The past year was characterised by firm prices in all the Group’s major products, particularly deciduous fruit and grain, but this gain was offset by the exceptionally high cost of critical inputs, including fuel, fertiliser, chemicals and electricity. The impact was particularly severe on our dryland cane operations in KZN where yields were below our long-term averages in most areas.

The cane crop of 594 894 tons was lower than last year’s record crop of 642 188 tons, although this was partially compensated for by higher RV/sucrose content. The South African RV price was 18% higher than the price achieved in the previous season whilst the Swaziland sucrose price was 16% higher. Despite the increased revenue for the year, the significant increases in input costs resulted in only a 4% increase in operating profit to R46.2 million.

These farms are all situated in the Grabouw area of the Western Cape. The acquisitions of Vyeboom in the current year and Dennebos in the previous year have enabled the deciduous operations to achieve the benefits of critical mass. The two recent acquisitions have already made a material contribution to operating profits with improved yields, quality and prices compared to the periods prior to their acquisition. The combination of higher yields, higher prices and the additional productive area significantly increased the annual operating income of these operations by 140% to R28.3 million.

Replanting of older orchards continues selectively with modern appropriate cultivars on all the farms. We are currently planning the development of the virgin Vyeboom land to add to the existing orchards on the farm. Replanting and development programme's are however constrained due to the long lead times for the availability of suitable and good quality plants, and management is exploring alternatives to expedite the sourcing of plant material.

The banana operation situated in the Komatipoort area of Mpumalanga produced 911 900 cartons during the year, an increase of 23% over the previous year, with better climatic conditions after the particularly cold winter of the previous year. Together with marginally higher prices this resulted in an increase in the operating profit by 31% to R9.1million.

Torrential rains at the time of the harvest adversely impacted on the quality and quantity of what was expected to be a record wheat harvest. Wheat prices achieved were accordingly much lower than expectations. Fortunately the barley crop had been harvested before the rains and the yield was 9% better than forecast. Barley prices achieved were considerably higher than the previous year.

Extremely cold weather significantly increased mortalities in the sheep flock. Accordingly a lower number of sheep were sold during the year at prices that were only marginally better than the previous year. Wool prices were 19% lower than the previous year’s high prices.

The Riversbend Estate at Nkwalini in KwaZulu-Natal again produced good quality grapefruit with a record packout of 241 931 export cartons. Orange production of 74 382 cartons was 22% lower than the prior year, due to small fruit and quality issues which were experienced by the region in general. Prices were again disappointing and with increased costs the contribution from citrus operations decreased to R1.2 million from R2.2 million. Management are refining marketing strategies and have also decided that certain orchards that can no longer produce profitably will be grubbed during the current year.

Cattle ranching in Swaziland and crocodile farming on the KwaZulu-Natal South Coast contributed R2.1 million to operating profit (2008: R 2.3 million). Although marginal in their contribution to profits, these operations play a valuable role in utilising land not suitable for other crops.

The Group’s medium term strategic initiatives are currently focused on settling land claims, divesting from marginal operations, expanding farm management operations, expanding core activities to achieve critical mass and identifying project opportunities in SADC, as well as considering selective alternative uses for the land assets under our ownership.

During the latter part of the financial year the company successfully concluded the settlement of two significant land claims lodged against the company in terms of the Government’s land restitution process. This has resulted in the disposal of the following sugar farming properties:

• Langespruit Estate (Doornkop, North Coast of KwaZulu- Natal) for R48.9 million. Half of the proceeds of the disposal were received in March 2009 and the remainder in April 2009. This farm will either be leased back to the company for a period of 5 years or farmed in a joint venture with the KwaCele community.

• Komatipoort Estate (Mpumalanga), subject to shareholder approval, for R200 million. These farms will be leased back to the company for a period of 5 years renewable for a further 5 years. In addition, the farm Cedars (South Coast of KwaZulu-Natal) was sold for R26.2 million to the Department of Land Affairs, also as part of the land reform programme. The sale was only effective after the year end and the proceeds were received during April 2009.

The acquisition of the 425 hectare farm “Vyeboom”, comprising 160 hectares of apples and pears, was successfully concluded during the year at a net cost of R42.2 million inclusive of growing crops and equipment. The farm is situated close to the company’s other deciduous fruit farms in the Grabouw area of the Western Cape. This property offers exciting potential, with approximately 110 hectares of additional area to be developed. It is pleasing to be able to report that the initial forecast profitability projections have already been exceeded following upon the implementation of the company’s agricultural practices and standards. With the Dennebos farm acquired in the 2008 financial year also outperforming expectations under our management, we are confident that the Group has the ability to successfully use available capital to identify and implement acquisitions and projects within our areas of expertise.

The Group’s land management activities, which are conducted through its subsidiary CBL Agri Services (Pty) Ltd (“CBAS”), commenced during the year with the formation of a joint venture with the Libuyile community on the Mthayiza farm leased from the community at Kaap Muiden near Malelane, Mpumulanga. This cane farm will require considerable replanting over the next year. Further farm management prospects are currently being explored which have the potential to enhance the company’s earnings as well as adding considerable value to the partner community both in terms of operating earnings and skills transfer over the long-term. With its reputation for integrity and farming expertise, the Group is well-positioned for expansion in this arena.

As noted by the Chairman, targeting expansion into SADC is a key element of the Group’s strategy. During the year considerable effort was put into investigating, planning and raising finance for a substantial sugar cane development in a SADC country in a joint venture with the local community on land under its control. Although the viability of the project was sound and planning permission was obtained, it proved impossible in the available time frame to raise the appropriate long-term development funding required to cover the community’s portion of the financial commitment. In this type of joint venture it is essential that the community receive an appropriate return for their participation to ensure the long term success and financial viability of the project. Even with short-term funding potentially being provided by the Group this was not possible, and consequently the company withdrew from participating in this project.

As mentioned earlier the farm Vyeboom was acquired earlier in the year at a cost, including growing crops and farm equipment, of R52.2 million, of which a portion is to be sold to the Two-A-Day Group for R10 million. In addition other new acquisitions of property, plant and equipment amounted to R5.1 million and replacement of property, plant and equipment amounted to R7.2 million.

Since the year end the company has sold its Cedars farm for R26.2 million and its Komatipoort farms for R200 million. The latter sale is subject to shareholder approval and the notice convening the general meeting of shareholders to be held on 17 June 2009 has been sent to shareholders. These estates are shown as assets held for sale at the year end.

Production and price expectations for the 2010 financial year are generally favourable, and the costs of key inputs, notably fuel and fertiliser, have declined somewhat from their record highs of the past year. The firm Rand is a cause for concern at this stage and this may negatively impact prices of fruit and sugar, although South African Sugar Association’s (“SASA”) practice is to hedge foreign currency exposure on sugar exports.

Total sugar cane production on the KwaZulu-Natal South Coast farms will decrease following the sale of the Cedars farm, but will increase in Mpumalanga as a result of the first cane crop to be harvested from the Mthayiza initiative. The South African RV price for 2009/10 of R2 300 per ton, as currently projected by SASA, is some 14% higher than the equivalent price received for the 2008/9 season. Moreover SASA projections indicate a firm sugar price over the next few years which will give some relief in respect of the margin pressures currently experienced, particularly by the KZN industry.

The deciduous fruit operations are expected to produce good results again. The rationalisation benefits and increased production at the two farms acquired in the past two years will continue. Firm export prices, subject to foreign exchange rates, should continue.

Production and prices in the banana operations are forecast to be similar to last year. It is expected that the measures being put in place to reduce harvesting and transport damage to bunches will result in improved quality.

Early indications are that citrus prices will exceed the poor levels obtained last year. Better quality and fruit size should result in increased cartons packed for export.

Grain prices have declined significantly from the exceptional levels of last year and although marginally higher production is forecast, the operating profit is likely to decrease. A greater contribution from sheep is expected as a result of improved production.

I would like to thank my management team for their enthusiasm and diligence in a year in which the Group tackled numerous new projects. I believe that it is a measure of their commitment that we were able to achieve record profits while making significant advances in positioning the Group as a major agricultural player in Southern Africa. I also extend my thanks to Guy Wayne and the Board for their strong support during the year.