Innscor posts US$269m turnover

INNSCOR Africa Limited reported a colossal US$269 million turnover, leveraged by Zambian and local retail operations, enroute to a solid US$11,5 million operating profit for the year to June, 2009....according to The Zimbabwe Guardian
 
Innscor said Zambian operations, despite the eventual US$1,58 million before tax loss, accounted for the bulk of its operating income at US$93 million.

The giant retail group said weak internal controls at its Zambian Spar operations had resulted in significant charges having to be processed through the income statement.

Innscor Africa’s local retail arm, comprising the Spar Corporate Stores, fast foods operations and TV Sales and Hire, had the best profitability result after posting a US$4,7 million before tax profit, which was achieved on the back of the group’s second biggest turnover amount of US$76 million.

The group while all the local retail operations were profitable the fast foods businesses were the most dominant in terms of overall contribution.
Innscor Africa said its fast foods outlets recorded an 86 percent rise in customer accounts in the first half of the just ended financial year while TV Sales and Hire witnessed a 54 percent increase in business last half of the year.

Profitability in the retail division was also a result of a 180 percent jump in customer accounts at Spar Corporate Stores in the second half of the year as well as the five new retail outlets that were added to the group’s stable.
The group’s milling and manufacturing divisions weighed in with the third the biggest share to turnover at US$36.7 million while before tax profit was perched at US$1.5 million.

The division is made up of Colcom Holdings, appliance manufacturer Capri, WRS, Herbies, biscuit maker Iris, snacks maker Breahtaway, associate investments in National Foods Holdings and three bakery plants.
Innscor said Colcom’s volumes were depressed in the first half of the year, but had picked up in the second half to an average 500 tonnes monthly from 260 tonnes.

The diversified group said appliance-manufacturing operations recorded 248 percent surge in the second half of the year while a 377 percent jump in volumes was witnessed in the retail group’s snacks food business.
Innscor Africa’s ostrich business was closed down in the fourth quarter owing to an increase in the cost of procuring stock feeds, which affected viability.

Innscor Africa’s bakery operations posted losses in the first half of the year due to price controls, but the use of foreign currency adopted in February resulted in a significant upturn in volumes and a return to profitability.
The fast foods business in Ghana, Senegal and Kenya and regional franchising operations achieved a combined turnover of US$30 million and US$1.47 before tax profit.

The group plans to cut output crocodile output at Niloticus from 60 000 to 42 000 per year. Innscor Africa said the decision was in response to the world economic recession, which has affected the global exotic skins market.
A total of 55 000 crocodile skins would however be processed during the 2010 financial year before output was reduced to 42 000 animals annually. The operation culled 22 000 animals in the course of the June year end period.
Innscor Africa said the Niloticus operations posted US$10 million turn over while profit before tax was perched at US$54 000 for the full year to June.

Going forward, Innscor Africa said focus would be placed on ensuring synergies in Zimbabwe’s fast moving consumer goods are fully utilised to maximise resultant turnover and guarantee profitability within the chain.
However, in this drive, Innscor said it would prioritise cost containment.

“Our manufacturing businesses will need to continually monitor their costing models to remain competitive with imported products, whilst it is vitally important that we increase our retail footprint; this will benefit our distribution and manufacturing business,” said Innscor in its year end financials.

The group did not declare a dividend in order preserve cash for working capital purposes.