Colcom first quarter revenues weaken

LISTED meat processor Colcom Holdings says its revenue for the first quarter of the 2015 financial year is lower compared to the same period last year.

Giving a trading update at the company’s AGM on Friday, group financial director Dino Tumazos attributed the depressed performance to weak economic fundamentals and rising competition.

“Liquidity is tight and trading conditions are being made even more difficult with increased competition coming into a shrinking market,” said Tumazos.

He, however, said that cost efficiencies at Tripple C and processing efficiencies in both AMP and Colcom factories have reduced deficit at gross profit level.

Operating expenses are flat compared to the first quarter of FY2015. As a result of the situation, profit-before-tax was below amount achieved in the same period last year.

Operationally, the group’s new pig production facility came on line in the first week of July and reached full production of 300 pigs per week by mid-August.

The group’s finance director said Colcom Foods’ volumes were flat compared to the prior year, but competitive pricing in the market has taken some value away from revenue posted in the comparative prior period.

He said the new Pie Factory, which was commissioned in August is “now performing to expectation”.

At AMP revenue during the period under review was slightly behind that reported in the same comparable period for 2015. But processing efficiencies and cost controls have helped to close the gap somewhat at profit-before-tax level, said Tumazos.

Going forward, the company is pinning hopes on ongoing expansion programmes.

“At CCC we expect to expand the refurbishment at the new facility to produce an additional 150 pigs per week by the third quarter of FY2016… . At AMP we expect to pen the new Texas Meats branch in Bindura in early December. Additional shops will be developed as appropriate sites are identified,” he said.

The AGM saw the company’s shareholders approve all ordinary business, as well as the special business of a share buyback. — BH24