Drought and land reform continue to create uncertainty, says Kaap Agri
Diversified agriculture group Kaap Agri says rising fuel costs, drought conditions and policy uncertainty continue to prompt caution in the agriculture sector in SA, and the company is focusing on its clients and simplifying its business processes.
The company, which trades in the agricultural, fuel and related retail markets in Southern Africa, said revenue rose 29.1% to R8.45bn in its year to end-September, partially due to the acquisition of a KwaZulu-Natal-based building-supply company in October 2018.
Kaap Agri said on Thursday it was continuing to consider further acquisitions, amid a subdued retail environment and caution in the agricultural community due to “erratic” climatic conditions.
Headline earnings per share rose 14% to 397.85c, with the company raising its total dividend 5.8% to 123.50c.
Agricultural conditions in the Western Cape had largely improved during the year, though certain areas were still experiencing drought.
Low rainfall in the latter parts of the wheat season had resulted in a decrease in the anticipated wheat harvest when compared to that of 2018, with all indications pointing to a slightly below-average yield across the total Swartland region.
Conditions in the northern parts of SA, as well as in KwaZulu-Natal, were encouraging, it said.
• Correction December 2 2019
An earlier version of this article had incorrectly stated that Kaap Agri’s share price was at R4.10, when it in fact rose 7.1% to R30 on Thursday, November 28.