CFI, Pelhams record losses

Agro products centred company CFI Holdings made a loss of $1,7 million for the half year ended March 21 2013 while Pelhams also recorded a $1,7 million loss for the year ended March 31 2013.

For CFI, group turnover for the half year declined by 13 percent to $48 million compared to $55.4 million achieved in the same period in prior year.

“Revenue declined by 25 percent and 28 percent for poultry and specialised divisions respectively due to the impact of inadequate working capital,” CFI said.

“However, low capacity utilization and heavy financing costs still weighed down on the business restricting turnaround,” CFI said. The company said it noted operational improvements at Victoria Foods and in poultry.

In its previous results for the full year ended September 30, 2012 CFI Holdings recorded a $4 million loss. On the recapitalisation front CFI said it expected it expected to conclude investment deals in Victoria Foods and Suncrest Chicken.

“The board remains committed to undertaking a capital raising transaction at holding company level, combining an appropriate mix of equity and appropriately priced medium to long-term debt once the separate business unit transactions have been completed,” CFI said.

Pelhams said in its results statement that it was going through a transitional phase.

“The new board inherited a company whose business was modelled around credit sales yet all the financial charges earned were mortgaged to lenders in their entirety leaving very little financial charges income for the company,” the company said.

The furniture retailer said it had to close the branches that were not profitable for the larger part of the four years since dollarization. It is seeking to strike a balance between credit sales and cash sales

“Owing to the harsh economic environment in which we operate it will take some time before the full benefits of the company’s strategic focus start to show,” Pelhams said.

In the period under review sales declined by 50 percent from the prior sales of $16,7 million to $8,4 million.

“The gross margin decreased marginally from 27 percent in the prior year to 26 percent as the company focused more on local better quality products that cost more than imported products,” Pelhams said.

Pelhams said it would complete the unwinding of some expensive debt structures during the financial year and added that overhead alignment would be key in returning the company to profitability.

Among the company’s financial highlights was revenue of $11, 4 million and a loss before tax of $2,3 million.