Presenting the trading update for the group’s first quarter, Chief Executive Officer, Michael Lashbrook said the Maize division had a difficult quarter with the transition away from the government subsidy programme with volumes reducing by 42% compared to last year and 35% versus the previous period.
“Substantial maize imports will be required to augment the recently concluded harvest which was impacted by a second successive drought. The group has recently commenced maize imports in preparation for expected demand in the December to April period.”
Lashbrook said in terms of performance the group had realized a 15% growth above prior year and 4% ahead of previous year.
“On a three month cumulative basis, volumes at 115,000MT were 15% above prior year and 4% ahead of the previous period. Volumes in the Maize division were disappointing and excluding Maize, volumes grew 42% on prior year and 30% on the previous period.
“Volumes in the Flour division increased substantially by 43% compared to last year and 31% relative to the previous period. The category benefited from access to funds on the foreign currency auction which assisted product affordability.
“The Maize division had a difficult quarter with the transition away from the Government subsidy program, with volumes reducing by 42% compared to last year and 35% versus the previous period.”
Lashbrook said in spite of the challenging quarter the return to market related trading is welcomed and a recovery in volumes is expected in the coming quarters
“Volumes in the Stockfeeds division were very encouraging, registering growth of 26% and 33% compared to the prior and previous periods respectively. The growth was driven by the poultry category where there was strong demand from small scale poultry farmers.
“The Groceries unit continued to deliver improved volumes, recording 76% growth on prior year and a similar outcome to the firm performance in previous quarter. The growth was driven by salt and to a lesser extent sugar beans, popcorn and pasta,” said Lashbrook.
He added: “The Snacks & Treats unit, which had been impacted by limited consumer activity during lock-down, recovered strongly with volumes increasing 21% against prior year and 40% compared to the previous period. Demand for Iris Loose Biscuits was strong during the quarter.
Despite the challenging quarter the return to market related trading is welcomed and a recovery in volumes is expected in the coming quarters.”
Lashbrook added that the trading environment had stabilized significantly during the quarter, highlighted by a marked reduction in inflation as this was brought about by the various policies that were enacted and in particular the foreign currency auction as well as the ability to receive foreign currency payments from customers.
At the AGM, auditors’ fees were approved at $28.99 million while a share buyback was also approved.