The Group continued with its rationalisation exercise in the period under review. Overall capacity utilisation remained lowas marginal operations were scaled down. This resulted in the Groups turnover declining by 13% to US$41.8 million in the current period. Of the total turnover, Poultry Division contributed 32% (2013 H1 - 23%), Specialised Division 6% (2013H1- 26%) andRetail Division 62%(2013H1- 26%). Rationalisation costs, working capital constraints, overall low capacity utilisation and heavy financing costs weighed down the business performance in the period. The business posted a loss for the period of US$5.5 million compared to US$1.76 million incurredin prior period. The Group invested US$0.15 million (2013 H1: US$0.26 million) in property, plant and equipment in the current period. The Group's total borrowings decreased by a marginal US$0.3 million relative toprior year, closing the year at $16.1million. POULTRYDIVISION AGRIFOODS The period was characterized by steep escalations in the prices of maize and soya meal. Intermittent availability of maize and soya coupled with s by working capital constraints awvolume declining 39% compared to the prior period. The business has however remainedsatisfactorily profitable. The business has exciting growth potential going forward given the favourable 2013/2014 agricultural season that the country has had. AGRIMIX Agrimix volumes declined by 43% relative to prior year. The business however managed to maintain margins and profitability despite the volume decline. HUBBARDZIMBABWE Hubbardhada difficult half year trading periodowing toincreased sales volatility and collapse of demand day old chicks for particularly in December 2013 and January 2014 periods. Power outages remain a major concern at the entity given obvious its impact of increasing the cost of production. The business was streamlined in o deal with increased volatility and reduced order t internal placements. GLENARAESTATES The farm has continued to consistently contribute towards food security andpoultry breeding in the country. Glenara Estates cropped 709 hectares with maize, maize seed, soya-beans and sorghum during the period under review. The cropping season has been goodwith above average yields. CRESTBREEDERSINTERNATIONAL The business rationalized in the current period Crest was . operations will be affected by the proposed land for debt swap with financial institutions, and hence the need for advance preparations for relocating the business elsewhere. The Group initiated discussions on the land for debt swap in the second quarter of its financial year and plans are toconclude these before end of June 2014. The Group is also in discussions with Government on modalities for compensation arising from its intention to acquire 1057 hectares of its urban land in respect of the Saturday Retreat Estate. SUNCRESTCHICKENS The Suncrest abattoir was put under care and maintenance since end of November 2013 given the unsustainable operational inefficiencies that were being incurred by the business. As a result 114 employees during the period. The Group were retrenched has been reliant on toll slaughters to maintain market presence. The Board and management remain committed to resolving the production bottlenecks at Suncrest in order to restore sustainability andviability in the poultry value addition chain. SPECIALISEDDIVISION VICTORIAFOODS The equity transaction Victoria Foods fell through in respect of during the period. negatively impacted the business' This production planning processes resulting in a constrained performance during the period. Due diligences by other interested entities are at various stages of execution and we remain hopeful that a sustainable solution will soon be found for the business. MAITLANDSZIMBABWE There was little progress on the joint venture projects due to the continued unavailability of long-term funds for development projects. RETAIL DIVISION FARM&CITY Turnover grew by 1 % relative to the prior year, spurred by 6 increased demand for agro-inputs given the good agricultural season the country enjoyed and participation n some NGO i projects. Farm&City continued to invest in upgrading its point of sale system and technologically linking its branch network in order to improve availability of accurate, real time information andenhancing internal controls. RECAPITALISATIONUPDATEANDOUTLOOK The Group owns 834 hectares held by Crest Breeders which was scoped into the Greater Harare municipal boundaries in July 2012. Independent valuations of the land were undertaken in pursuance of a debt securitization plan and land for debt swap in terms of a Memorandum of Understanding (MOU) agreed to with financial institutions exposed to the Group e Group . Th hopes to conclude the swap arrangements in the third quarter, thus rationalizing its gearing to levels commensurate with the streamlined operations for the Group. This should favo rably u impact on the recapitalisation requirements the Group. of Beyondthis, the Groupintends tovalue addthe residual landbank through undertaking residential development projects. The Group is also in the process of concluding the disposal of its investment in Windmill (Private) Limited and is targeting finalization before endof quarter. third ACKNOWLEDGEMENTS On behalf of the Board and Shareholders, l would like to extend my sincere appreciation to our valued customers, suppliers, financiers, other stakeholders and management and stafffor their support and commitment in seeing through the Group's restructuring initiatives. S.J. Chihambakwe GROUPCHAIRMAN DIVIDENDDECLARATION In view of the loss incurred by the Group and the need to raise equity capital, the Board considers it inappropriate to declare a dividendfor the half-year ended31March 2014. P. Hare COMPANYSECRETARY BYORDEROF THEBOARD 30May 2014 Financial report to shareholders for the half year ended 31 March 2014 U n i q u e
B r a n d s :
C F I / / 1 0
1 4 / 1 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME UNAUDITED AUDITED UN AUDITED SIX MONTHS IX MONTH S S YEAR TO Notes 31.03.1 30.0 .1 4 3 3 30.09.13 US$ US$ US$ Sales 41 796 590 47 987 367 87 187 838 Change in fair value of biological assets (3 597) 59 824 41 145 Revenue 41 792 993 48 047 191 87 228 983 Operating (loss) profit before depreciation, impairment and financing costs (3 703 081) 553 297 (2 160 905) Retrenchment costs (995 564) - - Depreciation expense 2.1 (1 105 169) (1 230 015) (2 432 377) Impairment of property, plant and equipment - (19 709) (377 436) Finance costs (1 686 735) (1 694 217) (3 896 817) Loss before tax (7 490 549) (2 390 644) (8 867 535) Income tax credit 2.2 1 985 409 626 567 2 284 363 Loss for the period (5 505 140) (1 764 077) (6 583 172) Other comprehensive (loss) income, net of income tax Items that will not be reclassified subsequently to profit or loss Gains on revaluation of properties 48,056,767 - - Deferred tax on revaluation of properties (4,109,986) - - - - 43,946,781 Items that may be reclassified subsequently to profit or loss Fair value loss on available-for-sale investments (782 508) (709 589) (1 380 000) Deferred capital gains tax on investments 3 803 - 69 000 (778 705) (709 589) (1 311 000) Other comprehensive (loss) income for the period, net of tax (778 705) (709 589) 42 635 781 Total comprehensive (loss) income (6 283 845) (2 473 666) 36 052 609 Loss attributable to: Equity holders of the parent (5 501 140) (1 764 077) (6 583 172) Total comprehensive (loss) income attributable to: Equity holders of the parent (6 283 845) (2 473 666) 36 052 609 Basic loss per share (US cents) (5,22) (1,67) (6,24) Net asset value per share (US cents) 71,01 40,44 76,96 Shares in issue 105 500 875 105 500 875 105 500 875 Weighted shares in issue 105 500 875 105 500 875 105 500 875 D i r e c t o r s :
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