Agriculture tractor. Picture: THINKSTOCK
Agriculture tractor. Picture: THINKSTOCK

Kaap Agri's shares jumped 6.3% to R31.90 on Monday after the agriculture group said revenue in the six months to March grew 28.7% to R4.4bn.

This was despite “lingering pressures from the recent drought and the general subdued performance of the retail sector”, the company said.

Like-for-like comparable store sales growth was 10.7%.

“Gross profit has not grown in relation to revenue growth due to sales mix changes, fuel price increases and margin pressure,” Kaap Agri said.

The group said that while agricultural conditions in the Western Cape had improved, the recovery had been slow, and that that had weighed on growth in the rural Agrimarks and Pakmarks operations.

“While drought conditions have persisted in the Northern Cape, inland operations have benefited from market share gains,” the group said.

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Although both agricultural and nonagricultural retail sales had shown signs of improvement, the outlook for the remainder of the year was dependent on “normalised weather patterns and improved consumer confidence”.

“The recovery in Wesgraan, store upgrades and expansions, as well as the revenue from new The Fuel Company sites will contribute more significantly during the next six months.

“The business remains committed to its medium-term strategic plans and continues to explore agri, retail and manufacturing expansion opportunities,” it said.

hedleyn@businesslive.co.za