4 May 2020

Zambeef Products plc

(“Zambeef” or the “Group”)

Trading Update

Zambeef (AIM: ZAM), the fully integrated cold chain foods and retail business with operations in Zambia, Nigeria and Ghana, is pleased to provide the following update on trading.

The Group announces that for the year ending 30 September 2020, dollar revenue, EBITDA and EBIT and adjusted Profit Before Tax* are anticipated to be in line with market expectations.

Despite the uncertainty caused by the COVID-19 pandemic, consumer demand for Zambeef’s products in-country has, to date, stood up well, and trading performance in H1 2020 has been satisfactory. It is expected that this will continue through H2 2020.

The Zambian economy has been under significant fiscal pressures over the last three months due to reduced demand for copper caused primarily by the current global COVID-19 pandemic, and this has led to a sharp depreciation of the local currency in recent weeks. This depreciation in turn impacts certain input costs into the business, as well as realising foreign exchange losses on our foreign currency-denominated debt. As such, and despite continued expected satisfactory operating performance during H2 2020, the Group’s Profit Before Tax for the full year is expected to be negatively impacted once these foreign exchange losses are factored in. 

In response to the current uncertainty of the COVID-19 situation, the Group is moving quickly to take appropriate actions to further manage costs and preserve balance sheet flexibility during this period. The conclusion of the sale of Sinazongwe farm in April 2020 is a key milestone whose proceeds will go towards reducing debt.  The Group’s net debt position as at 31 March 2020, excluding the proceeds,  was c.US$61 million.

The Group expects its results for the six-month period ended 31st March 2020 to be released by the end of June. Accordingly, shareholders are advised to exercise caution when dealing in the securities until publication of the results.

*Adjusted Profit Before Tax is defined as excluding any realised or unrealised foreign exchange gains or losses and any losses or gains made from asset disposals.

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Notes to the editors

The Zambeef Group is one of the largest integrated cold chain food producers in Zambia, involved in the production, processing, distribution and retailing of beef, chicken, pork, milk, eggs, dairy products, fish, flour and stock feed. The Group also has large cereal row cropping operations (principally maize, soya beans and wheat), with approximately 7,973 hectares of row crops under irrigation, which are planted twice a year and a further 8,776 hectares of rain-fed/dry-land crops available for planting each year.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement via Regulatory Information Service, this inside information is now considered to be in the public domain.

-Ends-