Kaap Agri brings back dividend


Kaap Agri brings back dividend

Published Date: 2020-11-27 | Source: Stephen Gunnion | Author: Stephen Gunnion

Kaap Agri brings back dividend

The group says footfall has returned to its retail fuel outlets and revenue has recovered - but not quite to pre-Covid-19 levels.

Kaap Agri estimates that Covid-19 shaved about 6.6% from revenue growth over the past year as transactions at its retail fuel outlets and convenience stores declined. Still, it managed to grow revenue and recorded only a small dip in earnings for the year to end-September.

After a slow start to agri and retail trade in the first half of the year as a result of sluggish retail spend and a constrained consumer environment, as well as adverse weather conditions, the agricultural group said Covid-19 impacted all business units in the second six months. Agri sales growth outperformed retail sales growth, largely due to Covid-related trading restrictions which impacted retail sales to a larger degree than agri sales. Retail fuel and convenience sales were hardest hit by the restrictions due to the reduction in travel and road transport, the inability to sell tobacco and the closure of quick service restaurants.

While agri input trade was the least impacted by the pandemic of all income channels, farm infrastructure projects were either halted or delayed during initial lockdown levels, resulting in a slowdown in products required from its manufacturing division. Its Grain Services business delivered what it said were pleasing results despite a wheat harvest which was more than 30% down year on year, supported by the timing of non-recurring surplus wheat sales and grading gains.

Revenue for the year increased by 1.5% to R8.6 billion and earnings before interest, tax, depreciation and amortisation (EBITDA) rose 6.8% to R588 million. Earnings per share (EPS) fell 0.9% to 391.49c per share while headline EPS came in 2.3% lower at 388.54c. After holding back on an interim dividend due to the uncertainty surrounding Covid-19, it cut its final dividend by 44% to 50c per share.

Its shares closed unchanged at R25 yesterday.

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