Listed agro-industrial concern, Ariston Holdings says the group expects recovery anchored on continuous improvement in yields and good cash management. Chief Executive Paul Spear said at the company’s Annual General Meeting on Wednesday that going forward, Ariston will focus more on cash management and resource allocation, improving yields and lower cost per unit and marketing of increased volumes.
Mr Spear said managing the cost of production was key in getting good yields.
“And we have made headway at Claremont in addressing this. If we get yields up, costs down we can be competitive against imports.”
Since 2012, there had been a 2 943 percent increase in potatoes, tea was up 264 percent, macadamia 60 percent , poultry 261 percent, pome 2 percent and stone 72 percent.
Revenue had increased 24 percent in 2014 from 2012 and income was up 216 percent.
“Obviously the $8 million capex from Afrifresh was a reasonable amount although quite a lot needs to be developed at the Chipinge Estates. The orchards planted at recapitalisation are starting to bear fruit. Assets have grown but so too has our debt which increased by $9,9 million to $13,5 million in 2014.”
In terms of operations, Mr Spear said there had been a slow start to the season due to the late onset of the rains (impact mostly felt on the tea).
“The rains have been unusual, however, irrigation has enabled us to make good progress on performance.”
He, however, said production is behind on 2014 but the group expects recovery anchored on increased macadamia prices and continuous improvement in yields.
At Southdown, the tea yields had improved but sales had been slow due to the lower prices prevailing on the international market. The group had done 3 400 tonnes last year against a peak of 4 200 tonnes. Spear said factory upgrades to improve the quality of the tea were in progress.
The macadamia crop set is excellent, of better quality better and harvest 33 percent ahead of prior year while demand remains firm.
“The macadamia story is becoming an increasingly big part of our situation. This year we are going to see another record crop. The total value of macadamia has now surpassed that of tea. We have made some improvements on the quality.
“I’ve been involved in agriculture for many years now but I’ve never been in situation where there’s such demand for a product. We have many customers than we have the product itself,” said Mr Spear.
FAVCO remains Ariston’s problem child and is operating at a loss. The company is investigating JV options before considering outright disposal.