Crookes Brothers’ share price shot up more than 16% percent on Friday after it predicted that it would swing sharply into profitability for the six months to September 23 compared with a loss at the same time a year before.
The group said in a trading statement it expected to report headline earnings per share of 321.2 cents for the six months, while for the same period last year, it reported a headline loss per share of 193.7 cents.
The basic earnings per share for the period was expected to be 326.8 cents, compared with a basic loss per share of 192.1 cents.
The group’s operations in southern Africa span South Africa, Eswatini, Zambia and Mozambique and it is a producer of primary agricultural products such as sugar cane, bananas, deciduous fruit and macadamia nuts.
“The increase in earnings is mainly attributable to an improvement in prices in the group's sugar cane and banana operations, as well as a reduction in fertiliser and other agricultural input costs, compared to the previous corresponding period,” the directors said.
The interim results are expected to be published on or about November 29, 2023.
The generally thinly traded share price closed 16.93% higher at R33.91 on Friday, marginally lower than the R36 that it traded at a year ago. Three years ago on the same day, the share price was trading at R47.01 a share.
The group also has a property division which, according to the integrated annual report, “is starting to live up to its immense potential.”
The Renishaw Coastal Precinct on the KwaZulu-Natal South Coast had been listed as a catalytic project within the province, as well as for the country.
“This announcement was made public by President Cyril Ramaphosa, during the South Africa Investment Congress, held on 13 April 2023 in Sandton. This announcement will elevate the profile of our Coastal Precinct significantly,” the group said.
In the 2022 financial year, the group struggled because of falling prices for its products. Three of four of its main agricultural products ended the 2022 year with negative price variances from budgeted prices, which were 20% to 30% below budget - over 10 years before, there had only three different years where one element suffered a 20% negative variance.
In June, the group described in the annual report how it dealt with the challenges of the previous year and anticipated improving margins.
“We have planted new hectares of bananas on existing properties. We have switched from cane to bananas and vice versa to obtain better yields overall without actual increases in their respective footprints. We have looked at ways of planting and replanting that captures more aggressively the young ratoon tonnages.”
“Field by field, tree by tree, we attempt to maximise what exists. We sacrificed and postponed non-essential expenses to ensure that our group’s assets productive integrity was not compromised. The overarching premise being protect and enhance what we have and wait for times to improve.”
“We are seeing a softening in fertiliser prices. Freight rates are improving. Inflation is being aggressively tackled and the rand remains inherently weak. Our operational management are focused on commercial outcomes of their farms. These and our cost cutting and efficiency programmes are all elements that point towards better margins going forward,” the directors said .