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Crookes fruit gets bruised

Agri-business group Crookes Broth­ers saw less succu­lent returns from its bulked up Western Cape-based decidu­ous fruit business in the year to end March. Crookes reported that although revenue was up strongly at R140m (compared with R90m in the previous finan­cial year,) operating profits were more than halved to R16m (previously R39m.)

Crookes MD Guy Clarke said decidu­ous prices in the com­pany’s major African markets were affected by demand weakness as the oil price fell. The robust oil price has buoyed a good number of oil and gas rich African econo­mies in the last few years. Hopefully the higher crude oil price will see the weaker de­mand trend in Africa reversed in the finan­cial year ahead.

But African markets were not Crookes’ only challenge. Clarke also noted that eco­nomic sanctions against Russia caused an over-supply of fruit in Europe.

“Revenue was con­sequently markedly lower than anticipat­ed, and with these low­er prices, fruit stocks and biological assets did not achieve the levels at which they were valued at the prior year-end.”

The disappointing yield from the decidu­ous fruit operations coincides with the first time that the contri­bution of the recently acquired High Noon farming operation was included for a full financial year. Two years ago Crookes acquired the High Noon estate near Villiersdorp – com­prising 200ha under deciduous fruit with a further 40ha avail­able for development – for R103m. The deal pushed Crookes’ deciduous area un­der management to around 700ha – giving the group critical mass in this farming niche. Events certainly put Crookes at an intrigu­ing juncture in terms of furthering its de­ciduous fruit interests.

The company is in the throes of raising R215m of fresh capi­tal to deploy into new agri-business projects. Clarke reckoned the agricultural environ­ment in southern Af­rica continued to offer great potential arising from regional eco­nomic growth, global food security con­cerns and renewable energy opportunities.

If smaller deciduous producers are feel­ing a profit squeeze, CBN has to wonder whether a portion of that R215m might be planted in new fruit opportunities in the Western Cape?

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