CFI revenue down 9%

Published: 31 March 2014

CFI HOLDINGS says trading performance deteriorated in the 5 months ended 28 February with revenue declining by 9 percent to $39,4 million, a company official has said.

Goup chief executive officer Mr Steve Kuipa told a shareholders' meeting Friday that while revenue was down on prior year of $43,1 million, margins also eased 1,2 percent during the period due to the impact of restrained margins in the poultry and specialised divisions.

"The specialised division volumes were subdued in the first 5 months relative to prior year owing to capitalisation challenges.

"The delay in the finalisation of the recapitalisation deal and the subsequent abrupt cancellation of same by our targeted investment partners negatively impacted the business' production planning processes, resulting in a constrained performance during the period," Mr Kuipa said.

The group is currently in discussions with three suitors interested in Victoria Foods and these were at an advanced stage. This follows the pulling out from a potential agreement by Grindrod Trading Limited, which withdrew its interest from purchasing the milling company.

CFI also terminated discussions with another suitor who had been identified for the purposes of underpinning the investment into a new abattoir for the group's poultry business.

Mr Kuipa said that the group is in negotiations with a local investor for an investment into Agrifoods.

"An indicative offer has already been received and the Board is evaluating options for moving forward the investment in order to underpin the capital expenditure and working requirements for the business," said Mr Kuipa.

CFI is banking on the transfer of its 953 hectares held by Crest breeders which was scoped into the Greater Harare municipal boundaries in July 2012. The land is valued at about $40 million. The group is working with realty and land development consultants in a bid to explore ways of beneficiating the land.

"The group owes local banks $13,3 million and is currently in discussions for a potential debt for land swap in efforts to rationalise its debt levels.

"The remaining land will be beneficiated through undertaking a low cost residential development project," Mr Kuipa told shareholders.

Trading for the poultry division was mixed in the year to December last year but demand for stock feeds and eggs has remained firm.

The group's retail business had a very good first quarter performance underpinned by surging volumes in agro-input sales. The improvement was on the back increased suppliers' support and a promising rainy season which overall encouraged farmers to spend in the efforts to bolster opportunities for a better yield and harvest.
- The Herald

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