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CKS
CKS
Crookes Brothers Limited - Chairman"s Address To The Annual General Meeting
Of Shareholders On 25 July 2006
CROOKES BROTHERS LIMITED
INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
REGISTRATION NUMBER 1913/000290/06)
("CBL" OR "THE COMPANY")
SHARE CODE: CKS
ISIN: ZAE000001434
CHAIRMAN"S ADDRESS TO THE ANNUAL GENERAL MEETING OF SHAREHOLDERS ON 25 JULY
2006
Ladies and Gentlemen,
Before proposing the adoption of the Annual Financial Statements, I welcome
the opportunity provided by this shareholders" meeting to give you a brief
update on the company"s prospects for the current year.
Early indications are that earnings for the 2006/07 financial year will
show further improvement on the 2005/06 results.
This is largely attributable to significantly higher sugar prices. Both the
South African RV price and the Swaziland sucrose price have benefited from
the higher world sugar price, as well as from the more favourable Rand/US
dollar exchange rate currently prevailing. The improved prices will be
partially offset by the poor quality of the cane, a problem experienced by
most KwaZulu-Natal growers during the current year. Input costs may also be
marginally higher due to the weaker Rand.
Good rains early in the year have resulted in the Komatipoort team making
significant progress on their extensive replant programme.
Mpumalanga cane production is nearly 21% lower (33 000 tons), however the
overall group tonnage is expected to fall by about 24 000 tons to 595 000
tons; when compared to the previous season"s 619 000 tons.
Production volumes of bananas are expected to be similar to those of last
year however prices are market-driven and inherently volatile, which adds
significantly to the difficulty of accurately forecasting the earnings of
this operation.
The deciduouse fruit operations continue to benefit from the extensive
replanting of orchards undertaken in prior years, in terms of higher
yields, improved product quality and a higher value product mix.
Indications are that export prices will be significantly better than the
prices realized last year. A satisfactory contribution is expected from
these operations in the current financial year with further improvements in
future as younger orchards mature.
Export citrus prices have greatly improved in the current year due partly
to closer co-ordination by industry players, which follows last years
disastrous market collapse in Japan. We once again have achieved good
yields and fruit quality which will result in a strong turnaround in this
operation.
It is early to predict the results of the grain harvest but we estimate
that yields will be similar to those achieved last year.
The current harvest will be the last that includes the Fairfield crop.
The lease of the 2920 hectare farm expires this year and has not been
renewed. This will not materially affect the contribution from the grain
and sheep farms.
Land Claims:
We continue to pursue the settlement of claims at our Renishaw, Doornkop,
Nkwalini and Komatipoort estates. Progress is slow although it appears that
the 2004 Nkwalini agreement for the sale of 195ha (out of the total farm
area of 2319 ha) is now being processed.
Durban
25 July 2006
FRED PALMER
CHAIRMAN
Date: 27/07/2006 05:17:57 PM Produced by the JSE SENS Department
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