Premier also surprised shareholders with a bumper dividend of 25c per share — a 67% hike on last year’s 15c per share. The group justified the higher payout with a more than doubling in cash generated to R91m. Headline earnings increased 19% to R82m.
Premier’s results were somewhat clouded by technical issues regarding the accounting treatment of profits from the Talhado acquisition. But if the Talhado acquisition was included from its effective date, Premier’s revenue line was R581m and operating profit R142.5m — representing a fatter operating margin of 24% from 16% in 2017. The segmental profit report showed Premier’s squid division chipping in R58m — making a larger contribution than lobster (R54m), which has traditionally been the group’s staple specie. Premier noted “excellent catch rates” in squid as well as firm pricing.
The lobster division — mainly involved in the south coast lobster segment — landed 100% of its quota with a good size mix realising higher average prices. Premier said its abalone farm increased stock holding by 19 tonnes with demand still exceeding supply. Average prices were 7% higher than 2017. Saban said the planned expansion of the abalone farm already increased its capacity from 120 tonnes to 160 tonnes. “We expect to double the farms abalone spat production because of the expanded hatchery on the abalone farm.”
The pelagic division, however, fared poorly with markedly lower profits of R16.4m (R23.6m) on the back of an industry-wide weak pilchard catch. Only 25% of the pilchard quota has landed — but Premier did manage to achieve better prices. Independent analyst Anthony Clark said further acquisitions would see Premier land good earnings in the financial year ahead. He reckoned the full inclusion of recently acquired Talhado could see the Premier dividend up another 50% to 35c a share in the 2019 financial year.
Source : Business Day