Ariston shareholders on Friday approved management’s plan to increase the authorised share capital from $1,6 billion to $2 billion, as the company seeks to convert a $5 million debt owed to majority shareholder Origin Global Holdings to equity.
“About $5 million of our $15 million debt is owed to our major shareholder who has agreed to convert it into equity or otherwise deal with it. This process has been going on for some time and demonstrates confidence in our business,” chief executive Paul Spear told the AGM.
“We are having a little bit of trouble concluding the exercise but after the events of this past week, we are going to see some progress,” Mr Spear added.
Ariston Holdings revenue in the year ended 30 September 2015 declined 6 percent to $11,8 million from $12,5 million in 2014 owing to a mixed performance across its units. Subsequently, the group incurred an after tax loss of $1,7 million largely due to a $2,2 million increase in finance costs.
Mr Spear said that the group was working on improving its overall liquidity, and several banks had shown interest in the company.
“We have some opportunities to improve our funding situation and there has been some significant cooperation from various banks and that exercise is ongoing. The interest rates we are seeing are a big improvement on what we have seen in the past, and that’s all very positive,” Spear said.
In 2016, the group is forecasting an increase in all its crops: potato would grow 748 percent from 2012, tea 97 percent, macadamia 75 percent, poultry 150 percent, pome 33 percent, Stone 191 percent.
Mr Spear noted that the improvements in power supply since December have heard a positive impact on the group`s performance this year. The group also experienced some pricing pressures due to delayed civil servants salaries.
In terms of estates performance, Claremont had enjoyed the biggest impact from the capital raise in terms of the mix of crops produced. Mr Spear noted that the company was in the process of improving its hydro-electric scheme at Claremont.
“At Claremont, we are in the process of rehabilitating the hydro-scheme which has been there for years, but out of action for the last three. Hopefully that will be done before next season and that will be a big help to us,” said Mr Spear.
The estate (Claremont) had a record yield for stone fruit while clingstones production increased by 68 percent, Mr Spear said. Last year, the group indicated that there is still room for improvement on quality and yields while benefits of investment in irrigation will increase in the seasons ahead.
“The apple quality has now improved and yields are expected to increase by 20 percent.”
Mr Spear said the effects of the drought the country is experiencing have been mitigated, as a number of their orchards are irrigated.
However, the high temperatures associated with the patchy rains have had a negative impact on tea yields in the first quarter of the year. Mr Spear also noted that the weaker rand had resulted in South African produced apples getting into the country at very competitive prices.
Ariston has in the past estimated that Zimbabwe consumes an average of 20 000t of apples annually against a national production of 5 000t, and that it intends to capture a significant portion of the local market.
At Kent which is close to 10 percent of the Group`s business, poultry was operating at 50 percent capacity as there is an ongoing land dispute, which the company hopes to resolve soon. On the horticultural side, Mr Spear said that there were no dry land crops on account of unfavourable weather patterns.
He said: “We have heard a record yield for stone fruit and there is still some more to come and we are targeting around 900t next year from about 720t done this year.” – Wires.