Tanganda eyes VFEX

STAFF WRITER

Zimbabwe’s largest tea producer, Tanganda Tea Company, is planning to delist from the Zimbabwe Stock Exchange (ZSE) and migrate to Victoria Falls Stock Exchange (VFEX), Business Times can report.

Additionally, Tanganda will use a rights offering to raise US$7,7m.

A rights issue is an invitation to existing shareholders to follow their rights and purchase additional new shares in the company.

Sharon Kodzanai, the company secretary, verified the development.

She stated that Tanganda would call for an extraordinary general meeting to seek approval of the proposed migration to VFEX and the rights issue.

“…the directors of the company are engaged in discussions which will culminate in the company calling for an extraordinary general meeting of members for the purposes of considering and approving the migration of Tanganda’s listing from the Zimbabwe Stock Exchange to the Victoria Falls Stock Exchange and capital raise by way of a renounceable rights offer to raise circa seven million seven hundred thousand United States Dollars (US$7.7m) together,” Kodzanai said.

As it continues to flourish through new listings and new product development, VFEX, a stock exchange denominated in US dollars, is progressively emerging as the preferred stock exchange.
VFEX has drawn listings from a variety of industries since its launch in October 2020, including financial services, apparel, tourism, hospitality, and mining.

In its trading update for the quarter to June 30, 2024, Tanganda  reported a muted performance primarily as a result of drought brought on by the devastating El Nino phenomenon that  impacted the agricultural sector and the crippling rolling power cuts.

Kodzanai, stated in a trading statement for the quarter under review that working capital management, and packaging supply limitations aggravated the problem.

“The effects of the El Nino impacted the agricultural sector and this comes at a time when international commodity prices are subdued. Persistent power cuts due to low water levels at Kariba continued to be experienced.

Bulk tea production yield of 7 293 tonnes, affected by the late onset of the rains in the first quarter of the year, recovered and was in line with prior year production. Export volumes declined by 9% to 4 504 tonnes from 4 959 tonnes achieved prior year due to timing of sales as production was more concentrated in the third quarter,” Kodzanai said.

She added: “Packed tea volumes of 1 303 tonnes were 11% below the 1 459 tonnes achieved in the previous year.The 33% decline in nut in shell exports from 735 tonnes achieved prior year to 494 tonnes is due to delayed start of the marketing season.”

The company’s revenue for the quarter under review at US$3.4m  was consistent with the previous year, but its revenue for the nine months ended June 30, 2024, US$14.5m , represented a 5% decrease from the US$15.3m realized in the previous year.

After-tax profit fell by 8% to US$1.2m from US$1.3m the prior year.

Nonetheless, Tanganda continued to diversify its markets in order to boost exports, and as a result, its volume of exported packed tea into the region increased by 50%.

Additionally, as plantings mature, macadamia production volumes increased by 61% to 1,487 tonnes from 921 tonnes the previous year. This growth is due to improved yield per hectare.

“Yields of avocado and macadamia continue to increase with enhanced plantation maturity profile. The demand for our packed tea products remains firm both on the local and regional markets and focus is on sustained diversification of the market,” Kodzanai said.