Premier fishing reports 31% profit growth

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Picture: Getty Images
Picture: Getty Images

Johannesburg – Since listing in March 2017, Premier Food and Fishing has reported an increase in bottom line by 31% for the financial year ended August 31.

The company is the largest black owned and managed South African fishing group and a subsidiary of African Equity Empowerment Investments. Premier fishing owns and manages its own factories, abalone farm, facilities and fishing vessels operating over three provinces. After listing, the group manage to raise capital of R526m.

According to the fishing group’s annual financial results, released on Tuesday, profit after tax increased from R52m to R68m. The group reported operating profit of R65m. Revenue only grew by 2% from R401m to R410m. “The stronger rand had an impact on revenue but with cost controls and operational efficiencies offset some of the negative impact,” the group said.

A dividend of 15c was declared to shareholders, however diluted earnings per share were down 7% to 33.77c and diluted headline earnings per share were down 6% to 34.59c. The group also reported a cash balance of R524m.

The positive results were mainly due to “excellent performance” across most operating divisions, by increasing volumes, better pricing, good catch rates, and efficient cost and vessel management, according to the report.

However the pelagic division had lower than expected catches of pilchards. The product range includes south and west coast rock lobster, pilchards and anchovies, hake, squid and abalone among others.

Future growth

Through its subsidiary Premier Fishing SA Proprietary Limited, the group has entered into a heads of agreement with Talhado Fishing Enterprises Proprietary Limited, the largest “squid player” in the South African market. Premier fishing wants to obtain a 50.01% stake in the business, the transaction due November 30 is subject to conditions in the heads of agreement.

“The acquisition fits in line with the group's growth strategy to expand organically or through acquisitions. This acquisition will also increase the diversification to our product basket,” the report read.

“We will continue to grow our business organically and by acquisition, as well as focus on the expansion of our product basket to meet our customer’s demands,” said chief executive Samir Saban.

The listing of the group and the capital raised have helped to place Premier fishing in a “strong financial position” to pursue its organic and acquisitive growth strategies, the group said.

The group will focus on expanding the abalone farm, scheduled to be completed by 2019/2020. production capacity is expected to increase in excess of 300 tonnes.

During the period, the group increased its investment in working capital by R28m to buy wild abalone, among other things.

The share price was down to R3.85 at 11:35, after opening at R4.15.

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