KAL Group, the South African agri, fuel and convenience speciality retailer listed on the JSE, reported a good recovery in the second half of the year to September 30 and this enabled it to declare a dividend that had been raised by 16.7%.
The dividend of 210 cents for the year was in line with the group’s earlier commitment to investors made during the year. The share price notched up 2.05% to R46.75 on the JSE after the release of the results Thursday.
“At mid-year, we spoke about the momentum building in our business and the uplift we expected in the second half – and we have delivered exactly that. The recovery we anticipated has materialised, with a strong upswing across our operations supporting an exceptional full-year performance,” said CEO Sean Walsh in a statement.
The turnaround was despite the challenging economic environment, which had remained tough despite interest rate reductions and lower inflation. Significant improvements in key financial indicators also boded well for the year ahead, he said.
Debt levels were at their lowest in 15 years, margins were being managed, as were working capital and operating expenditure. Gross profit increased by 3.9% for the year.
“Headline earnings per share of 620.98 cents increased by 10.6%, while recurring headline earnings per share (RHEPS) of 624.47 cents rose by 11.2%, representing a sharp rebound from a RHEPS 3.6% decline reported mid-year, and indicative of a strong recovery,” said Walsh.
Return on invested capital (ROIC) – a key metric for the company given that it is more reliable than turnover due to the fluctuation in the fuel price – increased from 12.6% to 13.2%. Ebitda (earnings before interest, tax, depreciation and amortisation) increased by 13.8%. Net-interest-bearing debt reduced by R436.3 million, while R268.2m in term debt was settled, which improved the debt-to-equity ratio to 38.1%, the lowest in more than a decade.
Walsh said this year’s results indicate the group is on track to deliver on its 2030 ambitions, which includes delivering a return on invested capital (ROIC) of 14% and a return on equity of 15%, while maintaining an average debt-to-equity ratio of 40% and improving dividend payments.
“We deliberately prioritised debt stabilisation and cash preservation through prudent capital expenditure during the past year, which sets us up well for 2026, as we look to grow by ramping up our footprint expansion,” said Walsh.
KAL Group has a network of 268 sites – including retail stores, fuel service stations, convenience shops and branded quick-service restaurants – strategically located across rural communities, peri-urban areas and major highway routes. These sites are operated through the company’s two core business segments, Agrimark Operations and PEG Retail Operations, which together anchor KAL Group’s presence in all nine provinces and Namibia.
PEG, the retail fuel and convenience arm, added 3 new service stations, completed 10 revamps and added 15 retail touchpoints. Agrimark, the agricultural and lifestyle retail business, added 1 new store and revamped another.
In 2026, 10 new, revamped or upgraded PEG sites would be opened, Agrimark stores as well as Agrimark fuel sites. “Our capital expenditure is expected to double next year as we accelerate our expansion strategy,” said Walsh.
During the past year, the group had scaled back acquisitions to progress on its goal to exit its manufacturing sector through the sale of Tego Plastics and Agriplas. The disposal of Tego was concluded effective September 30, 2025, and the Agriplas disposal is expected to be completed in the first half of KAL’s 2026 financial year.
“Agricultural performance remained strong across all major categories, with growth in the agri-input channel driving trading profit up 8.1%,” Walsh said.
“Apples and pears had a stable year, while stone fruit and table grape harvests improved, and wine production was excellent. The citrus sector hit record export volumes of over 200 million cartons during 2025. The group also handled approximately 18% more wheat into its silos.
“We expect retail fuel volumes to increase in the year ahead, supported by lower fuel prices and robust convenience retail and QSR performance. New fuel sites launched in 2025, and those planned for 2026… are also expected to positively impact group fuel volumes,” Walsh said.
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