Kaap Agri declared a final annual dividend of 50 cents a share after skipping the payment of an interim dividend due to the uncertainty created by the Covid-19 outbreak. Picture Jeffrey Abrahams
Kaap Agri declared a final annual dividend of 50 cents a share after skipping the payment of an interim dividend due to the uncertainty created by the Covid-19 outbreak. Picture Jeffrey Abrahams

Kaap Agri skips straight to the final dividend

By Sandile Mchunu Time of article published Nov 27, 2020

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DURBAN - KAAP AGRI declared a final annual dividend of 50 cents a share after skipping the payment of an interim dividend due to the uncertainty created by the Covid-19 outbreak.

Kaap Agri specialises in trading in agricultural, fuel and related retail markets in southern Africa.

The group said yesterday that for the year to end September it managed to declare a dividend as its business performance has been encouraging with results ahead of expectations given the current conditions.

Its recurring headline earnings per share increased by 4.6 percent to 392.52 cents a share, resulting in a five-year compound annual growth rate of 8.6 percent up to the end of September. Group revenue increased by 1.5 percent to R8.6 billion with like-for-like comparable growth declining by only 0.6 percent and earnings before interest, tax, depreciation and amortisation increased by 6.8 percent to R587.5 million.

The group said the 1.5 percent growth in revenue was achieved despite a 2.9 percent decline in the number of transactions which include an estimated 6.6 percent decline impact due to Covid-19. “Excluding the negative impact of Covid-19 and the adoption of IFRS 16, both of which are non-comparable with the prior year, recurring headline earnings would have grown by 15.4 percent year-on-year,” the group said.

Chief executive Sean Walsh said the group has shown a high degree of resilience under exceptionally challenging trading conditions.

“It was a year of two distinct halves for our business. We experienced a slow start with the results of the first six months being hampered by constrained retail consumer spending,

adverse weather conditions, suppressed GDP growth and increased competitor activity,” Walsh said.

He added that the second six months bore the brunt of the Covid19 impact with the effects having been felt across the organisation.

“We were fortunate in that most parts of the business continued to

trade as an essential service provider although under certain limitations during the different levels of lockdown,” he said.

The group’s fuel sales, quick service restaurants (QSR) and convenience store sales were adversely impacted, particularly due to reduced footfall as well as the inability to sell tobacco and products considered non-essential.

Kaap Agri said fuel sales were significantly impacted by the lockdownreduction in travel and road transport and despite restaurants reopening under level 3, QSR trade remained suppressed. Looking ahead, Walsh said Kaap Agri remained cautiously optimistic about the year ahead.

“Our ongoing strategy of diversification is expected to generate improved results as income streams, which were constrained during harsher Covid-19 lockdown levels continue to recover.

He added that the business environment in which they operate will continue to be constrained and it remains to be seen what the long-term effects of Covid-19 will be on general consumer behaviour.

Kaap Agri shares closed flat at R25 on the JSE yesterday.

BUSINESS REPORT

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