COMPANY COMMENT
Astral management failed to see the light
It would have been strong-stomached investors who bought the stock given management pessimism at September year-end results
One moment you’re up a smelly creek with no paddle, the next you’re king of the dung heap. Such appears to be the life in the South African chicken business, with Astral Foods’ latest trading update a graphic demonstration of how conditions can change, and how quickly. The poultry producer appears to be in a vastly different state to a year ago, when drought, imports and shaky consumers prompted the Department of Trade and Industry to label the sector as one in "crisis". Now, Astral expects to make interim headline earnings per share of between 1,958c and 1,994c, a gain of up to 460% on the year-before period. It credits good trading conditions and farming performances, while no losses due to the outbreak of listeriosis or avian flu have also helped. Wednesday’s update, while partly a demonstration of how cyclical the sector is, also offers an interesting perspective on the utility of management outlook statements. At the time of its September year-end results, published in November...
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