Premier Fishing and Brands saw a strong uptick in performance in the six months to February 28 with a return of the squid stock, improved catch rates and volumes landed and sold, as well as growing demand for its exports.
“The group has shown resilience over the past three years and the measures that were put in place to safeguard its sustainability have paid off,”. CEO Sooren Ramdenee said in a statement yesterday.
Similar positive results were experienced across the group’s other sectors, notably South Coast rock lobster and deep-sea hake stocks, which had bolstered revenue. The abalone sector was also back on track with an improvement in the Far East export markets, with selling prices for live and canned abalone all increasing.
These improved conditions saw the group lift revenue by 15% to R258 million. The Level 1 vertically integrated B-BBEE group said, however there had been declines in some sectors, such as pelagic and Seagro, due to the timing of sales.
“The resources in these sectors, however, are healthy and in high demand and the company expects an improved performance over the next six months,” Ramdenee said.
Gross profit increased 4% to R104m, while pre-tax profit increased 33% to R18m. Earnings before interest, taxation, depreciation and amortisation (Ebitda) increased by 29% to R32m. The board elected not to pay dividends in this period.
“As a fishing business, we are often at the whim of nature, which is why when we see the return of stocks to a willing market, we can cautiously celebrate.
That said, economic challenges facing us in South Africa and the wider globe remain a factor, along with other challenges specific to the group, so we will continue to run a lean and smart operation,” he said.
A high value of unsold stock and of accounts receivable on hand as at the end of the interim period had impacted cash generated from operations, as cash resources invested in catching the quotas was only realised in sales post the interim period.
Additionally, cash collections from debtors were also only received post the interim period.
“The timing of sale of stock and collection of cash from customers is temporary and the group is confident of selling all stock and recovering all monies owed by the 31 August 2023 financial year-end,” he said.
One of the challenges facing the group is uncertainty around banking facilities as it is involved in a wider group legal challenge with some of South Africa’s larger transactional institutions.
While rulings to date had been largely favourable for the group, the group decided not to declare a dividend to preserve cash, even though it had the financial resources and cash reserves to operate for the foreseeable future.
On March 1, 2023, the group acquired an extra 30% stake in its subsidiary, Talhado Fishing Enterprises.
“The overall outlook of the group is optimistic, and it is well positioned to create and maintain shareholder value through organic and acquisitive growth, thereby ensuring delivery on its commitment to shareholders,” said Ramdenee.
He said the pursuit of strategic acquisitions, coupled with the abalone farm expansion, were expected to have a positive effect on revenue and profit.
The company is in the process of delisting via a scheme of arrangement that still to be voted on by shareholders at a general meeting of shareholders.
BUSINESS REPORT