Astral Foods sets sights on further growth
By Marc Hasenfuss - Feb 9th, 08:52
Astral Foods, the "big bird" of the JSE’s poultry sector, assured shareholders at Thursday’s annual meeting that management would not be resting on its laurels after a hugely profitable 2017 financial year.
In the year to end-September Astral almost doubled headline earnings to R735m, or 1899c per share, with the poultry segments margins fattened up to 6.4% as trading conditions improved after a prolonged period of drought. The company also declared a bumper final dividend of 875c per share to bring the full year payout to 1,055c per share.
Noting that Astral had shown improvement in operating efficiencies over the past few years, Opportune Investments CEO Chris Logan asked whether there was not a risk management might rest on its laurels.
Astral CEO Chris Schutte said management looked to improve the business on a day-to-day basis and would never rest on their laurels. He said recent further improvements to the agricultural side of the business were already paying off.
"If you don’t farm right, you won’t sell chickens. We supply what the market wants."
Schutte said the IQF (individually quick frozen) business, which rival Rainbow Chickens largely exited in 2016, was proving a brilliant product in SA.
"Our selling strategy is working for us. We have further entrenched our sales and marketing function by hiring 18 more people to grow sales."
He reckoned Goldi was now the best-known IQF brand in Africa. Schutte said Astral was also making strong gains in the higher-margin quick service restaurant market and was "almost the sole supplier" to fast food conglomerate Famous Brands. He said Astral was also supplying KFC and Nando’s.
Vunani Securities analyst Anthony Clark believed Astral was poised for a strong 2018 financial year. "The cycle is with them and there have been much firmer poultry prices after the festive season, traditionally a weak period."
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