Thanks to all parties joining us for our half-year results presentation for the six months ending 31 March 2024. This is a prerecorded results presentation, and as per the normal with webcasts, I would ask you to start sending questions in as soon as you are ready, and we will try our best to answer all of them at the end of the results presentation, or we will follow up with you on any specific matters we are unable to handle appropriately. The presentation of our half-year results could take around 40 minutes and will also be available by link on our website post this presentation. As usual for this platform, Graeme Sim, our FD, will assist me with today's presentation. Business has really been tough in the past six months, but I believe we have shown a high degree of resilience.
Today's agenda covers various topics of importance to shareholders and investors alike. We will be covering the agenda items on the screen. Shareholdings in our group structure have not changed since our previous reporting period. I would highlight a few points. Firstly, the naming convention change of Kaap Agri Bedryf and Kaap Agri Namibia Operations to more accurately reflect the customer-facing brand as Agrimark has been completed. Secondly, the process of unbundling TFC to be a direct subsidiary of the KAL Group is still in process. Thirdly, the TFC BEE ownership status remained above 50% on direct black ownership basis and well above the current requirement of 25% as required by the Liquid Fuels Charter. Lastly, it is important for all investors running valuation models to keep in mind the KAL Group shareholding of 58.2% in TFC when modeling attributable earnings to shareholders of the holding company.
On this slide, we have a geographical heat map of all 267 group business units on the left-hand side, of which 89 units are within the TFC business segment. On the right-hand graph, we have the business unit movement as at the end of each financial reporting period. During the half-year, we closed 1 Agrimark pet store and didn't invest in any footprint expansion, as the focus was rather on investing in alternative energies and reducing debt. The group now operates 148 retail fuel licensed sites in RSA and Namibia, of which TFC is operating 85 in South Africa. Of the 85, four TFC sites remain earmarked for dis investment. There are nearly 350 retail touchpoints at our TFC sites, which focus on retail convenience, and as you will hear later, we are earning the majority of gross profits from convenience retail versus fuel.
While the Agrimark footprint has largely been focused on water-intensive areas of South Africa, the TFC footprint has focused on clusters in specific provinces, and since the addition of PEG, also a focus on high-value highway sites that have been added to the network. Overall, our business unit footprint is biased towards mainly peri-urban, rural, and highway locations, with a diverse range of customers which frequent our business units. The group half-year operational measures are showing healthy trends, with profit before tax and EBITDA up 9.7% and 9.2% respectively, with quarter two profit before tax improving since the quarter one reported growth of 7.3%. Interest-bearing debt has been dramatically reduced by ZAR 360 million during the period. Please note the qualification note at the bottom of the slide explaining a late supplier payment drawdown on the 2nd of April.
CapEx has also been curtailed to only ZAR 71 million during the period, which includes expenditure on alternative solar energy products. An interim dividend increase has also been approved by the board. While training conditions have been very tough, we have buttoned down the hatches and continued to deliver healthy growth. Although group statutory revenue was flat compared to last year, this off the back of lower wheat prices, deflationary fertilizer prices, and 2% lower fuel volumes, the first half has been characterized by low-margin commodities impacting revenue value, while through market share gains and higher sales in retail, we have been able to increase profitability while reducing debt, as already stated.
The numbers emphasize how in certain periods the commodity price fluctuation impact on revenue we experience doesn't correlate with our profitability drivers, and that revenue is becoming less of an appropriate measure due to the high fuel price and grain contribution. Fuel volume decline has mainly been due to KZN highway traffic decline, lower load-shedding use, and reducing mining activity. This has been countered with market share growth in the Eastern Cape area and highway growth on the N1 Limpopo corridor. The number of transactions for the group were marginally down, while basket size grew by 1.5%. In the period, DC value throughput has grown by 12.6% off the back of DC-appropriate range expansion and at a 3.2% lower cost to serve. Wheat intake was 21.2% higher, resulting in Agrimark grain profitability growing by 17%, with full-year profits mainly being generated in the first half of the year.
Our New Holland agency profitability was lower in the first half, with whole goods sales lower while spare parts and workshop sales were higher, typically expected when farm expenditures under pressure from high interest rates. Agriplas and TEGO have seen an improvement in profitability, mainly driven by strong irrigation equipment sales growth. Our like-for-like group operational expense growth has been curtailed to 6.4%, and both inventory and debtors levels have reduced in line with sales pressure, while debt- to- equity has decreased by 23%. I'll now hand over to Graeme Sim to take us through some more key highlights and financial trends.
Thanks, Sean. The highlights for the period show a resilient business that continues to grow despite the challenging trading environment. Revenue was in line with last year, with like-for-like comparable revenue reducing marginally by 0.3%. Revenue pressure was evident across general retail and agricultural channels during half one. However, the second quarter of the financial year improved significantly across all business units compared to the first quarter. While transaction numbers decreased marginally, basket size improved by 1.5% compared to last year. EBITDA increased by 9.2% to ZAR 569.1 million, indicating strong cash generation and sustainable financial health. Recurring headline earnings grew 8.1%, with recurring headline earnings per share growing by 7.1%. Recurring headline earnings per share growth remains a key benchmark to measure performance and to allow for meaningful year-on-year comparison. It is also one of the performance measures for our long-term incentive scheme.
Group fuel volumes decreased by 2%, performing significantly better than the industry-wide fuel volume reductions experienced. TFC fuel volumes ended 1.6% lower than last year. Non-highway site volumes have improved, while highway site volumes have come under pressure on specific routes. Market share gains have been made in TFC and Agrimark fuel channels due to our product availability and reliability of supply. Return on invested capital increased from 7.9% to 8.2%. Although this is not an annualized figure, it provides a good indication of year-on-year ROIC improvement, which is expected to continue through the second half of the financial year. An interim dividend of ZAR 0.54 per share was declared, being 8% up on last year's interim dividend of ZAR 0.50 per share. Looking at our gearing ratios, debt- to- equity has improved year-on-year, with ZAR 244.6 million in term debt being settled during the 12 months.
Debt to EBITDA also, not annualized, improved from 4.7x last year to 3.3x this year. Interest cover has also improved from 4x last year to 5.1x this year. This slide shows some key investor information. We have seen a fair amount of change to our shareholding over the past two years. During the second half of 2022, both Zeder and PSG unbundled their shareholding in KAL, resulting in a large increase in the number of shareholders. During April last year, we implemented an odd-lot offer process and in doing so reduced the number of shareholders by over 11,000. Currently, we have around 10,800 shareholders, about 500 less than at the last financial year end. Given that the KAL share has traded at a discount to NAV for some time, we continue to consider a share repurchase.
Currently, we do not feel this is opportune given the challenging economic landscape and the fact that the discount to NAV is relatively small, and we strongly believe the cash retention and debt repayment should continue to be prioritised, with balance sheet strength and sustainability being core focus areas. In terms of our long-term incentive scheme, certain minimum shareholding requirements have been set for participants, and both the group CEO and FD are ahead of this plan. During the past 12 months, 15.3% of issued shares were traded, with a KAL share ending the six-month period down 1.1% year-on-year. Our consistent dividend policy remains, taking into account debt repayment priorities. As mentioned, our F24 interim dividend has increased by 8%. Our full-year financial performance, when looked at in terms of a five-year compound annual growth rate, has been strong.
We have consistently delivered superior performance, with the F23 recurring headline earnings growing by 14.4% compound and return on invested capital ending the year on 14.3%, an improvement of 2.1% compared to five years ago. As mentioned in the previous slide, our gearing improvement continued in line with commitments. We have previously investigated the feasibility of moving our debtors' book off balance sheet. At the time, considering all potential impacts, it was decided not to proceed but to keep this opportunity on the radar and reassess on an ongoing basis. We intend revisiting this during half two this year. We have ongoing growth targets and continue to investigate value-adding mergers and acquisition opportunities in line with our strategy of balancing earnings evenly across the four sectors, being agri, general retail, convenience retail, and fuel.
Regarding our F25 target of ZAR 1 billion PBT, due largely to unforeseen and ongoing higher interest rates, direct cost of load-shedding, and cost of capital invested in alternate energies, we may possibly fall slightly short of the ZAR 1 billion PBT target. Looking at the income statement, revenue was flat year-on-year, as mentioned. Gross profit grew by 8.7% and accelerated in quarter two compared to quarter one. Gross profit growth has been aided by increased distribution centre throughput, fuel price gains realised, a larger contribution of convenience retail, as well as higher rebates received. This translated into a higher GP margin year-on-year. Effective cost management remains a key focus area, and more so given the revenue pressures being experienced. The business continued to demonstrate its ability to flex cost during difficult times, with like-for-like expenses growing by only 6.4%. EBITDA increased by 9.2% to ZAR 569 million.
Recurring headline earnings grew 8.1%, and recurring HEPS grew by 7.1%. Return on equity, being only six months return on full equity, was marginally down at 10.1%. Interim dividend of ZAR 0.54 has been declared, as mentioned, up 8% on last year. The three graphs illustrate the strong five-year performance of the business, reflecting in the continued year-on-year recurring HEPS growth. Moving on to balance sheet, year-on-year non-current assets grew off the back of capital expenditure, while current assets increased due to higher cash-on-hand balances at 31 March, partly offset by lower debtors and inventory levels. The group's commitment to reducing gearing level continues, with ZAR 244.6 million in term debt being settled over the past 12 months.
Debt-to-equity ratio decreased to 56.5% from 73.8% last year, interim net debt to EBITDA improving to 3.3x compared to 4.7x last year, and interest cover of 5x an improvement from 4x last year. Net asset value per share continues to increase, albeit at assets at historic values. So in summary, our balance sheet remains strong, and this strength will ensure sustainability and allow for growth, with effective capital allocation supporting our focus on return on invested capital and our debt repayment continuing. This slide reflects the recurring headline earnings movement from half year 2023 to half year 2024. Gross profit growth of 8.7% was very encouraging considering the flat year-on-year revenue position. Other income reduced due to fuel price provisions reversed in the prior year.
Expense management was excellent, with 6.4% like-for-like growth largely due to inflationary pressures and franchise fees in the QSR environment. Interest received decreased off the back of lower average debtor balances due to slower credit sales, and interest paid to banks decreased due to the year-on-year reduction in net interest-bearing debt, resulting from the scheduled term debt repayments being met. The minor recurring headline earnings adjustment refers to costs associated with last year's odd-lot offer. So in total, recurring headline earnings grew by 8.1%. We consider recurring headline earnings per share to be a strong indicator of sustained wealth creation, as it eliminates the impact of infrequently occurring events. As such, the slide illustrates the items impacting earnings to calculate headline earnings per share and recurring headline earnings per share.
Headline earnings adjustments in the current and prior year are minimal and relate to the profit and disposal of minor assets. There were no non-recurring items during H1 this year, and as shown on previous slides, recurring headline earnings grew by 8.1%, recurring headline earnings per share by 7.1%, and on a four-year pre-COVID compound annual growth rate basis, recurring headline earnings has grown by 16.3%, and recurring headline earnings per share has increased by 13.3%. Although load-shedding is now considered an ongoing cost of doing business and is not added back for any comparative purposes, it's still relevant to illustrate the ongoing impact on the group. During the past six months, direct load-shedding-related costs in terms of diesel, generator maintenance, and the like have cost the group just over ZAR 22 million. Added to this, the indirect cost of lost sales, which has not been factored into these graphs.
On a positive note, during the period, thanks to lower load-shedding stages as well as the positive impact of numerous electricity-saving initiatives and our investment into alternative energy solutions, direct load-shedding costs reduced by almost 37% across the group. Given the nature of the TFC business requirements, the cost of load-shedding in this segment is the highest, contributing 68.4% of group load-shedding costs. Despite a short-term improvement in load-shedding over the past few months, the medium-term outlook for the country as a whole still remains concerning. As you all know, return on invested capital and economic value add are key performance indicators in our business, and are entrenched in the effective capital allocation process. Looking at the period from 2020 till current, we have consistently maintained an upward ROIC trajectory, outperforming our weighted average cost of capital and creating shareholder value. During 2022, we completed two significant ROIC-enhancing initiatives.
Firstly, we disposed of TFC properties without any negative impact on the operations of TFC. And secondly, we concluded the acquisition of the PEG Group, adding 41 highly cash-generative retail fuel and convenience service stations to the TFC fold. The impact of these two transactions is evident in the group, with ROIC increasing from 11.6% in 2022 to 14.3% in 2023. Half year 2024 ROIC performance is encouraging and has outperformed half year 2023. Take note the half year ROIC figures are not annualized, but they're important trend indicators. Full year 2024 ROIC is expected to improve year-on-year thanks to continued strong cash generation, prudent capital investment, ongoing effective working capital management, and the resultant improvement in gearing levels.
As a reminder, you'll notice in the remuneration report tabled at our AGM in February that 40% of executive reward in terms of the long-term share incentive scheme is linked to EVA as a performance hurdle, with management incentivized to outperform specific ROIC targets. I'll hand back to Sean for segmental reviews.
As previously stated, our group has diversified and now offers investors a balanced exposure to a diverse range of customers, mainly in retail. We serve these customers in peri-urban, rural, and highway locations, doing around 6,000,000 transactions per month. In the bottom right of the slide, we indicate the four main income channels we operate within. Starting at the top right of the insert with a traditional agri input retail channel serviced by Agrimark and supported by the Agrimark Financial Services debtors' book. Then bottom right, the general retail channel in our Agrimark branches.
Moving to the left bottom, the convenience retail on the one hand, and top left, the fuel retail on the other hand, both farm and retail fuel. These four channels have an interconnection with each other, with a common theme being retail. This is our Agrimark business segment. Although traditionally the Agrimarks were focused on the agri input requirements of farmers, the farmers' post-harvest packaging requirements, farmers' spend on farm expansions, and their general farm maintenance spend, this has changed quite dramatically over time, with Agrimarks now boasting an A-store format including 20,000 active SKUs, while B-store formats carry approximately 8,000 SKUs, and other formats a tailored range. The retail in-store offerings have expanded to include garden, pet, pool, DIY, outdoor liquor, and other general retail assortments.
We have invested smartly in centralized supply chain capabilities like inventory management, warehousing, distribution, assortment planning, and optimization, price and margin management, and this now all been done centrally and digitally. Our distribution centre plays a critical role in enabling the Agrimark's to focus on a customer-first experience. Due to this investment, we are now able to offer a vastly improved product range to the Agrimark's diverse range of retail customers. We obviously tailor the formats depending on the locations, while doing business with more customers in more places, with more products, and making more money. In more detail, here with the Agrimark business segment review. Keep in mind that this business segment includes Agrimark Financial Services and a good chunk of the support service costs.
The strategy for the Agrimark remains largely unchanged, with a focus on market share-driven growth initiatives while optimizing our retail formats, increasing our DC utilization, and continued margin enhancements, while applying a measured approach to virtual branch market share growth on one hand and brick-and-mortar store expansions on the other hand. Our new B2B data-driven market share focus sales drive to current and new customers is quite unique and will drive growth going forward, most likely with the assistance of expanded AI tools. For the half year under review, agri input sales were lower, this off the back of high deflation in fertilizer, while infrastructure sales grew at 16%, packaging material sales at 3%, and horticulture, which was mainly seed sales, growing at 16%. New Holland agency sales were down 14.8%, mainly due to less large mechanization units sold after the last three-year record levels.
At the same time, spare parts and workshop sales actually grew in the period. As stated, fuel volumes were impacted by reduced load-shedding offtake, lower mining activity, and countered by market share gains in the Eastern Cape in this segment. Retail sales, although flat, saw pet grow by 4.4%, pool and garden grow by 8%, lubes grow by 6.5%, and building materials carry good growth of 5.6% compared to a large competitor which reported 1% growth. Online sales activity saw an acceleration off a low base with SKUs up 16% to just over 54,000, user visits up 12% to over 844,000, and return visitor rate up 29%. Basket size was up 16% to over 1,194. All good, but in terms of bottom line, 99.3% of the real value of our e-catalogue is being realized in-store.
Overall, the Agrimark segment grew trading profit off the back of margin improvements, lower growth in operational expenditure than GP growth, with interest rates only expected to annualize around September this year. Therefore, overall profit before tax was similar to prior year. When excluding support services, the Agrimark operations grew profit before tax by 3.3%. This year, we have also experienced the classic Easter swing, having had less full trading days in this half year than the prior year and have seen the uptick in the April figures, which bodes well for quarter three. In terms of an outlook, quarter two was better than quarter one, and we expect a further quarter three uptick off the prior year's low base. We also expect to continue growing fuel market share and should see farm spending normalizing, while we believe general trading will only show an uptick once interest rates improve.
The Fuel Company business segment is the largest independent retail fuel and convenience network in South Africa and now includes most of the retail fuel-related convenience offerings you can find in South Africa. There are currently 89 sites in the network, many of which are prime sites, and we currently operate 348 retail convenience touchpoints at these sites, very much a retail business and more of a retail business than a fuel business. The SA fuel and convenience market is still highly fragmented, with our sizable network still only representing approximately 3.8% of total retail fuel sales volumes in South Africa. Our network operates nationally, with the main volume and convenience contribution coming from highway locations. Not only are we the leading independent retail fuel and convenience operator in South Africa, but also a leading role player in the Famous Brands stable, reinforcing our diversified retail customer base.
The fuel company comfortably does over 4,000,000 transactions per month. That's 1.5 per second. Although the company is also well positioned to take advantage of EV charging development in its network, we have seen of late that many motor companies are downscaling their predictions on EV uptake and quite dramatically so. We are of the view that hybrid vehicles are better suited for South Africa, but we also believe that the traditional fuel station sector will continue transforming to a services-driven convenience network. In our case, nearly 60% of trading profits are realized from convenience retail activities and only just over 40% from fuel and lubricants. In our view, that investors overlook the value in our retail convenience offerings.
Getting into the performance of the business segment, the strategy will now shift from the onboarding of PEG to continue a selective footprint growth as we reduce debt, expand convenience offerings, seek supply chain scale benefits, and diversify into standalone convenience offerings. Optimization of our business model will also receive continuous focus. Furthermore, we did not expand the network in the period and only expanded certain convenience offerings, adding a KFC and converting most of our Fego Caffés into Mugg & Beans. Retail sales growth outpaced that of fuel, with volumes contracting 1.6% in this business segment in an overall sector showing a much larger contraction. When comparing the main routes and fuel volumes sold at our sites on these routes, it is clear that KZN, the N3 and N2 in that area are down, while Limpopo N1 is up.
Furthermore, petrol sales are the main reason for the contraction in overall fuel volumes, indicating a consumer under pressure and traveling less. We don't believe EV uptake has had any influence on our fuel volumes. The average margin per liter has improved by 12.7% as expected as a result of the higher retail convenience contribution. This talks to the 21% growth in profit before tax, with our PBT return improving to 22% from 18% last year. From an outlook point of view, we believe fuel volumes will continue to be under pressure depending on the fuel price trends, and we expect convenience retail to show a continued moderate growth trend for the year. Our focus will continue to be on optimizing our convenience offerings by adding more KFCs.
We are in the process of assessing the investment into 2 new sites, and the 4 site disinvestments remain in process, and we will seek to divest at the right time. We firmly believe that the strong cash generation capability of this business segment will continue. Also, keep in mind the uptick potential when interest rates reduce, while this segment is still highly geared. Let's move on to the Agrimark Grain segment, the management of which actually forms part of the Agrimark team. But due to its significance in the Swartland area, we continue to add detail on this segment. Although Agrimark Grain is a relatively small contribution to group profit before tax of 7%-9% in a full financial year, it is a division which is strategically aligned to our Agrimark operations in the Swartland area of the Western Cape.
The strategy for this division is to maximize wheat and seed market share while optimizing the grain facility utilization and being the leading role player in the Swartland area. This is achieved by ensuring farmers get optimal grain handling, storage, and seed processing services. In 2023/24, wheat intake was 21.2% up on the prior year. This has led to the increased profitability in the half year. Remember, this division's profitability leans towards the first half. Agrimark Grain has invested circa ZAR 27 million over the last five years in additional and alternative grain handling and storage capabilities and will continue to do so as demand increases and market share opportunities arise. The returns on net assets for this division support this strategy. The outlook is a bit uncertain currently, with rains expected to be late. Swartland has commenced planting, and farming intentions are to plant similar areas to the prior year.
Now to our manufacturing segment, which focuses on our farmers in mainly the fruit, vegetable, and sugarcane sectors. The manufacturing segment consists of Agriplas and TEGO. The target market is the fruit, sugar, and vegetable farming sector, and the strategy remains to drive market share gains, new product launches, and producing recycle-friendly products. These business units continue to experience the impact of load-shedding and high interest rates, which dampen farm infrastructure spend, with the exception of irrigation equipment sales to sugar and veg farmers in Limpopo and Mpumalanga. TEGO bin sales have been similar to prior year. TEGO has launched a new AgriCrate, and Agriplas is performing well with a healthy order book. Profit before tax improved by ZAR 7 million, mainly due to the uptick at Agriplas in the first half. Both businesses have managed margins and OpEx very well.
In our outlook, we highlight that TEGO has been onboarded as a supplier to the largest bin user in South Africa. Agriplas sales in Limpopo and Mpumalanga are expected to remain strong, while Western Cape farming seems to still be largely CapEx averse at this moment. The objective of these graphs is to summarize the group trading activities per segment while emphasizing a few unique characteristics. Firstly, while our roots are primarily invested in agriculture, the Agri Input Channel trading profit only accounts for 17% of group trading profit, with the retail contribution taking the lead at 43%. Similarly, non-Agri trading profit now accounts for over 70% of total trading profit.
As stated earlier, the current fuel price clearly overstates the contribution of fuel in our group, and while important, fuel price per se does not drive profitability or returns, as one can clearly see the different profit before tax return on net assets between Agrimark and TFC. We have also mentioned earlier that even in the TFC business segment, that retail convenience trading profit accounts for nearly 60% of total trading profit. The clear statement we are making is that the group has diversified into a significant retail role player of South Africa. Our close on 6,000,000 transactions per month, of which only about 1,000,000 per month are in the Agri Channel, bear testimony to this and are driven by our network of over 450 retail touchpoints that the group operates.
Thanks, Sean. The group's cash flow generation remains strong, with almost 70% of revenue being cash revenue.
This ratio is expected to stabilize now that the PEG acquisition, a large cash revenue contributor, has annualized. Working capital has been managed effectively, inventory reduced by 0.7% compared to flat revenue growth. The impact of centralized procurement and distribution and the higher contributions of quick-moving convenience retail and fuel stock have supported this inventory reduction. Trade debtors reduced by 3.9% year-on-year off the back of lower credit sales, with debtors not exceeding terms as a percentage of trade debtors in line with the previous year-end position. With regard to creditors, important to note as in previous years is that seven months of supply payments are made in the first six months due to the timing of year-end supply payments. This normalizes again across the full year when reduced supply payments are made in September.
Due to the Easter weekend falling over the March month-end, one of our large fuel suppliers drew their payment later than normal. This had a positive impact of ZAR 211 million on cash at 31 March. Capital spend during the period was prioritised and well controlled. During the period, ZAR 30 million was utilised to purchase shares for future vestings in terms of our long-term incentive scheme. It was very satisfying to see the reduction in interest paid year-on-year off the back of a reduction in net interest-bearing debt, albeit that interest rates remain high. And lastly, the final dividend paid relating to 2023 was just short of ZAR 100 million. In summary, a very healthy and well-managed cash position for the period showing similar trends to last year, reduced inflation has softened pressures on working capital and widened funding headroom.
With regard to capital expenditure, capital spend was suitably contained to ZAR 70.7 million, which includes ZAR 39.8 million rand spent on various earnings-enhancing expansion-related projects and ZAR 22.1 million for replacement capital expenditure. ZAR 8.8 million was allocated to alternative energy installations, and we continue to evaluate the feasibility of alternative energy generation at a number of sites. ZAR 9.8 million of capital was released through disposals. Capital was evenly allocated across the major operating segments, being Agrimark and TFC. Included in the Agrimark CapEx is the expansion of our packaging material warehouse in Addo. Included in the TFC CapEx are site upgrades and QSR expansions. In our corporate space, we also included costs in terms of our long-term ERP modernization project. By now, most of you would be familiar with this slide and these graphs.
For new attendees to the webcast, we like to give a bit more insight into our debtors' book and debtors' model. Our strategy to grow the debtors' book remains key to our business model. Credit is used as a revenue growth enabler by increasing the customer's ability to purchase from our various offerings. The production credit we grant can only be used for purchases at the various Agrimark and TFC outlets. Our stringent and well-entrenched credit vetting processes consider a wide range of factors, including financial and non-financial variables, as well as the nature and value of any securities provided. The resulting credit rating is then used to determine the approved facility size and the interest rate charged to that account. Our debtors' book reduced by 3.9% of lower credit sales. The book totals 16,290 accounts, marginally up year-on-year.
Roughly 21% of these accounts are seasonal accounts with payment periods linked to the cash flow cycle of the underlying product being produced, and with payment terms ranging from 3 months up to 12 months. The contribution of debtors by product type and half year remained fairly similar to last year, except for fruit, which are slightly lower. Our bad debt write-offs continue to be very low and are reflective of the quality of the underlying accounts and the rigorous vetting processes, with only 0.05% of the debtors' book being written off during the 6 months. As you'll recall, the 2022 exceptional write-off highlighted by the orange bar was fraud-related and not related to normal debtors. The 5- and 10-year average bad debt written off include all write-offs, even in the exceptional write-off of 2022. Despite this, the default trend remains very low and has improved year-on-year.
Despite the really good performance of our debtors' book, given the tough trading conditions out there, we have proactively increased our expected credit allowance provision at half year from 1.9% to 2.5% of the book. Lastly, as a reminder, we earn in the region of 225 basis points net interest received on all accounts. Moving on to our net trade terms debtors, this graph illustrates the monthly five-year trend of overdue debtors as a percentage of total debtors and highlights the following. Over the past five years, we've successfully navigated some of the worst agricultural economic conditions that have been faced by producers in decades, without any significant deterioration of the book and without any meaningful default.
Monthly trends remain similar year-on-year, except where we had specific events, as you saw in 2020 with COVID-related table grape and wine grape payment challenges that successfully cleared within a few short months. The 2022 out-of-terms was the lowest we have seen during five-year period. We saw a spike in our out-of-term balances in February of last year, coinciding with the increased levels of load-shedding. This resulted in certain customers holding back on settlement as they faced the challenges associated with severe power interruptions. We ended the 2023 year with an out-of-terms percentage higher than 2022, with this increase representing a small number of specific customers on which we hold sufficient security. Our half-year 2024 out-of-terms percentage has increased marginally from half-year 2023. This year-on-year increase relates largely to the customers who were out of terms at year-end.
As the collection period for these accounts is quite long due to the nature of securities held and in some cases their ability to settle with proceeds from new and different harvests, as such, the increase is not considered a default risk but has definitely negatively impacted our cash flow. Agri conditions looking forward are encouraging and bode well for facility repayments. Our book remains healthy and resilient with continuing low default rates and good securities in place, and we are comfortable with the book and consider it suitably provided for given the track record we have with our longstanding customers. This graph reflects the debtors' balances by month by underlying product group from March 2023 to March 2024. Note that the only significant product group that is exposed to dry land farming is wheat.
Furthermore, the large exposure to table grapes during December to March is driven by packaging material, and this exposure is harvest-dependent. The various product groups have different harvest timelines and, as such, different cash flow timings, which improves the cash flow cycle and reduces any single cash flow constraint event in the group. You'll also see that no product group ever gets to zero, the reason being that even during off-season periods, farmers continue to spend on their accounts, be it for infrastructure maintenance, upgrades, pre-season activities, etc. Product groupings with shorter seasons, example vegetables, have a quicker payback and, as such, a lower exposure at any point in time. So ultimately, a good spread over the various product ranges, which reduces risk. Our agri-strategic focus revolves around water-intensive farming areas, and this graph shows the credit sales by month by river system from March 2023 to March 2024.
The highest sales areas are the Berg River and Hex River systems, which aligns to the wheat and table grape information on the previous slide. The wide geographic distribution of the debtors' book is evident and ensures the impact of regional weather or other challenges is lessened, in addition to also smoothing the cash flow impact from debtors due to different harvest times. We operate with decentralized credit teams in all the regions we engage, face to face with customers, supported by a centralized credit vetting office. You will see that March was a particularly slow month for Agrimark. This was due to the Easter weekend falling across the month-end, as well as the fact that this year we had five weekends in the month of March, which impact sales. This normalized across the combined March and April period.
The growth opportunities for Agrimark in certain of these river systems are very encouraging, and a number of CRM initiatives are yielding good results. In summary, a good spread over a wide geographic area, which reduces risk. This is the same slide we included in our full-year 2023 year-end results webcast. As we update this annually, it sets out how long our customers have been with the group. More than half our debtors by credit facility value have been with the group for more than 10 years, and 76.5% have been with us for five years and more. Only 10.3% of debtors have been customers for less than two years. And remember, this 10% even includes accounts where there have been entity changes. For example, where a farmer previously traded in a CC and now trades in a Pty.
It's clear that a very large percentage of our debtors have supported the group for a long time, and this speaks to the low default rates we are able to achieve. We know our credit customers well. We are familiar with their individual operations, and we have very close relationships with them. With regard to the risk profile of the book, 60.7% of the book is considered to be low and very low risk, with less than 1% being seen as very high risk. So in summary, the book is well-managed, stringently vetted, diversified from a product and geographic perspective, has an exceptionally low default ratio, and is suitably secured. Furthermore, we are well-positioned given the positive agri conditions being experienced in our areas.
I'm certain that these specific slides on debtors provide very good insight into why we are very comfortable with the quantum and risk profile of the credit book and why we continue to leverage credit to drive sales. Sean will close out from here. We can summarize the first half of the year as follows. Under the circumstances, we are happy with profit-before-tax growth of 9.7%, reduced debt levels, and increased interim dividend. Like-for-like Agrimark and Grain improving profitability while New Holland agency felt sales pressure. TFC Group volumes contracted less than the sector, and retail convenience growth has been more moderate than in the prior year and very specific. DC throughput continues to grow off the back of our DC's appropriate range expansion and our support services cost to serve being well-controlled.
CapEx curtailed to ZAR 71 million in the period including spend on alternative energies, and we continue to improve ROIC. From an outlook point of view, wheat and canola planting intentions are similar to the prior year, with the El Niño weather impact only being felt in livestock areas we service. We expect Western Cape winter rain to be later than the prior year. Farm cost pressures are expected to continue lifting, and we will continue to drive retail margin opportunities. We believe Agrimark business segment should have a strong quarter three. TFC will focus on further expansions to its retail offerings while investigating a few footprint expansions. We are still positive about TEGO landing a large customer, and Agriplas is expected to continue its first half momentum, which started in quarter four of last year.
While the economy remains sluggish, we will capitalize on opportunities to enhance value for our shareholders. Our expectations are to continue our growth trend. We thank you for your time, and we'll respond to any questions that have been sent in.
Thank you, everyone, for joining us for the webcast. We do have a number of questions that have come through during the webcast. Let's start off with a few of the first ones. There seems to be quite a lot of interest around the exit of Shell from its downstream operations. So some of the questions are: Given Shell's intention to exit SA, what is the impact on the fuel company? Will there be a rebrand of some of the petrol stations, or will things continue as is? Given the reports that others like Engen and Total might follow suit, what is the plan for our group moving forward? And then even, is there any risk to the business going forward with these developments? And if Shell is selling the stations, is there any possibility or opportunity for KAL to acquire them?
So I'll answer those few questions all at once. Currently, we only have two Shell sites in our network. There will be no impact on TFC operations as both sites are on supply agreements and not franchise agreements. Also, per the communication distributed by Shell to its network on the 6th of May, the exit process will have no impact on current site operations. Should we decide on any rebrand in the future? It will be based on commercial decisions and nothing to do with the Shell process, really. We signed agreement with TotalEnergies, for example, to rebrand one of our sites. But that is a commercial decision as it would be for any others. The Engen transaction has been finalized and approved by the Competition Tribunal with the Malaysian shareholders of Engen selling their stake to Vitol.
There's actually no impact in the short to medium term on any of the operations expected from that. So really, the bottom line is even if the oil majors exit, TFC operations will continue to operate and look for opportunities within the marketplace. Our multi-brand strategy has shown that we can operate with various partners. Security of supply is, however, a key factor, and quality of product is also a key factor. And we believe with our fuel logistics team and our capability to source direct from gantries puts us in a competitive advantage space. We envisage that the service station of the future, really, will revolve around service offerings and not necessarily so much around fuel as we have seen in our network. We therefore don't foresee any exit of the brands as a risk to us.
Like most other SA companies, we are more worried about load-shedding, lack of power, and other bigger risks for GDP growth, etc. Obviously, when anything's for sale, it's an opportunity. We will, however, assess these according to our investment mandate, at least 600. We think the number's actually more around 720 Shell sites. At least 50% will be probably privately owned. So maybe some of those individuals would be looking at offloading those assets. Yes, we would look at these opportunities like others, but we would assess them against our investment guidelines according to ROIC and also assess it against our leveraging situation at the time. So our team is on it and is having a look at it as we speak. Now, even with if the Engen exit is any way to go about it, then probably there's been no impact on us at this stage.
In fact, once these things are clarified, the management teams of the network that's left are more accessible to engage to improve operational situation. Okay, let's move on. Are there any other acquisitions of interest at the moment, and how many potential targets are under consideration? Well, we did highlight that we're looking at two TFC network expansions and that we are in process of expanding the convenience offerings at a number of our sites. So that would continue. And given the leveraging plan is working for us in TFC and reduced debt levels, we are probably going to push down the pedal on expansions in terms of the TFC network. At the same time, there are two or three opportunities which the Agrimark operations team are looking at. We obviously, at this stage, can't divulge any detailed information on that. But our business is a business of growth.
We get up and look for these opportunities every day. So having come off the high 70+ leveraging levels, debt- to- equity, we're feeling there is a bit of headroom to push the envelope again, and we will get back to growing the network significantly. Now, you would have heard on the Agrimark operations business segment, I was talking about market share growth. We are achieving market share growth in areas where we have not had a presence in the past. So we are, at the same time, growing our network and growing our market share on both sides, TFC and Agrimark. There's a question around how much scope the group sees in extracting higher return on invested capital and/or EVA in the years ahead.
Given that we actually have a growth strategy going forward, maybe now we've just completed the F30 business strategy review with our board, and we are targeting double-digit compound growth going into the future. Maybe not as high as the past. That might put a bit of pressure on our debt levels. But we certainly would see ROIC improve over that time given that if we can keep our debt- to- equity in that 40-50 range most of the time. It would depend on how big opportunities were that came along. I'm going to hand over to Graeme. There's a question now, Graeme, on given the strong deleveraging of the company, how could KAL make use of the additional headroom? And does it plan to further reduce debt, and if so, to what extent? Graeme?
Yeah, thanks, Sean. We'll definitely continue to repay term debt going forward. Our forecasts are a further reduction in term debt of about ZAR 260 million over the next 12 months, of which roughly ZAR 170 million of that ZAR 260 million relates to the PEG acquisition. So we've always indicated our desire to accelerate the repayment of the PEG debt, PEG-related debt specifically, given that it's such a cash-generative environment. So that will definitely continue. Given our growth targets, we could expect higher working capital requirements as top line grows, and that will add some gearing into the mix. But as Sean mentioned, I think our long-term debt- to- equity position will be in the 40%-50% range, excluding any peaks we might see from any M&A activity as we did with the PEG acquisition. And that then will allow us to revisit our dividend cover down the line.
Thank you, Graeme. I don't see any other come through. Let me just check our refresh. With that then being the last question we received, thank you very much for everyone joining. Goodbye.