CFI Holdings says growing competition from Zimbabwe’s informal sector squeezed profit margins during the six months ended 31 March 2026, even as revenue rose on the back of strong agricultural demand.
The diversified group reported an 87 percent decline in profit before tax to ZiG78,76 million from ZiG593,24 million recorded in the same period last year, reflecting mounting pressure on formal businesses operating in a difficult trading environment.
In a statement accompanying the group’s interim financial results, chairperson Valerie Pasi said the expansion of informal traders continued to distort competition and weigh on profitability.
“Despite these developments, the operating environment remained challenging due to the continued expansion of the informal sector, which largely operated on a cash basis and outside the formal regulatory framework,” Pasi said.
“Meanwhile, the formal sector continued to bear the burden of taxation, high borrowing costs and significant banking charges.”
Her remarks come as formal businesses across several sectors continue to raise concerns over competition from informal operators, who typically face lower regulatory and tax costs and are able to offer products at lower prices.
Despite the earnings decline, CFI increased revenue by 51,3 percent to ZiG2,30 billion from ZiG1,52 billion in the comparable period last year, supported by stronger demand for agricultural inputs following a favourable farming season.
Retail operations remained the group’s largest business, contributing 86,33 percent of total turnover. Food manufacturing and down-packing accounted for 11,12 percent, while farming operations contributed 2,18 percent and property activities made up the balance.
The group also stepped up capital investment during the period, spending ZiG69,85 million on property, plant and equipment compared with ZiG6,64 million a year earlier. The investment was largely directed towards retooling Victoria Foods and reviving hatchery operations at Crest Poultry Group.
Farm & City Centre, CFI’s largest retail business, recorded a 16 percent increase in sales volumes as demand for agricultural inputs and farming accessories strengthened after good rainfall.
Agrifoods also posted improved performance, with sales volumes rising 13 percent from the prior-year period as demand recovered.
Victoria Foods delivered one of the strongest performances within the group after improved availability of raw materials boosted production. Wheat flour sales volumes surged 139 percent, while maize meal volumes increased 88 percent compared with the same period last year.
At Glenara Estates, potato production declined five percent after persistent rains disrupted harvesting operations. However, tighter market supplies supported prices, with average selling prices rising 10 percent from last year.
“The Estate’s cattle breeding and pen fattening operations were maintained with reasonable success,” the company said.
CFI said it remains focused on broadening its product range and improving operational efficiency as it seeks to sustain profitability in an increasingly competitive market.