next year. I remember the days you were talking about as I invested in this originally at 49p a share before averaging down. I do expect an upturn, as I think they have somewhat embellished the downsides due to the political situation. The board changes certainly look promising - we can hopefully leverage that expertise and they can inject fresh impetus into ZAM
DD77, you have raised several good points My take is that there could be a substantial uptick in profits over the next couple of years. This case rests on the following: 1 Non recurring material items such as the diesease outbreak in the wheat crop. It twould be high odds against a repeat 2 Agricultural commodity prices are hardly booming, but the like of soya and wheat are off their bottom 3 The corproate action to boost chicken production 4 Exiting ZAMPALM and goodbye to the whole AMANITA mess. 5 Growing revenue on high operational gearing leading to increase in revenue falling through to the bottom line while the new focus seems to be on making operational efficiencies rather than on agressive acquisitions. 6 AND most important, contiuing substantial growth in cold strorage and retail driven in part by material outlet expansion by SHOPRITE in Zambia The risks are: A FOreign exchange losses and the ZMW is weakening against the USD while the NAIRA looks in a critical condition also.The ongoing paydown in debt should mitigte to an extent B ANother exceptional operational disaster C A slow down in the Zambian economy. Porbably not for a couple of years but there is empirical and analytical evidence that government borrowing is approaching a tipping point I am pushing for 20p this year , with the possibility of more if operations run more smoothly. Remmeber this share was trading around 60p not that long ago The Board contains a number of well connected local dignataries , especially the Chairman ,but who do not provide a working counter-point to Grogan. Perhaps the heightened role of CDC will improve decision making
Never wrong to move on if the stock does not meet your expectations. I have reduced 75% here leaving me an 'interest' position. Good luck comeonvog in whatever you do.
That's me out now , had so much hope for this stock but i have now lost my enthusiasm . Thks JL for your input and continued support here. GL.
Bulls in full control....stay long recommendation.
First time I've really had a chance to sit and analyse the results from a couple of weeks ago. They were probably worse than expected personally, with the increase in debt being the most surprising. I am pleased the company's focus will be on margin management and shareholder return and the shake up of the board is pleasing and I think needed to bring some fresh blood and new perspective. Also a number of esteemed locals on there too. Good to see the capex investments in 2018 should be cash generative. West African operations look worrying, even stripping out the forex hit. Margins are not great. I would have this down as a hold and a target price of 14p