Cafca's revenue remained static

Cafca Limited's revenue for the six month period remained static when compared to the same period last year. The liquidity crunch in the last quarter has resulted in a significant drop in the sales to our major customers as they have not been able to meet their obligations to us.

Margins have remained tight in the face of imported competition. The net result is the operating profit being very much in line with the previous period.

Net finance costs have shown a marginal improvement due to more competitive interest rates paid on reduced borrowings. A slightly beneficial tax rate ensured a marginal increase in profit after tax for the six month period.

The consolidated statement of Financial Position has seen some strategic changes being made, namely, the increase in finished goods stockholding to around 300 tons valued at $3.0 million. Finished goods inventory has been deliberately increased to reduce lead times.

Debtors have been contained at the expense of revenue by not selling to customers who have exceeded their agreed credit terms.

Current liabilities have remained constant in relation to prior periods whilst borrowings have been reduced to $443,804.

Cafca Limited said it is not anticipating any changes in the short term i.e liquidity will remain tight and revenue will be curtailed because of enforcing credit terms.

Exports currently at 20% of volumes in the last quarter will be grown in the traditional markets whilst assistance will be sought from the major shareholder to access niche markets.

Borrowings will be kept to a minimum with any cash generated appropriately invested back into strategic debtors or finished goods inventory.

The Directors have recommended waiving payment of a dividend due to the strategic need to finance debtors and finished goods.