CHAIRMAN’S STATEMENT
For the half year ended 30 June 2026
OPERATING ENVIRONMENT
The operating environment during the six months ended 30 June 2026 was considerably more stable than the comparative period last year, supported by improving macroeconomic fundamentals. Annual Zimbabwe Gold (ZWG) inflation moderated into single digits for the first time in over three decades, averaging around 4% during the period, while the official exchange rate remained comparatively steady from December 2025 to June 2026. This stability, underpinned by tight monetary policy, provided a firmer platform for trading, pricing and planning decisions across the half year.
Firm mineral prices, tobacco season liquidity and diaspora remittances, supported by recent capacity enhancement investments and strong consumer demand supported the Group’s strong volume recovery.
Government continued to refine the fiscal and regulatory framework during the period, including an increase in the standard Value Added Tax (VAT) rate with effect from 1 January 2026, and a reduction in the Intermediated Money Transfer Tax (IMTT) on ZWG-denominated transactions, while the 2% IMTT rate on United States Dollar (USD) transactions remained unchanged. The Group continued to comply fully with these regulatory developments while optimising its route-to-market and pricing strategies to protect volumes and margins.
Geopolitical tensions in the Middle East and Ukraine exacerbated global shipping disruptions, driving volatility in oil prices and freight costs, increasing imported input costs, a portion of which the Group absorbed to protect price competitiveness. Further structural pressures include the sugar tax burden on the Beverages category, unreliable utility supply, delayed customer payments, and the high cost of accessing funding in a developing local capital market.
PERFORMANCE
Sales Volume and Revenue
Consolidated sales volume grew by 26% to 78.3 million litres, from 62 million litres in the comparative period last year, while raw milk utilisation was broadly flat at 20.4 million litres.
Performance was strong across all product portfolios. Beverages continue to be the Group’s largest volume contributor, accounting for 67% of total volume. The portfolio delivered a 33% yearon-year increase to 52.8m litres from 39.6m litres in the prior year. All Beverage lines recorded growth, with Quench cordial achieving an exceptional 82% increase compared to prior year. Strategic capital investment in capacity expansion at the Simon Mazorodze factory successfully unlocked volume growth on bottled Cascade, driving volume up by 68%. Fun n Fresh and Pfuko maheu grew by 56% and 43% respectively, the latter also benefiting from capacity expansion at the Chitungwiza plant, which enhanced production capability and product availability.
Foods delivered the Group’s second- highest growth, with sales volume rising 30% to 7.3m litres. The portfolio’s positive performance was underpinned by firm consumer demand for Bulk Ice Cream, Salad Cream, Yogie Drinking Yoghurt and Yummy Yoghurt, which achieved year-on-year growth of 80%, 72%, 42% and 25%, respectively.
Liquid Milks grew moderately, up 8% to 18.2 million litres. Category expansion was constrained by raw milk supply rather than market demand. However, Steri Milk achieved 72% yearon-year volume growth, capitalizing on the added capacity from the newly commissioned Chipinge facility in December.
Exports declined by 30% as product was strategically redirected to meet strong domestic demand across all portfolios, ensuring sustained market availability and supporting local market growth. Revenue increased by 28% to US$82.56 million, from US$64.32 million in the comparative period, driven primarily by the strong volume recovery and supported by the more stable pricing and currency environment described above. Revenue from the Group’s South Africa segment grew by 38% to US$0.72 million, from US$0.52 million, continuing to build scale in the Group’s regional operations.
Profitability
Cost of Sales increased by 25% to US$60.87 million, while Gross Profit increased by 37% to US$21.69 million, from US$15.78 million, reflecting the benefit of higher volumes together with disciplined management of raw and packaging material costs. Operating expenses grew at a slower pace than revenue, with Selling and Distribution expenses up 16% to US$10.14 million and Administration expenses up 35% to US$6.03 million. Consequently, Operating Profit more than doubled to US$5.54 million, from US$2.76 million in the comparative period.
Finance costs increased to US$1.15 million, from US$0.72 million, reflecting the higher level of borrowings drawn to fund capital expenditure and working capital requirements. Profit Before Tax more than doubled to US$4.40 million, from US$2.08 million, while Profit for the Period increased by 169% to US$3.25 million, from US$1.21 million in the prior period. Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) grew by 78% to US$7.64 million, from US$4.29 million. Basic earnings per share increased to 0.91 US cents, from 0.34 US cents.
Working Capital and Financial Position
Net cash generated from operating activities improved significantly to US$4.38 million, from a marginal US$38,322 outflow in the comparative period, reflecting the improvement in trading profitability. Cash and cash equivalents closed 30 June 2026 at US$4.01 million, more than three times the US$1.31 million held at the same date last year.
The Group invested US$3.87 million in capital expenditure during the period, continuing investment in production capacity across the Group’s factories. Total assets grew by 11% to US$75.03 million, while total equity increased by 9% to US$31.81 million, both compared to 31 December 2025. The significant increase in prepayments was attributable to advance payments for capital expenditure, raw and packaging materials, made to secure critical inputs and support sustained volume growth.
Interest-bearing borrowings increased to US$13.83 million, from US$11.63 million at 31 December 2025, reflecting funding drawn to support the Group’s capital expenditure programme. The Group continues to manage its credit risk and working capital cycle closely.
Sustainability
Sustainability remains central to the Group’s growth strategy. We continue to focus on reducing our environmental footprint through improved energy and water efficiency, responsible waste management and recycling, while investing in the resilience and development of dairy farmers who are critical to our raw milk supply.
Tax Matters
The Company is currently being audited by the Zimbabwe Revenue Authority for the period 2019 to 2024.
OUTLOOK
The improved stability in inflation and the exchange rate experienced during the first half of 2026 is expected to continue supporting trading conditions into the second half of the year. However, the Group remains alert to the risks and cost push pressures presented by the geopolitical headwinds in the middle east.
The Group will continue to prioritise capacity expansion, cost discipline and a stable, competitively priced local raw milk supply through its out-grower support programs. Regional expansion remains a strategic focus, with continued growth in the South Africa segment and the toll manufacturing model supporting efforts to diversify the Group’s revenue streams and increase foreign currency earnings.
DIVIDEND
The Board of Directors has declared a dividend of US$773,723, translating to 0.22 US cents per share, in recognition of the Group’s financial performance and its commitment to delivering value to its shareholders.
The dividend will be paid per the following timelines;
| ACTION | DATE |
|---|---|
| Announcement date | 24th of August 2026 |
| Last date to trade Cum-dividend | 9th of September 2026 |
| Shares trade Ex-dividend | 10th of September 2026 |
| Record date | 11th of September 2026 |
| Payment date | 21st of September 2026 |
The Board remains committed to rewarding shareholders while prudently retaining sufficient resources to support the Group’s long-term objectives.
APPRECIATION
I wish to express my sincere appreciation to my fellow board members, management, staff, and all stakeholders for their continued support and commitment to our strategic objectives during the period under review.
N.H.C. Chiromo
Chairman
19 August 2026