CFI Holdings Limited has reversed its decision to offload 49% of its Victoria Foods Limited shares to JSE listed logistics firm Grindrod Trading Limited.
Tarisai Mandizha
The deal was reversed although it was approved at the extraordinary general meeting by shareholders in July last year. The deal was expected to raise $3,2 million for the recapitalisation of Victoria Foods and restructuring of $2 862 245 of its intergroup loan owed by Victoria Foods into a shareholder loan.
CFI Holdings group company secretary Panganayi Hare yesterday in a statement said: “the directors of CFI Holdings Limited wish to advise all shareholders that the proposed acquisition of a 49% stake in Victoria Foods Private Limited by Grindrod Trading Limited which was approved at the extraordinary general meeting held by shareholders on July 26 2013 has been terminated.”
CFI Holdings reported a $6,6 million loss for the full year to September 30, 2013 as compared to a $3,8 million loss in the prior year on the back of declining revenue and a surge in overheads. During the period under review, turnover for the year ended September 30, 2013 declined by 6% to $87,3 million.
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.
Hare attributed the decline in revenue to the underperformance of the group’s poultry division.
The development came 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.
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Hare added that growing demand for hardware and agro-inputs in the retail division combined with the effect of the incorporation of vector division saw the retail register 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.
