The KAL Group weathered harsh economic conditions in the six months to March 2024 with an increase in earnings and dividends to shareholders, as well as a significant reduction in debt. This paved the way for cautious optimism by the group for the coming six-month period.
Profit before taxation increased by 9.7% to R458.5 million (2023: R417.8 million) whilst gross profit grew by a healthy 8.7% to R1.65 billion (2023: R1.52 billion). Like for like expenses grew by only 6.4% and despite high interest rates, net interest earned increased. Headline earnings per share increased by 7.3% to 408.74 cents per share whilst recurring headline earnings per share grew by 7.1% to 408.74 cents per share.
An interim dividend of 54 cents per share (2023: 50 cents) was declared, an increase of 8%.
The group’s continued commitment to reduce gearing levels resulted in net interest-bearing debt reduced by an effective R360 million compared to the same period last year with net interest-bearing debt to equity reducing to 56.5% (2023: 73.8%).
Robust trading performance, prudent capital expenditure and working capital management positively impacted borrowing levels, while group cash generation remained strong. Although revenue pressure was evident during the first quarter in general retail and agri channels, the second quarter brought a significant improvement and market share gains across business units in specific geographical areas.
Various business segments outperformed relevant sectors including revenue growth in The Fuel Company (TFC) outperforming performance in the sector.
Commenting on the interim results, CEO Sean Walsh, said: “KAL remains resilient. Management is focussed on controllable factors in pursuit of our medium-term strategic objectives. Balance sheet strength will ensure sustainability with effective capital allocation supporting our focus on return on invested capital and debt repayment continuing.”