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ASTRAL FOODS LTD
(Registration number 1978/003194/06)
* Operating margins improved to 7,4%
* Cash from operations R51,5 million
* Maiden dividend 36 cents per share
Interim report and dividend declaration
for the six months ended 31 March 2001
Group Balance Sheets
Unaudited Pro forma
Six months ended Year ended
31 March 2001 30 Sept 2000
Note R'000 R'000
Assets
Non-current assets 356 627 360 602
Property, plant and
equipment 328 385 336 490
Investments and loans 28 242 24 112
Current assets 657 422 611 570
Inventories 202 729 193 482
Trade and other receivables 427 596 394 702
Cash and cash equivalents 27 097 23 386
Total assets 1 014 049 972 172
Equity and Liabilities
Capital and reserves 323 404 266 034
Issued capital 266 034 266 034
Reserves 2 57 370 -
Minority interest (2 259) (2 733)
Non-current liabilities 229 952 224 820
Interest bearing borrowings 122 906 123 163
Deferred tax 68 490 63 101
Post-retirement medical aid
obligations 38 556 38 556
Current liabilities 462 952 484 051
Trade and other payables 354 566 336 613
Short-term borrowings 97 563 122 335
Provision for tax 10 823 14 803
Provision for dividends - 10 300
Total equity and liabilities 1 014 049 972 172
Group Income Statements
Revenue 1 328 227 2 441 594
Operating profit 98 829 173 554
Finance costs (19 851) (39 763)
Exceptional items - 1 327
Income from associates 2 976 -
Profit before tax 81 954 135 118
Income tax expense (26 778) (43 550)
Profit after tax 55 176 91 568
Minority interest (681) (584)
Income attributable
to shareholders 54 495 90 984
Headline earnings for period 3 54 366 90 336
Number of ordinary shares in
issue and on which headline
earnings and net earnings per
share is based 42 924 000 42 924 000
Net earnings per share (cents) 127,0 212,0
Headline earnings per share (cents) 126,7 210,5
Net asset value per share (cents) 753,4 619,8
Group Cash Flow Statement
Cash operating profit 119 533
Working capital changes (24 188)
Finance costs (19 851)
Tax paid (24 387)
Cash available from operations 51 107
Dividends paid (10 300)
Cash outflow from investing activities (12 067)
Net cash flow to financing activities (25 029)
Net increase in cash and
cash equivalents 3 711
Cash and cash equivalent
balances at beginning of period 23 386
Cash and cash equivalent
balances at end of period 27 097
Segmental Reporting
Operating Total
Revenue profit assets Depreciation
R'000 R'000 R'000 R'000
Animal feed 923 187 37 585 448 760 5 580
Poultry 617 610 61 244 579 458 15 228
Inter segment (212 570) - (14 169) -
Total 1 328 227 98 829 1 014 049 20 808
Notes
1. Accounting policies
The results for the period has been prepared on the historical cost basis
and in conformity with Statements of Generally Accepted Accounting Practice.
The same accounting policies and method of computations are followed in the
interim financial statements as compared with the pro forma financial
statements at 30 September 2000.
Unaudited Pro forma
Six months ended Year ended
31 March 2001 30 Sept 2000
R'000 R'000
2. Changes in reserves for
period ended 31 March 2001
Income attributable to shareholders 54 495
Movement in foreign exchange
translation differences 2 875
Balance at end of period 57 370
3. Calculation of headline earnings
Income attributable to shareholders 54 495 90 984
Profit on sale of operations - (1 011)
(Profit)/Loss on
sale of plant and equipment (129) 271
Other - 92
Headline earnings for the period 54 366 90 336
4. Pro forma results
The pro forma results for the year ended 30 September 2000 are, after
adjustments to reflect the capital structure of the group on formation, in
agreement with the pro forma results as set out in the pre-listing statement
issued during March 2001. The pro forma income statement reflects the
effects of the capital structure as listed in note 6 on page 39 of the pre-
listing statement.
5. Comparative results
The group was not constituted at 31 March 2000 and, accordingly, the pro
forma comparative results for the six months ended 31 March 2000, as well as
the cash flow statement for the year ended 30 September 2000 are not given
due to the change in the capital structure upon the listing of Astral Foods
Limited.
Information to complete reliable comparative results are not avaliable.
Commentary
Operating margins of 7,4% for the period under review compares favourably
with the 7,1% for the previous financial year.
The Poultry Division was the main contributor to this satisfactory
performance. The outbreak of foot and mouth disease in Europe and the United
Kingdom increased the demand for poultry products in those countries which,
together with an improved local supply and demand balance, resulted in a
return to stability in the South African poultry industry. Foot and mouth
disease in KwaZulu-Natal also resulted in an increase in local demand.
Production efficiencies continue to improve with a continuous focus on being
a low cost producer of poultry products.
The Animal Feed Division experienced higher raw material prices as well as
higher fuel costs, which were not passed on to customers as a result of
increased competition in the market place. There was also a drop off in
demand for dairy feeds due to good rains, resulting in the operating margin
for this division reducing from the previous year's 5,9% to 4,1%.
The finance cost of R19,9 million for the six months reflects the effect of
the gearing structure following the unbundling from Tiger Brands Limited.
Profit before tax of R3,0 million from National Chicks Limited was accounted
for the first time during the period under review following the acquisition
of a 34,9% equity interest towards the end of the previous financial year.
The tax rate of 32,7% includes an amount of R2,5 million Secondary Tax on
Companies in respect of a dividend paid by joint venture Earlybird Farm
(Pty) Limited.
Headline earnings for the period under review of R54,4 million represent
earnings of 126,7 cents per share.
Capital expenditure amounted to R12,1 million. Gross borrowings reduced by
R25 million since the unbundling, with the gross debt level at R220,5
million.
Prospects
The improved trading conditions in the broiler industry are expected to
continue in the second half of the financial year. Steps taken to arrest the
declining margins in the Animal Feed Division are expected to pay off in the
second half of the year. The group's earnings for the full year should
therefore exceed the pro forma results of the prior year.
Directorate
The following changes in the composition of the board of directors took
place since listing:
Resignation: R H Parry
Appointment: J J Geldenhuys
Interim dividend
Notice is hereby given that an interim dividend of 36 cents per share
(dividend number 1) has been declared in respect of the financial period
ended 31 March 2001, payable on 20 July 2001 to shareholders registered in
the company's share register at the close of business on 15 June 2001.
On behalf of the board
J L van den Berg N C Wentzel
Chairman Chief Executive Officer
Pretoria
24 May 2001
Registered office
Block E, Castle Walk Office Park, Erasmuskloof, Pretoria.
Postnet 329, Privatebag X10, Elarduspark, 0047
Telephone: 012-3475077 Website address: www@astralfoods.com
Share transfer secretaries
Mercantile Registrars Limited, PO Box 1053, Johannesburg, 2001.
Telephone: 011 370 5000
Directors
JL van den Berg (chairman), *NC Wentzel (chief executive officer),* #T
Pritchard (financial director) *MA Kingston,
J J Geldenhuys, EM Groeneweg, CG van Veyeren (*executive director) (#
company secretary)
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