How Zed Koudounaris is stocking up on Innscor

Businessman Zed Koudounaris has spent nearly US$260,000 buying shares in Innscor over recent weeks, shoring up his position in the company that he founded.

Koudounaris has bought additional shares since May, when he added 125,000 shares for US$52,500. He followed this up with 306,574 shares for US$141,024.04 on June 11, 83,664 for US$36,812.16 a week later, 28,596 worth US$12,582.24 on June 24, and another parcel of 33,895 shares worth US$15,235.8025 on June 27.

In total, the entrepreneur now holds 108,443,926 shares in the company. His worth in Innscor shares is now $48.9 million at Thursday’s closing price of 45 US cents on the Victoria Falls Stock Exchange.

At the end of Innscor’s last financial year, Koudounaris’ ZMD Investments held around 20% of the company. A holding under Stanbic Nominees accounted for 18%, while director Mike Fowler’s HM Barbour held 17.5%. ZMD is also the biggest shareholder in Axia, Padenga and Simbisa, which were all spun off from Innscor and are now run and listed separately.

Koudounaris’ stacking up on shares sends a positive signal to stock pickers on the future of the share. Analyst Sylvestor Mupanduki reckons Innscor is underpriced, saying: “My intrinsic value estimate for Innscor is slightly over US$1 per share, indicating a margin of safety of over 50%.” In a report on retail stocks out this week, brokers IH Securities recommended that its clients buy more stock in Innscor and Simbisa.

Says IH: “As well as having sound fundamentals in the current environment, we believe that Simbisa and Innscor are trading at discounts to their fair values. We would recommend increasing exposure to these counters.”

IH forecasts that Innscor will face pressure on profit margins as it resists passing on the full impact of rising costs to consumers. EBITDA margin will soften from 11.3% to 11% in FY24 before finding a steady level at around 12.5%, IH projects. However, the brokers see revenues rising by 9% to US$876 million as Innscor benefits from expanded capacity and route-to-market plans.

Innscor has spent close to US$160 million to grow its business over the past three years, building new factories and expanding production capacity at its divisions. The largest investment has been into National Foods, the country’s biggest food manufacturer.

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