ZAMBEEF PRODUCTS PLC

("Zambeef" or the "Group")

Trading Update

Zambeef (AIM: ZAM), the fully integrated cold chain foods and retail business with operations in Zambia, Nigeria and Ghana provides the following update on trading.

The Group announces that for the year ended 30 September 2024, revenue and gross profit (reported in USD) are now expected to be c.15% below current market expectations due to the underlying operational performance and exacerbated by the translational effect of a depreciating local currency. Reported profit before tax is expected to be c.30% below current market expectations due to higher than expected financing costs and an impairment of the investment in an associate. Reported profit after tax is expected to be c.55% below current market expectations and this reflects the inclusion of a loss from asset held for sale.

During the half year period to 31 March 2024, the Group endured a tough market and operating environment amidst continued constrained consumer spending exacerbated by the ongoing tight monetary policy of Zambia's Central Bank put in place to address inflation and exchange risk, and constrained government spending. Furthermore, albeit recent positive developments, specifically the understanding reached by government with international bond holders around debt restructuring, over the period the operating environment was marked by macroeconomic instability stemming from delays in concluding the country's debt restructuring process.

As the country grapples with the far-reaching adversities brought about by El Nino; the worst drought since records began, adversely permeating through various sectors crucial to the nation's well-being including agriculture, water resources for power generation, health and social-economic stability, our cropping division has not been spared the significant impact leading to reduced crop yields. Additionally, with diminished water levels Zambia's hydro power generation which accounts for 85% of electricity produced has resulted in an aggressive load management programme by the national power utility leading to the use of more expensive energy sources putting further pressures on overheads. A combination of these factors coupled with the sustained devaluation of the local currency beginning the financial year at K21.02/USD and ending the period at K24.9/USD, have led to higher input costs across the Group. Despite these headwinds, the demand for our products remained resilient, demonstrating positive growth compared to prior year (in ZMW). The strategic initiatives put in place, including optimized pricing across all divisions, have helped to mitigate the impact of rising input and overhead costs.

The impairment of the investment in an associate relates to Zampalm in which the Group owns a 10% equity interest, and remains in operation. The impairment reflects a reduction in the forecast Zampalm gross margin used in the value-in-use calculation for the investment, with a 50% impairment expected to be taken in the interim results to 31 March 2024, and impaired in full (c.USD1.4m) in the full year results to 30 September 2024.

The Group expects its results for the half year ended 31 March 2024 to be released by the end of June 2024. Shareholders are advised that the information contained in this Trading Update has not been reviewed nor reported on by the Company's external auditors.