Premier Fishing and Brands, owned by Iqbal Survé’s Sekunjalo Investment Holdings, has reported a double-digit increase in revenue and a 4% rise in gross profit due to higher squid catches, in the half year to end-February.
SA squid is in strong demand overseas, the small-cap seafood company said.
Premier Fishing, valued at R421m on the JSE, also catches hake, pilchard and lobster, produces environmentally friendly fish-based fertiliser, specifically Seagrow, and exports farmed abalone to Asia.
During the interim period, the group reported a high value of unsold stock and outstanding payments, which reduced its cash flow. However, it said it remains confident these issues will be resolved by the financial year-end in August.
It reported revenue of R258m, representing an increase of R34m and a profit of R12.5m after tax, up from R10m previously.
Pilchard sales fell due to lower catch rates, while it reported a slight increase in hake sales.
It achieved high catches of lobster and strong demand, and has already caught 60% of the allocated quota for the year. Despite strong demand for SA lobster in the US, strict quotas limit the amount that can be sustainably caught.
An increase in demand in the Far East resulted in improved selling prices for both live and canned abalone. However, the abalone operations still operate at a loss. It is common for aquaculture farms in SA to run at a loss until the farm and products mature.
Premier Fishing said it hopes that the situation will improve in the next six to 12 months as they strategically grow their abalone farm to meet market demand and maximise margins. The company plans to expand its farming capacity from 120 tonnes to 300 tonnes to 350 tonnes a year.
Due to uncertain banking facilities and the need to preserve cash for the sustainability of the group, Premier Fishing has chosen not to declare a dividend.
Survé’s companies have faced multiple bank account closures, and he has undertaken frequent legal actions to force banks to keep accounts open.
Despite the challenging economic conditions, Premier Fishing said it remains confident in its ability to continue operating as a going concern.
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