KAL Group profit dips slightly, but management is optimistic about the second half
The KAL Group is an agriculture and lifestyle company specialising in the trade and retail of agriculture, fuel and related markets in southern Africa. Its management is optimistic about trading prospects in the second half of is financial year to end-September 2025.
Image: supplied
KAL Group, the JSE-listed agri, fuel and convenience speciality retailer reported a steady performance in the six months to March 31, with earnings only marginally lower, and it has predicted a stronger performance in the second half.
It generated R557.1 million in earnings before interest, tax, depreciation, and amortisation (EBITDA), a decline of 2.1% over the first half of last year, while R440.6m in pre-tax profit (PBT) was lower by 3.9%. However, the interim dividend was raised to 56 cents a share from 54 cents in 2024 – reflecting business confidence and a commitment to shareholder returns.
'KAL Group has grown tenfold over the past 14 years. To put it in perspective – fourteen years ago, we made just 10% of what we've reported this half. That kind of growth, even in a flat period, shows our business remains solid,' Sean Walsh, CEO of KAL Group, said Thursday.
Debt was reduced by R243.5m in the first half, and the debt-to-equity ratio declined to 48.4% from 56.5%. The balance sheet remained robust, with healthy cash flow, strong working capital, and debt levels at their lowest in a decade.
'Over the past two years, we've deliberately prioritised debt stabilisation and cash preservation, including refraining from major expansion to bed down the R1 billion PEG Retail Holdings acquisition,' he said.
He said they were now well positioned to reach their target of R1.5 billion PBT by 2030, and a debt-to-equity ratio of 40%, delivering a return on equity of 15%.
'We will achieve this through footprint expansion, market share growth, and improved efficiencies, with the team expecting significant inroads already made by year-end,' he said.
Revenue was impacted by a 12.4% decline in fuel prices — fuel comprises 57% of the group's revenue, but this had no material effect on profitability due to the regulated nature of fuel pricing.
Walsh said a R5 change in the fuel price per litre can shift revenue by as much as R250m in a month, yet it has little bearing on gross profit apart from the one-off stock price adjustment. In fact, group R1.7bn gross profit increased by 0.9% (and by 1.5% excluding fuel price change gains).
The Agrimark business reported a 2.4% year-on-year increase in PBT. The segment felt the impact of slow growth in the general retail sector and a slowdown in building activity — with cement volumes down 0.7%. However the lower interest rate environment was seeing farmers beginning to reinvest and spend capital after several tough years.
Strong sales of netting infrastructure at Agrimark signalled a return of capital investment to farms, and strong fertiliser sales signaled an execution of strategy in to grow market share in the Eastern Cape.
The fuel and convenience business, TFC Operations (TFC), was rebranded to PEG Retail Operations (PEG). PEG was affected by lower fuel prices, subdued volumes, and the shift in the Easter holiday trading period from March last year to April this year. PBT declined by 4.8%.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Daily Maverick
an hour ago
- Daily Maverick
‘No problem,' says Joburg as R1bn tender goes to officials' families or friends
The City of Johannesburg defends the award of massive transport contracts to politically connected families, despite concerns from the Auditor-General and civic watchdogs A week after Auditor-General revealed that the City of Johannesburg had awarded R972-million in dodgy family-linked tenders, city spokesperson Nthatisi Modingoane has confirmed that the metro government sees no problem and will not investigate. Six awards (or contracts) valued at almost R1-billion were made to the family of either a city official or councillor for the extension of the BRT/Rea Vaya bus system in 2023. The extension of the city transport service is eight years behind schedule, and a final deadline for the end of 2024 was also missed. 'There is no regulatory provision that prohibits the Municipality to award contracts to the category of people in question (spouse, child or parent of a person in service of state either actively or in the past twelve months). Therefore, the question whether the City failed in oversight and due diligence is misplaced,' said Modingoane. The Auditor-General has a different view. 'Although there is no legislation that prohibits municipalities from making awards to suppliers in which close family members or business associates of employees or councillors have an interest, such awards create conflicts of interest for these employees or councillors and/or their close family members or business associates. The possibility of undue influence cannot be discounted, especially if the person could have influenced the procurement processes for these awards, potentially creating opportunities for irregularities.' While Modingoane confirmed the awards were made for the BRT/Rea Vaya extension, he would not provide further details. He said the connected council official had not sat in on the award decision. Asked if the award would be rescinded or investigated, Modingoane said, 'To rescind such an award will be unlawful and the Municipality will be exposed to litigation risks as a result'. He said that the transactions had been disclosed in the city's annual financial statements as required by law, and no further investigation was necessary. BRT-Rea Vaya veers off track When cities commit to ending spatial inequality (which means that poor black people live on the outskirts while the middle and wealthy classes live in the city near opportunities and amenities), there are two ways to do so: provide transport for workers to get to economic opportunities or increase social housing near jobs. In Johannesburg, the rapid bus transport system was an innovative idea to mediate apartheid planning by making it cheap, easy and fast for workers living on the city's outskirts to go into town, to where they worked, or to get around. The city, which began as a gold mining town, was built along the ultimate apartheid master plan. Black people were housed in dormitory towns and suburbs far out of the white city in enclaves easily controlled by security forces if they resisted – the violent response to the 1976 student rebellion was the obvious example of how it worked. The BRT/Rea Vaya incorporates the taxi industry and co-owns two companies that run the system, PioTrans and Litsamaiso. The city pays BRT/Rea Vaya for trips made. The system has not been without conflict, especially with PioTrans. Its expansion to the north (the so-called Phase 1C) of the project has fallen prey to serial infrastructure and leadership weaknesses that beset local government, which Maluleke highlighted. The city has expanded north, and job opportunities are increasingly available in the new nodes. Phase 1C would almost double the number of buses and take people to where the opportunities are. But new stations lie dormant as delays have repeatedly impacted on roll-out. The weaknesses include corruption (as the R972-million contracts suggest), institutional capacity, effective project governance, ineffective planning, procurement and contract management weaknesses and a lack of accountability for poor performance. Maluleke's report lays bare all these factors. Phase 1C is eight years behind schedule, and the Johannesburg Development Agency (JDA) missed a pledge to get it running by the end of 2024. Daily Maverick regularly tracks the route to check, and progress is still far from complete. This detracts from the effort to end spatial inequality and get young people into jobs — Gauteng and Johannesburg have among the highest youth unemployment rates. Because it is subsidised, trips on the Rea Vaya are cheaper than other forms of public transport. Intervention delivers little Johannesburg is under soft intervention by the Presidency because of its rapidly collapsing infrastructure and services, but after 100 days, most residents say the impacts on the ground are imperceptible. In the past week, there have been multiday water cuts in the east of the city and power outages in the near west and across the inner city as underground fires roar through cabling. Last week, Mayor Dada Morero launched a 'bomb squad' to help him improve city management. MMC for Transport Kenny Kunene said, 'I have not heard anything about it (the R972-million dodgy tenders).' He said he would investigate and revealed that when he started his job in 2021, R23-million had been stolen from the BRT and officials had been suspended, but reinstated after the ANC intervened. He had ensured they exited as part of an anti-corruption plan, he told Daily Maverick. Failing management Johannesburg's audit outcome was unqualified with findings. (For context: the board of a private sector CEO of a company with a budget of R88-billion – Joburg's budget – would sack a CEO for this outcome.) The city lost R2.9-billion in water and R4.93 billion in electricity. Auditors ensured city finance officials reduced fruitless and wasteful expenditure to R1.48-million in 2023/24. Over the past three years, this figure stood at R354-million. The AG said the quality of its submitted statements was poor, but good on publication after remediation. The quality of its performance reports was poor. The overall status of its financial controls was poor. The BRT/Rea Vaya delays symbolise this failing management. The AG also found that 'The City of Johannesburg did not coordinate effectively with its entities. This was due to misalignment between the metro and its entities on expectations and plans, obligations, budgets and timelines for the successful delivery of key projects.' The DA has lodged a formal complaint with the Special Investigating Unit over the R1-billion in awards to companies that are linked to current and former councillors, said its head of caucus, Belinda Kayser-Echeozonjoku. 'This shocking report paints a grim picture of a city where public money is seemingly treated as a personal piggy bank by those elected to serve it. At a time when Joburg's streets are crumbling, power outages are the norm and basic service delivery is in freefall, it is unacceptable that councillors may be benefiting from a broken procurement system.' Risk is that nothing will be done – Corruption Watch 'The worrying thing is that it is a sizeable amount – it may be six officials (or six awards to one official) or their relatives who cost Joburg residents just under R1-billion. 'The official response is quite disturbing. The biggest risk is that nothing will be done, and another big transport infrastructure is threatened. Metro governments are regressing in terms of their reports to the Auditor-General,' said Moepeng Talane of Corruption Watch, who assesses all AG reports for the organisation. 'It's worrying and urgently needs the intervention of the provincial governments,' she said. DM
TimesLIVE
2 days ago
- TimesLIVE
Joshco bridges housing gap for missing middle residents
Construction is under way on what will become the largest phase of the Johannesburg Social Housing Company's (Joshco) Riverside View project in Diepsloot, which will add more than 700 new units to the growing social housing development. During an oversight visit, Nhlamulo Shikwambana, Joshco's acting COO, said 'the development has already completed three phases, with tenants living in over 300 units, and construction of phase 4 now under way'. 'Once complete, phase 4 will add over 700 more units. This is going to be our biggest build in the area. The plan is to reach over 1,000 units in Diepsloot' Shikwambana said the project is specifically aimed at South Africans in the 'missing middle', those who earn too much to qualify for RDP houses but too little to afford bonded homes. 'We are closing the gap for people who fall through the cracks. Most of our residents come from informal areas. We want them to feel safe and comfortable without being financially overstretched,' added Shikwambana. For many residents, the move from informal settlements to the structured, well-maintained apartments has been life changing. Marriam Tom, 50, sits in her bachelor unit with a sense of peace she says she has not known in years. 'I moved from the informal settlement and this place exceeded my expectations. I stay with two kids in a bachelor, and I have peace of mind because I know my kids are safe. I can leave them behind when going somewhere,' she said. Tom mentioned that 'the maintenance is also excellent'. 'My sink once had a blockage and after reporting, it was fixed within a few days.' Emmanuel Ramangwala, 32, who has lived with his brother in a two-bedroom unit for four years, described it as a major upgrade from his previous living conditions. 'This place gives off luxury vibes at an affordable cost. I'm paying R2,500 and we are more than happy. Transport is easily available outside the complex and Ubers can pick you up at the gate,' Ramangwala said. Kholwani Baloyi, the property supervisor, told TimesLIVE that the demand for the flats, which range from R1,200 for bachelor units to R2,500 for two-bedroom units, continues to grow. Each unit includes a modern kitchen, solar geyser, prepaid electricity, water meters and biometric access control. 'We cater for a range of residents and the demand is very high. Once we open applications, they fill up quickly', said Baloyi. Neo Matshitse, Joshco's acting general manager, said 'these units are meant to bring people out of informal settlements and into secure, affordable housing'. 'Safety features are central to the design. The flats come equipped with 24-hour CCTV surveillance, biometric access control and fenced-off play areas,' said Matshitse. Pfeno Ratovhowani, 28, who lives with her husband and daughter said: 'I am happy there is a playground around the block. I am at peace even when my daughter plays without supervision because there's CCTV everywhere. The place is also well maintained and cleaned throughout the day.' Shikwambana said beyond housing, the project is also helping combat unemployment in Diepsloot by creating job opportunities. Cleaners, security guards and gardeners are hired directly from the surrounding communities'.
IOL News
2 days ago
- IOL News
TFG's robust earnings reflect strategic growth and online success
TFG's results for its 2025 financial year underscored a focus on market share growth, margin improvement and cost management, said its CEO, Anthony Thunström Image: Supplied JSE-listed international fashion, homeware and lifestyle retailer TFG's robust financial results for the year to end-March 2025 were fueled by a strong second half from TFG Africa, store expansion, and the acquisition of White Stuff in the UK. Headline earnings a share (HEPS) were up 4.6% to 1015.6 cents. The final dividend was raised by 15% to 230 cents a share. 'The result underscored a 'relentless' focus on market share growth, margin improvement, and cost management,' CEO Anthony Thunström said in a statement. The group has a portfolio of 39 leading retail brands, with over 4 900 outlets in 23 countries on five continents. 'We are targeting the opening of over 100 new stores in the coming year while optimising our existing footprint. With the Riverfields distribution centre now close to fully operational—alongside our other growth and efficiency strategies—we expect continued improvement in operating margins and capital returns in 2026 and beyond,' said Thunström. The Africa business led the charge in the past year with "exceptional" results in the second half. Online sales surged, driven by the success of the Bash platform, which had reached profitability two years ahead of schedule: 'a very likely unique achievement in the South African retail space,' said Thunström. Gross margins expanded by 150 basis points. These gains, along with disciplined cost management across divisions, translated into solid profit growth. Online sales maintained momentum and accounted for 12% of group sales, up from 9.9% the previous year. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading TFG Africa's sales were up 7% in the second half as the base normalised from the prior year's first half's clearance activity. All brands and categories showed improvement, generating full-year growth of 3.7%. Thunström said there was strong growth ahead of the market from womenswear, beauty, and jewellery, as well as recently acquired businesses, Jet and Tapestry, where the retail platform provided credit, online, and distribution capabilities. Online sales grew 43.5% and contributed 5.8% (2024: 4.2%) to total TFG Africa sales. TFG UK increased sales 16.4% in pounds following the acquisition of White Stuff from October 25, 2024. White Stuff saw 20.3% year-on-year growth for the five months post-acquisition. The addition of White Stuff to the portfolio saw store sales up 11.8% and online sales grow 22.5%. Online sales now contribute 44.8% (42.7%) of total TFG UK sales. TFG Australia faced difficult trading conditions, with sustained high inflation and interest rates impacting the consumer. Sales were 2.6% lower in Australian dollars, with a mixed performance throughout the second half in a 'highly promotional market,' Thunström said. Online sales grew by 7.3% and now contribute 8.1% (7.3%) to total TFG Australia sales.
