CFI plots resurgence

July 19, 2021

RYAN CHIGOCHE

Diversified conglomerate, CFI Holdings Limited is plotting the group’s resurgence to deliver ‘acceptable’ return to shareholders and contribute to the country’s food sustainability, Business Times can report.

CFI Holdings operates Victoria Foods, Farm & City,

Glenara Estates, Langford Estates, Suncrest,Agrifoods, and Crest Poultry.

To begin with, the group will pursue the exit of its unit, Victoria Foods, from receivership.

Victoria Foods was placed under judicial management in 2016 after the High Court gave the nod to CFI’s application for voluntary placement.

The judicial manager, Reggie Saruchera, of Grant Thornton last week advised Victoria Foods has been successfully restructured and has been nursed back to financial health.He said the application to remove the company from receivership will be lodged with the High Court. Once the order is granted, Saruchera said the board and management of Victoria Foods will assume control over the company.

Victoria Foods has since begun  mealie-meal and flour production.But, continued to operate under care and maintenance in the period under review.

CFI said after Victoria Foods exit from administration, it will recapitalise all its units beginning the second half of this year.

“….The board will be focused on consolidating the group’s resurgence in order to nurture the businesses to contribute fully to food sustainability in the country whilst delivering acceptable returns to shareholders,” CFI board chairperson Itai Pasi said.

She added: “….The plans (are) to thereafter further recapitalise all the business units during and beyond the second half of the year. Right aligning overhead cost structures and adapting the business to the changing business environment remains key to ensuring sustainability of the group’s operations.

“ In addition, the management of a consistent raw material supply line for Agrifoods and Victoria Foods will remain an on-going priority given the prevailing liquidity situation in the economy and the long delivery lead times for importing critical raw materials and products.”

The group will also prioritised the development of low cost housing in Harare South.

However, Pasi said the scourge of land barons required  resolution to make way for progressive and orderly infrastructure deployment and service delivery to the various settlements.

In its financial results for the six months to March 31, 2021, CFI’s revenue rose 79.8% to ZWL$3.6bn from ZW$2bn reported in the prior comparative period on the back of increased demand for farming inputs.

Profit for the group increased 32.1% to ZW$319m in the reviewed period   from ZWL$241m delivered in in the prior period as a result of increased procurement efficiencies and strengthened cost containment efforts sustained during the period.

Total assets stood at ZWL$4.6bn from ZWL$4.2bn in the same period last year.

 

Interest expenses and mark to market financing costs  stood at ZWL$653 m compared to ZW$158.m incurred in the prior half-year.

Volumes for Farm and City increased 82% in the reviewed period owing to relatively good 2021/2020 rainy season together with the introduction of the foreign currency auction system and the use of USD as a mode of payment.

The Glenara Estate is anticipating summer bumper harvests having established 570 hectares of commercial maize, 173 hectares of soya beans, and 14 hectares of sugar beans for its summer crops during 2020/2021 farming season.

However, the Group continued to import the expensive maize and soya given the effects of the 2019/20 drought on local cereals supply despite above-average rains received during the period.

Stockfeed sales volumes for Agrifoods increased during the period on the back of recoveries in lost market share and encouraging success in the targeted medium to large scale commercial farmers.

 

Crest Poultry Group’s units: Crest Breeders, Hubbard Zimbabwe and Suncrest Chickens remained under care and maintenance during the period.

Joint ventures leveraging the group’s poultry infrastructure and brands are still being pursued.

Pasi also revealed that they also managed to open a new operation in the first half of 2021 as well.

”During the period, Farm and City opened a new branch in Msasa and re-launched the Nyazura one, which had been under care and maintenance from previous years. Also during the period, FCC refurbished the Bindura branch,” she said.

Pasi said legal proceedings for Langford Estates remained pending before the relevant tribunals.

The development of low cost housing in Harare South in support of Government’s Vision 2030 housing plans will be prioritized going forward. However, the scourge of land barons requires resolution to make way for progressive and orderly infrastructure deployment and service delivery to the various settlements.

Currently, CFI shares are not trading on the Zimbabwe Stock Exchange after its suspension on January 2, 2018.

 

 

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