Innscor profit remains flat

INNSCOR Africa Ltd’s after tax profit for the year ended 30 June 2013 remained flat at US$48, 5 million despite a 5% revenue growth to US$656,3 million, according to the company’s latest financial statement.

Report by Taurai Mangudhla

Board chair David Morgan said profit before tax went down by 3% to US$59,4 million.

“Consolidated operating profit was marginally lower than that recorded in the prior year and was affected by a combination of lower gross margins in certain business as well as a number of cost provisions and restructure charges emanating from Colcom,” he said.

In addition to provisions of US$1,3 million reported at the half year, Colcom made further provisions of US$1, 1 million in the second half of the year, mainly emanating from stock and retrenchment charges, together with a review of fixed assets, which resulted in impairment and de-recognition charges of US$1,6 million.

Innscor’s generated cash from operating activities amounted to US$54, 2 million, up 11% from prior year, after accounting for a US$3,9 million growth in the debtors book of one of its electrical appliances retail units, TV Sales and Home.

This cash profit, together with the increased borrowing position was utilised to fund the numerous capital expansion and maintenance projects.
Total assets grew to US$348, 6 million from US$ 286,6 million at the end of 2012, comprising noncurrent assets of US$203,8 million and current assets worth US$144,8 million.

Total equity to shareholders stood at US$192,8 million, up from US$ 160,5 million last year while total liabilities stood at US$155,8 million, up from US$126, 1 million in 2012.

Innscor said bread volumes recorded in its bakery operation Bakers’ Inn increased by 12% compared to prior year, after the company added two new bread lines in February 2013, each with a capacity of 80 000 loaves per day, bringing total installed national capacity to 450 000 loaves a day.

“A further two new bread lines, again each with a capacity of 80, 000 loaves per day, are due to be installed towards the end of the first half of 2014 financial year at the Graniteside site, whilst the Simon Mazorodze Road site will shortly see the commissioning of a new pie plant,” said the Innscor chairman. The company’s fast food divisions Chicken Inn and Pizza Inn reduced prices promotion yielded improved customer counts of 31% and 13% respectively over prior year.

The group said a total of 21 counters were added to the Zimbabwe fast-food network while 16 were added in the region.

The new Fish Inn outlet was launched in Harare during the fourth quarter and results were above budget.TV Sales and Home recorded an overall revenue growth of 11% against prior year, while its refrigerator manufacturer Capri recorded a 19% growth in production volumes.

Innscor’s poultry unit Irvine’s recorded an 11% volume growth in processed chicken sales, whilst day old chicks sales grew by 16 % on prior year.

Milling division National Foods Limited’s volumes grew by 21% to 489 000 metric tonnes.