Kaap Agri shares rose 7.1 percent to close at R30 on the JSE on Thursday. Photo: Leon Nicholas/African News Agency (ANA)
DURBAN – Kaap Agri weathered the agriculture sector's slower-than-anticipated recovery from drought and stressed consumers to deliver shareholders a dividend 5.8percent higher in the year to end September. Kaap Agri trades in the agricultural, fuel and related retail markets in South Africa.

The group on Thursday declared a final dividend of 90 cents a share, bringing the total dividend for the year to 123.50c, which was up by 5.8 percent compared to last year’s 116.70c.

Chief executive Sean Walsh said despite the slower-than-anticipated recovery from the drought and the severely stressed consumer environment the group had traded in during the year, Kaap Agri managed to report growth in annual earnings.

“All of our divisions contributed significantly during the period. Our ongoing diversification strategy and resilience continue to yield strong revenue growth, paving the way for further profitability as some of the revenue growth is still to flow through to the bottom line,” Walsh said.

Agricultural capital investment and expansions had been curtailed partly due to land policy uncertainty, as low gross domestic product growth, decreasing business and consumer confidence, rising unemployment and ongoing fuel price volatility had negatively affected retail consumers, the group said.

However, agricultural conditions in the Western Cape had largely improved year-on-year, even though certain areas still continued to experience drought, with KwaZulu-Natal and northern regions showing encouraging signs.

The group reported a 29.1 percent increase in revenue to R8.5 billion, with like-for-like comparable growth of 7.6 percent. The growth was mainly driven by a 10.6 percent increase in the number of transactions stemming from strong organic growth and expansion activities.

Its recurring headline earnings per share was up by 6 percent to 375.19c a share, resulting in a five-year compound annual growth rate of 10.9 percent and headline earnings per share inched up by 14 percent to 397.85c.

Income growth from the trading division, which includes Agrimark stores, Forge, Pakmark, as well as mechanisation services and spare parts increased by 20.6 percent, but operating profit before tax declined by 0.4 percent.

Wesgraan recovered from the previous year's drought related performance, increasing income by 91.5 percent and growing operating profit before tax by 113.8 percent.

The Fuel Company continued to reflect strong growth with income increasing by 36.4 percent and operating profit before tax increasing by 18 percent.

Kaap Agri shares rose 7.1 percent to close at R30 on the JSE on Thursday.

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