Premier Fishing and Brands reports revenue despite Covid-19 restrictions on export markets

CFO Brent Robertson: The group is cash positive and continues to operate well under the circumstances.

Premier Fishing and Brands has delivered “reasonable” results, given the local and global challenges that the fishing industry faced during the financial year ended 31 August 2020.

Despite the challenges brought on by Covid-19, the group achieved a revenue of R449 million and an EBITDA of R55 million. According to the results statement, these results were achieved through Premier’s focus and determination, which mitigated various potential risks by implementing efficiencies, cost savings exercises, as well as preserving the operations during the unusual economic and Covid-19 times.

“The group has had a tough year, but we remain optimistic for the future,” says Premier CFO Brent Robertson. “The group is cash positive and has adequate financial resources with a current asset ratio of 4.5 to 1 and continues to operate well under the circumstances.”

He says that the one major aspect that pleases him most is how all Premier’s staff members remained resilient during the year. “The way we worked as a united team during this period is highly commendable.”

He adds that preservation of cash during this time is still paramount due to Covid-19 and the impact it will have on the immediate future. “However, I am confident that with the strategies we have put in place, we will have a strong 2020/2021 financial year.”

Divisional performance
According to the results presentation, the demand for Premier’s branded products remains strong despite the impact of Covid-19 on the West Coast Rock Lobster market, the abalone market in the Far East, squid in the Italian and Spanish export markets and the export of South Coast Rock Lobster to the US. This, together with the lack of export opportunities to Premer’s clients, was exacerbated by undue pressure placed on the selling prices of abalone, which affected the operating margins, with a decline in revenue and, in turn, profitability.

Premier’s lobster and pelagic divisions continue to deliver solid performances year after year as the resource continues to be stable. “The group successfully mitigated all Covid-19 related risks in these divisions, the prospects of which remain positive,” the statement read.

The squid sector experienced industry-wide low landings with a decrease of 47 percent, compared to the previous fishing season. According to the statement, this is not unusual for the squid sector, as it has the tendency to go through seasonal trends, but the outlook for this division remains a positive one and catches have already improved since the financial year-end.

Expanding its prospects
One of Premier’s largest projects, the expansion of its solar powered abalone farm, is nearing completion after months of lockdown restrictions. Based on the current growth, Premier expects the abalone farm to produce between 300 to 350 tons of abalone in the near future.

The abalone farm is one of the first in the country to be solar powered and plans are in place for further “greening” the farm. Since the start of the expansion in 2018, the farm has already increased its production by 91 percent from 120 tons to 229 tons. The farm continues to strategically grow its abalone to a larger size, in order to meet market demand, thereby maximising the margins received for its abalone division.

Premier has also announced one of the largest transactions and issuance of shares to its previously disadvantaged employees. The group will be transferring 30 percent of the company shares in a vendor transaction to a BEE SPV of which 20 percent will be allocated to its employees.