Kaap Agri remains optimistic | Daily Financial Express

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Kaap Agri, the JSE-listed agriculture related retail, trade and services group, remains optimistic about the outlook for agriculture in South Africa and expects a partial recovery of lost growth this year as drought conditions ease in the Western Cape region.

This optimism was reflected at Kaap Agri’s Annual General Meeting held in Malmesbury recently.

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Kaap Agri CEO Sean Walsh told shareholders that despite last year’s drought conditions and regulatory delays in the retail fuel sector, the company delivered growth in profitability and remains on track to achieve its strategic medium-term targets.  

The Kaap Agri group is structured into four divisions – Trade, The Fuel Company (TFC), Wesgraan and Irrigation Manufacturing – and its diversi?ed exposure to other retail markets bodes well for healthy growth in future.

“Kaap Agri remains well positioned for growth, with the business development division focusing on projects across all channels with expansions, acquisitions, mergers and strategic alliances. We will continue our efforts to optimise the offering at existing branches, while expanding the trade, fuel and convenience footprint. Strategic outcomes are evaluated annually, and we remain focused on delivering the company’s strategic intent of growing profitability that significantly outperforms inflation,” Walsh said.

During the financial year to September 2018 drought conditions had a significant impact on the company’s Wesgraan and Trade income channels. The group estimates that the drought cost 11.3% of the targeted 15% recurring headline earnings growth.

Recurring headline earnings per share have grown at a compound annual growth rate (CAGR) of 14.1% for the last five years, and shareholder value measured according to the share price, has increased by a CAGR of 18.8% over the last five years.

The Trade segment contributed 62.9% of revenue, with TFC contributing a further 27.5%, illustrating the high contribution of retail activities in the group. The Trade and TFC segments showed profit growth during the year, while Wesgraan and Irrigation Manufacturing felt the pressure of the drought.

With regard to governance, Kaap Agri’s broad-based black shareholders now hold equity in the company worth R726.9m.

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