Innscor Africa unveils US$60m investment plan

Audrey Galawu

Innscor Africa plans to invest between US$50 million and US$60 million in capital programmes during the 2024 financial year.

Innscor will reportedly allocate funds across its subsidiaries to enhance automation, expand facilities and establish new plants, contributing to market consolidation.

The Capital expenditure follows a cumulative US$125 million invested in the past two years, fostering new business units, product expansion and manufacturing efficiency improvements.

Innscor said it aims for world-class quality, increased manufacturing capacities, and customer-centric pricing.

The Group recorded revenue growth of US$804.040 million during the financial year under review, representing a growth of 14.7% over the comparative year.

Revenue performance was driven by improved capacity utilisation across the Group’s core manufacturing businesses, and further supported via the introduction of new product categories, category extensions, and route-to-market optimisation strategies undertaken during the financial year under review.

According to the Innscor 2023 financial year report, the year under review was initially characterised by reduced inflationary pressure and market volatility as authorities sought to moderate money supply growth, instituting a considerable increase in local currency lending rates.

“This achieved the desired impact of arresting inflation and local currency devaluation, resulting in improved business and trading sentiment, albeit with significantly reduced market liquidity.

“The second half of the financial year under review saw a rapid devaluation of the local currency with complex and unpredictable market conditions prevailing before liquidity was controlled, and refinements made to the Reserve Bank of Zimbabwe foreign currency auction system.

“Pricing distortions and resultant arbitrage in the trade persisted for much of the year, negatively impacting consumer demand and confidence in formal retail channels; despite this however, consumer demand across the informal market remained buoyant, supported by increases in mining and agricultural output, diaspora remittances, and Government infrastructure spending during the year.

“The Group’s investment drive underpinned the overall volume trajectory, with focus being deployed on expanding plant capacities, enhancing manufacturing capabilities and product extensions; whilst route-to-market initiatives continued to be refined in order to drive volume into new markets,” reads the report.

Profit Before Tax amounted to US$48.315 million, representing a decline against the comparative year and driven by the margin dynamics at a gross margin and Earnings Before Interest, Taxes, Depreciation, and Amortisation level, and compounded by exchange losses and weaker equity-accounted earnings.

Headline Earnings Per Share for the year under review amounted to 5.63 US cents per share, which was 26% lower than the comparative year.