Shares in listed poultry group Astral Foods have come down from their precariously high perch of R329 on April 11. It’s not as though Astral’s interims were in the least disappointing, but the local poultry sector can be a viciously cyclical business. Still, Astral’s interim results to end-March showed the lean and mean business dishing up fat profits, rich cash flows and a succulent dividend. In terms of sustaining performance, the company committed to spend R1.3bn on improving efficiencies and bolstering production at key poultry plants. This might have rattled shareholders — especially those craving an even more generous dividend serving. I’d say that fretting over dividend cover is shortsighted, given that Astral CEO Chris Schutte has proved time and again that he is adept at capital allocation through the cycle. The capital expenditure, while representing a fair sum, will be phased in over three years — which should preclude any marked drag on distributions. In this regard, I n...

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