ADVISORY firm IH Securities has projected a 23% rise in revenue at the Zimbabwe Stock Exchange-listed conglomerate, Innscor Africa Limited, for the 2023 financial year, from a combination of volume and pricing.
Innscor management has revealed that indicative revenue in United States dollars is around US$700 million for the financial year 2022 with a net profit of US$90 million.
“For forecasts to remain relevant in the present inflationary environment, we have shifted to a US$ based valuation of the business.
“We expect revenue for Innscor to grow 23% y/y (year-on-year) to US$864 million from a combination of volume and pricing.
“Our view is that EBITDA [earnings before interest, taxes, depreciation and amortisation] margins will register at 13,7% in FY23 (financial year 2023) and improve thereafter. Net margin is, however, expected to soften to a steady state of 7% as other once off income lines fall away,” the researchers said.
Innscor said the operating environment in the financial year 2022 proved turbulent in the face of inflationary pressures emanating from the Ukraine-Russia war and increasing currency instability in the second half of the year.
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As a result, the group experienced supply side challenges in the form of increased freight costs and delays in procuring inputs and capital expenditure goods.
Growing demand from the informal market and improved product mix helped boost double digit volumes growth for most of the group’s segments.
In the mill-bake segment, annual loaf volumes were 19% over the comparative year aided by improved loaf quality, and a renewed focus on the sales and distribution functions.
Aggregate National Foods volumes grew 8% year-on-year, while Profeeds volumes increased 15% with an encouraging performance