ZAMBIA, Lusaka. Shares in food processing company Zambeef Products last week doubled in price on the London Stock Exchange (LSE) in the space of two months.
The company started the year on a positive note with its share price closing at 11.50p on Monday, 11 January, a 100% rise on the closing price of 5.75p on 11 November last year.
Strong retailing of cold chain products helped Zambeef Products achieve 189% operational profit increase.
As of last Monday Zambeef was the highest performer in the Food Producers sector of the whole LSE market – both the main market and the Alternative Investment Market (AIM) - over the preceding three weeks, with its share price rising 51% during the period.
The company’s share performance was particularly impressive given that during the four weeks between 14 December and 9 January the AIM market as a whole lost 1.25%, while Zambeef gained 34.6%. This put Zambeef in the top 100 of nearly 1,000 companies on the AIM market, said the company’s London stockbrokers FinnCap.
In additional to international investors, Zambeef has a substantial number of local Zambian shareholders, chief of which is the National Pension Scheme Authority (NAPSA) as Zambeef’s single largest Zambian shareholder with 24,979,819 shares (10%). Others include Saturnia Regna Pension Fund, Barclays Pension Fund, Bank of Zambia Pension Fund, Zambia State Insurance Company (ZISC), KCM Pension Fund and Workers Compensation Fund and Professional Insurance Pension Fund.
The upswing began last year as Zambeef announced an increase of 189% in operating profits saw for the financial year to 30 September, 2015. The company’s operating profit increased by K106 mill. to K162 mill., from K56.2 mill. in 2014. Meanwhile, profit before tax excluding exchange losses, increased by 728% to K107 mill., equivalent to $15 mill.
This was largely due to a strong performance in Zambeef’s cold chain food production and distribution helping to propel the profit figures. Its core cold chain food products division performed exceptionally well, recording an increase in gross profits of 29.1% in kwacha terms. Its growing retail network now totals 150 outlets from the previous 139, and continues to play a vital role in enhancing the operations of the division. The division, which includes the production, distribution and retailing of beef, chicken, pork, fish, dairy products and eggs, is expected to drive the growth of Zambeef in 2016 with more outlets planned by the company as well as through its partnership with Shoprite.