Fu­ture should be brighter

Finweek English Edition - - MARKETPLACE -

Food pro­duc­ers have been pub­lish­ing re­sults and they all have the same is­sue – high in­put costs due to the re­cent drought. But the drought is most def­i­nitely less­en­ing so they should all see in­put costs com­ing down and that should boost prof­its as mar­gins ex­pand. I al­ready have a hold­ing in Ton­gaat Hulett* to take ad­van­tage of this and am now also look­ing at Quan­tum Foods. Its cur­rent as­sets are al­most dou­ble the mar­ket cap while to­tal li­a­bil­i­ties are about the same as its mar­ket cap, mean­ing it is trad­ing well below its al­most 700c net as­set value. At rev­enue level, it has three legs of equal size: feed, farm­ing and eggs. The com­pany had an is­sue with eggs that swung into a loss but should rec­tify it­self in the next year, and with in­put costs likely com­ing down, this is worth adding as an­other stock to ben­e­fit from im­proved rain­fall and egg prof­its.

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