Year End Trading Update

RNS Number : 6013A

Zambeef Products PLC

30 September 2015

 



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:  [phone]

Carl Irwin, Joint Chief Executive Officer

Francis Grogan, Joint Chief Executive Officer                                                    

Strand Hanson Limited                                                                                  Tel: [phone]

Angela Hallett

James Spinney

Panmure Gordon                                                                                             Tel: [phone]

Tom Salvesen

Peter Steel                        

Finncap                                                                                                               Tel: [phone]

Joanna Scott

Raymond Greaves

Buchanan                                                                                                           Tel: [phone]

Mark Edwards

www.buchanan.uk.com

 

END

 

 

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