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Colcom CEO Mr Constantine Tumazos

COLCOM chairman Mr John Koumides is stepping down from his role at the listed meat processor and is poised to take up an “executive position” at Axia Corporation.

Colcom CEO Mr Constantine Tumazos told the company’s shareholders on Friday:

“The chairman has indicated his intention to resign from the Colcom board to take up an executive position in Axia Corporation. We would like as a board and company to thank him for his contribution.”

Colcom is majority owned by conglomerate Innscor Africa Holdings, and Axia Corporation is a product of the recent unbundling of the same group specialising in the specialty retail, distribution and logistics sectors.

Commenting on his exit as Colcom chairman Mr Koumides lauded the performance of the company.

“When I joined the Innscor Group, the first big acquisition we made was Colcom and I think it was the best acquisition we ever made . . . Colcom is one of the shining lights on the stock exchange and I am glad that the share price is starting to reflect that result, the fact that it has doubled more or less in the last couple of months is testimony to what the chief executive has done,” he said.

Meanwhile, the meat processor has recorded an improved performance during the first quarter of FY2017, with revenue being “slightly ahead” of that reported in the prior comparable period.

Management has attributed this to increased volumes traded. The CEO, however, said the rise in revenue did not have a material impact on gross profit for the period under review.

“The increased revenue did not directly translate to increases in gross profit dollars due to the reduction in average selling prices. This reduction came about primarily from a direct reduction in prices of product across the whole range of products over the prior year period but has been compounded by a significant shift in sales mix from processed foods to fresh meat and carcass sales,” said Mr Tumazos.

During the quarter, Colcom saw all its business units achieving modest savings in operating expenses over the same period last year.

In terms of operational performance, subsidiary Triple C Pigs’ second phase of development came on line in earlier in March and added 150 pigs per week to production, which saw a 34 percent rise in pigs delivered in the current quarter compared to the same period in 2015.

Colcom Foods’ volumes were up on prior year. However, management reported that competitive pricing into the market and a significant shift in sales mix has held back the growth in revenue to “modest levels.”

AMP’s revenue during the period was slightly behind that reported in the comparative quarter last year, while volume increases were negated by depressed beef prices.

Mr Tumazos said despite cost control measure being undertaken during the period, pressure on margins has had a direct impact on the bottom line.

Going forward, the company expects to extend the AMP branch network by opening Texas Meats branches in Gweru and Mutare in the current financial year. – BH24