ZSE silent on CFI ban
TINASHE MAKICHI
The Zimbabwe Stock Exchange (ZSE) has remained silent about CFI Holdings Limited’s application, three years after it suspended trading of the diversified conglomerate’s shares on the local bourse.
The stock exchange suspended CFI in 2018 after failing to comply with the ZSE listing rules.
“The company has heard nothing further from ZSE in respect of removing their suspension of trading in the company shares. Your board is hopeful that the same will be resolved in due course,” CFI company secretary Panganai Hare said.
All efforts to get an official comment from ZSE were futile.
The CFI suspension was triggered by its failure to comply with ZSE listing rules, especially the free float requirements and the appointment of executives.
Section 4 paragraph 4, 25 (d) of the ZSE listing rules, stipulates that 30% of each class share shall be held by the public.
The company, which operates Victoria Foods, Farm & City, Glenara Estates, Langford Estates, Suncrest, Afrifoods and Crest Poultry, has been engulfed in shareholding wrangles, which saw British tycoon Nicholas van Hoogstraten seizing control of CFI with 52% shareholding. Stalap Holdings had about 40% stake in the company, meaning the public held less than 10% equity, in breach of the ZSE listing rules.
The listing rules also state that listed entities should have a substantive chairperson, CEO, finance director and appointment of non-executive directors who are not affiliated or have any association with any of the company’s shareholders.
However, it appears CFI is yet to satisfy some of the conditions set by ZSE. For example, the company still has an acting CEO, Shingirai Chibhanguza and acting group finance director, Chester Mutevhe.
In its trading update for the quarter to June 30, 2021 , published last week, revenue for the group increased 88% from the prior comparative period.
Retail operations contributed 94.9% to the total revenue, whilst farming contributed 5.1%.
Sales volumes in the period under review, rocketed 169% over the previous period, largely due to an increase in aggregate demand following the relatively good 2020/2021 rainy season, which boosted both summer crops and the tobacco season.
Also contributing to the growth during the period, though modest, was the resurgence in construction activities.
The group also benefited from growing demand for Agrifoods’ stock-feeds after it exited judicial management in prior year as well as opening of additional retail stores during the period.
Hare noted that Farm & City reopened its Chipangayi branch in May 2021 and added another branch in Masvingo at the beginning of June 2021.
At Glenara Estates, both maize and table potatoes harvested increased by 42% and 85% respectively.
Victoria Foods’ legacy foreign and local creditor debts were fully repaid during the period.
Having resolved the legacy debt issues, Victoria Foods is expected to exit receivership.
Going forward, Hare said priority will also be given to the development of low cost housing delivery in Harare South in support of government’s Vision 2030 housing plans.
“The scourge of land barons will need resolution to make way for progressive and orderly infrastructure deployment and service delivery to the various settlements,” he added.
Hare said CFI is anticipating an improved business out turn overall for the full year 2021 driven by the implementation of more flexible lockdown measures compared to prior year.
“While the Covid-19 pandemic is expected to remain ongoing, the group expects an improved business outturn overall for FY2021, due to the implementation of the more flexible lockdown measures compared to prior year,” he said.
“The management of consistent raw material supplies for Agrifoods and Victoria Foods will remain an on-going priority as the group seeks to play its part in underpinning food security in the country.”
Hare noted that during the period under review, the economic environment remained heavily impacted by the Covid-19 pandemic, with a spike in new infections from mid-May 2021 going forward.
