Innscor is set to move a biscuits and snacks manufacturer to the National Foods set up to complete the reconfiguration of the group into a light manufacturing company. Well-placed sources said the group will add the snacks business to Natfoods although they were already involved in the business. The company; Breathaway Food Caterers makes Zapnax snacks and Iris Biscuits.A couple of disposals and an imminent unbundling will see the group becoming a “pure light manufacturing business,” according to chief executive Toni Fourie.
The group will, at the end of the current financial year, now be made up of Irvine’s, Colcom Ltd, Bakeries Factory, Natfoods, Profeeds, Natpak and Capri. Natfoods which is the biggest of the units will be comprised of Maize, Flour, FMCG, Other (which could include a stake in Zim Gold) and an ANO (a yet to be announced acquisition, which well-placed sources say is Breathaway).
Mr Fourie told analysts last Thursday that the group’s portfolio had been reconfigured as mentioned last year although under a complex agenda which helped mitigate some of the risks.
“We undertook significant restructuring in the interim period and as a result once-off costs have impacted on the results.”
In the period, Quick Service Restaurants had been unbundled while the group had exited Spar Corporate stores and closed the DC. A decision had been taken to dispose of Zambia and the process was currently ongoing. The River Club would also be disposed of while the company had exited Shearwater.
But a corporate services company had been created while Transerv had been acquired in the period. The plan now is to unbundle speciality retail which will include Transerv, TV Sales and Home DGA Zimbabwe and region. The transaction will be concluded in April/May.
The corporate centre will be shrunk into two companies which will result in a much leaner structure. The group had also acquired a 29 percent stake in Profeeds.
“Given this portfolio of assets, the Group’s view is that the current environment provides substantial opportunities for growth which it is now well positioned to take advantage of.”
He noted that the units (under light manufacturing) had achieved organic growth except Capri which had struggled after the collapse of the export market following the devaluation of currencies.
“However, in spite of this we do have great companies which we can only do good things with. Setting aside Spar, I believe we produced a strong set of results.”
On a continuing basis, in the six months to December, the business reported a growth of 2 percent to $300,6 million. Fourie said there was a good growth in volumes after prices of selected products were reduced. In turn capacity utilisation improved and through restructuring the group saw improved efficiencies which lowered the operating expenses.
“The good thing to note is that money is now staying in the group.”
At a segment level, Speciality Retail and Distribution turnover was at $104,6 million, a 1 percent increase, QSR (only for Q1) was at $38,33 million and other businesses were down 37 percent to $45,16 million. As a result total consolidated revenue was down 5 percent to $467,93 million.
Operating profit was up 8 percent to $27,4 million while the pre-tax line grew 18 percent to $20,5 million. Operating profit of the discontinued businesses, however, declined 43 percent as they were distorted by the once-off effects of the disposal and closure of Spar Retail and DC.
EBITDA for continuing ops was up 8 percent at $27,44 million but consolidated was down 13 percent to $37,52 million. The bottom-line was up 23 percent to $15,8 million and basic EPS was up 65 percent to 1,78c on a continuing basis but down 44 percent to 1,40c overall. Total profit for the period was at $15,33 million, a decrease of 23 percent from $23,79 million last year. Total dividend declared for the period was 5,74c including the dividend in specie already paid of 5,44c. – Wires.