Improved Profits, Lower Revenue: KAP Stock Dives 10%, Threatening to Resume Downtrend
KAP Limited delivered stronger profits and reduced debt in its 2025 interim results, but the JSE-listed stock reversed sharply after an...
Quick overview
- KAP Limited reported a 32% increase in headline earnings per share, reflecting improved operational performance despite revenue decline.
- The company's diversified portfolio showed strength, particularly in Feltex, while cost control and new product development contributed to progress.
- Despite strong interim results and reduced debt, KAP's share price fell 9.62%, indicating investor caution amid macroeconomic uncertainties.
- CEO Frans Olivier noted that prior headwinds related to production costs have moderated, leading to improved efficiency and margins.
KAP Limited delivered stronger profits and reduced debt in its 2025 interim results, but the JSE-listed stock reversed sharply after an initial rally.
Profit Growth Despite Revenue Pressure
KAP reported a solid set of results for the six months ended December 31, 2025. Headline earnings per share rose 32% to 22.7 cents, reflecting improved operational performance despite challenging trading conditions.
Revenue declined year-over-year, yet EBITDA and operating profit increased, supported by easing cost pressures and disciplined execution. CEO Frans Olivier noted that prior-period headwinds — particularly elevated ramp-up costs tied to PG Bison’s new MDF production line — had moderated. The upgraded presses and plants are now operating at full capacity, improving efficiency and margins.
KAP Chart Daily – Sellers Test the 50 SMA Again
KAP’s share price fell 9.62% to R2.16 on the JSE Friday afternoon, testing the 50 daily SMA (yellow) again which has acted as support several times since October 2025 when the trend shifted to bullish. However, the larger trend is downward and if the 50 SMA breaks then the bearish trend is back on.
Divisional Performance Strengthens
KAP’s diversified portfolio includes Safripol (polymers), Feltex (automotive components), Sleep Group (mattresses and bedding), PG Bison (wood and decorative products), and Unitrans (transport and logistics).
Feltex delivered a particularly strong performance, while Sleep Group and Unitrans showed improvement as turnaround initiatives gained traction. Management highlighted tighter cost control, new product development, and expansion into additional markets as key drivers of progress.
Market Reaction Turns Negative
Despite the improved earnings profile and debt reduction efforts, the stock’s initial gains faded. JSE: KAP ultimately fell 9.62% on Friday, suggesting investors remain cautious about near-term demand conditions and broader macro uncertainty.
While operational momentum is improving, market confidence appears sensitive to revenue softness and the pace of sustained recovery.
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