National Foods makes $10,7 million profit before tax

National Foods Holdings made a profit before tax of $10,7 million in the financial year ended June 30, an increase of 47% over last year’s pre-tax profit of $7,3 million.

This was achieved through a 15 percent growth in sales volumes, better operational efficiencies and focusing on core business, group chairman Todd Moyo said, in a statement accompanying the financial statements for the year.

The overall volume sold was 404 000 tonnes compared to 352 000 tonnes last year, generating turnover of $234 million compared to $201 million the previous year, an increase of 16 percent..

“The group benefitted hugely from the turnaround in the maize division. Flour and stockfeeds showed a pleasing recovery in the last quarter and this recovery is expected to continue into the following year,” Mr Moyo said.

“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,” he said.

The focus from 2009 to 2012 had been, Mr Moyo said, on establishing a competent manufacturing base and competing for market share with a 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.

“There is still, however, significant work to be done to right size and re-equip the business to match regional efficiency benchmarks.

“To this end, numerous interventions are ongoing to upgrade our operating platform and up-skill our workforce, wherever possible,” he said.

Although most of the group’s strategic objectives had been achieved, there was still need to focus on the information technology platform to enhance operational efficiencies, tighten internal controls and ensure an efficient service, he said.

There was growth in most key areas of measurement. Operating profit went up by 50 percent compared to last year to $12, 9 million, while basic earnings per share were 11,55 cents, an increase of 57 percent, and headline earnings were 11,32 cents per share, an increase of 67 percent.

“The compounded average growth rate at earnings level since dollarisation is 19 percent, which should be maintained through the next three year strategic horizon, assuming marketplace stability,” Mr Moyo said.

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