CONSUMER staple and durable goods manufacturer, Innscor Africa Limited (Innscor) raised its investment by nearly 4% to US$72,77 million in its financial year ended June 30, 2024, as it completes an intensive three-year investment programme.
The latest investment was a huge increase from a 2023 comparative of US$70,25 million.
The investment helped the firm increase its overall volumes that saw group revenue rise by 13,18% to US$910, 06 million in the period under review from the comparative period last year.
Innscor operates several segments, including cereal, protein, dairy, beverages, and packaging, from several subsidiaries and associate firms.
The subsidiaries and associate firms include National Foods Holdings Ltd, Profeeds (Pvt) Ltd, Irvine’s Zimbabwe (Pvt) Ltd, Colcolm Division, Associated Meat Packers (Private) Limited, Probottlers (Pvt) Ltd, Probrands (Pvt) Ltd, Prodairy (Pvt) Ltd, and Natpak (Pvt) Ltd.
In a statement attached to the firm’s financial results for the year ended June 30, 2024, Innscor chairman Addington Chinake said the group had undergone a three-year period of intensive and significant investment into factory expansion.
“The group’s statement of financial position remained robust, with a strong fixed asset base, supported by efficient working capital positions and negligible net debt; net gearing closed at 9,2% at the end of the current financial year under review,” Chinake said.
“The group’s current year cash generation was outstanding, with cash generated from operating activities of US$106,103 million being recorded.
“The strong operating cashflows enabled the group to continue its extensive investment programme, with a total of US$ 72,774 million invested in the year under review.”
The firm had US$1,25 to every dollar of short-term debt, indicating that firm was in a liquid position entering its current year period.
Innscor’s balance sheet for the period under review was recorded at US$728,59 million, up from US$653,84 million recorded as of June 30, 2023.
This was mainly driven by a US$45,38 million increase in property, plant and equipment value to US$358,23 million, from the 2023 comparative.
Trade and other receivables also saw an increase to US$111,14 million for the period under review, from a 2023 comparative of US$88,02 million.
“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.
“Earnings quality remained excellent, with strong free cash generation; the group is now well positioned for sustainable growth in the period ahead,” Chinake said.
“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 ensure 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 added.
A net interest expense of US$9,23 million recorded in the current year under review (2023:US$13,44 million), fair value adjustments on livestock and listed equities, and equity accounted earnings boosted profit after tax.
For the period under review, profit after tax was recorded at US$48,16 million from US$37,84 million recorded over the comparative 2023 timeframe.
“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 carry-forward effects of the 2023/2024 El Nino 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,” Chinake said.
“The group remains cautiously optimistic on the medium to long-term prospects for the economy and is hopeful that the authorities will pursue a pathway of implementing consistent and clear policies that encourage more market-determined outcomes which in turn will allow for improved capital allocation decisions by industry.”
