{"id":847446,"date":"2026-01-09T09:15:00","date_gmt":"2026-01-09T07:15:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=847446"},"modified":"2026-01-09T09:17:15","modified_gmt":"2026-01-09T07:17:15","slug":"114-year-old-company-taking-over-petrol-stations-across-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business-opinion\/847446\/114-year-old-company-taking-over-petrol-stations-across-south-africa\/","title":{"rendered":"114-year-old company taking over petrol stations across South Africa"},"content":{"rendered":"\n

KAL Group is gradually expanding its presence at numerous forecourts along South Africa’s major highways through its subsidiary, PEG. <\/p>\n\n\n\n

Sean Culverwell, Investment Analyst\u00a0at Anchor Capital, said that 1912-founded KAL Group is stea<\/span>dily transforming from a niche agricultural supplier to a scaled convenience and fuel retailer. <\/p>\n\n\n\n

Culverwell said that while the company\u2019s Agrimark chain still anchors earnings, the rapid expansion of its PEG fuel station business is reshaping the group\u2019s fundamental profile.<\/p>\n\n\n\n

PEG operates an extensive network of service stations, with nearly 50% of these located along national highways.<\/p>\n\n\n\n

The company collaborates with all of South Africa’s major petrol station brands, including BP, Engen, Sasol, Shell, Total Energies, and Astron Energy. <\/p>\n\n\n\n

Culverwell<\/span> said that the shift in KAL’s investment profile started when it acquired PEG in 2023 and merged it with The Fuel Company. <\/p>\n\n\n\n

The acquisition doubled KAL\u2019s footprint to 89 service stations, making it the country\u2019s largest independent operator. <\/p>\n\n\n\n

“PEG now contributes around one-third of group profits and, in our view, will be the primary growth engine,” said Culwerwell. <\/p>\n\n\n\n

“Fuel dominates PEG\u2019s revenue line, but profitability is driven by convenience retail and quick-service restaurants.”<\/p>\n\n\n\n

While PEG sells around 300 million litres of fixed-margin fuel per annum, it generates roughly R4\/litre in retail and quick service restaurant (QSR) revenue.<\/p>\n\n\n\n

Although some regions are oversupplied with low-margin fuel sites, PEG is looking to expand its footprint to high-traffic, peri-urban locations with above-average retail spend per litre. <\/p>\n\n\n\n

Culwerwell added that recent acquisitions include sites generating up to R7 retail spend per litre at roughly 25% EBIT margins.<\/p>\n\n\n\n

Looking good for the company <\/h2>\n\n\n
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Looking ahead, Anchor Capital believes that PEG’s bolt-on strategy offers meaningful optionally for investors. <\/p>\n\n\n\n

As one of the largest Famous Brands franchisees, KAL can acquire sites in prime locations and bolt on multiple QSR chains to increase spend per litre.<\/p>\n\n\n\n

Culverwell added that PEG is acquiring sites at low single-digit earnings multiples, which make deals immediately earnings accretive.<\/p>\n\n\n\n

Retail and QSR inventory turns at fuel stations are high, keeping\u00a0capital\u00a0requirements low relative to returns.<\/p>\n\n\n\n

The company is also viewed as the “partner of choice” by oil majors thanks to its scale and operational track record, giving it favourable terms vs smaller competitors. <\/p>\n\n\n\n

With three sites added in late FY25 and five more planned in the coming financial year, PEG is expcted to deliver a strong performance in FY26.<\/p>\n\n\n\n

This is also supported by the low fuel price environment, which boosts domestic travel and is expected to continue into 2026, providing consumer relief. <\/p>\n\n\n\n

Looking at the broader group, KAL now has its strongest balance sheet in more than a decade, bolstered by recent disposals of lower-return businesses. <\/p>\n\n\n\n

“This gives the Group the capacity to continue to acquire value-accretive sites at attractive multiples,” said Culverwell.<\/p>\n\n\n\n

“We expect earnings to compound at double-digit levels over the medium term, while the recent drop in the group\u2019s dividend cover will provide an uplift to shareholder returns.” <\/p>\n\n\n\n

Despite strong FY25 results, the share traded at a forward multiple of just 6x in December 2025, which Anchor believes is compelling in the context of a clear growth runway and improving fundamentals. <\/p>\n\n\n

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Kal Group Share Price<\/figcaption><\/figure><\/div>\n\n\n
\n","protected":false},"excerpt":{"rendered":"

Anchor Capital’s Sean Culverwell has backed KAL Group following the strong performance of its forecourt-focused subsidiary PEG. <\/p>\n","protected":false},"author":95,"featured_media":847449,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[24464,24465,2240,2239],"class_list":["post-847446","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-opinion","tag-kal","tag-peg","tag-sasol","tag-shell"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/847446","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=847446"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/847446\/revisions"}],"predecessor-version":[{"id":847455,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/847446\/revisions\/847455"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/847449"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=847446"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=847446"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=847446"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}