KAP shares rise after forecast of up to 35% increase in headline earnings

The diversified JSE-listed industrial group KAP's share price lifted 2.2% on Friday after it forecast headline earnings per share (HEPS) to increase by between 28% and 35% for the six months to December 31, 2025.

The group's businesses include polymers company Safripol, automotive component company Feltex, mattresses and bed products subsidiary Sleep Group, wood and decorative products company PG Bison, and transport and logistics company Unitrans.

KAP's share price increased 2.22% to R32.39 on the JSE Friday afternoon, still well down from R3.97 three years ago, and 16% lower than the price a year ago.

KAP said in a trading statement that earnings per share for the six month period were expected to increase between 24% and 31%, to between 20.1 cents and 21.3 cents, compared to the EPS of 16.2 cents reported for the first six months of the 2025 financial year.

HEPS was expected to be between 22 cents and 23.2 cents, compared to the HEPS of 17.2 cents reported for the same period a year before.

The group attributed the increase in earnings largely to "meaningful improvements" in the performances of PG Bison and Feltex, due to increased production and sales volumes, and higher domestic new vehicle assembly volumes.

Earnings were also boosted by lower net finance costs, owing to lower interest rates and net interest-bearing debt.

These factors had offset a weaker result from Safripol - the polymers sector remained in a cyclical low. The interim results are expected to be published on February 26, 2026.

Last August KAP approved a R240 million investment for a new high-volume, high-pressure Melamine Faced Board (MFB) line to be installed at PG Bison's Mkhondo facility in Mpumalanga. It will be the fourth MFB line at the site, and the company's eighth in total.

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