DIVERSIFIED Group Innscor Limited’s half-year profits for the year to December 31, 2012 dipped 11%, reflecting a depressed trading environment despite a modest 6% rise in top line revenues.
Innscor achieved gross sales of US$338 million in the first six months of trading, yielding an operating income of US$34 168 million, down from US$38 278 million in the previous year’s comparative period.
The lower outturn negatively impacted on the group’s net profit after tax, which declined from US$27 434 million previously to US$25 951 million. Despite the dip in basic earnings per share to 3,70US cents from last year’s 4,15 US cents, the group managed to declare an interim dividend of 0,8 US cents per share.
The company recorded impressive across the board volumes growth in Capri, National Foods, bakeries and fast foods business as well as Colcom, but this still failed to stimulate profitable growth.
The bakeries produced 30% more volumes following the commissioning of additional bread plant capacity, while additional capacity of 60 000 loaves per day was commissioned in February this year, bringing total installed capacity for the bakeries to 560 000 loaves per day.
Colcom was a disappointment with 25% growth in volumes failing to have a positive impact on performance.
Equipment failures, weak governance and depressed margins were blamed for the woeful performance of Colcom that led the group to provide for a write down of US$1,3 million in stock obsolescence and doubtful debts.
Capri also chalked up a 42% growth in volumes while National Foods produced 241,000 metric tonnes, 24% ahead of production figures in the comparative period. Profitability at both these units was boosted by improved margins and disposal of non-core assets.