Durban - Crookes Brothers, the family-owned agricultural producer, would retain its listing on the JSE Securities Exchange even though its shares were trading at a 45 percent discount to net asset value, directors said yesterday.
Fred Palmer, the chairman, said after the company's annual general meeting that the listing provided public exposure and enabled shareholders to realise their investment.
The R127 million-a-year business, the bulk of whose revenues accrue from sugar cane farming, was listed in 1948, enabling members of the extended Crookes family to dispose of their shares as they wished.
Dudley Crookes, the managing director, said: "When the company went public the family was so big that we couldn't have one person speaking for all."
Family members now hold about 62 percent of shares in individual parcels. On the JSE yesterday, the share closed unchanged at R8,60, against net asset value of R15,55 a share.
Palmer said yields from the farming industry were not as attractive as manufacturing or commerce, but the group was committed to consistently raising earnings and expanding through acquisition and other opportunities.
But Crookes Brothers remained "risk averse" as it wanted to ensure that the farms it bought - particularly irrigated land for cane and bananas - could provide long-term benefits.
Directors had also ruled out expanding into value-added agriculture as the outlay involved was "enormous" and the group could not compete with larger processors.
Looking ahead, Palmer said cane yields were expected to drop 9 percent to 485 000 tons from the previous season's record 531 000 tons because of heavy summer rains. This would be offset by higher sucrose prices in South Africa and Swaziland.
But banana volumes were expected to rise 9 percent. Crookes produces about 5 percent of South Africa's banana output.
Palmer said the group was expected to generate between R30 and R40 per carton of grapefruit this year against the disastrous R12 a carton received last year in the middle of a marketing collapse. Although the company anticipated lower export volumes of citrus, it still expected to turn around the citrus division's R2,9 million loss last year.
Palmer was confident of a "significant" overall rise in earnings, which came in at R1,49 a share in the year to March.