.Mr. Francis Grogan
By MAIMBOLWA MULIKELELA –
ZAMBEEF Products Plc share price on the London Stock Exchange (LSE) has increased to 30 per cent in two days after the company was designated “Tip of the Week” by leading investment magazine Investors Chronicle.
Zambeef is one of more than 3,000 companies listed on the LSE’s Alternative Investment Market (AIM), yet it was singled out by the influential weekly publication as being one of the most promising companies for investors to watch.
Under the headline “Zambeef’s 44 per cent discount to book value reeks of recovery upside”, the Investors Chronicle analyst set out how the company’s shares are under-valued on the stock exchange when compared with the underlying value of the group’s assets.
In a statement issued in Lusaka yesterday, the article referred to the praise lavished on the food producer for the success of its ‘farm-to-fork’ model, and last year’s accolade of chief executive Francis Grogan winning the Entrepreneur of the Year award at the All Africa Business Leaders Awards.
But it pointed out that the company’s drop in profits for the year to September 31, 2013, had prompted a fall in share price that meant the company’s shares were now good value for investors to buy, and have potential to rise further.
“It is clear that the chief causes for the failure of 2012-13’s profits to meet city expectations were one-off and equally clear that Zambeef has much going for it; not just that vertically integrated model, but its potential to grow on the back of Zambia’s march out of poverty and the ability of its bosses to make the right deals for its success,” Investors Chronicle said.
The analysis, which included a “Buy” recommendation, helped fan investor interest, pushing the share price up 15 per cent on Friday.
“When Zambeef listed on the AIM of the London Stock Exchange in June 2011, it laid out an ambitious expansion plan which, in addition to the acquisition of Mpongwe Farm, included the complete upgrade of Zamanita’s plant and equipment and improvements in production facilities at Master Pork.
Mr Grogan said: “During the course of 2011 and 2012, the Group made significant capital investment in order to achieve its objectives.
“I am pleased to report that the business generated a net cash inflow before financing of K112 million (US$21 million), as the benefits of our recent investment began to show.”
Zambeef, which is listed on both the London and Lusaka stock exchanges, saw revenue rise by 24 per cent to K1,595 million during its last financial year, with gross profit up by a similar percentage to K553 million.
