Last checked at 30 Sep 2015 07:00
Immediate Release 30 September 2015 Zambeef Products plc
("Zambeef" or the "Group")
Year End Trading Update
Zambeef (AIM: ZAM), the fully integrated agribusiness with operations in Zambia, Nigeria and Ghana, is pleased to provide an update on its performance for the year ending 30 September 2015. The audited results are expected to be announced on 25 November 2015.
Group Overview
Continued management focus on the retailing division and the opening of additional retail stores have resulted in the cold chain food products division continuing to perform well. The cropping division has also had a good year, with gross margins exceeding management's expectations. The conclusion of the sale of Zamanita Limited to Cargill on 1 June 2015 resulted in a cash inflow to Zambeef of US$27.0 million and a substantial reduction in the Group's indebtedness. This is in line with Zambeef's strategy of unlocking value within the Group and reducing debt and gearing.
In the interim results to 31 March 2015 (as announced on 10 June 2015), Zambeef highlighted the Zambian Kwacha's depreciation against the US Dollar. During the second half of the financial year, the Zambian Kwacha has continued to weaken against the US Dollar, and the ensuing foreign exchange losses are expected to impact negatively on the Group's results. Also, recent electricity supply issues in Zambia have resulted in unforeseen generator running costs being incurred and additional operating challenges for the Group.
In view of this, the Group expects US Dollar reported revenue for the year to 30 September 2015 to be lower than market expectations, largely because of the weakening of the Zambian Kwacha against the US Dollar. We anticipate, however, that the improvement in our gross profit margins will result in operating profits and net cash inflow from operating activities exceeding expectations. This will, in turn, result in the Group's expected US Dollar reported adjusted profit before tax being in line with market consensus.
Carl Irwin, Joint Chief Executive of Zambeef, commented:
"In line with the Group's strategy, it is pleasing to note that gearing has reduced significantly following the disposal of Zamanita Limited. Furthermore, driving the cold chain food products through the retail network will continue to be a key focus".
For further information, please contact:
Zambeef Products plc Tel: +260 (0) 211 369003
Carl Irwin, Joint Chief Executive Officer
Francis Grogan, Joint Chief Executive Officer
Strand Hanson Limited Tel: +44 (0) 20 7409 3494
Angela Hallett
James Spinney
Panmure Gordon Tel: +44 (0) 20 7886 2500
Tom Salvesen
Peter Steel
Finncap Tel: +44 (0) 20 7220 0500
Joanna Scott
Raymond Greaves
Buchanan Tel: +44 (0) 20 7466 5000
Mark Edwards
www.buchanan.uk.com