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Condensed Consolidated Financial Statements For The Six Months Ended 31 March 2020
KAAP AGRI LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2011/113185/06)
Share code: KAL
ISIN: ZAE000244711
(“Kaap Agri” or “the Company”)
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS
ENDED 31 MARCH 2020
1. INTRODUCTION
Despite a slow start to the financial year due to a combination of sluggish retail spend and
a constrained consumer environment, Kaap Agri increased revenue by 11.6% to
R4.9 billion, up from R4.4 billion in the previous comparable financial period, with like-for-
like comparable sales growth of 4.8%. This growth in revenue was driven by a 5.0%
increase in the number of transactions. Product inflation, excluding the impact of fuel
inflation, is estimated at 1.5%.
Both agri and retail performance improved during the second quarter. As indicated at the
prior year end, crucial late season rainfall needed by the wheat farmers did not
materialise, resulting in harvest reductions. Despite lower wheat volumes received
compared to last year, the increased rate of sales has resulted in a heavy weighting of
Wesgraan full year profitability in the first six months of the year. This performance will
not re-occur in the second six months. Conditions for fruit and vegetable production have
largely been positive but significant expansions and infrastructural spend have
diminished, partly drought related and partly related to ongoing concerns around land
policies. The fuel industry has experienced ongoing fuel volume decreases.
Group fuel volumes increased by 6.7%, of which TFC owned and managed sites have
grown fuel volumes by 12.6%. Growth in fuel site convenience and quick service
restaurant retail operations exceeded fuel volume growth.
EBITDA, excluding the impact of adopting IFRS 16, has grown by 9.5% and ahead of
recurring headline earnings growth.
It is clear that we are moving into a challenging period of further reduced consumer
confidence and uncertainty. As a supplier of essential goods and services we will
continue to review the way we interact with our customers to ensure we provide a relevant
and sustainable offering in a responsible manner. We are committed to the wellbeing of
all our stakeholders and remain relatively positive about the medium-term prospects for
agriculture in southern Africa.
We anticipate that retail trade will remain under pressure in the short term. However, good
agri trade performance is expected to continue. A number of new TFC licence
applications are expected to be finalised before year end. The heavy weighting of
Wesgraan performance to the first half of the year as well as the impact of Covid-19 will
result in the second half of the year reflecting a weaker trading environment than the first
six months. We remain committed to achieving our strategic medium-term growth targets.
2. SALIENT FEATURES
Revenue increased by 11.6% to R4.9 billion, from R4.4 billion in the prior corresponding
period.
EBITDA increased by 14.8% to R349,3 million. EBITDA, excluding the impact of adopting
IFRS 16 grew by 9.5%.
Earnings per share increased by 8.0% to 242.21 cents per share, from 224.23 cents per
share in the prior corresponding period.
Headline earnings per share increased by 7.9% to 241.83 cents per share, from 224.17
cents per share in the prior corresponding period.
Recurring headline earnings per share increased by 7.5% to 247.65 cents per share, from
230.34 cents per share in the prior corresponding period.
No dividend has been declared. An interim dividend of 33.50 cents per share was
declared in the prior corresponding period.
3. DIVIDEND DECLARATION
The impact of Covid-19 is being felt across all the markets in which the Group
operates. As such, a number of interventions have been implemented to mitigate the
impact of Covid-19 on the business. Although the majority of Kaap Agri operations have
been designated as essential goods and service providers, revenue will be impacted by
the reduction in footfall in specifically our Trade retail and TFC stores. In response to this,
management have implemented a host of cost saving and cash flow initiatives as well as
capital expenditure curtailment. Given the uncertainty of the duration and impact of the
current circumstances, the Board is of the view that cash preservation and liquidity
remains paramount and as such has decided to forgo the declaration of an interim
dividend.
4. SHORT-FORM ANNOUNCEMENT
This short-form announcement is the responsibility of the directors of the Company. It
contains only a summary of the information in the full announcement (“Full
Announcement”) and does not contain full or complete details. The Full Announcement
can be found at:
https://senspdf.jse.co.za/documents/2020/JSE/ISSE/KALE/KALMar20.pdf
Copies of the Full Announcement is also available for viewing on the Company’s website
at https://www.kaapagri.co.za/wp-content/uploads/2020/05/07-Condensed-Interim -
Financial-Statements.pdf or may be requested in person, at the Company’s registered
office or the office of the sponsor, at no charge, during office hours.
Any investment decisions by investors and/or shareholders should be based on
consideration of the Full Announcement, as a whole.
The condensed consolidated interim financial statements have not been audited or
reviewed by the Company’s auditors.
7 May 2020
Sponsor
PSG Capital
Date: 07-05-2020 08:00:00
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