5. COLCOM
Colcom share price rose by 41.2 percent year to date to 24 cents. Although the Group’s revenue was 7 percent down to $59.90 million as compared to the same period in the previous financial year, production efficiencies improved as the company recorded an operating profit of $9.09 million, a growth of 1 percent on the previous financial year.
The growth in operating income was driven by the performance of Triple C Pigs production and cost containment measures. Triple C Pigs production units yielded improved margins that were partly offset by margin reduction at the Colcom Foods Division resulting from pricing decisions made in the year.
The group continues with its expansion projects, investing $4.45 million in working capital and another $2.73 million was invested in property, plant and equipment. A further $453 199 was invested in long-term biological assets. After settling $456 587 in borrowings and paying a dividend of $4.03 million the Group retained $4.90 million in cash at the end of the financial year.
The group largely benefit from Triple C Pigs which has continued to yield excellent results with pig deliveries increasing by 40 percent over the previous year. Of this, the auxiliary pig unit developed over the past 24 months delivered 27 percent of the growth. As per the phased expansion plan, this unit further increased production from 300 to 450 pigs per week from March 2016.
Business performance continue to be enhanced as the group commissioned a new pie factory in August 2015. Pie production has doubled since the pricing reductions effected in February 2016, and the factory has had to put in on a second shift to meet demand while year-on-year pie production has increased by 38 percent. As such, the Group recorded an overall increase in sales volumes of 4 percent over the previous year.
The group intends to maintain production volumes of pig production at the current levels with focus on efficiencies to reduce costs. As a result of the poor maize harvest achieved in the past season the group has depended on grain imports which have contributed to an increase in production costs.
Colcom also expects to add 5 new outlets to its chain of Texas Meats branded butcheries in the interim.- The Source
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