INNSCOR Africa Limited (Innscor)’s management will direct their focus on ensuring that the firm’s US$72,77 million capital investment into expansion efforts will bring out returns in its current financial year ending June 30, 2025.
In September, Innscor, a consumer staple and durable goods manufacturer, revealed that it had raised its capital investment by nearly 4% to US$72,77 million in its financial year ended June 30, 2024.
The increase is from a 2023 comparative of US$70,25 million. This capital injection completed an intensive three-year investment programme spread across Innscor’s several business units.
The company operates in several segments including cereal, protein, dairy, beverages and packaging, from several subsidiaries and associate firms.
Such subsidiaries and associate firms include National Foods Holdings Ltd, Profeeds (Pvt) Ltd, Irvine’s Zimbabwe (Pvt) Ltd, Colcom Division, Associated Meat Packers (Pvt) Limited, Probottlers (Pvt) Ltd, Probrands (Pvt) Ltd, Prodairy (Pvt) Ltd and NatPak (Pvt) Ltd.
“Notwithstanding the extremely turbulent and complex market conditions under which the group operated during the year, solid and encouraging volume growth was registered across the portfolio, and this was key in delivering the improvement in overall profitability,” Innscor chairman Addington Chinake said in the group’s annual report for the period ended June 30, 2024.
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“Earnings quality remained excellent, with strong free cash generation; the group is now well positioned for sustainable growth in the period ahead. The group has undergone a three-year period of intensive and significant investment into factory expansion and in doing so has also entered a number of exciting new categories.
“Many of these investments are now complete, or nearing completion, and as a result, focus will now be deployed by management in ensuring that these new investments generate the targeted returns.”
He said that as a manufacturing entity, the attainment of critical volume mass was vital to ensuring that the necessary operating efficiencies and economies of scale can be achieved.
“Volume performance will, therefore, be a key area of focus for management in the year ahead; pricing decisions will be undertaken scientifically and precisely, with the overall objective of ensuring convenient and affordable product availability to the consumer,” Chinake said.
“Persistent change in policy application, coupled with the cost-push pressure emanating from the rebasing of the operational cost base has been exacerbated by the carryforward effects of the 2023/2024 El Niño drought and diminishing disposable incomes. In this regard, management will focus heavily on ensuring that its bills of materials and operating costs are managed to optimum levels.”
He said the group remained cautiously optimistic on the medium to long-term prospects for the economy.
The group hopes that authorities will pursue a pathway of implementing consistent and clear policies that encourage more market determined outcomes as it will allow for improved capital allocation decisions by industry. Innscor is currently engaged with the government over high taxes as it is causing cost push pressures on its bottom line.