CFI's 5 months revenue declined by 9%

Published: 28 March 2014

CFI's 5 months revenue declined by 9% while margins eased by 1% due to the impact of restrained margins in the poultry and specialized divisions, CE Steve Kuipa told the AGM today.

He said the Poultry division had mixed trading characterised by firm demand for stock feeds and table eggs.

"However huge fluctuations were encountered on demand for dress chickens and day old chicks," said Kuipa.

"Retail division had a very good first quarter performance underpinned by surging volumes in agro-input sales on the back of improved suppliers support and a very promising rain season which encouraged farmers to spend money through those stores."

CFI incurred retrenchment costs as a result of the restructuring in poultry division.

"As a result total expenses went up 6%, but this is once-off."

Kuipa told the meeting that the group is currently in investment negotiations of 49% into Agrofoods with a local investor.

The short term gearing remained at levels comparable to prior year with short term gearing of $13.3 million and the long term of $3.1 million

He said the group owes local banks $13.3 million in terms of short term debt and is currently in discussion for a potential debt for land swap in efforts to rationalize its debt levels.

Kuipa added that the group is confident that the initiative will be a success.

"The debt rationalization will help realign the gearing to levels commensurate with streamline operations of the group," said Kuipa

On the failed Victoria foods deal with Grindrod Investments Kuipa said they had hoped to consummate the deal by 31 December 2013 and move on to receive injections of $6 million equity and a revolving trading credit line of $12 million for input.

"The deal collapsed for reasons best known by Grindrod." Right now three entities interested in Victoria Foods are carrying due diligence.

"The $18 million deal would have gone a long way in addressing working capital challenges in that particular company and offering us the opportunity to rearrange our balance sheet at Vic foods and CFI."

He also said at the poultry divisions they had terminated discussions with a suitor and "Suncrest abattoir was put under care and maintenance in November 2013."

Kuipa also said their land banks at Crest Breeders and Glenara estates were rezoned from commercial agriculture to urban land. CFI has 953 ha at Cresta which they value at $40-45 million and they are exploring ways of unlocking the value.

Shareholders approved directors' and audit fees of $104 998 and 264 818 respectively while all directors who retired by rotation were re-elected.

- zfn

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