The strategic progress and financial results were presented by Senwes Group CEO, Francois Strydom, and Senwes Group CFO, Corné Kruger.
Strydom explained the major events in the group’s life such as the merger with the Suidwes Group, the exit from the joint venture with AFGRI as well as the completion of the on-boarding of Falcon Agricultural Equipment and Staalmeester Agricultural Equipment. It was also noted that KLK Landbou was fully on board and its results were consolidated for a full financial year. He also highlighted the restructuring and alignment of the different business models, such as the exit from the trading business, Tradevantage Grain, the deployment of a rebranded Agri Credit Solutions in the Suidwes and KLK areas, as well as further consolidation and integration with Certisure, Agri Credit Solutions and estate planning now that the brokerage joint venture between Senwes and NWK Ltd has been terminated.
Shareholders were advised that the capital investment in the core assets (silos) will be continued with and further developments will be taking place on the Basislink platform.
Strydom also emphasised the effects of Covid-19, which placed both the supply chains and consumers under severe pressure. The future outlook with higher input prices, volatility of the exchange rate and the allocation of capital remain critical challenges and focus areas. Logistics were becoming an even more strategic aspect, with the security of the physical supply of food and fibre being more crucial than ever. Rising input costs and lower consumer demand are concerning factors, while political rivalry, a lack of service delivery and corruption remain a challenge for business South Africa.
Shareholders also noted Senwes’ very positive expectations in view of a good harvest, stable interest rates and good planting intentions.
Mr Kruger reported on the segmental results for each of the business clusters and the normalised headline earnings and growth. Profit before tax increased by 73%, while earnings were 74% higher than the 2020 financial year. Excluding abnormal once-off items, normalised headline earnings increased by 71%, namely from R246m to R420m. A return on opening equity of 20,5% was achieved and a gearing ratio of 138% was maintained. The key financial and operating ratios were highlighted and it was explained that a total shareholder return on opening market price of 12,7% was achieved.
During the meeting, Steve Booysen, Dries Kruger, Danie Minnaar and Pieter Stander were re-elected as directors, while the appointment of Gert Malherbe, Hansie Viljoen and Andrew Waller was also confirmed. Both Simon Mohapi and Frans Marx retired at the meeting and were not available for re-election. The Chairman thanked them for their contributions and involvement with the board during their terms of office.
The final and special dividends of respectively 32 and 26 cents per share were also confirmed, which will be paid to shareholders on 2 September 2021.
Shareholders were also updated about the trading of shares and the temporary suspension of trading on ZARX by the Financial Sector Conduct Authority and noted that alternatives are being pursued as a priority should the suspension not be lifted soon.
After the Senwes meeting, the 2021 Agribel Holdings annual general meeting was held, with Dries Kruger as chairman. Mr Kruger retired as chairman at the meeting and it was noted that Nico Liebenberg would take over the reigns as chairman, with Jaco Minnaar as the vice-chairman. The Agribel shareholders also adopted all the proposed resolutions. The Agribel dividends of 23 and 19 cents per share of will be paid on 3 September 2020.
Any queries regarding shareholder matters may be directed to Elmarie Joynt, Group Company Secretary, at e-mail: elmarie.joynt@senwes.co.za.