November 18, 2005/source The Guardian
Hopes of reaping dividends on their investments by the shareholders of Livestock Feeds Plc was dashed on Tuesday even as prospect for that in the near future is remote, due to precarious financial position of the company over past six years.
At the yearly-general meeting held in Lagos to deliberate on Ordinary business of the company among which was the presentation of the operating results to the shareholders, the management announced that the company was able to record an operating profit of N19.5 million, after six years it was walloping in operational loss.
The chairman of livestock Plc Mr. R. A. Tade in his address at the meeting, attributed the very poor performance over the years to the policy somersault of the federal government on agriculture and stiff operating business environment in the country, as well as refusal by the financial institution to extend credit to the agricultural sector.
\"Poor implementation of credit schemes and apathy on the part of financial institution to grant agric credit facilities required to fund renewed enthusiasm on livestock business (especially poultry fish and fish farming) limit higher growth and improvement in the industry,\" Tade lamented.
Despite return to profitability of N19.5 million this year at the poultry, through a turnover which increased by 43 per cent to over come a huge debt overhang, which necessitated significant interest provision, however, a loss of N238 million was made after tax.
Production margin increased by 65 per cent to close at N59.9 million or 10 per cent of sales.
\"Operational Expenses decline by 5 per cent due to streamlining of costs to reflect sales volume achievement. Despite the non-acquisition of new loans, bank charges and interest expenses on old debt continued to meet, thereby aggravating the loss position,\" he added.
The chairman stated that multi-pronged strategies had been put in place to change the precarious financial position since 1999, which include raising fresh equity by way of right by the existing shareholders of the company and successful securing of debt relief on the initial debenture valued at N464.5million.
Tade said that despite poor operating result posted by the company, a re-appraisal of the turnover and marketing strategies had been undertaken to re-launch the company to the market, return it to net profitability and increase return to shareholders\' investment.
According to him: \"A re-appraisal of our sales and marketing strategies had been undertaken with the objective of grossing the current market share from below 5 per cent o 15 per cent in the next three years. Provision of adequate working tools, recruitment and re-training of field force to ensure efficient territory coverage and unsurpassed customer services will form the mainstay of our sales promotion,\" he concluded.