Kaap Agri, which specialises in retail and trading in the agriculture, fuel and related markets is well positioned for further growth, and agricultural conditions in the regions where the group operates were stable with a positive outlook.
CEO Sean Walsh and chairman George Steyn said in the integrated report released yesterday that the PEG transaction would also annualise – in the past financial year to September 30, 2022 the results of only three months of the newly acquired fuel stations were included in the group’s financials.
“In line with our strategic initiatives, the group will continue to optimise offerings at existing branches and be more selective with the expansion of bricks and mortar, especially with our B2B and B2C focus,” the executives said.
The group, via subsidiary TFC Operations acquired 100% of the shareholding in PEG Retail Holdings (PEG) from July 1, 2022. PEG is an independent fuel retailer with 41 service stations, mostly on national highways.
The acquisition has made TFC a leading multi-branded fuel and convenience retailer in South Africa.
An indication of the impact on the group can be gleaned from the divisional revenue figures in the report, which showed revenue in the fuel retail and convenience division for the past year more than doubled to R6.27 billion from R3.03bn the year before, while pretax profit increased to R100.46 million from R72.04m.
Kaap Agri’s brands include Agrimark, which consists of 77 shops that sell farming production inputs and equipment, the retail fuel and convenience division that owns 85 service stations, Agrimark Grain which consists of 14 silo companies, three seed-processing plants in the Western Cape, and a manufacturing unit that makes mainly irrigation equipment.
In the past year Kaap Agri continued a strong performance, increasing revenue by 48.4% to R15.7bn, with comparable like-for-like growth of 24%.
The number of transactions increased 54.3%, and excluding PEG the growth was 7.9%. Recurring headline earnings a share increased to 578.23 cents from 477.55 cents.
Agrimark developed its first e-commerce website through the year, which would “expand our retail footprint and provide a platform where we can reach even more farmers, families and friends – and their fur families”.
“Our new online store places Agrimark front and centre as our customer-facing retail brand. It will offer us the opportunity to grow our brand awareness while reaching new markets, especially clients in urban centres,” the executives said.
“The company’s diversified exposure to other retail markets bodes well for sustainable growth and cash generation. Although the economy is under pressure, the group is on track for growth in line with the medium-term targets,” they said.
The share price traded 0.47% higher at R42.50 yesterday afternoon, slightly off the R54.44 that it traded at a year ago, but about 10% above its net asset value.
BUSINESS REPORT