DURBAN – KAAP Agri, the JSE-listed retailer specialising in agricultural, fuel and related retail markets in Southern Africa, has invested around R158.9million in the six months to end March despite the challenging trading environment and subdued economic activity in the country.
In September last year, Kaap Agri acquired 60percent in Partridge Building Supplies, the company that trades as Underberg Forge in Southern KwaZulu-Natal, and currently operates six branches servicing customers in both the farming and building materials sectors. The acquisition was instrumental in lifting revenue from the trade division, which includes the Agrimark retail branches, Pakmark packaging material distribution centres, mechanisation services and spare parts by 24.1percent, with operating profit before tax increasing by 0.7percent.
“Excluding the impact of the recently acquired Forge business, non-agri retail sales have performed well, growing at 3.9percent on the previous comparable period,” the group said. As a result, group revenue increased by 28.7percent to R4.4billion with like-for-like comparable sales growing by 10.7percent.
The group said the largest impact on revenue came from The Fuel Company (TFC), specifically in newly acquired and non like-for-like sites. “Group fuel volumes increased by 9.2percent, of which TFC owned and managed sites have grown fuel volumes by 9.5percent. The TFC’s revenue grew by 45percent and operating profit before tax by 24.7percent,” the group said.
However, Kaap Agri’s financial performance was also impacted by a slower-than-anticipated recovery in agricultural conditions in the Western Cape and the continued drought conditions in the Northern Cape.
Recurring headline earnings per share increased by 3.2percent to 230.3cents a share while profits increased by 3.19percent to R16.19m. The group declared an interim dividend of 33.5c, up by 4.7percent compared to last year’s 32c.