LONDON (Alliance News) - AfriAg PLC shares rose Friday after it reported a strong start for its fledgling agricultural produce logistics investment and said the outlook remains positive.
AfriAg bought 40% of logistics unit AfriAg SA (Pty) Ltd from Paul de Robillard last year, its first investment under its policy to invest into the growing African agriculture and logistics sector.
In a statement, it said the unit air freighted 1.2 million kilograms of perishable produce during the first seven months it has been operating under the AfriAg name.
"The vast majority of these perishable goods were trucked by AfriAg's branded fleet (owned and sub-contracted) and exported from Africa to Europe using IAG Cargo's British Airways passenger fleet from Johannesburg and Cape Town to London," it said in a statement.
AfriAg now intends to report freight figures from the logistics unit every six months.
"We have seen tremendous growth in this fledgling business from a standing start only 7 months ago," AfriAg Chairman David Lenigas said in a statement. "We see the outlook for 2014 remaining strong as we seek to sign more corporate clients that are looking to use AfriAg SA's bespoke truck-air-sea logistics services to move their perishable produce around southern Africa and on to their respective overseas markets."
The parent company would get its share of the logistic unit revenues through dividend. However, there won't be any dividends in the short term because capital is being retained in the logistics unit to help drive growth.
Last week, AfriAg had said the agri-logistics unit was expanding its fleet of Mercedes articulated trucks to 14, from six, and has already taken delivery of the first five new trucks after winning new contracts.
AfriAg has made other investments since taking a stake in AfriAg SA. It has shares in companies including Cranswick PLC, Agriterra Ltd and Zambeef Products PLC.
AfriAg PLC shares were up 14.4% at 0.658 pence Friday morning.
By Steve McGrath; stevemcgrath@alliancenews.com; @SteveMcGrath1
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