CFI banks growth on consumer spending
CFI Holdings (CFI) has staked its growth on increased consumer spending on foodstuffs as well as farming, construction, and mining activities, despite decreasing incomes.
Owing to a depreciating Zimbabwe dollar, consumers are facing a monthly erosion on their incomes.
However, in CFI’s first quarter trading update ended December 31, 2021, the group recorded a 17% increase in sales volumes for its retail division’s key revenue drivers compared to the 2020 comparative.
CFI said the positive growth was attributable to improved agricultural output in 2021, increased construction activities and payment of bonuses and salaries in foreign currency.
“Notwithstanding the challenges of high inflation levels and unstable exchange rate, the group projects that aggregate demand will continue to firm on the back of growth in consumer spending on the basic foodstuffs, farming activities, construction and mining activities,” CFI said.
“The board is encouraged by the positive trajectory the economy is on and hopes that the ongoing collaborative dialogue between government, industry and other stakeholders will be maintained in order to safeguard business confidence and the significant economic achievements attained since the introduction of the auction system.”
CFI added: “The group will continue to uphold COVID-19 protocols in order to safeguard the health and safety of its staff and stakeholders.
“Hopefully, the future will see the world facing progressively weakening variants, and ultimately the reopening of world travel and economies”.
In September 2021, CFIs food manufacturing subsidiary, Victoria Foods, exited judicial management, with the business being capitalised during the quarter.
This underpinned the resurgence of the Victoria Foods’ brands the market has always been accustomed to, enhanced by further innovations and consistent product quality and performance that the group will leverage on consumer spending.
“Glenara harvested 2 406 tonnes of potatoes during the period. The estate has established maize and soyabean summer crops, which should assist with underpinning raw materials supplies to Victoria Foods and Agrifoods,” CFI said.
During the quarter under review, group inflation-adjusted revenue increased by 65,7% to $5,25 billion from $3,17 billion for the comparable prior year quarter.
“Historical revenues for the quarter grew by 161% to $4,98 billion in the current quarter from $1,91 billion in the comparative prior year quarter,” CFI said.
“Of the group’s turnover, retail contributed 87,06% (2020-Q1 — 96,6%) while milling and farming operations accounted for (10,26% (2020-Q1 — 0%) and 2,68% (20201 — 3,4%) respectively.”