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Crookes Brothers might be ripe for the picking

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Multinational food processing and retailing company Associated British Foods swallowed SA’s biggest sugar industry player, Illovo, in May last year. The move by the British group (which, as it happens, owns cheap ‘n chic Primark) was part of a scramble for Sub-Saharan African agricultural assets. Crookes Brothers, another JSElisted player now stands out as another highly attractive potential target.

The stage for an eventual acquisition of Crookes could already be set thanks to the involvement of African agriculture-focused UK private equity firm SilverStreet Capital as the key shareholder through its Silverlands (SA) Plantations investment vehicle. As with all private equity firms, SilverStreet will exit at some point.

SilverStreet’s involvement began in 2013 when it acquired Rand Merchant Bank’s 33.1% stake in Crookes. SilverStreet followed this in June 2015 when it upped its stake to 45% through a R215m claw-back issue of new ordinary shares. The issue was pitched at R80/share, a premium of over 30% to Crookes’ then share price.

SilverStreet clearly sees solid growth potential. Crookes aims to deliver it, targeting 15%/year headline EPS (HEPS) growth over rolling five-year periods. “We are fairly confident we can achieve this,” says Crookes MD Guy Clarke.

Diversification strategy and new projects

Underpinning his confidence is a diversification strategy whereby a steady stream of new projects will kick in over the short to medium term. The strategy calls for R500m investment in new projects between 2014 and 2018.

Diversification has already radically reduced Crookes’ dependence on sugar cane, which had been its mainstay since its founding in 1913. Highlighting this, in the group’s year to March 2016 sugar cane produced in Mpumalanga, KwaZulu-Natal (KZN), Swaziland and Zambia accounted for 41% of operating profit, just ahead of the 39% contribution from its 700ha Western Cape deciduous fruit operations.

Bananas from Crookes’ Mpumalanga plantation were another big contributor, accounting for 18% of operating profit.

It is a contribution that is set to rise. Under development in a R117m joint venture with Silverlands Mozambique is a 300ha banana plantation in southern Mozambique. The project promises higher yields and lower costs compared with SA production, says Clarke. The first 40ha of banana trees will be planted in February with the first crop likely in as little as 18 months.

Crookes has gone it alone on another project in Mozambique: a 300ha macadamia nut tree plantation. Under development since 2012, the first crop will be harvested in March with full plantation maturity and the first positive cash flow expected in 2021. With macadamia nut prices hovering around record highs, prospects are good. But, cautions Clarke, as with all agricultural commodities, prices are prone to high volatility.

Crookes to capitalise on its property holdings

Taking diversification another step forward, Crookes is capitalising on its vast property holdings through a new venture, Renishaw Hills, an upmarket retirement village on KZN’s south coast.

“We plan to sell 550 units over the next five to seven years,” says Clarke. “They will take up 20ha of 260ha-280ha suitable for development. We envisage full development to take 2030 years.”

Riding agricultural commodity price volatility

SilverStreet’s confidence in Crookes is paying off. In Crookes’ year to March 2016, HEPS jumped 37% followed – despite a 19.5% rise in issued shares – by a 27% rise in the six months to September. The big interim results kicker came from sugar cane, where operating profit jumped 169% to R134m.

The division rode high on a 12.5% rise in the SA sugar reference price in February and another 15% rise in July. Another strong boost came from a 50% rise in world sugar prices, which lifted export prices to almost the same level as SA’s normally far higher reference price.

Also turning in robust growth were bananas, where a drought-driven 48% rise in SA prices lifted operating profit 168% to R26.6m.

It was not all good news from Crookes. Hammering home the risks inherent in agricultural commodities and the wisdom of diversification, a fall in deciduous fruit prices sent this division’s operating profit crashing to a R24.8m loss.

Trading on a 15.5 p:e, Crookes appears fully priced. However, for small-cap investors prepared to ride agricultural commodity price volatility, it is a share worth consideration on price weakness.

Source: Financial Mail

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Nissan SA’s Whitfield given Egypt portfolio

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CAPE TOWN – Nissan South Africa and sub-Saharan Africa managing director Mike Whitfield has been appointed managing director of Nissan Motor Egypt.

The Japanese-based group said yesterday that Whitfield would also serve as chairperson of Nissan in Africa South as it announced changes in its senior management structure in Africa to drive growth.

Africa is seen as the last frontier for global carmakers. The group said Whitfield would be based in Cairo and his appointment would be effective from June 20.

Whitfield, a former president of the National Association of Automobile Manufacturers of South Africa and vice-president of the African Association of Automotive Manufacturers, joined Nissan in 1981 as a marketing trainee.

Since then he has held a variety of senior positions before being appointed as Nissan SA’s managing director in 2008. “Under his leadership, Nissan posted a record market share in South Africa of more than 10 percent in the last financial year, the highest this century,” the group said.

It said Shinkichi Izumi would succeed him as the managing director of Nissan South Africa.

“Nissan has a plan for rapid and sustainable growth in Africa. We were the first to assemble cars in Nigeria and our ambition is to lead the way in developing automotive manufacturing on the continent,” said the chairperson of Nissan’s Africa, Middle East and India region, Peyman Kargar.

BUSINESS REPORT

 

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Smile Telecoms Appoints Ahmad Farroukh As New Group Chief Executive Officer

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Irene Charnley, founder of Smile, appointed as Deputy Chairman

PORT LOUIS, Mauritius, May 21, 2019 – Ahmad Farroukh, Smile Group Executive Director Operations, appointed as Group CEO; Irene Charnley, founder of Smile, appointed as Deputy Chairman.

Smile Telecoms, a Pan-African telecommunications group with operations in Nigeria, Uganda, Tanzania and the Democratic Republic of the Congo, today announces the appointments of Mr. Ahmad Farroukh as Group Chief Executive Officer and Ms. Irene Charnley as Deputy Chairman, respectively, effective 1 June 2019.

Ahmad Farroukh, who currently serves as Smile’s Group Executive Director Operations, is a seasoned and experienced telecoms executive with a distinguished record of commercial and operational success. Mr. Farroukh’s vast experience extends to executive management positions at Investcom Holdings and the MTN Group (where he served as CEO of MTN Nigeria, MTN South Africa and Group Chief Operating Executive, responsible for 19 countries) and immediately prior to joining Smile, as CEO of Mobily, Saudi Arabia’s second largest telecommunications operator. Given the extent of the opportunity and the significance to Smile, Ahmad will spend the majority of his executive time in Nigeria.

Hailed as one of Africa’s most successful business leaders, Smile Telecoms founder and shareholder, Irene Charnley has led the Company’s innovation and pioneering of Africa’s first 4G LTE network infrastructure, using low band spectrum in 800MHz band. thereby revolutionizing the way people in Africa accessed high speed internet. After 12 years at the helm, Ms. Charnley will now serve as Deputy Chairman for the Company and will fulfil a strategic role.

Commenting on the announcement, Mohammed H. Sharbatly, Smile’s Co-Chairman and Group CEO of Smile’s majority shareholder, Al Nahla Group of KSA, said “The Africa telecoms market is as dynamic as it is challenging, and Ahmad is suited to lead Smile’s next exciting phase of growth, as we have transitioned from a spectrum rich upstart to the fastest, most reliable data gigabyte factory in Sub-Sahara Africa. We are equally delighted that Irene will continue to serve the company she founded as Deputy Chair, and we look forward to her ongoing strategic direction and guidance.”

“The next phase for Smile will focus on delivering excellent operational returns, achieving profitability and creating value for all stakeholders, and I believe that Ahmed is best suited to lead the Company forward in this regard”, added Irene Charnley.

“Africa is experiencing explosive data growth, and I am honoured to have the opportunity to lead the operations of one of the continent’s best 4G LTE networks at this exciting time. It has also been a revelation after over 20 years in the industry to witness the power and versatility of Smile’s proprietary technology applications platform, which was developed in-house and provides a huge competitive and cost advantage,” concluded Ahmad Farroukh.

Smile Telecoms Holdings Ltd.

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General Electric appoints Eric Amoussouga as GE Francophone Africa CEO

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Eric is also Sales Director for GE’s Grid Solutions Business across Sub-Saharan Africa

ABIDJAN, Ivory Coast, April, 2019 — General Electric (GE) has announced the appointment of Eric Amoussouga as the Chief Executive Officer for Francophone Africa. In this position, Eric will play a pivotal role in steering the next phase of strategy and growth for GE in Francophone African markets.

Based in Abidjan, Eric will lead the development of diverse programs with public and private sector projects and partnerships across Francophone Africa.

Commenting on the appointment, Farid Fezoua, President and CEO, GE Africa, reiterated GE’s commitment to work together with government and private sector order to develop public private partnerships and sustainable outcome-based solutions.

“We are optimistic about Francophone Africa and the opportunities to develop breakthrough solutions in power, healthcare, aviation and renewable energy. We believe that the appointment of Eric is a further step in making our vision a reality. We are also glad to bring on board someone with the experience and passion required to drive our growth in this region,” he said.

Eric brings onboard 19 years of experience in the energy sector with the major players like AREVA, ALSTOM and GE and has strong expertise in energy business development and sales strategy especially in West and Central Africa.

“I am very excited to be leading GE’s regional growth in Francophone Africa and driving innovative initiatives to support the needs of GE stakeholders within the region.” Eric Amoussouga said.

Partnership with Governments and local companies form a very important part of GE’s growth in Francophone Africa and across the continent. Through these collaborations, GE has made significant investments to develop infrastructure projects, including sustainable energy solutions, provide efficient and reliable transportation as well as improve access to quality healthcare.

– GE

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