Farming service group is Cape Town Stock Exchange’s inaugural stock

Agribusiness TWK Investments has become the “first official listing” on the recently rebranded Cape Town Stock Exchange (previously called 4 Africa Exchange), which is looking to provide a platform for small businesses to raise capital.

TWK, one of the oldest agribusinesses in SA dating back to 1940, is hoping to enhance the tradability of its shares by attracting institutional investors such as pension funds.

The shares debuted at R35 on Cape Town Stock Exchange on Thursday, giving it market value of R1.4bn. TWK migrated from ZAR X exchange, whose operating licence was suspended in August for noncompliance with a section of the Financial Markets Act related to liquidity and capital adequacy requirements.

The timber business is the biggest in the TWK overall portfolio and has been identified by the company as the growth area. Timber products are used in the DIY market and are supplied to pulp producers such as Sappi, which are then converted into packaging products. Timber is also used in mining.

“We are a diversified company and that is very important. We have different income streams. We are in agriculture but we have different commodities and even in those commodities we have different markets. That is what has helped to have profits even in tough times,” said CEO Andre Myburgh. He said that 2020 was the first year in 10 years that TWK could not exceed the prior year’s earnings.

The company also has a retail and mechanisation segment, which supplies an assortment of agricultural products to producers and the public.

The grain segment deals with the storage, processing and marketing of maize, used as an input in food products. In addition, it owns a network of vehicle dealerships and provides insurance products to farmers.

TWK said the outlook for its financial year ending in August 2021 was promising, given the increased demand for its woodchip exports, treated timber as well as timber for mining.

The acquisition of a 51% stake in Sunshine Seedlings Services as well as the Peak Timbers forestry assets has been successfully implemented during the last financial year and should contribute to further growth, the company added.

“For us ourselves, our journey was about digitise, democratise and demonetise finance. We think we have come up with solutions that save issuers, investors significant amount in terms of costs and complexities,” said Eugen Booysen, CEO of Cape Town Stock Exchange.

mahlangua@businesslive.co.za