Crookes Brothers gets a boost from nuts and bananas


Crookes Brothers gets a boost from nuts and bananas

Published Date: 2019-06-13 | Source: Stephen Gunnion | Author: Stephen Gunnion

Crookes Brothers gets a boost from nuts and bananas

The agricultural group says its 2019 results underscore the success of its diversification strategy.

Crookes Brothers says the past year was marked by record crops in its sugar, banana and macadamia businesses. So, despite a year of turmoil for the sugar industry, it believes its 2019 financial results underscore the success of its diversification strategy.

The agricultural group sold off some assets it considered non-core over the period to help create more long-term value for investors. It said the sale of its Renishaw Hills infrastructure, the lifestyle property development near Scottburgh in KwaZulu-Natal, supported that strategy.

Its sugar cane operation increased revenue by 7% to R322 million in the year to end-March, while operating profit rose 59% to R70.3 million as production improved by 26%, reflecting a strong recovery from the drought. However, it said a decline in local consumption of sugar due to cheaper sugar imports, a weak world sugar price and the implementation of the sugar tax meant that a return to previous price levels was unlikely in the absence of structural changes in the sugar industry.

Revenue from its deciduous fruit operation increased by 46% to R100 million and operating profit jumped to R10.1 million, from a R20.4 million loss previously. It attributed the improvement to an increase in average deciduous prices, helped by rand weakness end better quality fruit.

Its macadamia business grew revenue by 268% to R8.1 million and operating profit by 231% to R18.2 million due to increased yields and higher prices for the nuts. Profit exceeded revenue due to the significant impact of the year-end crop valuation. It also developed new macadamia markets, selling directly to Hong Kong, as well as to South African processors.

Finally, following a record crop of 24,000 tons of bananas, revenue from the division grew by 32% to R117 million and operating profit rose 32% to R36.8 million. It said bananas constituted an integral element of its diversification strategy and with the end of the drought in the Lowveld region, it has re-commenced planting at its Quinta Da Bela Vista (QBV) project in Mozambique.

As a whole, revenue from continuing operations increased by 21% to R576 million and operating profit rose 1,702%, from R4.1 million to R73.9 million. It reported headline earnings per share of 145c, from a loss of 50.6c the previous year. It's not paying a final dividend.

The group's shares didn't trade yesterday, closing unchanged at R45. The results were released after the close of trade.

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