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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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COVA Insurtech Dissociates from COVA Wealthtech

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COVA Insurtech, a player in the InsurTech sector, has announced its formal dissociation from the activities of COVA WealthTech, effective immediately. This decision comes in the wake of COVA WealthTech’s announced cessation of operations on February 10, 2024.

These two (2) brands have historically been separate entities with distinct focuses within the tech landscape. While both companies share the COVA brand, they operated independently, each catering to specific market segments and addressing unique financial service needs.

The decision to shut down COVA WealthTech was taken in alignment with the evolving dynamics of the tech industry, and after a thorough strategic review by the leadership of COVA WealthTech. COVA Insutech was not involved in or influenced by the decision to cease operations of COVA WealthTech.

COVA Insutech wishes to reassure its clients, partners, and stakeholders that its operations remain unaffected by the closure of COVA WealthTech. The company remains committed to providing innovative and reliable InsurTech solutions, maintaining the high standards of service that its clients have come to expect.

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“We want to make it clear that COVA Insutech is a separate entity from COVA WealthTech, and our commitment to our clients and partners remains steadfast. We will continue to focus on delivering cutting-edge insurtech solutions and expanding our presence in the InsurTech sector”. says Bayo Adesanya, Founder & CEO, COVA Insurtech.

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aYo Holdings boosts executive team

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aYo Holdings Ivan Welch and Miles Bloemstein

African insurtech aYo Holdings has made two key C-suite appointments as it looks to accelerate its ambitious growth plans across the continent and into the South African market. The company has named Ivan Welch as its new Chief Customer Acquisition Officer and Miles Bloemstein as its Chief Operating Officer as part of its vision of becoming the largest insurance technology platform in Africa.

Welch, who has already been with aYo for four years, will be responsible for driving new customer acquisition through various distribution channels, with a specific focus on digital marketing and sales. His position will also include a commercial legal remit and administrative oversight, and support of the company’s subsidiary operations.

A 20-year veteran of the African insurance sector, Welch defines success as a world where every customer with a mobile phone has an aYo subscription, which would have been obtained through a simple few clicks or button presses on a mobile device. While approximately 46% of Africa’s population has access to and uses cell phone services, insurance penetration remains below 5% in most markets, except South Africa.

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“The industry has so much scope for development, as it is massively underserved in Africa. With aYo and our shareholders, MTN and Sanlam, I believe we have the right offering, platforms and ability to scale to serve this market,” he said.

Bloemstein joined aYo in July 2021.  He also has more than 20 years’ experience in the insurance industry, specifically in IT operations and related functions.  His new position will include him overseeing the day-to-day operations of the business, working closely with executive and product teams to grow the platform and its system and channel capabilities.

“We must constantly find ways to keep our clients engaged and be able to have access to insurance. Due to low disposable income levels, insurance adoption and trust in insurers, we are being challenged to produce ‘out of the box’ solutions to keep our clients engaged and active,” he said.

aYo Group CEO Marius Botha said Welch and Bloemstein’s expertise are key to the company’s drive to enable the distribution of affordable financial services products to people who have never had the opportunity to engage in financial services before. aYo launched in January 2017 in Uganda and has since expanded its operations across Ghana, Zambia, Côte d’Ivoire and Cameroon, with plans to launch operations in Nigeria and South Africa imminent.

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Fearless Energy Drink Backs Fanfaro Autofest 2022

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Fearless energy drink from the stable of Rite Foods Limited has made full preparation to support this year’s Fanfaro Autofest event as the headline sponsor. This is in its bid to make the platform bigger and more thrilling for car drifters, super bikers, and fun seekers in the ancient city of Ibadan from Friday, 2nd to Sunday, 4th December 2022.

The Managing Director and Chief Executive Officer, Fanfaro Oil Nigeria, Mr. Adekunle Olanrewaju, stated that the support from the Fearless energy drink is enormous hence the event is credited to it and dubbed “Fanfaro Autofest, Fearless Edition,” as the contestants will be rejuvenated with the brand’s positive energy and courageous spirit to actively showcase their talent in car drifting.

“It takes a lot for someone to align with your dream; it takes like minds to be part of it. The previous events have been successful, but now having the marketing leading; Fearless brand behind it, is a success even before the start of the event.  The brand also resonates with what the sport stands for, we are fearless, tough, energetic, and want to make it more exhilarating,” Olanrewaju explained.

He pointed out that with the Fearless brand behind the largest motorsport in the country, Nigerians should expect more exciting and action-packed sporting activities, as the product has been with Fanfaro from the planning stage to the exercise which takes a year to put together, and also for a refreshing moment with the trailblazer in the energy drink segment.

According to him, a Fearless brand raffle draw will be organised before the main event in November, where participants would be told to make a creative design with five empty bottles of the product, with the winners going home with exciting gifts.

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Commenting on the sponsorship, Rite Foods Head of Marketing, Olumide Aruleba, affirmed that the Fearless brand is very proud to throw its weight behind the sport, as it will bring into it the positive energy associated with the brand as a means to create the desired impact and make it a ground-breaking event. “We also want everyone to look forward to it,” he stated.

On her part, the Assistant Brand Manager of Fearless Energy Drink, Kanyisola Sangowawa, said the support from the product signpost is its connection with consumers in keeping them refreshed by providing the vigour needed while attaining their dreams or showcasing useful talents. She avowed that it takes a fearless spirit to support an action like the auto fest, which requires boldness, daring force, and strength in making it a success.

In his remark, the Fearless Brand Ambassador and the Face of Fanfaro Autofest, the Fearless Edition, Tobi Bakre, actor and a lead cast in the movie, Brotherhood, extolled the partnership between the Fearless energy drink and the motorsport, stating that both connects with a Fearless and reinvigorating force.

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