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In a busy day for corporate news, Astral Foods announced it had sold its chunk of Quantum after being soothed by a long-term deal for its egg supply. In international news, the UK is cutting its capital gains tax on property, and Brazil is getting a hefty investment from Toyota.
SA's biggest chicken group Astral Foods said on Wednesday it has disposed of its 9.8% interest in SA's biggest egg producer Quantum Foods for R141.7 million to rival Country Bird Holdings. No regulatory approvals were required by Astral for this transaction. At the time, the group, now valued at over R6 billion on the JSE, had said it needed to ensure the company's independence amid a share scramble by third parties that raised the spectre of a takeover. Chris Schutte, CEO of Astral, said in a statement on Wednesday that at the time Astral acquired the 9.8% equity stake in Quantum in June 2020, there were "unmitigated risks the group had to manage". "These risks centred on securing the supply of live broilers to Astral's County Fair operation in the Western Cape from Quantum. Quantum supplies Astral with approximately 600 000 broilers per week for further processing, about 35% of County Fair's total slaughter capacity." A five-year term remains on the existing broiler supply agreement, and Astral has sufficient time to implement mitigating actions should the supply agreement come under threat at the end of the contractual period, it said, while it realised its investment in illiquid shares at a premium. The proceeds exceed the carry value of Astral's investment of R97.8 million at the end of September, providing a boost to a battered balance sheet.
Mustek, which assembles and distributes computers and energy products and provides ICT services, reported on Wednesday that revenue fell 13% to R4.3 billion in its six months to end-December, while profit more than halved to R52.3 million, as it grappled with lower demand for its green energy products. Demand for green energy products declined by approximately 55% year-on-year, but the rest of the business was more stable. Economic conditions remain challenging, it said, and while demand for PCs declined after the rampant post-Covid-19 era, it has been stabilising, it said. Mustek added that it is cautiously optimistic that the AI PC will bring a new round of potential growth in the PC market. The group's shares closed a little lower, having fallen by more than a third in the past year.
