CFI Holdings operating loss widens

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CFI Holdings Limited posted a loss for the year ended September 30 2014 of $9,9 million from $6,5 million in the comparable period in 2013 attributed to limited working capital.

BY VICTORIA MTOMBA

The group’s chairman Simplicius Chihambakwe said the group finance costs were flat at $4 million compared to the previous year.
“Rationalisation costs, limited working capital availability, overall low capacity utilisation and heavy financing costs weighed down the business’s performance in the period,” Chihambakwe said.

Turnover for the year declined by 18,5% to $71,1 million.

“The retail division revenue registered a modest 1% turnover decrease, while poultry and specialised receded 31% and 40%, respectively, due to the impact of operations rationalisation in poultry and inadequate working capital for the specialised division. Of the total turnover, poultry contributed 38% (2013 — 44%), specialised 8% (2013 — 11%) and retail 54%(2013 — 45%),” Chihambakwe said.

During the period under review the group incurred $1 million in retrenchment costs.

The group invested $400 000 in property plant and equipment in the current period while a 14% investment stake in Windmill was disposed of at consideration at $1,15 million effective end of September in 2014 through a debt swap with the entity.

Crest Breeders International, a division of the group, had its operations rationalised and had its capacity utilisation reduced to 20% of the 2013 levels.

He said Crest operations would be affected by the proposed land-for-debt swap with local institutions and hence the need for advance preparations for relocating the business elsewhere.

“The group signed a memorandum of understanding defining a land-for-debt swap framework with its financiers in April 2014. The proposed transaction was premised on a property owned by Crest Breeders measuring 834 hectares known as Langford Estates,” Chihambakwe said.

“The group hopes to conclude the swap arrangements before the third quarter ending June 20 2015, thus rationalising its gearing to levels commensurate with the streamlined operations for the group.”

He said the group had so far approved the subdivision permit for the development of 12 401 high-density residential stands measuring 240m² each.

Meanwhile, Chihambakwe said the group had registered 5 500 stands and payment was coming from Saturday Retreat, a property measuring 107ha which had been invaded by various housing co-operatives.

The land was taken by the government, but a settlement was reached in January this year and CFI is registering the individuals who were at Saturday Retreat.