Innscor Africa performance rebounds
DIVERSIFIED industrial conglomerate — Innscor Africa Limited — performance rebounded in the first quarter of the financial year 2020 on the back of a more stable business environment.
A trading update for the first quarter to September 30, 2020, shows volumes grew across board ahead of same period last year and the previous quarter, despite a challenging environment.
The easing of lockdown restrictions coupled with a more stable foreign currency exchange rate ushered in a more stable environment for businesses to thrive.
“The trading environment for the quarter under review was underpinned by improved business and consumer confidence arising from a relatively stable local currency, a significant decline in local inflation and the easing of Covid-19 lockdown restrictions.
“These factors combined to result in a trading-oriented focus for the Group, with solid volume growth being registered across most of the Group’s product categories.
“The introduction of the foreign currency auction system and Statutory Instrument 185 of 2020 allowed for the implementation of precise pricing strategies, enhanced planning capability, improved capital allocation and value preservation for the group’s business units; these policy measures are extremely encouraging,” said Innscor in a trading update for the quarter under review.
At National Foods, first quarter volumes closed 15 percent higher than the comparative quarter, and also showed continued growth against the previous quarter.
Volumes for the bakery division were marginally ahead of the comparative quarter, but continued to show good recovery against more recent trends, being 36 percent above those recorded for the final quarter of FY2020.
“The period under review was characterised by relative price stability across the value chain and allowed for relevant and competitive loaf pricing to the consumer,”said Innscor.
Although volumes at Colcom were under pressure during second half of FY20 due to the impact of Covid-19, first quarter performance recovered with volumes growing 47 percent ahead of previous quarter following the progressive relaxation of lockdown restrictions.
According to the group, the number of pigs slaughtered went down 12 percent compared to the same quarter last year, but volumes of meat delivered for processing were compensated through the delivery of heavier pigs, as the operation adjusted to significant changes in market demand during the lockdown phase.
The processed range of products showed a growth of 57 percent quarter on quarter.
At Irvine’s, the three main product categories showed strong growth from the final quarter of FY2020 with table eggs, day-old chicks and frozen poultry rising by 10 percent, 29 percent and 77 percent respectively over this period.
As measured against the comparative quarter, volumes in table eggs rose 17 percent whilst day-old chick volumes were up 21 percent and frozen poultry volumes were at similar levels.
Volumes at Associated Meat Packers (AMP) were flat but grew 23 percent against the final quarter of FY2020.
The operation’s backward integration investments continued to deliver an increasing share of raw material requirements, whilst the store network continues to expand with the Masvingo Texas Meat Market branch scheduled to open in the second week of November 2020.
Natpak registered consistent volume growth achieving an overall 24 percent increase on the comparative quarter and a 22 percent growth on previous quarter.
The Flexibles division continued to command strong market share with improved capacity utilisation driving volume growth of 25 percent against the final quarter of F2020 and 43 percent against the comparative quarter.
Overall volumes at Prodairy grew 24 percent above the comparative quarter and 60 percent quarter-on-quarter driven by a continued increase in local raw milk supply and the addition of new and adjacent product lines.
According to the group, the Profeeds operation showed a pleasing recovery against the subdued latter part of the FY2020, with volumes increasing 46 percent against the final quarter of the prior year; volumes were also 10 percent above the comparative quarter.
Said Innscor: “The upgrading of the “Profarmer” retail network into an all-encompassing, one-stop, agricultural outlet for farmers continued, and this, together with the introduction of an enhanced information system, will offer consumers an improved product portfolio as well as key farming and livestock support services.”
Volumes at Probrands increased by 18 percent compared to same period last year on the back of improved rice volumes, specialised products and continued growth of the condiments range.
Quartets on quarter, volumes were however lower due to reduced demand in the food hamper category brought about by a strategic refocus of the associated NGO stabilisation programmes.
Despite the pandemic and its effects on economies, the group remains resilient and will continue to review its financing, capital investment and working capital models as part of its business continuity plans.