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BKB reports solid growth despite challenging trading environment

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Estimated reading time: 2 minutes

BKB’s performance for the financial year ending June 2022 was better than expected in a year overshadowed by challenges surrounding Covid-19, biosecurity and export logistics.

Johan Stumpf, BKB Group CEO since 2020, attributes the good results to the diverse nature of BKB’s operations and the group’s focus on limiting non-essential expenses.

BKB’s value of business grew 8% year-on-year to R14,3 billion (2021: R13,2 billion), and its profit before tax increased by 15,2% to R171,6 million in the 2022 financial year (2021: R148,9 million).

The fibre and livestock businesses were under pressure in the last quarter due to foot-and-mouth disease (FMD), but they were still able to deliver good profits. The ban on the export of wool to China was lifted and the fibre division should be able to deliver a solid performance in the coming year.

The effect of FMD on the livestock business is more uncertain. However, alternative business models have already been implemented should the situation continue, with the movement of animals being restricted. The retail business had an exceptional year and reported a record profit.

PaKHouse Brands, the processing subsidiary of the BKB Group, significantly improved its financial performance and reported a 19,2% increase in operating profit. This was mainly driven by a new grain procurement strategy and the restructuring of market access for its products.

According to André du Toit, managing director of PaKHouse Brands, this improvement must be seen against the background of increased logistical costs, as well as unproductive and ineffective local terminal services for the shipment of export containers. According to Du Toit, the focus remains on improving efficiencies at each of the sugar, raisin, mills and lucerne operations.

Read more about the deterioration of the Agbiz/IDC Agribusiness Confidence Index.

Thanks to the improved financial results, earnings per share and headline earnings per share both increased to 148,1 cents (2021: 133,3) and 134,1 cents (2021: 132,5), respectively. In addition, the board approved a gross dividend of 42 cents per share.

According to BKB’s financial director, Jannie van Niekerk, the group will focus on growth within conservative debt level targets in the coming year. He also mentions that the group was successfully listed on the Cape Town Stock Exchange (CTSE) during the past financial year.

Stumpf thanked all stakeholders for their valuable input and continued support that made these results possible. – Press release, BKB Group

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