FOOD processor, Colcom Holdings profit fell sharply by 66 percent to $1.6 million for the year ended June 2013 down from $4.8 million recorded last year mainly due to raw material price increases.
This is the lowest profit that the company has recorded since dollarisation when the company posted a $2.5 million profit.
In a statement accompanying the results, group chairman, Robert Davenport acknowledged the “disappointing ” result which he attributed to” low margin product lines where thin margins were further affected by raw material price increases not passed on the consumer.”
In addition to the $1.3 million provisions reported at half year, a further $1.1million of cost provisions were processed in the second half of the year, emanating mainly from stock and retrenchment charges.
However, revenue was up $60.7 million compared to $52.8 million in prior year.
The group’s current liabilities for the year at $7.6 million were $ 1.3 million higher than last year’s.
Total assets grew to $37 million compared to $35.7 million last year.
Basic earnings per share stood at 0.87 cents compared to 2.87 cents last year.
Turning to operations, Davenport said the Triple C Pigs livestock division recorded a six percent increase after delivering 57 646 pigs during the year translating into 4490 tonnes of raw input.
“However, the cost and availability of maize for stock feeds remains a challenge,” he said, adding that the genetic upgrade programme remained on line.
The Colcom factory suffered a five percent reduction in overall volumes processed over the prior year due to equipment failure compounded by increased costs of operating and maintaining an aging plant.
The pie plant production was up 38 percent.
A number of product lines have been re-engineered resulting in improvement in product quality.
The group’s subsidiary, AMP achieved volume growth of 57 percent over the prior year translating into 19 percent growth in profitability.
Four new stores under the “Texas” brand were opened during the year, bring the total outlets to eight with a further four units currently being developed.
On the outlook, the company is pinning its hopes on the $1.4 million plant to be commissioned before year end to address the challenge of aging equipment.Advertisement
Plans are also underway to modernise its pie facility with investigations on plant make-up in their final stages.