Wool broker BKB – nowadays made up of Ltd, BKBLouwid, Van Wyk Lewendehawe and GrainCo – released the best financial results in its history, due to the highest-ever wool prices in US$ terms, and good performance by the livestock and auctioneering divisions. Its other divisions, some in very competitive markets, also fared better than both the previous year and the budget, according to a statement released by in Port Elizabeth.
The value of business in the livestock, auctioneering and property division amounted to over a billion rand, up 40% on 2006. During the year handled over 30 million kilograms of wool, and over a million kilograms of mohair. Over five million animals were shorn by its shearing services.
The value of business conducted increased by 69,8% to R2,96 billion and turnover jumped more than 100%. Over the R1,74 billion earned in 2006, headline earnings per share rose from 666,2c to 1 227,6c. The statement said the share price rose from R18,01 in July 2006 to R80 on 20 August 2007, “showing unparalleled investor interest and confidence in BKB’s operations”. Return on ordinary equity rose from 8% in 2006 to 14% in 2007. Net asset value per share rose from R74 to R83, further evidence of increased shareholder value. Merger with GrainCo A ccording to BKB, the group’s balance sheet fundamentals remain solid, although farming and agricultural profit remain under pressure.
The merger with GrainCo has diversified BKB’s business focus to include grain. This has significantly increased inventory, trade and other receivables as well as other payables and short-term borrowings. The growing need for differentiation and separate storage of grain has placed GrainCo in a good position to develop niche markets. In the new financial year the group will try to exploit the synergies between the grain business, livestock and auctioneering and the other divisions within to increase shareholder value and profitability. – Roelof Bezuidenhout