National Foods profits up

HARARE - Grain processor National Foods Holdings Limited (NFHL) recorded a 23,6 percent growth in after-tax profit to $7,9 million in the year to June 2012.

Earnings per share went up 57 percent to $11,55 during the period under review.

The firm said the performance was driven by a 15 percent growth in volumes, better operational efficiencies and focus on the core business.

Group revenue surged 16 percent to $234 million from $201 million.

Todd Moyo, NFHL chairperson, said the group benefited hugely from the turnaround in the maize division.
He said flour and stockfeeds showed an improved recovery in the last quarter and was expected to continue into the following year.

“Turnaround strategies are in place to revamp and improve performance in the Fast Moving Consumer Goods (FMCG) division and these include streamlining distribution costs, reducing the interest burden and developing category plans which should hopefully spur volumes in the coming financial year,” Moyo said.

From 2009, NFHL’s focus was to establish a competent manufacturing base and to compete for market share with nationwide distribution capability and keenly priced products.

“We believe that the group has achieved this as evidenced by an improved set of financial results and most importantly overall growth in volumes sold. The strategic initiatives set in place in the early stages of dollarisation are beginning to have a positive effect on the group,” said Moyo.

He said although the group had achieved most of its initial strategic objectives, there was need to focus on the Informtion technology platform to enhance operational efficiencies, tighten internal controls and ensure efficient services to customers.

During the period, NFHL generated improved cash flows from trading, good working capital management and disposal of non-core assets.

Moyo said most of the funds were invested into capital expenditure and on repairs and maintenance into the core activities of milling, stock feed production and packing of FMCG.

“The strategy of disposing non-core properties remains in place with the intention of directing proceeds from sales to strengthening core business capabilities, funding strategic raw material positions and growth opportunities,” he said.

The group’s flour and stock feeds plants in Bulawayo were re-opened during the reporting period to satisfy local demand and potential exports for stock feeds.

“At year end 28 depots were operational with new depots opening during the year at Beitbridge, Binga, Chivhu and Shamva as part of our endeavour to establish a competitive distribution footprint to ensure our products are available throughout the country.”

“The majority of our depots are now linked to the central IT system with dual connectivity to ensure reliability and improved service to customers,” he said.

The group declared a final dividend of $1,55.

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