Zambeef Products Share Discussion Threads

[tenapen] 30/6/2011 10:44

Hi HJFe,

I hope you get your price, and good luck with Mwana

[hjfe] 30/6/2011 10:19

Tenapen,

Also looking to take a position here - just waiting to see what the right entry price is for me........

[tenapen] 29/6/2011 10:57

With thanks to HJFe on the Mwana Africa thread for posting,



Into Africa

Created:
14 June 2011
Written by:
Maike Currie

Most investors understand emerging or frontier markets to mean Asia and Latin America. But perhaps a far more exciting frontier market opportunity lies in Africa. The past few years have seen more ways to invest in Africa emerge, but old stereotypes and new conflicts have dented sentiment - creating an opportunity for the patient and the risk-tolerant.

Cont...

[jonwig] 29/6/2011 04:54

dvarty - done that.

I don't like cluttered-up headers, but I find a very useful thing to have is a list of significant shareholders. I'll produce that when I've time.

Meanwhile ... holders here are on a roll; the rest of us can hop on or, like me, sit it out for now.

[dvarty] 28/6/2011 19:22

jonwig

Good new thread.

This is one to watch for a while to see how it settles after its rights issue. Seems an interesting business model in a country that could be on the move. More research links in the header may help. Could you add the bbc piece to it?

[tenapen] 26/6/2011 13:36

Express | 13 June 2011
Zambeef will use the money from its stock market floatation to buy 123,550 acres of prime farming land in Zambia.

By Andrew Johnson


ZAMBEEF, the first Zambian company to float on Aim, is planning to join the market in a listing which will help it raise £34million.

Zambeef Products is a "farm to fork" company involved in growing, processing, distributing and retailing almost everything from beef to bread, oils to eggs and pork to chickens.

Using broker Renaissance Capital, the float will take place later this month with the advice of Strand Hanson.

The money will be used to buy 123,550 acres of prime farming land in Zambia, currently owned by ETC Bio-Energy. Zambeef, which also has operations in Ghana and Nigeria, wants to limit its exposure to commodity prices and "erratic supply chains".

It's proposed move onto Aim is a further sign of growing interest in Africa among investors outside the mining, oil and gas sectors.

It follows conglomerate Lonrho's move from Aim to the London Stock Exchange earlier this year. Zambeef's chief executive Francis Grogan said the main driver of growth would be rapid urbanisation in many African countries.


Business advisor McKinsey says consumer spending is set to grow from $860billion (£529billion) today to $1.4trillion by 2020. Zambeef is already listed on the Lusaka Stock Exchange. It is raising the cash through a rights issue there and a placing in London.


The eventual size of the London listing will depend on the take-up of rights in Lusaka.

[jonwig] 26/6/2011 06:38

Val - yes, the first impression was that it wasn't "priced to go" as they say. I think the relative size of the outfit and growth possibilities across the continent will have been the USP. Plus, of course, what we're getting is just part of a rights issue, not the whole show.

JonC - I think you'll find they supply those as well!

[jonc] 25/6/2011 21:17

I would like chips and a green salad with my steak.

[valhamos] 25/6/2011 21:04

I'm also on the look out to increase my exposure to Africa (like tenapen I'm holding Lonrho long-term). I had a brief look at the Admission Document before work on Thurday after the First Day of Dealing RNS caught my eye.

My initial reaction was that it wasn't particularly cheap, given the variable earnings record, at the listing price, so rather surprised by the initial price increase in the first two days of dealing (interested to note above that the IC thinks it's lowly valued compared to peers). What I particularly wanted to find out but couldn't see in the documents was the recent earnings at ETC's farm land being acquired to get an idea of possible future profits growth.

Will watch with interest and do more research.

[tenapen] 24/6/2011 14:12

I'm in Lonrho big time (in my small way) :-). I can certainly see why people / investors do not like the Leni and his gang, but i look at the brand Lonrho and see that people like myself will see Lonrho as a safe African play.

Sorry for the Off topic.



I will also try and dig a bit deeper for ZAM information.

Cheers.

[jonwig] 24/6/2011 13:57

Hello tenapen - yes, I have some other stuff too.

I've looked at the divis policy in the prospectus, and the history is lumpy, with a miss in 2009. Also they pay in local currency, though I haven't checked whether you can receive in USD or GBP.

I think the amount you've bought is about what my commitment would be for the moment. Need to look a bit deeper, especially the profile of the BoD ... don't want any Lonrho people involved!

[jonwig] 24/6/2011 06:57

Investors Chronicle 23/06/11:

Do you know a great deal about Zambia? No, neither do I. And that's a good thing according to the management of ZamBeef which listed on Aim this week. According to chief executive Francis Grogan and director of strategy Carl Irwin, the reason we hear so little about Zambia is because it is a settled, relatively prosperous democracy which is pretty much self sufficient in terms of food production – Mr Irwin describes it as the 'mini-Brazil of Africa'.

The facts speak for themselves. Zambia is enjoying strong GDP growth of 7.6 per cent with inflation running at less than 8 per cent and external debt only amounting to 10 per cent of GDP, figures European central bankers can only dream about - if you ignore the inflation that is. More than two fifths of sub-Saharan Africa's fresh water originates in the country and farming is well established on fertile lands. Furthermore, the temperate climactic conditions are excellent for farmers with two growing seasons a year.

Now, news of an agricultural float on Aim may automatically conjure up thoughts of bandwagon jumping and Zambeef is not the only agricultural business from the emerging world to seek a London listing. Today saw Ukrainian/Polish wheat farmer Continental Farmers Group also announce its intention to float.

But a meeting with Zambeef's management team shed light on what is a long established business with considerable growth potential in a region where demand for its products is likely to remain strong for many years to come. Zambeef has its origins in Carl Irwin's family business, which he and Francis Grogan took on and built up over a period of more than 20 years. From retailing meat, it has expanded significantly and now owns processing facilities, abattoirs, herds, crops, dairy, edible oils, bakery and tannery businesses, fulfilling the 'farm to fork' strategy management set out on. It is using the proceeds of its float to buy up further farming assets, primarily to boost its production of soy beans - it is acquiring almost 47,000 hectares of farm land, of which less than a quarter is currently farmed. Gradual expansion plans, which should be funded from cash flow, mean Zambeef will be busy developing this asset for many years.

It has also expanded outside Zambia in partnership with South African retailer Shoprite which has taken its meat retailing business into Nigeria and Ghana where Zambeef expects, over time, to replicate its business model of buying up the means of production. In future, production may also be exported into neighbouring Zimbabwe.

Zambeef shares went well on their Aim debut, rising from 38p to 44p and, based on the pre-IPO research, the company is fairly lowly valued against peers in the developing world. By no means are we exhorting people to fill their boots with Zambeef shares straight away, but it is certainly worthy of consideration for those looking for exposure to emerging markets food plays. We'll certainly be keeping a close eye and will keep you posted.

[jonwig] 24/6/2011 06:50

Initial rise yesterday puts this off-limits for the time being.

In theory, should tick all the boxes: frontier markets, agricultural commodities. But I've already a stake in Africa via AOF and AFMF.

[jonwig] 24/6/2011 06:48

The Group has raised US$54.97 million (approximately £33.95 million) in aggregate by way of both a rights issue of 35,558,580 new ordinary shares to existing investors via the Lusaka Stock Exchange ("LuSE") (the "Rights Issue"), and a placing of 53,713,570 new ordinary shares to institutional investors via AIM (the "Placing") at 38.06p, in aggregate representing 21.66 per cent. of the enlarged ordinary share capital of the Group. The approximate market capitalisation of the Group following Admission is £94.38 million.

Forecast PBT for 2012 = $20m, eps 7c.

Useful links:









Interactive charts on Lusaka SE:




Significant holdings (total, 247,978,195 shs) updated 29/11/11:

M&G Inv Mgt......... 26,623,908 10.7%
Ashmore EMM LLC..... 24,631,080 9.9%
SQM Frontier Mgt.... 19,764,333 8.0%

Jacob Mwanza (Dr).... 1,100,000
Francis Grogan....... 3,596,631
Lawrence S Sikutwa..... 115,176
Irene M Muyenga......... 13,129
John Rabb............ 7,868,813
Adam Fleming........ 13,656,917
Carl Irwin........... 4,326,445
Yusuf Koya.............. 42,762