Bumper crop from Kaap Agri


Bumper crop from Kaap Agri

Published Date: 2019-04-16 | Source: Stephen Gunnion | Author: Stephen Gunnion | Comments

Bumper crop from Kaap Agri

The farming community retailer and agri-services group will post a sharp rise in first-half sales as it expands and gains market share.

Kaap Agri says it's been gaining market share in the interior of the country, which together with more favourable wheat positions has contributed to a strong rise in first-half sales.

In a trading update, the farming community retailer and agri-services group said sales increased by 28.7% to R4.39 billion in the six months to end-March despite lingering pressures from the recent drought and the general subdued performance of the retail sector. Comparable sales grew by 10.5% over the period. It said sales growth was driven by a 22% increase in the number of transactions, while average prices decreased by 0.5%, excluding fuel. It said gross profit rose at a slower pace than turnover due to changes to its sales mix, fuel prices increases and margin pressure.

Kaap Agri said while drought conditions have persisted in the Northern Cape, its inland operations benefitted from market share gains. Wesgraan performed well over the period due to a more favourable wheat position, however the full impact of the recovery is weighted to the second half of the financial year. Revenue includes Underberg Forge, the KwaZulu-Natal farming and building-supplies retailer it bought a 60% stake in last September. Excluding the impact of Forge, it said non-agri real sales grew at 3.9% from a year earlier.

Fuel volumes increased by 9.2%, with growth at its fuel site convenience and quick service restaurant retail operations exceeding fuel volume growth.

The group said the recovery in Wesgraan, store upgrades and expansions, as well as the revenue from new petrol station sites, would contribute more significantly during the second half of the year.

Its shares rose 6.3% to R31.90 yesterday.

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