Kaap harvests higher earnings

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Kaap harvests higher earnings

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Published Date: 2021-05-07 | Source: Stephen Gunnion | Author: Stephen Gunnion

Kaap harvests higher earnings

The agriculture services group says retail sales have rebounded and retail fuel sales have also improved as Covid-related restrictions ease.

Kaap Agri has reported a strong start to its 2021 financial year, supported by higher than expected growth in its retail businesses and a strong contribution from convenience sales at its The Fuel Company petrol stations. It has also resumed its interim dividend.

Releasing results for the six months to 31 March, the agriculture services group said the performance of its Agri businesses was stable, increasing during the second quarter of the year. It continued to experience the positive impact of the 2020/21 wheat season and said conditions for the upcoming season also look encouraging, although always weather dependent. Fruit and vegetable production was largely positive. However, significant expansions and infrastructural spend had slowed, partly due to Covid-19 related cashflow curtailment as well as ongoing concerns around land policies. It said the main agri focus had been on replacement infrastructure spend. The fuel industry had experienced significant fuel volume pressures throughout the various Covid lockdown levels.

Revenue increased by 15.6% to R5.7-billion as transaction volumes rose by 8.6%. Like-for-like comparable sales growth was more muted at 1.6%. Earnings before interest, tax, depreciation, and amortisation (Ebitda) came in 13.9% higher at R398-million. Earnings per share (EPS) jumped 2% to 300.39c while recurring headline EPS were up 23.3% at 305.34c. It has declared an interim dividend of 40c per share after holding back on a half-year payout last year.

Kaap Agri said consumer confidence, while low, had improved in recent months.

While positive on its prospects for the remainder of its financial year, the company said the first six months historically contributed more to full-year earnings than the second half.

Its shares closed 1% higher at R42.77 yesterday.





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