Zambeef Prod. Regulatory News (ZAM)

17 June 2020

Zambeef Products plc

("Zambeef" or the "Group")

Interim results for the Half Year Ended 31 March 2020

Zambeef (AIM: ZAM), the integrated cold chain foods and retail business with operations in Zambia, Nigeria and Ghana, today announces its unaudited interim results for the six months ended 31 March 2020.

Financial Highlights

PERFORMANCE OVERVIEW

The half-year period ended 31st March 2020 (HY 2020) saw Zambeef post encouraging results in the context of a very challenging macroeconomic environment. During this period, the Zambian Kwacha weakened by 37%, resulting in short- to medium-term record inflation. The high inflation, coupled with a tight monetary policy, eroded the purchasing power of our customers. The challenges stemming from reduced electricity generation, on the back of a regional record drought, significantly increased operational costs which, in turn, impacted on margins as some divisions were unable to pass through the increases.

Despite the challenging economic environment and the uncertainty caused by the onset of the COVID-19 pandemic, consumer demand for Zambeef's products remained robust, and the trading performance in the period has been satisfactory.

Zambeef's chain of 237 retail outlets - both own-brand and within Shoprite supermarkets - remain at the heart of the business, with demand from customers driving supply. During the half-year period under review, the Group continued to invest in the roll-out of two macro stores and two retail outlets in strategic locations.

KEY FINANCIAL HIGHLIGHTS

Revenue and gross profit for the period was ZMW 1,798 million (USD 129.2 million) and ZMW 626 million (USD 45.0 million), which was up in Kwacha terms by 27% and 33% respectively, and in dollar terms by 9% and 14% respectively, from the previous half-year period.

Management's continued focus on cost control ensured administration expenses increased by only 9% (7% in US$ terms) from ZMW 459 million (US$38.6 million) in the previous period to ZMW 501 million (US$36 million) in the current period, in the context of 14% inflation during the period.

The Group achieved an operating profit of ZMW 125 million versus ZMW 11 million recorded in the previous half year period (USD 9 million vs USD 0.954 million), which represents a 1,003% increase in ZMW and an 846% increase in USD. This increase in profitability was driven by increased sales volumes in the Cropping and Stockfeed divisions and pricing and cost optimisation initiatives undertaken by management across our divisions.

Finance costs increased by 33% in ZMW and 14% in USD as a result of higher utilisation of working capital, rising ZMW interest rates and the depreciation of the Zambian Kwacha against the US Dollar, resulting in increasing interest on US Dollar facilities in Kwacha terms.

As a result, the Group managed to generate a profit of ZMW 2 million (USD 0.154 million) compared to a loss of ZMW 32 million (USD 2.7 million) in the previous half-year period.

Zambeef's management remains committed to focusing on its core divisions to generate cash flow that will be channelled towards deleveraging the Group.

Zambeef's management will continue to focus resources on the Group's profitable business divisions, whilst improving those divisions that need additional attention to ensure that all areas of the business contribute fully to Group profitability. In response to the current uncertainty of the COVID-19 situation, the Group is moving quickly to take appropriate actions to further manage costs and preserve balance sheet flexibility during this period. The conclusion of the sale of Sinazongwe farm in April 2020 was a key milestone whose proceeds will go towards reducing debt.

OUTLOOK

As previously announced, despite the uncertainty caused by the COVID-19 pandemic, the trading performance is expected to remain satisifactory for H2 2020 and, accordingly, for the year ending 30 September 2020, dollar revenue, EBITDA, EBIT and adjusted Profit Before Tax* are anticipated to be in line with market expectations.

* Adjusted Profit Before Tax is defined as excluding any realised or unrealised foreign exchange gains or losses and any losses or gains made from asset disposals.

Commenting on these results, Chairman Mr. Michael Mundashi said:

"The Zambian economy was under significant fiscal pressure during the period, which, combined with the shock of the COVID-19 pandemic on the global economy, led to reduced demand for copper and a sharp depreciation in the Kwacha. The subsequent inflationary impact resulted in a significant drop in our customers' disposable income.

"Despite the challenging economic environment and the uncertainty caused by the COVID-19 pandemic, consumer demand for Zambeef's products remained robust and the trading performance in the period was satisfactory.

"The Group continued with its long term strategy to invest in the roll-out of macro stores and retail outlets in strategic locations. The Group's strategic partnership with Shoprite has been essential as we continue to observe growth through the Shoprite butcheries.

"Looking ahead, the macro-economic climate is expected to remain challenging for the rest of the financial year, characterised by a volatile Kwacha, continued electricity supply constraints and a potentially crippling COVID-19 pandemic. Despite this, the Group still expects to report Full Year results for the year ending 30 September 2020 in line with current market expectations."

About Zambeef Products PLC

Zambeef Products PLC is the largest integrated cold chain food products and agribusiness in Zambia and one of the largest in the region, involved in the production, processing, distribution and retailing of beef, chicken, pork, dairy, eggs, fish, flour and stockfeed throughout Zambia and the surrounding regions, as well as Nigeria and Ghana. The Group also has large cereal row cropping operations (principally maize, soya beans and wheat), with approximately 7,973 hectares of row crops under irrigation, which are planted twice a year and a further 8,776 hectares of rain-fed crops available for planting each year.

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.

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

CHAIRMAN'S REPORT

It is my pleasure to present to you the Chairman's Report for the six months ended 31 March, 2020.

Despite the challenging economic environment and the uncertainty caused by the COVID-19 pandemic, consumer demand for Zambeef's products in-country stood up well, and trading performance in the period has been satisfactory.,The Group generated a profit after tax of ZMW 2 million (USD 0.1 million), compared to a loss of ZMW 32 million (USD 2.7 million) in the previous period. This achievement, in the face of economic and market difficulties, illustrates the Group's fundamental strengths as a diversified and vertically integrated business.

The Board remains committed to achieving the Group's strategic priorities, despite fundamental changes in the operating environment. The Group will continue to focus on organically growing the core business that generates sustainable and strong cashflows, particularly our Retail and Cold Chain Food Products (CCFP) and Stockfeed divisions.

I am pleased to report that the successful divestment of Sinazongwe Farm to Chenguang Biotech (Zambia) Agri-Dev Limited for a total consideration of USD 10 million was finalised in April 2020. The net sale proceeds will largely be used to pay down the Group's debt and reduce interest costs. The disposal demonstrates the Group's strategy to focus on its core business of producing and retailing CCFP and stockfeed.

The Economic Environment

The Zambian economy has been under significant fiscal pressure during the period, which, combined with the shock of the COVID-19 pandemic on the global economy, has led to reduced demand for copper and a sharp depreciation in the Kwacha. The subsequent inflationary impact has resulted in a significant drop in our customers' disposable income and has continued to put pressure on the share of wallet going towards food spend.

Zambia is currently battling an electricity generation crisis, with load shedding hours having worsened in the period from October 2019 to January 2020. The Kwacha to Dollar exchange rate depreciation has resulted in significant price increases, especially on imported goods, which in turn saw inflation leap to 14% in March 2020 from 11% at the beginning of October 2019.

Trading Results

In the face of these macroeconomic challenges, management took proactive mitigation steps for both the short and longer-term, underpinned by continued focus on key strategic initiatives. Therefore, the Group's results are very encouraging as the Group posted a profit after tax (from continued operations) of ZMW 11.6 million (USD 0.8 million) compared to a loss of ZMW 32 million (USD 2.7 million) over the same period last year. The increased profitability was mainly driven by cropping, following improved yields in the summer crop, and increased volumes and margins in the Stockfeed division.

During the period, the Group recorded an underlying EBITDA growth of 173%, supported by top-line growth and cost optimisation.

Net debt at the end of the period was ZMW 1,002 million (USD 55.5million), compared with ZMW 886 million (USD 67.1 million) for the same period last year. This was before any repayment of debt from the proceeds of the sale of Sinazongwe farm. Despite making strides towards the repayment of USD debt, the devaluation of the local currency resulted in a translational increase in the Kwacha debt. Our focus continues to be on reducing the Group's indebtedness, with dollar debt being the priority.

Retail and Cold Chain Food Products

Zambeef's chain of 237 retail outlets - both own-brand (166) and within Shoprite supermarkets (71) - remain at the heart of the business, with demand from customers driving supply. During the half-year period under review, the Group continued to invest in the roll-out of two macro stores and two retail outlets in strategic locations. The Group's strategic partnership with Shoprite has been essential as we continue to observe growth through the Shoprite butcheries. Revenue in Retail and Cold Chain Food Products grew 15% against the prior half-year period. Cost pressures, mainly from increased depreciation and dollar-denominated fleet maintenance costs, resulted in operating profit performance being largely in line with the prior half-year period.

Cropping

Cropping revenue increased by 71% due to improved maize and wheat volumes, coupled with better pricing obtained on maize sales. Difficulties arising from the constrained electricity supply and Kwacha depreciation-related inflation put pressure on costs while having the opposite effect on revenue.

Stockfeed

The Stockfeed operations posted strong volume growth of 19% in the half-year period. This, coupled with strong revenue realisation, ensured healthy top-line growth. Despite the challenges around load shedding and the drought impacting margins, gross profit grew 58% compared to the prior half-year due to improved manufacturing capacity utilisation and cost management.

Outlook

The macro-economic climate is expected to remain challenging for the rest of Zambeef's financial year, characterised by a volatile Kwacha, continued electricity supply constraints and a potentially crippling COVID-19 pandemic. Despite this, the Group still expects to report Full Year results for the year ending 30 September 2020 in line with current market expectations.

The pandemic has changed the way we work and the way we interact with our customers in the marketplace. Exports into some of our key markets have slowed as many countries impose strict movement lockdowns. The pandemic presents an unprecedented challenge for all of us, yet the fundamental strengths of our company remain unchanged. The health and safety of our employees is our priority and we are doing our part to help the communities we operate in.

In response to the current uncertainty of the COVID-19 pandemic, the Group is moving quickly to take appropriate actions to manage costs further and preserve balance sheet flexibility.

I would like to express my utmost appreciation to our management and staff for their dedicated efforts to feed the nation during this challenging period.

Michael Mundashi

Chairman

16 June 2020 

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

CHIEF EXECUTIVE OFFICER'S REVIEW

Overview

The half-year period ended 31st March 2020 (HY 2020) saw Zambeef post encouraging results in the context of a very challenging macroeconomic environment. During this period, the Zambian Kwacha weakened by 37%, resulting in short to medium term record inflation. The high inflation coupled with a tight monetary policy eroded the purchasing power of our customers. The challenges stemming from reduced electricity generation, on the back of a regional record drought, significantly increased operational costs that eroded margins and some of our divisions were unable to pass on the increases to our customers.

Our revenue for the period was ZMW 1,798 million (USD 129.2 million), and we achieved a gross profit of ZMW 626 million (USD 45.0 million), which was up in Kwacha terms by 27% and 33%, and in dollar terms by 9% and 14% respectively from the previous half-year period. The growth in both metrics was driven by the performance of the Stockfeed and Cropping divisions.

Despite the challenges in the operating environment, Zambeef recorded an operating profit from continuing operations of ZMW 125 million (USD 9.0 million) and a profit after tax of ZMW 11.6 million (USD 0.8 million) compared to a ZMW 11.4 million (USD 0.95 million) and a ZMW 31.8 million (USD 2.7 million) loss respectively in the previous half-year period.

The performance achieved was encouraging, considering the adverse trading conditions, and is attributable to the strong Zambeef brands, a wide-ranging retail footprint, market penetration and a vertical and diversified product offering. In addition, swift actions from the management team resulted in mitigating some of the aforementioned challenges. Management will continue driving efficiencies to enable sustained top-line growth while looking for opportunities to optimise costs. Our consistent commitment to achieving our long-term strategic objectives through the years has allowed the Group to maintain market share and grow, despite a volatile economic environment.

Strategic focus

Zambeef's strategic focus on the roll-out of macro and retail stores across Zambia has continued to contribute to revenue growth. The proceeds from the sale of the Sinazongwe Farm will enable us to accelerate the pay down on our debt as we continue with the deleveraging strategy and focusing on our core businesses.

Retail and Cold Chain Food Products (CCFP)

The disposable income of our customers was constrained during the period, driven by high inflation which resulted in a subdued performance in some of our product lines. Despite this, the Group continued to grow revenue and volumes in its Retailing and Cold Chain Food Production division from the prior half-year period. However, margins have come under pressure because of higher production input costs that we were unable to fully pass on to our customers.

Stockfeed

The Stockfeed division performed exceptionally well during the period. Stockfeed sales volumes grew by 19% to 117,313 tonnes (HY 2019: 98,847 tonnes). Revenue growth of 56% was recorded on the back of volume growth and pricing. Management focus on cost control ensured operating profit growth of 160% above HY 2019 in Kwacha terms, despite the period being characterized by higher fuel and electricity costs.

Cropping

Cropping revenue increased 71% on the back of increased sales volumes of maize and wheat following the carryover stocks from the previous season. The drop in the average price of soya beans by 9% in Dollar terms was offset by the translational effect of the depreciation of the Kwacha. Increased load shedding and the cost of inputs was shielded by the dollar-denominated revenue increase.

Outlook

We anticipate the macro-economic climate to remain challenging but more stable in the second half of the financial year. The accelerated depreciation of the Kwacha appears to be behind us for now and the Kwacha seems to have stabilised. We anticipate that Zambia will acclimate to living with COVID-19 and resuming life under a new normal. However, the impacts of the pandemic still pose a significant risk to the business.

Moderate revenue growth is expected across most of our product lines due to a slowdown in the economy, supported by anticipated good yields from the winter crops. However, the full effects of an inflationary second quarter will be felt in the next half year. Consequently, we expect to see more pressure on our margins with minimal passing on of cost increases as consumer spending power erodes further.

As such, and despite expected satisfactory revenue, EBITDA and EBIT performance (all of which are currently in line with market expectations for the full year) and the Group's profit before tax for the full year (when factoring in foreign exchange effects) is expected to be negatively impacted.

Our Dollar debt is expected to reduce after applying the proceeds of the sale of the Sinazongwe Farm. However, we expect to end the year with a higher Kwacha debt balance due to the effects of its continued depreciation. This will be due to the increased interest costs on dollar debt in Kwacha terms, although we expect to continue paying down the debt.

I am confident that management will respond to these challenges and continue steering the business towards sustaining this performance over the second half of the year. We will continue our concerted efforts to protect our staff, customers and the general public from the effects of COVID-19. Health protocols have been rolled out in all of our workplaces and shops, and periodic compliance audits continue to be performed.

DIVISIONAL PERFORMANCE

Table 1 (ZMW) and Table 2 (USD) below provide a summary of the consolidated performance of the key business divisions reported at an operating profit level.

Table 1: Divisional financial summary in ZMW'000

Table 2: Divisional financial summary in USD'000

DIVISIONAL REVIEW

Taking the performance of each of our key business areas in turn:

Retail and Cold Chain Food Products

Table 3 (ZMW) and Table 4 (USD) provide the key business area performances of the combined Retail and Cold Chain Food Products divisions.

Table 3: Retail and Cold Chain Food Products ZMW'000

Table 3: Retail and Cold Chain Food Products USD'000

We successfully rolled out two new macro outlets and two new retail outlets in strategic locations as part of our ongoing drive to optimise revenue and efficiencies across the Retail division.

Net sales in the combined Retail and Cold Chain Food Products (CCFP) divisions increased by 15% to ZMW 1,163 million (2019: ZMW 1,009 million) and decreased by 1% to USD 83.6 million (HY 2019: USD 84.6 million), the difference owing to the depreciation of the Kwacha. The gross profit margin decreased slightly by 75 basis points to 27% in Kwacha terms (HY 2019: 28%), with a 15% increase in overheads to ZMW 271 million (HY 2019: ZMW 236 million) or a 2% reduction in dollar terms to USD 19.5 million (HY 2019: USD 19.8 million).

The combined Retail and CCFP divisions generated a satisfactory 4% operating margin despite declining from the 2019 margin of 5%, owing to cost increases that could not be fully passed on to our customers through the retail network. The operating profit value in absolute terms decreased by 1% to ZMW 45.9 million (HY 2019: ZMW 46.3 million) in Kwacha terms and 15% in USD terms to 3.3 million (HY 2019: USD 3.9 million).

Zambia Retail

Zambia Retail revenue increased by 17% to ZMW 1,029 million (HY 2019: ZMW 883 million), whilst the gross profit increased by 13%. However, due to the depreciation in the Kwacha relative to the Dollar, revenue was flat at USD 81.9 million (HY 2019: USD 81.8 million).

West Africa Retail

Sales in West Africa (via the Nigeria and Ghana Shoprite concessions) increased by 18% to ZMW 109 million (HY 2019: ZMW 93 million). West African retail contribution to revenue increased by 9 basis points to 10.60%, from 10.51% last year. It has turned cash flow positive and marginally contributed to the operating profit in the division.

Beef

Beef is the largest contributor to revenue in the CCFP at 23% (HY 2019: 22%) of total revenue. Despite sales volumes increasing by a marginal 1%, revenues increased 8% owing to the favourable price of Beef and by-products. Gross profit increased by 34% on the back of an 8% revenue increase due to a reduction in input costs, particularly the buying price of Cattle. The price of maize bran remained relatively stable, only increasing by 9% against the prior half-year, especially in the context of Maize price increasing by 72%.

Poultry (ZamChick, ZamHatch and ZamEgg)

Revenue in the poultry business increased by 24% to ZMW 240 million (HY 2019: ZMW 193 million) and is the second-largest revenue contributor to the CCFP business. Gross profits decreased by 30% to ZMW 41 million (HY 2019: ZMW 59 million), mainly due to the higher input costs that could not be fully passed on to customers. In particular, stockfeed increased by 36%, which affected input costs. Overheads increased by an inflationary 14%, mainly impacted by higher energy and repair and maintenance costs.

Pork (Masterpork)

The Pork division saw a drop in sales volumes by 9%, mainly impacted by a decline in affordable Hungarian sausage sales. Revenue increased by 12%, translating to a 26% increase in gross profit of ZMW 24 million (HY2019: ZMW 19 million) due to pricing to recoup some lost margin due to cost increases.

Overhead costs increased by 36% compared to the prior year, mainly impacted by power outages causing increased machinery repair and maintenance costs and electricity tariffs

Milk (ZamMilk)

Milk revenue increased by 3% on the back of a 6% increase in average selling prices. The volumes of processed milk products reduced as the demand for fresh milk products soared, resulting in a net 3% reduction in sales volumes. Gross profit margin increased by 1,470 basis points owing to price and a favourable sales mix skewed towards the higher-margin products. Kalundu dairy saw an improvement in production efficiencies which also contributed to the increased margins.

Stockfeed (Novatek)

ZMW

USD

Revenue grew by 56% in Kwacha terms (33% in USD terms) due to volume and pricing, while the operating profit grew by a significant 160% to ZMW 62 million (HY 2019: ZMW 24 million) or 123% to USD 4.4 million (HY 2019: USD 2.0 million) in Dollar terms. The gross margin remained flat at 19.1% from 18.8% in the prior year. Increased raw material costs, due to a severe drought in the 2019 harvest season as well as running backup diesel generators for prolonged periods to generate electricity, impacted on the profit margin.

Overheads and efficiencies were key operational focus areas during the period and grew only by an inflationary 13% to ZMW 61 million (HY 2019: ZMW 54 million).

Cropping

ZMW

USD

Zambeef's cropping division provides a currency risk hedge against the depreciation of the Kwacha, due to the crops being traded and financed in USD terms. The division performed exceptionally well during the period.

Revenue increased 71% to ZMW 257 million (HY 2019: ZMW 151 million) or 46% to USD 18.5 million (HY 2019: USD 12.6 million), mainly due to increased maize and wheat sales volumes coupled with an increase in maize price. Gross profit increased 73% compared to the prior half-year, with only a 26% increase in the overheads due to increases in the cost of electricity and fuel.

Other businesses

ZMW

USD

Total revenue from the other business divisions increased by 14% to ZMW 109 million (HY 2019: ZMW 96 million) and decreased by 2% to USD 7.9 million (HY 2019: USD 8.1 million). The gross profit increased by 44% in Kwacha terms (23% in Dollar terms) and the operating profit increased by 226% in Kwacha terms (179% in Dollar terms).

Milling

The wheat and maize milling division had an exceptional performance, recording operating profit growth of 57% in Kwacha terms (40% in Dollar terms), due to the increases in the flour price and the volumes of maize milled. Overheads were also well managed, assisted by a reduction in repair and maintenance costs.

Zamleather

Zamleather recorded a significant improvement in the period as the turnaround strategy for the leather and shoe business began taking shape. Revenue increased by 29% (10% in Dollar terms), supported by an increase in shoe sales volumes. Gross profit increased 56% in Kwacha terms (34% in Dollar terms), helped by a swing in volume to higher-margin shoes and grade improvements resulting from higher selectivity of the hides processed into wet blue leather.

Walter Roodt

Chief Executive Officer

16 June 2020

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

REPORT OF THE DIRECTORS

In compliance with Section 275 of the Companies Act, the Directors submit their report on the activities of the Group for the six month period ended 31 March 2020.

1. Principal activities

Zambeef Products PLC and its subsidiaries ("Group") is one of the largest agri-businesses in Zambia. The Group is principally involved in the production, processing, distribution and retailing of beef, chicken, pork, milk, dairy products, eggs, edible oils, stock feed and flour. The Group also has large row cropping operations (principally maize, soya beans and wheat), with approximately 7,971 Ha of irrigated row crops and 8,623 Ha of rain-fed/dry-land crops available for planting each year. The Group also has operations in West Africa in Nigeria and Ghana.

2. The Company

The Company is incorporated and domiciled in Zambia.

Business address Postal address

Plot 4970, Manda Road Private Bag 17

Industrial Area Woodlands

Lusaka Lusaka

ZAMBIA ZAMBIA

3. Share capital

Details of the Company's authorised and issued share capital are as follows:

4. Results

The Group's results are as follows:

Unaudited Audited

5. Dividends

There was no dividend paid or proposed for the six month period ended 31 March 2020.

6. Management

The Senior Management team comprise the following:

 7. Directors and Secretary

The directors in office during the financial period and at the date of this report were as follows:

8. Directors' interests

The directors held the following interests in the Company's ordinary shares at the reporting date:

*Retired on 31 December 2019

9. Directors' fees and remuneration

In addition to the above, all Executive Directors are also entitled to a gratuity of 10 per cent. of their gross basic salary paid over the two-year contract term, less statutory deductions for tax.

Further, the board co-opted Mr Hastings Mtine into the Audit Committee as an expert advisor. Mr Mtine's remuneration was ZMW11,588 in the period under review. 

10. Significant Shareholdings

As at 31 March 2020, the Company has been advised of the following notifiable interests in its ordinary share capital:

CDC Group Plc are also the holders of 100,057,658 convertible redeemable preference shares. These shares have four voting rights for every five preference shares held resulting in CDC having 34.85% of the voting rights.

11. Employees

The Group employed an average number of employees of 7,422 (30 September 2019 - 7,407; 31 March 2019 - 7,215) and total salaries and wages were ZMW242.4 million (USD17.4 million) for the six month period to 31 March 2020 (30 September 2019 - ZMW453.7 million [USD36.8 million], 31 March 2019 - ZMW237.6 million [USD19.9 million]).

The average number of persons employed by the Group in each month of the 6 month period is as follows:

12. Safety, Health and Environmental issues

As part of some of the Group's term loans, as well as the recent CDC Group PLC equity investment, the Group has signed up to an Environmental and Social Action Plan ("ESAP"), which requires the Group to meet both local Zambian standards as well as international standards relating to the environment.

The Group provides education and healthcare services to its employees. The Group also supports various community activities in the areas in which it operates.

13. Legal matters

There are no significant or material legal or arbitration proceedings (including to the knowledge of the Directors, any such proceedings which are pending or threatened, by or against the Company or any subsidiary of the Group) which may have or have had during the 12 months immediately preceding the date of this document a significant or material effect on the financial position or profitability of the Company or any member of the Group.

14. Gifts and donations

The Group made donations of ZMW1.2million (USD0.09 million), (30 September 2019 - ZMW2million [USD0.165 million], 31 March 2019 - ZMW1.2 million [USD0.10 million]) to a number of activities.

15. Export sales

The Group made exports of ZMW43 million (USD3 million) during the period (30 September 2019 - ZMW46.5 million [USD3.8 million], 31 March 2019 - ZMW24 million [USD2 million]).

16. Property, plant and equipment

Assets totalling ZMW57.9 million (USD4.2 million) were purchased by the Group during the period (30 September 2019 - ZMW113.8 million [USD9.2 million], 31 March 2019 - ZMW54.6 million [USD4.6 million]).  

17. Interim report

The interim report set out below has been approved by the Directors.

By order of the Board

Danny Museteka

Company Secretary

Date: 16 June 2020

The Directors

Zambeef Products PLC

Plot 4970, Manda Road

Industrial Area

Lusaka

Dear Sirs

INDEPENDENT REVIEW REPORT OF ZAMBEEF PRODUCTS PLC AND ITS

SUBSIDIARIES

Introduction

We have been instructed by the Directors of the Company to review the financial information set out on pages 15 to 52 and we have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information.

Directors' responsibilities

The interim report, including the financial information contained therein, is the responsibility of, and has been approved by the Directors. The Listing Rules of the Lusaka Stock Exchange and International Accounting Standard 34 require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual financial statements except where changes, and reasons for them, are disclosed.

Review of work performed

We conducted our review in accordance with guidance contained in the International Standards on Auditing. A review consists principally of making enquiry of Group management and applying analytical procedures to the financial information and underlying financial data and based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as test of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with International Standards on Auditing and therefore provides a lower level of assurance than an audit. Accordingly, we do not express an audit opinion on the financial information.

Review conclusion

On basis of our review we are not aware of any material modifications that should be made to the consolidated financial information as presented for the six month period ended 31 March 2020.

Chartered Accountants

Christopher Mulenga (AUD/ F000178)

Name of Partner signing on behalf of the Firm

Lusaka

Date: 16 June 2020

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTH PERIOD ENDED 31 MARCH 2020

The accompanying notes form part of the financial statements.

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTH PERIOD ENDED 31 MARCH 2020

The accompanying notes form part of the financial statements

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENT OF MOVEMENTS IN EQUITY

FOR THE SIX MONTH PERIOD ENDED 31 MARCH 2020

 ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENT OF MOVEMENTS IN EQUITY

FOR THE SIX MONTH PERIOD ENDED 31 MARCH 2020