South African agribusiness Crookes Brothers has announced robust headline earnings of R64.9 million for the year to March 31, marking the highest annual earnings since 2014, following strong performances from its banana and property divisions.
This was despite facing a myriad of challenges, including adverse weather conditions and operational setbacks, its directors said Friday.
In reflecting on this performance, the company did announce a 24% reduction in its dividend to 150 cents a share. This decrease stems from the exclusion of once-off proceeds from the sale of its deciduous division in 2024, even as headline earnings surpassed the previous year’s figures. Crookes Brothers’ share price fell by 3.33% to R30.21 on Friday afternoon on the JSE.
From continuing operations, revenue rose by 15% to R833.8m. A highlight was the property division’s successful sale of shopping centre and filling station sites, contributing significantly to overall revenue stream.
However, not all aspects were as rosy. The fair value of biological assets witnessed a significant decline of 69% to R15.4m. In contrast, the operating profit following adjustments for biological assets experienced a healthy increase of 19%, amounting to R132.5m.
One particularly encouraging development was the resurgence of the banana joint venture, Quinta Da Bela Vista, which returned to profitability for the first time in three years, despite facing election-related unrest in Mozambique. Profit contributions from both Quinta Da Bela Vista and the Lebombo investment climbed to R8.5m, a significant increase from R3.3m in the previous year.
The group’s headline earnings per share saw an uplift of 27%, reaching 425.1 cents. Notably, finance costs fell by 21%, attributed to modest debt use, allowing the company to navigate financial pressures diligently.
Nonetheless, challenges remain, especially in its sugar cane operations. Revenue from sugar marginally increased by 1% to R519.8m, yet overall volumes were slightly off last year’s levels. Adverse weather, including a lagging El Niño and unusually cold conditions in July, significantly hampered yields, particularly in the un-irrigated KwaZulu-Natal region. Furthermore, a prolonged labour strike in Eswatini led to delays in harvesting, causing unanticipated losses, despite eventual favourable negotiations.
Conversely, the banana segment flourished, with revenue surging by 31% to R198.4m, despite severe weather disruptions. The Mawecro farm did experience early season frost that affected 16 000 bunches, but strong market prices and a promising plant crop aided recovery. A windstorm in October resulted in extensive damage, including the loss of around 189 330 plants.
The macadamia nut division also saw progress, with revenue more than doubling to R29.1m, though global prices remained below pre-COVID levels. Around 1 040 tons were harvested, but heat damage during transport reduced the saleable amount.
In the property segment revenue climbed to R63.5m. This surge was bolstered by the successful sale of assets at the Renishaw Coastal Precinct, reflective of the group’s strategic shift towards revamping marginal farmland for effective use.
Looking ahead, the company remains cautiously optimistic, although potential pressures exist in the sugar segment, with a forecast for lower sugar prices impacting the valuation of next year’s standing crops.
Nevertheless, management’s focus on optimising yield and quality remains steadfast. The upcoming development phases in the Renishaw Coastal Precinct exemplify the group’s proactive approach to navigating challenges and seizing growth opportunities.
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