adminCairns now wholly own ME Charhons after purchasing an additional 40 percent from Dairibord Zimbabwe for US$1 million in February this year.
For the six months to February 29, 2012 Cairns turned over US$7,4 million, a 32 percent negative variance compared to the same period last year.
This was due to depressed volumes at Cairns Foods as well non-activity at ME Charhons. Cairns Foods turned over US$7,1 million, representing 96 percent to total group turnover.
Finance costs for the period were at US$1,4 million, showing an 18 percent increase in the comparable period resulting in a loss after tax of US$1,6 million.
Last year the group incurred a loss of US$1,3 million.
Cairns says interest burden was 12 percent higher than the previous year.
The group continues to struggle to raise fresh capital and to restructure its debt with finance costs taking away 18 percent of the revenue.
“Unfortunately, the group was unable to take advantage of this relatively stable macro-economic stability due to its debt burden and working capital constraints,” said the company.
The company said it was about to conclude a supply chain management deal which could help turn around its fortunes.
The group is currently operating at 20 percent capacity and is envisaging production levels to up 75 percent if it manages to get working capital.
Going forward, Cairns is seeking a strategic partner by buying out the Reserve Bank of Zimbabwe through which the Finance Trust of Zimbabwe owns 64 percent. It is understood the central bank is about to conclude negotiations with potential investors.
The new investor is expected to take up Cairns’ US$12 million debt as part of the deal to revive the firm.
Management and about 800 employees are expected to benefit from the deal through a share ownership scheme.
Online Reporter