Michael Tome Business Reporter
CFI Holdings Limited, has revealed its intentions to fully capitalise its subsidiary – Crest Poultry Group (CPG) – after it was placed under judicial management in 2016.

In its full year results ending 30 September 2019, CFI noted that it had managed to raise $42,5 million to fund the payment of Crest Poultry Group’s creditors adding there was enough working capital required to re-launch the businesses.

The business is now under its control.

CFI early last year indicated that it had begun formalities to make way for CPG’s exit from Grant Thornton’s judicial management.

CPG and Agrifoods were placed under the care of a judicial manager in August 2016 after failing to viably fund some of its operations.

At the time, CPG creditors resolved to put the company under judicial management to turnaround the business and recover their  monies.

Upon placement under judicial management, the administrator went on to shut down CPG’s poultry units that had not been viable in the previous five years.

CFI, however, seems to now have a stronger financial standing and well positioned to engage in more capital intensive projects all subsequent to successful recapitalisation of both Glenara Estates and CFI Retail last year.

The agri-industrial firm’s prospects began to look up last year on the account of streamlining debts, all which undeniably stimulated the 2019 performance.

In sentiments accompanying the group’s results for the period under review, Itai Pasi, the CFI acting group chairman highlighted that albeit the enduring hard-hitting economic and operational challenges in the short to medium term, the company would be focusing on recapitalising the poultry division.

“Your group’s focus will be on ensuring that Crest Poultry Group, which recently exited judicial management is adequately capitalised and strengthened,” she said.

The embattled CFI in 2019 embarked on a recapitalisation drive on a number of its dismally performing subsidiaries, following the partial clearance of credit.

In the year the group invested $5,4 million in replacement capital expenditure, driven mainly by the branch refurbishments and fleet renewal of distribution trucks and branch managers’ vehicles to enhance marketing and operational efficiencies.

A visit to one of CPG’s workshop revealed severe deterioration of the company’s infrastructure, which will undoubtedly require intensive capital injection to resuscitate operations.

On the other hand CFI says it is determined to meet Victoria Foods’ foreign creditors’ obligations and exit judicial management before the end of 2020 financial year.

“The local pre-judicial management obligations for Victoria Foods have been resolved. The Group looks forward to the unfolding prospects, which will see it play its role in underpinning the nation’s food security requirements in the economy,” said Pasi.

These developments come in the wake of a 141 percent jump in operating profit for the year ending September 30, 2019 to $43 million compared to $20,2 million recorded in the previous year.

The group attributed the improvements to growth in merchandise in retail and enhanced cost-containment efforts.

Profit before tax rose 141 percent to $44,4 million.

Basic earnings per share grew 112 percent to 28,72 cents.