24th Sep 2013 15:10
LONDON (Alliance News) - Zambeef Products PLC Tuesday said allegations that it was importing contaminated beef has had a considerable impact on its business and means its adjusted pretax profits will be substantially lower than current market estimates.
Also affected by lower-than-forecast global wheat prices and some additional cost pressures, the Zambian feed producer said that the allegations had a financial impact on the Group that was, "significantly worse than originally anticipated," in its year-end trading performance update. The company also notes that the allegations incurred further costs as it had to write off the destroyed beef products.
Despite the allegations, the company said it expects turnover to be in line with market forecasts, following strong performances from cropping, Zamanita and the stockfeed division, though profit before tax will be hit considerably.
Francis Grogan, Chief Executive of Zambeef, said Tuesday, "This has been an extremely difficult year for Zambeef. The allegations of importing contaminated beef have had a considerable impact on our business, despite timely and decisive action to address the causes of concern and reassure our customers. We have also had to manage sharply increasing and unforeseen costs, coupled with weak wheat prices.
"On the positive side the continued good performance from Mpongwe and the commissioning of Zamanita's expanded crushing plant means Zambeef is well positioned to meet the challenge of an increasing demand for food in the region," he adds.
The company will announce its preliminary results 26 November 2013.
Zambeef shares were trading 10.5% down at 40.50 pence Tuesday afternoon.
By Alice Attwood; [email protected]; @AliceAtAlliance
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