Volume growth spurs Afdis performance
Zimbabwe Stock Exchange-listed African Distillers Limited posted a 150 percent increase in profit for the year ended June 2014 spurred by volume growth, cost management and improved productivity.
The company’s revenue increased to $2 million from $0,808million recorded in the previous period.
Afdis’ gross sales for the year increased 18 percent to $35million from $29 million recorded in the comparative period.
Revenue increased 8 percent to $23 million for the year ended June 2014 from $22 million of the prior year.
“The strong performance by the company has been achieved in a very difficult trading environment characterised by a slowdown in consumer spending and tight liquidity conditions.
“The product portfolio has been expanded with the addition of ready to drink offerings such as the recently launched Esprit,” said Mr Joe Mutizwa in a statement accompanying the company’s financial statement. The year’s volumes for the company were sitting at 6,1 million litres, registering a 10 percent growth as compared to the previous year.
Local product portfolio contributed 71 percent to the company’s turnover, up from 58 percent recorded last year.
Mr Mutizwa said growth was driven by firm demand for brown spirits in the second half of the year.
“The company continues on a path to sustainable growth as it assets itself in the market as the leader in the fine spirits, ciders and wines segment,” he said.
Earnings before interest and tax grew by 80 percent to sit at $3 million.
Gross margin for the company improved 47 percent as a result of a favourable product mix dominated by a significant increase in brown spirits volume.
Earnings before interest and tax improved to 13 percent from 7 percent of last year, indicating strong retention of value created.
Net finance costs were 30 percent below last year due to improved cash holdings during the latter half of the year, while earnings per share grew to 2,01cents from 0,85 cents of the previous period.
Recapitalisation of the company through a rights issue was successfully undertaken in January 2014 and an additional 15 451 174 shares were issued at a price of $0,3236.
Mr Mutizwa said funds raised by the company have been earmarked for the project that seeks to localise the production of ciders and production is expected to commence this year.
He said trading conditions are expected to be difficult.
“However, the company will continue to focus on volume and revenue growth while containing costs and improving efficiencies in order to continue creating value to the shareholders,” said Mr Mutizwa.