The company’s financial performance in the last 5 years were remarkably stunning after inflation adjustments with the revenue increasing from 14 ZW$ millions in 2017 to 2021 to 34 ZW$ millions, cash generated from 700 000ZW$ to 800 000ZW$, profit from operating activities growing from 900ZW$ to 1.4ZW$ and the net cash from 4 800ZW$ to 6 800ZW$.
The market price/share rose from 380ZW$ cents in 2017 to 52 013ZW$ cents, headline earnings/shares dropped down from 982.17ZW$ cents to 5.4ZW$ cents, basic earnings per share were at 105.89ZW$ cents from 981.19ZW$ cents and ordinary dividend per share were at 1 152.16ZWLc from 490.90ZWLc in a period of 5 years.
Todd Moyo the Independent, Non-Executive Chairman, mentioned that volumes climbed by 15% to 525 000 tons throughout the time, compared to the previous period.
These results were the result of a 32 percent drop in maize quantities, which was mostly due to competition from imported maize.
Moyo further went on to say that the volume of other proceeds excluding maize grew by 48% mainly because customer demands have improved, and the company’s market presence has constantly improved.
Revenue for the quarter climbed by 343 percent from the previous period to 28.07 ZW$ billion.
Lower gross margins from the maize unit’s performance, as well as significant increases in operating expenditure and interest costs, resulted in a profit before tax growth of just 82 percent to 3.42 ZW$ billion, a modest performance relative to inflation.
The decline in inflation had a significant impact on gross margins, as gains on prepaid raw materials, as well as increase volumes in a rebounding market, were reduced compared to the previous period.
The maize unit had a dismal year, with market normalization following the elimination of the subsidy plan, as well as a proliferation of cheap imported maize meal, particularly from South Africa, weighing on performance.
Operating costs increased by 327 percent as inflation slowed and costs normalized in real terms. As interest rates on local borrowings soared, interest charges jumped by 564 percent to 389 ZW$ million.
The Statement of Financial Position is in good shape, with relatively low levels of gearing and net debt of only 591 ZW$ million at year’s end.
In the latter half of the year, deposits were paid for both the new Bulawayo Flour mill and the new Cereal project, and the company is well positioned to fund its pipeline of future projects.
In terms of flour milling, volumes increased by 43% compared to the previous year. Consumer demand continued to strengthen, resulting in this increase.
In terms of maize milling, volumes fell by 32% compared to the previous year, despite the fact that last season was a drought year, which normally results in strong demand, a sales competition that increased due to cheap maize imports from South Africa and abnormal demand last year as a result of the subsidy scheme.
In comparison to the previous year, stockfeed volumes increased by 33%, the poultry sector, volumes climbing by 53% year over year, being the driving force behind this performance.
On the strength of good early rainfall and a general reduction in cattle feeding, beef feed volumes were reduced, falling by 14%.
In terms of groceries, volume climbed by 74% over the previous period.
Snack and treat volumes climbed by 57% year over year, and new products continue to be introduced across the portfolio to widen and enrich the offering.
Throughout the year, consumers continued to accept “Pearlenta Nutri-Active” quick maize porridge.
Furthermore, the market has reacted positively to “Better Buy Soya Delights,” a soya-based meat alternative.
The Board of Directors has approved the purchase of new cereal manufacturing equipment for a total cost of US$ 4 million, allowing the Group to extend its breakfast cereal and extruded product portfolio.
This investment will bring to market a diverse assortment of affordable and healthy cereals. These goods are expected to be released in stages beginning in mid-2022.
The Board of Directors is happy to declare a final dividend of 296.49 ZW$ cents per share payable on all of the company’s ordinary shares and the total dividend for the year ended 30 June 2021 is 1 099.76 ZW$ cents, and it will be paid to all shareholders of the company who were registered at the close of business on 15 October 2021.
This final dividend will be distributed on or around November 10, 2021.
The company’s shares will be traded on the Zimbabwe Stock Exchange until the market day of October 12, 2021, and ex-dividend from October 13, 2021.
In comparison to the Reserve Bank of Zimbabwe (RBZ) auction rate of exchange, which increased by 48.9% during the same period, the Consumer Price Index (CPI) preparation of hyperinflation increased from 1,445.20 in June 2020 to 2,986.40 in June 2021, representing a 106.6% increase during the financial year under review.
Stockfeed volumes improved by 33% when compared to prior year.
Speaking about the flour mill project to be set up in Bulawayo, the companies CEO, Michael Lashbrook, mentioned that the project is set up to be completed by next year November, with the ‘a state of the art’ mill being imported from Switzerland early next year.
He went on to say that at a cost of US$5 million, the will be constructed as a replacement for the existing mill at the Bulawayo Basch Street site which will increase productivity by 60 tons/day of wheat ore thus 2000tons/month in additional wheat.
Lashbrook also mentioned that the summer contract farming is likely to be normal, with an expectation of around 10 000 hectares of maize and soya beans as an output during the next harvest.