The group said that despite lingering pressures from the recent drought and the general subdued performance of the retail sector, its revenue increased 28.7 percent to R4.39 billion from R3.41bn during the corresponding period last year, with like-for-like comparable store sales growing of 10.7percent.
“The growth in the value of business transacted was driven by a 21.9 percent increase in the number of transactions. Product inflation, excluding the impact of fuel inflation, is estimated at -0.5 percent. Gross profit has not grown in relation to revenue growth due to sales mix changes, fuel price increases and margin pressure,” the group said.
The amount included growth from Forge, a business that the group acquired last year.
“Excluding the impact of Forge, non-agri retail sales have performed well, growing at 3.9 percent on the previous comparable period and with the exception of water storage categories coming off a large base last year as well as constrained cement sales, non-agri retail sales have delivered growth of 13.4 percent,” the group added.
The share price increased to R31.50 a share after the release of the trading update, up from Friday’s closing price of R30.
It eventually closed 6.33 percent higher at R31.90.
Kaap Agri specialises in retail and trade in agricultural, fuel and related retail markets in Southern Africa.
The group said agricultural conditions in the Western Cape have improved, but the sluggish recovery has led to slower than expected growth in the country region Agrimarks and Pakmarks.
“The subdued retail sector had the largest influence on the urban region Agrimarks. While drought conditions have persisted in the Northern Cape, inland operations have benefited from market share gains,” the group said.
Its subsidiary Wesgraan also performed on the back of a more favourable wheat position, although the full impact of the recovery was weighted to the second half of the financial year.
The group said its fuel retail expansion remained on track on a positive outlook. It said it expected existing and acquired sites to perform well.
Kaap Agri said fuel volumes increased by 9.2 percent, with The Fuel Company (TFC) owned and managed sites having grown fuel volumes by 9.5 percent, with additional TFC site acquisitions at various stages of conclusion.
“Growth in fuel site convenience and quick service restaurant retail operations has exceeded fuel volume growth,” the group said.