Crookes Brothers half-year profit soars by 165% to R70m

AGRICULTURAL company Crookes Brothers yesterday reported half-year results that bucked the trend in the sector by posting a 165 percent increase in profit after tax.

Crookes Brothers saw its profit climbing to R70.01 million for the six months to the end of September, up from R26.46m as compared with the same period last year.

The profit was largely driven by the company’s operations in sugar cane and bananas. Crookes Brothers has been operating for 150 years in sugar farming but has since diversified and added deciduous fruit, bananas and macadamia nuts in the past 10 years.

Chief executive Guy Clarke said, “We are comfortable with the results. We have achieved good growth despite the drought and we have invested in good growing areas. Sugar cane and banana were the most pleasing.”

Revenue increased by 27.9 percent to R451.7m, while basic headline earnings a share was up from 203.1 cents a share to 257c a share.

Sugar cane operating profit increased by R84.5m driven by higher prices across all regions. Cane production volumes decreased by 19 percent due to persistent drought conditions effecting southern Africa.

Banana production improved by 6 percent supported by a 48 percent increase in banana prices, as the market has been undersupplied as a result of the drought conditions. This resulted in a R16.6m increase in operating profit against the corresponding prior period.

The deciduous fruit operating profit was R25.6m lower than the corresponding prior period, mainly as a result of a decline in deciduous fruit prices since the start of the financial year. Regarding the macadamia nuts, the orchards under development in northern Mozambique continue to make good progress, with the first small crop expected next March.

Clarke said worldwide demand for macadamia nuts remained strong and continued to outstrip supply, keeping macadamia prices high.

It is expected that this operation will become a major contributor to the group’s operating profit in years to come, with positive cash flows from the project expected to be achieved from about 2021.

The board declared a gross cash dividend of 50c a share, up from 35c a share declared last year.

Crookes Brothers acquired a 49.5 percent stake Silverlands Mozambique Holding as part of the group’s investment in a 300 hectare banana project in Mozambique in September.

“We will continue to look for growth opportunities but we are satisfied with our current investments as our hands are full at the moment,” Clarke said.