Diversified model, solid balance sheet and strong cash generation position the Group to keep investing and supporting customers
KAL Group, the unique South African agri, fuel and convenience speciality retailer listed on the JSE, today reported a strong set of financial results for the six months ended 31 March 2026.
“We are encouraged by this set of results, particularly against the backdrop of ongoing uncertainty and challenging conditions,” said Johann le Roux, CEO of KAL Group. “The resilience of our operating model, combined with disciplined execution across the business, contributed to steady growth and improved profitability.”
Financial highlights
All key financial indicators improved during the half year, with the Group declaring an interim dividend of 70 cents per share, up 25% from 56 cents per share in the prior comparative period. Revenue increased by 5% to R11.36 billion, while gross profit grew by 8.8% to R1.81 billion. Headline earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 7.7% to R599.7 million, while headline earnings per share (“HEPS”) increased by 12.5% and recurring HEPS grew by 15.1%.
The Group continued to reduce debt during the period, with net interest-bearing debt declining by R453.8 million. Over the past 12 months, R239.8 million in term debt was settled, contributing to a decrease in the Group’s debt-to-equity ratio to 32.9%, compared to 48.4% in the prior year.
“Our debtors’ book remains robust, while disciplined working capital and balance sheet strength continue to position the business well for future opportunities,” said le Roux. “Cash generation remains strong and, together with low debt levels, reflects management’s confidence in the business, despite the uncertain operating environment.”
Results in context – fuel impact largely contained
Le Roux explained that during the first six months of the reporting period, several macroeconomic factors contributed to cautious optimism across the market, including lower inflation, moderate economic growth prospects, South Africa’s exit from the FATF grey list and a strengthening rand. However, towards the end of the reporting period, escalating conflict in the Middle East created renewed uncertainty, driving fuel and agricultural input costs higher and placing additional pressure on inflation. In late March, concerns around fuel availability and anticipated fuel price increases resulted in a sharp increase in consumer-driven demand, placing pressure on supply across the industry.
“The business was already performing well, with double-digit growth during the first five months of the reporting period, and although we saw a fuel demand spike in March, once-off price adjustments on fuel will only impact the second half of the financial year,” said le Roux.
Fuel prices trended downward for most of the six months to March 2026, with average fuel prices throughout the period 3.0% lower than the same period last year. Although outside of the reporting period, record fuel price increases followed from April as geopolitical tensions intensified. KAL Group’s fuel volumes increased by 6.7% year-on-year, supported by the surge in demand experienced during March.
“We recognise that farmers and consumers are operating under challenging conditions. As a responsible business committed to supporting our customers, we implemented practical interventions, including extended credit support to qualifying customers. Our fuel teams worked tirelessly to manage the fuel supply challenges and ensure fair access to loyal customers and availability across the network,” said le Roux.
While credit sales increased by 5.4% during the period, trade debtor balances grew by only 3.6%, indicating that collections remained well managed. The percentage of overdue accounts also improved, declining to 8.6% from 11.5% in the prior comparative period.
Performance of business segments
Revenue from Agrimark increased 6.3% year-on year and PBT increased by 10.9% when excluding Group incentives.
“We continue to invest in the business and support our customers, opening two new Agrimark stores in Mbombela and Hartenbos, as well as a new Mechanisation offering in KwaZulu-Natal,” said le Roux, adding that improved procurement, margin management, cost efficiencies and stock control were key drivers of growth during the period.
PEG, KAL Group’s fuel & convenience business, increased PBT by 49.2%, driven by 7% growth in fuel volumes and a 5.6% increase in retail revenue.
Le Roux said footprint expansion remains essential to PEG’s long-term growth strategy. “Two new fuel sites were added and 18 projects completed, including three quick-service restaurants (QSRs), two bakeries and 13 upgrades. The pipeline for further sites and QSR expansion remains positive.”
Capital expenditure for the period totalled R112.8 million, including upgrades, maintenance and R38.5 million spent on the acquisition of the two new PEG sites.
Despite below-average rainfall impacting yields, Agrimark Grain (grain handling and storage, seed processing, and potato seed marketing) achieved a 14% year-on-year increase in wheat volumes received. “Due to commodity price fluctuations, grain volumes is a more relevant indicator of performance than revenue,” said Le Roux. “An additional 30,000 tonnes of grain storage capacity was added during the period in the Swartland region.”
Outlook: Challenges remain but strong fundamentals and diversification position KAL Group well to weather pressures
Le Roux said higher fuel prices, potential inflationary pressure and the possibility of higher interest rates may impact the remainder of the financial year, “although the short- to medium-term effect on the Group is not expected to be significant.”
Challenging agricultural conditions in terms of increased input costs may place pressure on some wheat and winter grain farmers during the planting season, while export fruit farmers continue to face supply chain challenges in our ports and pressure from a stronger rand. The Group believes its diversified customer base helps it to mitigate the risks emanating from these conditions.
“Fuel volumes are likely to remain under pressure in the short term due to higher fuel prices. However, our strong balance sheet and cash generation position us well to support customers during uncertain periods, while also enabling us to pursue selective value accretive growth opportunities, which bode well for creating additional shareholder value,” concluded le Roux.