ARISTON Holdings Ltd is beginning to reap the rewards of its successful recapitalisation exercise after turnover increased 26,9% to US$5,051 million in the four months to January, group chief executive Paul Spear said.
Last year the horticultural producer raised US$8 million, which saw South African company, Afrifresh, getting a 40% stake in the group.
Spear told shareholders at an annual general meeting last week the group had spent around US$3 million on capital investment last year and was adequately funded from April onwards.
Tea estates are behind budgets of 3 000 tonnes, but Spear was quick to point that they had already produced 1 000 tonnes of tea, the same figure they achieved for the whole of last year.
The group was experiencing good prices on tea exports as the investment that was made in the factories enabled them to manufacture the tea correctly while the investment into harvesting equipment helped with good quality leaf.
However, the trading business had performed below expectations. The exclusive arrangement with OK Zimbabwe came to an end and there were a few internal control issues, he said.
But before the changes with OK took place, Spear said his company had already made the decision the business needed to change its balance and reduce reliance on one company.
Spear said Favco’s business model was now more balanced.
He said the company was facing pressure like most businesses, including what he termed “unrealistic wage demands” by national employment councils.
Spear said the group had finished in a loss-making position, but was optimistic last year was the end of the loss-making years.
He said: “The company has had a very strange start to the season as the rains started very late, then it went extremely heavy and as we stand, we are about average year-to-date, but the distribution has not been very kind.”
Spear said even though the firm was just about double what they did last year, they were unable to keep up with the demand on the local market so they had got a bit of an upside still to come.
On macadamias 10 to 15% harvesting had been achieved so far and “a much higher quality crop is expected thanks to the investment”.
Spear further highlighted that for the apple crop, they had started harvesting four weeks earlier than they had expected.
He also said at Kent, the firm had invested some money in upgrading the poultry facilities to the point that they were now up to about 90% of their capacity with projection to operate at full capacity from 2014.