Strategy Financial performance
Consolidation is the strategy Senwes has embraced to react
to these trends. The industry is in a consolidation phase and
Senwes foresaw that, as manifested in its 2020 strategy. This
strategy also prescribes that individual businesses in our value
chain are in the process of reorganising and specialising. The group financial performance for the 2013/2014 financial
year reflects a profit after tax of R251 million and a turnover of
R11 476 million - a decrease of 18.2% and 17.3% respectively
compared to the previous year.
To this end, Senwes specialises in –
• Retail, with AFGRI as partner; (Hinterland)
• Insurance, with NWK as a partner; (Certisure Group)
• Logistics, with Imperial Logistics as a partner;
(Grainovation)
• International trade, with Bunge as partner;
(Bunge Senwes)
• Bond and hire purchase financing, with WesBank as
partner;
• Local distribution of John Deere equipment in the Eastern
and Western Cape with JDI as partner; (JDI)
• Electronic Silo Certificates with AFGRI as partner;
(Silo Certificates)
• Lime with NWK Ltd as partner. (Grasland Ondernemings)
In line with the 2020 strategy, Senwes remains committed to
the continued creation of consolidation platforms with specific
partners and to accelerating the process in the coming year.
Another international trend impacting on Senwes’ future strategy
is the taking over of local companies by large international
conglomerates. International examples of this trend include
the USA, Canada and Australia, where competition authorities
prohibited the consolidation of local agri-businesses. Large
international conglomerates saw the gap to dominate this
sector, which disempowered local businesses and which in turn
led to a loss in food security and job opportunities, with foreign
conglomerates disregarding the social structure and fibre of
local communities and posing an increasing threat to national
interest.
The net profit reflects the two successive drought years and
the resultant decrease in grain volumes and capital expenditure
programmes of producers.
The following are key financial ratios:
• A decrease in normalised HEPS of 35.1%
• A decrease in EPS of 14.8%
• Return on opening equity of 15.7%
• Increase in net asset value of 74 cents/share
• Dividend yield of 4.6% on opening market price which
represents 48 cents per share.
• Total shareholder return (capital growth + dividends) of
R150 million generated for shareholders.
Senwes managed to maintain its own capital ratio at 40% at
year-end. Facilities at Absa were increased by R900 million at
favourable rates. Unutilised short-term facilities as at 30 April
2014 amounted to R1,1 billion, which ensured adequate liquidity
for growth opportunities.
Senwes managed to maintain its balance sheet on the same
levels as the previous year, despite proven growth in the debtor
book.
The Centre of Excellence project which was launched last year,
started to deliver results during the year, as is evident in the
streamlined processes which, in turn, resulted in decreased
costs.
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