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CFI remains in the red

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CFI Holdings Limited has reported a$6,6 million loss for the full year to September as compared to a $3,8 million loss in prior year.

CFI Holdings Limited has reported a$6,6 million loss for the full year to September as compared to a $3,8 million loss in prior year on the back of declining revenue and a surge in overheads.

Tarisai Mandizha

During the period under review, turnover for the year ended September 30, 2013 declined by 6% to $87,3 million while finance costs advanced.

Depreciation expenses increased to $2,4 million from $1,8 million in 2012, impairment of property, plant and equipment declined to $377 000 from $402 000 and finance costs increased to $3,9 million from $3,4 million in 2012.

In a statement accompanying the group’s financial results, CFI Holdings company secretary Panganayi Hare attributed the decline in revenue to the underperformance of the group’s poultry division.

The development comes at a time the local poultry sector has been hit by stiff competition from cheap imports. He said revenue declined by 20% and 16% for poultry and specialised divisions respectively.

Hare added that growing demand for hardware and agro-inputs in the retail division combined with the effect of the incorporation of vector division into retail saw retail registered a 20% revenue growth during the year.

In the period under review, the poultry division contributed 45% of the total turnover from 53% in 2012, specialised division contributed 11% from 12% in 2012 and retail division contributed 44% from 35% in 2012.

Turning to the recapitalisation of the group, Hare said the process was expected to improve production efficiencies as well as ease working capital constraints.

“The Victoria Foods transaction is in the final stages of implementation as well as regulatory approvals have been secured. “We are confident that the transaction will be fully implemented soon, paving way for an exciting recovery and growth era for Victoria Foods going into the future,” Hare said.

He added the group has plans to develop land that that had been initially earmarked for compulsory acquisition to unlock value.