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Implementation of the Disposal of TFC Properties and Prospects
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”)
IMPLEMENTATION OF THE DISPOSAL OF TFC PROPERTIES AND PROSPECTS
Disposal
Shareholders are referred to Kaap Agri’s announcement released on SENS on
4 October 2021, in terms of which Kaap Agri advised shareholders of the conclusion of the
agreement for the disposal by Kaap Agri, through its wholly-owned subsidiary, Kaap Agri
Bedryf Limited (“KABL”), of its shareholding in TFC Properties Proprietary Limited (“TFC
Properties Disposal”).
Shareholders are advised that the remaining conditions precedent have been met and the
TFC Properties Disposal has been implemented. The TFC Properties Disposal consideration
proceeds for Kaap Agri comprises R444,191,981, payable against the required transfer and
related documentation. R380,000,000 has already been received and the balance should be
received on or about May 2022.
Prospects
The proposed category 1 acquisition (“Acquisition”) of the PEG Retail Holdings Proprietary
Limited (“PEG”) group, as announced on SENS 19 January 2022, is proceeding but remains
subject to certain suspensive conditions. The Acquisition aligns with Kaap Agri’s
communicated strategy and focuses to enhance the earnings of the fuel and fuel retail
environments. The Acquisition will add 41 service stations (mostly national highway sites),
across all major oil company brands. Furthermore, following the Acquisition, TFC Operations
Proprietary Limited (“TFC Operations”), a subsidiary of Kaap Agri’s wholly-owned subsidiary
KABL, will have approximately 50.98% direct broad-based black economic empowerment
shareholding and the strong management team within PEG will remain. Looking forward, this
Acquisition is expected to be earnings and ROIC enhancing, should generate stable and
predictable income streams, and is expected to be highly profitable and cash generative, and
to have a favourable working capital cycle and will contribute to the diversified fuel brand
offering of TFC Operations. The Acquisition is expected to contribute 4 months earnings to
the Kaap Agri group for the current financial year ending 30 September 2022 (“F22”).
The overall medium-term outlook for the Kaap Agri group is encouraging. Overall fruit sector
expectations are positive, however wine grape producer cashflow pressure is expected to
continue. Record wheat, barley and canola harvest are currently in storage. Weather patterns
appear volatile this year. Moderate growth in the retail channel is expected, whilst growth in
the quick service restaurant sector continues to recover slowly. Although the high fuel prices
are curtailing consumer usage, the Kaap Agri group’s fuel volumes are only down 1% due to
market share gains with alternative customers.
Considering current information available, management remains comfortable that the
Company’s F22 performance should be in line with the upper end of medium-term growth
targets, as presented at the annual general meeting and shared with the market via SENS on
10 February 2022.
The financial information and any reference to future financial performance included in this
announcement has not been reviewed or reported on by the Company’s external auditor.
22 April 2022
Sponsor and Transaction Advisor
PSG Capital
Date: 22-04-2022 02:35:00
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