Agriculture-focused Kaap Agri, whose interests span retail, fuel, and manufacturing, says its revenue was up by almost a quarter in the first three months of its 2022 financial year, driven by a surge in fuel prices and buoyant farming activity.
Group revenue was up 24% in the three months to end-December, Kaap Agri said in a voluntary update, with recurring headline earnings up 15.1% to R130.6m. This is the group’s preferred measure, excluding certain non-recurring items, such as acquisition costs.
The revenue rise was driven by a 7.3% increase in the number of transactions processed and inflation of 20%, or 7.7% inflation when excluding the effect of fuel prices, Kaap Agri said.
Kaap Agri, valued at R3.66bn on the JSE, runs various brands, and sold 6.5-million kilograms of dog food, 304.7-million litres of fuel, and 550,757 pies in 2021. The group also sells building materials, as well provides financial, grain handling and agency services.
Agri-related revenue also fared well, growing by 24.4%, with the group saying the outlook for SA’s agriculture sector remained positive and, while weather patterns have been volatile, the damage to inland crops from heavy rains will have no influence on its performance.
Within the grain services division, Agrimark Grain had another record profit performance, and the recent wheat harvest intake was the largest in 16 years, which led to some challenges on storage availability and increased inter-silo movements.
Total group fuel litres sold decreased by 4%, but the group said it expected a pick up in demand as the market recovers from Covid-19.
In January Kaap Agri announced a R1.1bn deal to buy independent fuel retailer PEG, which would almost double its network to 84 service stations, as well as boost its empowerment credentials.
This new business is expected to contribute five months of earnings and revenue in the group’s year to end-September 2022.
In afternoon trade on Thursday Kaap Agri’s shares were flat at R49.34, having risen almost 80% over the past two years.
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