INNSCOR Africa, the second-largest counter by market capitalisation on the Victoria Falls Stock Exchange (VFEX) as of September 29 2025, with a market weight of 25%, has released its financial results for the year-ended June 30 2025.
The diversified conglomerate reported a 19% increase in revenue to over US$1 billion and a 12% growth in headline earnings per share. This performance was achieved against a backdrop of macroeconomic volatility in the first quarter of the financial year, marked by shifting fiscal policies and currency devaluation which cost the group US$1,9 million in financial losses.
However, monetary interventions implemented, thereafter, particularly stabilisation measures that anchored exchange rate expectations, ushered in a more predictable operating environment over the final nine months.
The key question for investors: how sustainable is this newfound economic stability? For now, improved foreign currency availability and a deceleration in inflationary pressures provide cause for optimism, but the durability of these gains rests heavily on consistent monetary discipline and policy continuity, two factors Innscor must watch closely to maintain its growth trajectory.
Segmental performance
Innscor’s operations span three broad segments: mill-bake, protein, and beverages and light manufacturing.
The mill-bake segment was again the standout performer, contributing more than half of group revenues. National Foods recorded 18% growth in aggregate volumes, and the Bakery division recorded 12% surge in volumes, highlighting Innscor’s ability to leverage strong consumer demand in staple categories.
In contrast, the protein segment delivered a mixed picture. Fresh pork (under Colcom) volumes grew by a healthy 25%, but Irvine’s profitability lagged expectations, squeezed by input cost pressures and competitive dynamics.
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The beef category (under AMP) also recorded volume contractions, underscoring persistent challenges from both the supply and demand side.
Under the beverages and light manufacturing segment, Probottlers continued to grapple with regulatory shocks. The Sugar Tax, which has cost the company US$10 million since inception, materially suppressed demand in soft drinks and cordials.
However, Innscor’s Nyathi beer brand delivered resilient growth, and Prodairy aggregate volumes closed 27% ahead of the comparative year, allowing some offset against the underperformance in sparkling beverages.
This divergence in performance illustrates the group’s diversified model: strong defensive growth in mill-bake, selective resilience in beverages (via sorghum beer), and cyclical challenges in protein that management will need to address through margin recovery and efficiency improvements.
Regulatory and tax pressures
Fiscal headwinds remain a defining feature of Innscor’s operating environment. The US$10 million sugar tax impact is already reflected in suppressed volumes, but more concerning for investors is the US$13,4 million in unresolved historical tax assessments from Zimbabwe Revenue Authority (Zimra). Investors will need to track both regulatory policy direction and tax resolution outcomes as critical catalysts for the stock.
Capital allocation
Innscor has sustained an aggressive investment programme, spending US$73,9 million in capex in FY25 and committing the same range of CAPEX in FY26. This continues the group’s multi-year strategy of upgrading capacity, expanding production lines, and diversifying product categories.
The focus now, management indicates, will shift toward achieving optimal utilisation of these new assets. Returns are expected to flow most significantly from:
Expanded milling capacity, solidifying National Foods’ dominance in staples.
Snacks and light manufacturing, where growth prospects remain robust.
Selected beverage lines (such as Nyathi) that have shown resilience against fiscal shocks.
In the medium term, this investment-heavy strategy positions Innscor competitively against peers by embedding economies of scale and broader category reach, but execution discipline will be key.
Cash flow, shareholder returns
Innscor generated US$104 million in operating cash flow, a 20% increase from the prior year. This strong cash generation has funded the ambitious capex program while also supporting shareholder returns, with total dividend per share up 11%.
The balance between reinvestment and shareholder payout is notable: management has chosen to sustain capital intensity while still providing incremental dividend growth.
For investors, this signals confidence in long-term prospects while ensuring short-term returns are not neglected.
Conclusion: Growth case intact
Innscor Africa’s FY25 results highlight the resilience of its diversified model and the strength of its Mill-Bake SBU, which continues to anchor group performance. Yet, unresolved tax exposures, regulatory burdens like the Sugar Tax, and underperformance in parts of the Protein and Beverage businesses remain key downside risks.
If the current macroeconomic stability proves durable and Innscor executes efficiently on its new asset base, the group is well-positioned to deliver sustained top line and earnings growth. For long-term investors, Innscor presents a compelling case, albeit one that must be continuously assessed against Zimbabwe’s volatile policy and fiscal environment.
Innscor’s share price has been rallying upwards for the past fortnight. While the counter’s strong fundamentals justifies bullish sentiment, investors should also be mindful of market timing, lest they will buy when there is limited short-term upside, making the stock more suitable for those with a long-term holding horizon.
Taimo is an investment analyst with a talent for writing about equities and addressing topical issues in local capital markets. He holds a First Class Degree in Finance and Banking from the University of Zimbabwe. He is an active member of the Investment Professionals of Zimbabwe community, pursuing the Chartered Financial Analyst charter designation.
