Two major developments were the disposal of the cotton ginning interests in Clark Cotton to Cargill Incorporated, and the acquisition of Daybreak Farms. Wright says the cotton ginning interests, which were sold subsequent to the financial year end, were not part of Afgri's core business, and the decision to sell was consistent with the group's philosophy of exiting businesses that fail to meet its required rate of return.
“Clark Cotton has suffered considerable financial losses in recent years due to its exposure to multi-currency risks and international cotton commodity markets. Cargill has the critical mass to make a success of this business,” he says.
The acquisition of Daybreak Farms for R120 million marks the group's re-entry into the broiler industry following the sale of its 50 percent interest in Earlybird Farm in 2004.
Afgri's board has evaluated the group's cash flow requirements for the year ahead after taking into consideration the sale of the cotton ginning interests and the acquisition of Daybreak Farms and has decided to declare a capital distribution of 21.18 cents per share.
“The broiler market is enjoying particularly strong growth and the disposal of the cotton ginning interests in Clark Cotton will curtail the losses from this source. These factors should contribute to a year of significant earnings growth for Afgri,” concludes Wright.
Afgri offers a range of agricultural services and products.
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
