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National Foods recorded 11 percent growth for the year ended June 30

Business Reporter
AGRO processing concern, National Foods Holdings recorded an 11 percent growth in revenue for the year ended June 30 as volumes increased by eight percent to 538 000 metric tonnes compared to the previous year.
Revenue for 2013 was $309, 2 million.Capacity utilisation was at 48 percent while margin grew fractionally to 23 percent.
After tax profit increased by 20 percent to $16,8 million in the year to June from $13,9 million achieved in the comparative period last year. The company realised a non-recurring profit of $1,5 million on the disposal of some property assets.

Natfoods operated eight out of eleven factories for all the year and opened the Mutare maize milling plant for five months.
“We met market demand and were able to achieve logistical efficiencies through our ability to manufacture product at different geographic locations in response to localized market demand,” the company said.

At stockfeeds, the company completed the commissioning of a new pelleting machine and an extruder with the desired improvements in quality. The company also installed moisture addition equipment to reduce moisture loss and homogenise product quality. The dog food lines were also renovated.

Eight new depots were opened during the year under review and 20 depots are connected on a “real-time” basis to the central processing system.
The company’s flour milling division experienced relatively subdued trading patterns with revenue decreasing by one percent in the year under review due to a lower realisation per ton wheat sold.

Year on year profitability dropped 13 percent as the company continued to sacrifice margin in order to hold volumes against flour imports.
Volumes sold in the year increase by a meagre two percent Bakers are allowed to import duty free flour of any quality and origin while spot traders of flour have the ability to import cheap product into the country during the periods of international price volatility.

The company said it has procured sufficient wheat of the correct quality and at satisfactory prices.
The milling business’ volumes increased by 19 percent in the year under review compare to the previous year which, when combined with a four percent increase in average utilisation per ton, resulted in revenue growth of 33 percent.

Under the stockfeeds business, the company lost market share to small scale poultry sector which has continued to grow quickly.
The company sold six percent more product when compared to the prior year’s sales.

This translated into revenue growth of three percent but profitability remained flat.
Natfoods successfully commenced exporting product to the beef-lots in Botswana.

“During the second half of the year we secured a supply of day old chicks from a local supplier which is distributed throughout our depot network to service small scale producers,” the company said.

Volumes of rice, salt, small grains, pasta and spreads were collectively 22 percent higher that previous year whilst baked beans volumes were down 31 percent.
“Like for like margins achieved, excluding oil sales, were 24 percent compared to 21 percent in the prior period,” the company said.

Natfoods resumed sales of Red Seal and Better Buy cooking oil which is produced for it under licence by a local manufacturer.
Going forward, the company said the macro-economic indicators suggest that Natfoods will achieve little growth from the existing businesses hence its desire to invest into new and adjacent categories.

The company declared a final dividend of 5,18c per share. Bringing the total dividend for the year to 8,18c per share.