Prospects for growth there

Finweek English Edition - - INVESTMENT - TAN­DI­S­IZWE MAHLUT­SHANA

IF THE South African Poul­try As­so­ci­a­tion finds a way around the pro­posed duty in­creases on im­ported poul­try prod­ucts, lo­cal producers could end on com­pet­i­tive foot­ing with their in­ter­na­tional coun­ter­parts. The or­gan­i­sa­tion says lo­cal pro­duc­tion and em­ploy­ment in the poul­try in­dus­try has been un­der threat be­cause of the low-priced poul­try im­ports.

East­ern Cape-based busi­ness Sov­er­eign Foods re­leased its in­terim re­sults for si x months ended 31 Au­gust 2013, which showed poul­try stock earned 18.9 cents/share, 9% lower in com­par­i­son to the pre­vi­ous pe­riod. The counter also has lower debt com­mit­ments which have led to it achiev­ing a net gear­ing of 6% from 14%.

You do not get an in­terim div­i­dend (only fi­nal is de­clared) with this stock, but you will have ex­po­sure to 25 poul­try pro­duc­tion farms pro­duc­ing 95 000 tons of poul­try per an­num. You also get a div­i­dend yield of 2.86% and a P/E ra­tio of 7.58 with a stock that is trad­ing at a deep dis­count to NAV of 973.99c.

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