Kaap Agri, the agriculture related retail, trade and services group has, despite the severe Western Cape drought, increased revenue by 2,3% to approximately R6,6 billion, up from R6,4 billion in the previous financial year on a statutory basis.
However, on a pro forma basis, as defined below, revenue increased by 8,4% with like-for-like comparable growth of 6,9%, according to a Kaap Agri trading update released for the year ended 30 September 2018.
The company’s consolidated financial results for the year ended 30 September 2018 will be released on or around 29 November 2018.
This growth in revenue was driven mainly by a 12,1% increase in the number of transactions. Product inflation is estimated at 5,1%. However, when excluding the impact of fuel inflation, it is -0,1%.
Despite the estimated 11,3% drought-related negative impact on recurring headline earnings (RHE) growth for the year from predominantly the Wesgraan and Agri-Retail divisions, the group expects RHE for the full year to be between R249,2 million and R251,7 million, representing an increase of between 0,5% and 1,5% from the previous year, on a statutory basis, with all divisions, except Wesgraan, performing well. Once-off items are excluded from headline earnings to calculate recurring headline earnings.
The company said that the trading results have been negatively affected by the drought conditions experienced in the Western Cape and specifically in the Wesgraan and Agri-Retail divisions.
Non-agri retail sales performance has been subdued during the second half of the year due to continued consumer pressure and the overall anticipated improvement during this period did not materialise.
Delays in fuel expansion related regulatory processes have improved but have negatively impacted new site roll-outs during the year. Despite these challenges, The Fuel Company (TFC) continued with its expansion strategy and annual fuel volumes grew by 15,8%. Including managed sites awaiting regulatory approval, TFC fuel volumes grew by 38,5%, with additional TFC site acquisitions at various stages of conclusion. The business continues to explore Agri and Retail expansion opportunities.
The company’s diversification strategy and ongoing investment into improvements, upgrades and acquisitions continues to generate strong earnings and shareholder returns under the circumstances, with EBITDA increasing by 6,3% for the year, on a statutory basis. – Press release