FOOD processing firm Cairns Holdings Ltd has reported a marked slowdown in demand for food products largely due to a deteriorating economic environme
nt marked by high prices and galloping inflation.
This, however, did not deter the group, which posted results ahead of market expectations. Cairns turnover for the interim reporting season ending February 28 grew by 477% to $1,2 trillion compared to the same period last year. Volumes were 21% lower than what was achieved the previous year during the same period.
“The operating environment for the first half of the year was characterised by a number of challenges,” said the group in a statement accompanying its financial results.
“The challenges ranged from intermittent shortages of production inputs, continued escalation in both the inflation and interest rates and depressed demand,” said Cairns.
Cairns Foods contributed 71%, Charhons 28% and Paprika 1% to the turnover. Paprika was affected by the sub-optimal availability of the paprika pod in the last season.
With the economy showing no signs of improving, the group has resorted to expanding its export market to boost its sales volumes.
“With no immediate prospects in the improvement of the current environment, management is implementing strategies aimed at arresting the decline in volumes.
“Focus will be on growing volumes through the expansion of export markets and introduction of new products,” said Cairns.
Cairns Holdings Ltd is an attractive consumer-oriented stock that should thrive in the current operating environment. Figures made available by the Consumer Council of Zimbabwe this year have shown that consumer spending patterns on foodstuffs are fast-moving goods.
Cairns sales volumes and earnings are poised to increase during the financial results year end as the group seems to be well placed to meet demand locally and if it is successful with spreading its wings in the region.