Food company stocks start the year on a strong note

LUSAKA, ZAMBIA – Shares in food processing company Zambeef Products last week doubled in price on the London Stock Exchange (LSE) in the space of two months.

The company started the year on a positive note with its share price closing at 11.50p on Monday, January 11, a 100 percent rise on the closing price of 5.75p on November 11 last year.

As of last Monday Zambeef was the highest performer in the Food Producers sector of the whole LSE market – both the main market and the Alternative Investment Market (AIM) – over the preceding three weeks, with its share price rising 51 percent during the period.

“Zambeef’s share price in London has performed particularly well and is a measure of the confidence that investors place in Zambeef and Zambia as a whole,” said Joint Chief Executive Officer Carl Irwin.

The company’s share performance was particularly impressive given that during the four weeks between December 14 and January 9 the AIM market as a whole lost 1.25 percent, while Zambeef gained 34.6 percent. This put Zambeef in the top 100 of nearly 1,000 companies on the AIM market, said the company’s London stockbrokers FinnCap.

In additional to international investors, Zambeef has a substantial number of local Zambian shareholders, chief of which is the National Pension Scheme Authority (NAPSA) as Zambeef’s single largest Zambian shareholder with 24,979,819 shares (10 percent). Others include Saturnia Regna Pension Fund, Barclays Pension Fund, Bank of Zambia Pension Fund, Zambia State Insurance Company (ZISC), KCM Pension Fund and Workers Compensation Fund and Professional Insurance Pension Fund.

The upswing began last year as Zambeef announced an increase of 189 percent in operating profits saw for the financial year to September 30, 2015. The company’s operating profit increased by K106 million to K162 million, from K56.2 million in 2014. Meanwhile, profit before tax excluding exchange losses, increased by 728 percent to K107 million, equivalent to US$15 million in US dollar terms.

This was largely due to a strong performance in Zambeef’s cold chain food production and distribution helping to propel the profit figures. Its core cold chain food products division performed exceptionally well, recording an increase in gross profits of 29.1 percent in kwacha terms. Its growing retail network now totals 150 outlets from the previous 139, and continues to play a vital role in enhancing the operations of the division. The division, which includes the production, distribution and retailing of beef, chicken, pork, fish, dairy products and eggs, is expected to drive the growth of Zambeef in 2016 with more outlets planned by the company as well as through its partnership with Shoprite.

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About Zambeef Products Plc
Zambeef Products Plc is the largest integrated agribusinesses in Zambia.
The group is principally involved in the production, processing, distribution and retailing of beef, chicken, pork, milk, dairy products, eggs, stock feed and flour. The group also has large row cropping operations (principally maize, soya beans and wheat), with approximately 8,120 hectares of row crops under irrigation which is planted twice a year and a further 8,480 hectares of rain-fed/dry-land crops available for planting each year. The group is also in the process of rolling out its West Africa expansion in Nigeria and Ghana, as well as developing a palm project in Zambia.
It slaughters around 55,000 beef cattle, 50,000 pigs and 6 million chickens, and processes 10 million litres of milk per year. The company has 120 retail outlets throughout the country, along with three wholesale depots.
More information is available at www.zambeefplc.com