Innscor makes $14.6 billion profit

Despite the country’s seriously deteriorating economy, fast food giant, Innscor, had a turnover of $78.7 billion and net profit of $14.6 billion. And it says though hyperinflation is likely to put pressure on consumer purchasing power, it has a diversified stable business which has tremendous potential.

In its report for the year ending June, Innscor says its food sector contributed $5.5 billion to trading profit. The company commissioned new bread plants in Mutare and Bulawayo and this should lead to increased volumes if the supply of flour improves. Customer count improved in the fast food division despite the impact of inflation.

The company says the inclusion of fun and entertainment in the high profile sites also contributed to positive customer counts. Three ExxonMobil sites were added at Clonsilla, Emerald Hill and Manica West.

The non-food sector contributed $11.2 billion to trading profit. Crocodile ranching operations were expanded by an additional 10 400 square metres.

Despite the shrinking market, the appliance division had an increase in volumes of 18 percent. The EPZ plant operated above expectation while Capri fridges and freezers were well received.

Exports now account for 36 percent of sales up from only 3 percent last year. The tourism division while profitable continued to battle because of Zimbabwe’s poor international image. The company sold 50 percent of the division to management in January.

The credit retail division which includes Television Sales and Hire also made useful contributions and so did Kodak Photo division.

The distribution sector produced trading profits of $4billion largely through the importation and distribution of new leading brands.

The Spar franchise was also aggressively expanded with the number of centers being increased from 39 to 45. In the region 27counters were opened in 4 countries.

The franchising operation serviced 98 counters at year-end. There are plans to open an additional 70 counters in 7 countries this year.

The operations division failed to realise its potential largely because of lack of adequate skills in the region. It managed 78 counters in 5 countries. Another 59 counters, including On The Run Shops in 5 countries should be added to the portfolio this year.

During the year Innscor also acquired a 26 percent stake in milling company National Foods. It has an option to buy a further 10 percent. The milling company, it says, synergises well with its food, manufacturing and distributions businesses.

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