Crookes Brothers, a JSE-listed company, has hit a snag in its financial journey. The company, which is involved in sugar, banana, macadamia nuts, and property, has just announced a R274 million loss in the last financial year.

This loss is a stark contrast to the company's R89,8 million profit in the previous year. The company's financial woes can be attributed to the conflict in the Middle East, which has led to increased input costs across all segments.

The company's sugar division is also expected to face softer pricing, with the strength of the Rand and Kwacha against the US dollar and the influx of imported sugar into South Africa making it difficult for local producers to compete.

However, the company's banana division has performed well, with the launch of the new Crookes Brothers first-grade brand for fruit produced in Eswatini being well-received by the market.

The company is planning to build on this success by establishing a dedicated sales and marketing capability to deepen market penetration and capture efficiencies along the value chain.

In the meantime, the company's property division is also optimistic, with a strengthened pipeline and the growth of new residential offerings like Restilridge Farm Estate.

Key Facts

  • Crookes Brothers' loss: R274 million
  • Previous year's profit: R89,8 million
  • Input costs due to Middle East conflict: increased
  • Sugar pricing: expected to be softer
  • Banana yields per hectare: robust
  • Planned exit from macadamia segment: expected to improve group liquidity

The tornado-like storm that damaged the macadamia nut trees and processing plant was a significant blow to the company's finances. The storm, which occurred in October 2024, uprooted approximately 210 hectares of trees and caused severe damage to the processing plant.

The company's financial woes are a concern for investors and the wider economy, particularly in the KwaZulu-Natal South Coast region where the company operates.

A planned exit from the macadamia segment is expected to improve group liquidity, enabling the company to focus capital and management attention on its core agricultural and property operations.

The company's revenue fell 7% to R777,59m in the last financial year, with the operating loss coming to R209,9m compared to an operating profit of R117,1m a year before.

The banana segment, however, has been a bright spot for the company, with improved profitability at QBV, driven by quality enhancements that resulted in a higher proportion of the crop being classified and sold as first-grade.

The Renishaw Coastal Precinct, which is being developed by JSE-listed Crookes Brothers, had been listed as a catalytic project within the province, as well as for the country.

The project is expected to bring significant economic benefits to the KwaZulu-Natal South Coast region, but the company's financial woes may put a damper on its progress.