Wrap Text
Audited group results and dividend declaration
for the year ended 30 September 2013
Tiger Brands Limited
Registration number 1944/017881/06
Incorporated in the Republic of South Africa
Share code: TBS ISIN:ZAE000071080
Audited group results and dividend declaration
for the year ended 30 September 2013
Key financial indicators
INCLUDING DFM
Group turnover R27,0 bn Up 19,1%
Operating profit# R3,1 bn Down 11,6%
Headline earnings per share 1 624 cents Down 3,8%
EXCLUDING DFM
Group turnover R24,7 bn Up 8,8%
Operating profit# R3,5 bn Flat on previous year
Headline earnings per share 1 781 cents Up 5,4%
#Before abnormal items
Commentary
OVERVIEW
Trading conditions for the year were once again difficult. The challenges facing the global economy have
undoubtedly affected Tiger Brands sphere of operations. In South Africa in particular, the difficulties
facing the group have been driven largely by the trade-off between the groups ability to recover cost
increases through appropriate pricing, and the pressure on consumers to purchase at acceptable price points.
The increase in competition through the continued growth in dealer-owned brands and the entry of new
competitors, has added to these challenges. Whilst the group has taken some important steps in its strategic
journey towards building a sustainable platform for future growth, the results for the financial year are
disappointing and reflect a difficult transitionary phase as the group repositions its domestic business for
growth and drives expansion on the balance of the continent.
As reported previously, the group acquired a controlling interest of 63,35% in Dangote Flour Mills of
Nigeria (DFM) with effect from 4 October 2012. Whilst this company has good assets and a strong market
position, the trading performance has been disappointing and the acquisition has had a dilutive effect on
the groups earnings for the year. As with other acquisitions made on the continent, we expect that it
will take two to three years to fully align the DFM operations to Tiger Brands standards and for the
business to deliver acceptable returns. However, the group remains optimistic that this investment in one
of the fastest growing economies in Sub-Saharan Africa, will meet expectations over the medium term.
FINANCIAL PERFORMANCE
Revenue increased by 19,1% to R27,0 billion, assisted by acquisitions which contributed an amount of
R2,3 billion. Excluding acquisitions, revenue grew by 8,4% to R24,6 billion.
Total volumes in the domestic businesses were in line with last year. Notwithstanding volume declines
in the Maize, Sorghum Beverages, Groceries and Personal Care businesses, the balance of the businesses
reflected solid volume growth, with the Jungle and Rice businesses in particular achieving strong
volume growth.
Revenue in the International and Exports businesses (excluding acquisitions) grew by
21,7% to R4,4 billion, boosted by foreign currency translation gains of 12,1% and strong volume growth
in the Davita and TBI export businesses.
Total group operating income declined by 11,6% to R3,1 billion. This was mainly caused by a R389,2 million
operating loss incurred by DFM, which included once-off retrenchment costs and increased stock and bad debt
provisions of R85 million. DFMs performance was also affected by raw material cost push that could not be
recovered in the market through price increases. In addition, volume pressures arising from measures taken
to recover long-outstanding customer debts in an industry with significant overcapacity, as well as aggressive
pricing by competitors in the Nigerian flour market, negatively impacted income.
Dangote Agrosacks, DFM's packaging subsidiary which has been earmarked for sale, has been reflected as a
discontinued operation and its profit contribution for the year is reflected as a single line item,
outside of operating income.
Excluding DFM, operating income was in line with the prior year and the overall operating margin reduced
from 15,3% to 14,0%. The decline in operating margin was largely due to raw material, fuel and labour
cost push in the domestic market, which was partially absorbed in order to drive volume recovery.
Net financing costs increased from R138,2 million to R378,8 million as a result of the groups higher
borrowing levels, including underlying debt in DFM of R1,5 billion. During the year DFM reached an
agreement to sell its subsidiary Dangote Agrosacks Limited (DAS), to Dangote Industries Limited (DIL)
for N7,55 billion (R470,1 million), resulting in a R25,8 million abnormal loss on the remeasurement
of the carrying value of DAS' net assets at year end, to fair value. The proceeds from this sale will
assist in reducing the overall debt in DFM, which currently bears interest at approximately 15% per annum.
It is anticipated that the refinancing of a portion of the remaining debt at DFM at more favourable interest
rates will be effected by the end of the current calendar year.
Income from associates increased by 23,9% to R515,1 million due to solid growth in earnings from Oceana
in particular and a 10,1% foreign currency translation effect in respect of the offshore associates. During
the year, the group increased its shareholding in Oceana by 4,5% to 41,9%.
The reduction in the groups effective tax rate from 27,2% to 25,9% is largely due to the replacement of
the Secondary Tax on Companies (STC) with the new Dividends Tax introduced with effect from 1 April 2012.
The previous years tax charge included STC of R79,1 million.
The profit from the discontinued operation of R158,0 million is stated after the abnormal loss of R25,8
million noted above.
Net profit for the year attributable to ordinary shareholders decreased by 5,5% to R2,6 billion and earnings
per share decreased by 5,8% to 1 608 cents. Headline earnings per share decreased by 3,8% to 1 624 cents.
Excluding the results of DFM and the related acquisition costs, headline earnings per share increased by
5,4% to 1781 cents.
Total equity increased from R11,7 billion as at 30 September 2012 to R13,9 billion as at 30 September 2013.
Net profit for the year of R2,5 billion and foreign currency translation gains of R496,8 million were partly
offset by net dividend outflows of R1,4 billion. The DFM acquisition also added R541,2 million to
non-controlling interests.
Net interest-bearing debt increased from R1,2 billion to R4,5 billion mainly as a result of DFMs underlying
debt of R1,5 billion and additional group borrowings raised of R1,5 billion. The groups net debt to EBITDA
ratio of 1,2 times is well within its general borrowing covenant of 2,5 times.
FINAL ORDINARY DIVIDEND
The board has decided to declare a final ordinary dividend of 555 cents per share (2012: 555 cents) for
the year ended 30 September 2013. This dividend, together with the interim dividend of 310 cents per share
(2012: 295 cents), brings the total dividend for the year to 865 cents per share (2012: 850 cents), being
an increase of 1,8%.
ACQUISITIONS
The 63,35% shareholding in DFM was acquired for a purchase consideration of R1,5 billion. In light of the
proposed sale of DAS by DFM, the net assets of DAS have been reflected in the groups closing statement of
financial position at 30 September 2013, as held-for-sale and the profits of DAS have been reflected as
arising from a discontinued operation.
The group made three other acquisitions during the year. It acquired the Mars sugar confectionery trademarks
in South Africa for R10 million with effect from 1 November 2012 and the Mrs Balls chutney trademarks for
R475 million with effect from 1 April 2013. It also increased its shareholding in Oceana Group Limited by
4,5% to 41,9% with effect from 1 March 2013 for a purchase consideration of R314 million.
With effect from 26 September 2013, the group subscribed for additional share capital of $24,4 million
(R242,8 million) in its associate company, Empresas Carozzi. The subscription was in proportion to its
24,4% shareholding in the company. The capital injection was used to strengthen Carozzis balance sheet
following a number of capital projects to upgrade the companys manufacturing facilities and to increase
capacity. Since the acquisition of its shareholding in Carozzi in 1999, Carozzi has performed well and the
group has received dividends in excess to its original investment in the company.
GRAINS
The most significant contributor to operating income in the Grains segment is the Bakery business which
achieved a pleasing volume growth in a contracting market. Despite considerable pressure on raw material
input, labour and distribution costs in particular, the Bakeries business produced a strong increase in
operating income.
The Flour Milling business was able to grow volumes marginally in a contracting market. However, a
combination of aggressive competitor activity and a significant increase in raw material costs resulted
in lower margins and profitability.
The Maize business lost market share in a contracting market and margins were squeezed in a highly
competitive environment. The impact on profitability was exacerbated by an adverse procurement position
at the end of the first quarter.
The Sorghum beverage business was able to sustain satisfactory profitability notwithstanding the increase
in raw sorghum costs and a continuation of the long-term declining volume trend in this market. The sorghum
porridge offerings (King Korn, Mabela and Morvite), as well as Ace Instant, recorded good profit growth.
The Rice business achieved strong volume growth with volumes exceeding the levels of 2011 as pricing was
adjusted to reflect a more realistic premium to other rice offerings. As a consequence, the business
benefited from a much improved second half performance relative to the same period last year. The Thai
government has in the last quarter of 2013 lowered its level of support to rice farmers, although much of
this pricing benefit has been eroded by the recent depreciation of the rand. The decline in the premium
of Thai rice relative to Indian rice should allow for a modest expansion in margins going forward,
notwithstanding the increasing levels of competition in the premium rice segment.
Off the back of several successful innovation launches under the Jungle brand, the Oats business recorded
good volume growth and a satisfactory increase in operating income.
CONSUMER BRANDS
The Groceries business faced extremely tough trading conditions during the year, with intense pricing
competition, higher input costs and volume pressures having a significant impact on profitability.
Divisional turnover declined by 1,7% to R3,7 billion, whilst operating income fell by 33,1% to R361 million
due to volume pressures that arose from widening price differentials relative to aggressive competitor pricing
and also due to higher input costs which could not be fully recovered in the market. The financial performance for
the year was also negatively impacted by once-off costs relating to certain extraodinary stock write-offs,
unfavourable manufacturing variances and the effect of IR issues at the Boksburg site, totalling R44,7 million.
The business has heightened its focus on the containment of costs and the close management of price points.
As part of the strategic cost saving initiatives announced by the group earlier in the year, the business
embarked on two key supply chain optimisation projects to consolidate certain of its manufacturing facilities
at sites located closer to the raw materials supply sources, thereby resetting the cost base for certain
product lines. The full projected cost savings are expected to materialise in the 2015 financial year. These
projects should drive improved competitiveness on shelf and generate savings to support further innovation and
brand investment.
The Snacks & Treats business achieved a solid performance for the year, driven by pleasing volume growth and
a positive sales mix, as well as strong operational leverage resulting from manufacturing cost efficiencies.
The Beverages business achieved satisfactory volume growth for the year, which was primarily driven by the
Oros, Roses and Superjuice brands. However, sales mix and profitability were negatively affected by
short-term supply issues relating to Energade, stemming from the changes in the manufacturing architecture
implemented during the year.
In order to improve efficiencies and generate cost savings, the Beverages business has consolidated its
triple-factory manufacturing configuration into a single site with the closure of its Salt River and Phoenix
factories and the upgrade of its manufacturing plant at Roodekop. The new configuration became operational in
October 2013.
Despite a slowdown in the overall Value Added Meat Products category, the Enterprise business grew in both
volume and value terms within its core segments, benefiting from various strategic initiatives implemented
in the prior year.
The Out of Home business produced pleasing results for the year, driven by strong Christmas and Easter
festive season buy-ins by distributors, increased food hamper business as well as the take-on of new franchise
and contract catering customers.
The HPCB business delivered a modest top-line performance, which translated to a slightly lower operating
income for the year. The highly competitive market environment continued into 2013, with increased levels of
innovation, brand investment and aggressive pricing by competitors. The Baby care business continues to
perform well despite competitive pressures in the jarred baby food category. Innovation in this sector is high
and the group continues to successfully introduce new products and category extensions.
EXPORTS AND INTERNATIONAL
Haco Tiger Brands recorded pleasing performances across its key categories despite a subdued trading
environment pre and post the Kenyan general elections in March 2013. The company continues to successfully
pursue its regional exports growth strategy in East Africa with key markets being Tanzania, Uganda and
Ethiopia.
Chococam also delivered excellent growth across all its key categories in both domestic and export markets.
The company maintained its leading market share positions in chocolate spreads, chocolates, candies and gums
despite heightened competitor activities in these categories.
EATBI delivered strong results for the year, despite ongoing challenges across the supply chain. The strong
overall performance was driven mainly by excellent growth achieved in the higher margin Home and Personal Care
categories, which is expected to continue into 2014. Its leading positions in laundry soaps and detergents
were maintained during the year, despite sustained competitor activity in the form of cheap imports.
Global markets for canned deciduous fruit remained challenging in 2013. Langeberg & Ashton Foods volumes
declined marginally during the period in the face of intensely competitive pricing particularly from
European-based producers. Notwithstanding this, operating income grew by 60% partly assisted by the weak
rand.
The Export business enjoyed another successful year on the back of several consecutive years of sustained
growth. Strong volume growth was achieved although margins were compressed slightly as a result of the need
to maintain relative price points in key markets. The Export division continues to play a strong feeder and
development role for our chosen categories and brands as it successfully drives market penetration in both
existing and new geographies.
Davita has enjoyed a successful year and continues to deliver noteworthy volume performances in Southern
and West Africa in particular. The business has been successfully integrated into the Tiger Brands stable,
with the associated throughput and manufacturing efficiency programmes enabling the business to compete
effectively in key markets.
NIGERIA
With regard to DFM, the focus for the year has been on the integration and consolidation of the business. This
involved fixing a number of key elements of the business delivery platform to eliminate the duplication of
resources and to position the business for improved efficiencies into the future. Significant investment was
also made in the up-skilling of staff and the enhancement of the workplace environment. Revenue growth and a
meaningful improvement in the performance of the business remain the foremost deliverables for the year ahead.
Broadening the market universe and further improvements in the outbound logistics infrastructure are key thrusts
towards achieving these objectives.
Following a disappointing performance during the previous year, Deli Foods operating platform has remained
stable during the year under review. The prospects for the business remain exciting given the size of the
biscuit category as well as the opportunities for growth through product differentiation.
UAC Foods introduced additional capacity and implemented capabilities to improve manufacturing efficiencies.
Capital expenditure was invested towards doubling the capacity for snacks manufacturing, increasing the
end-of-line packing efficiencies and installing new capacity for spring water production. The additional
capacity further enables the drive for new innovative products that will be a key vector for stimulating
both volume and value growth.
OUTLOOK
Trading conditions are expected to remain challenging for the foreseeable future, with the ongoing weakness
in the domestic economy continuing to affect consumers spending ability. In this environment, competition
is expected to further intensify. Margin pressures are likely to persist due to volatile commodity prices,
fluctuating exchange rates and rising energy costs. The continued growth of the value sector in the domestic
market is likely to exert further pressure on premium brands.
Notwithstanding these challenges, the group is well positioned to compete more effectively as a result of
the various strategic initiatives currently being implemented. The brand preference for Tiger Brands products
remains high and will be strengthened through increased brand investment and innovation.
The performance of DFM is expected to improve over the next year. We are satisfied that DFM is positioned
appropriately in the right categories and that solid progress is being made in all key elements of the business.
The remaining international and export businesses are expected to continue to deliver good growth.
For and on behalf of the Board
André Parker Peter Matlare
Chairman Chief Executive Officer
19 November 2013
DECLARATION OF FINAL DIVIDEND NO 138
The Board has approved and declared a final dividend of 555 cents per ordinary share (gross) in respect of
the year ended 30 September 2013.
The dividend will be subject to the Dividends Tax that was introduced with effect from 1 April 2012. In
accordance with paragraphs 11.17 (a) (i) to (x) and 11.17(c) of the JSE Listings Requirements the following
additional information is disclosed:
The dividend has been declared out of income reserves;
The local Dividends Tax rate is 15% (fifteen per centum);
There are no Secondary Tax on Companies (STC) credits utilised;
The gross local dividend amount is 555 cents per ordinary share for shareholders exempt from the Dividends
Tax;
The net local dividend amount is 471,75 cents per ordinary share for shareholders liable to pay the
Dividends Tax;
Tiger Brands has 191,550,468 ordinary shares in issue (which includes 10 326 758 treasury shares); and
Tiger Brands Limiteds income tax reference number is 9325/110/71/7.
Shareholders are advised of the following dates in respect of the final dividend:
Last day to trade cum the final dividend Friday, 3 January 2014
Shares commence trading ex the final dividend Monday, 6 January 2014
Record date to determine those shareholders entitled to the final dividend Friday, 10 January 2014
Payment in respect of the final dividend Monday, 13 January 2014
Share certificates may not be dematerialised or re-materialised between Monday, 6 January 2014 and Friday,
10 January 2014, both days inclusive.
By order of the Board
IWM Isdale
Secretary
Sandton
19 November 2013
Condensed income statement
Audited Audited
Year ended Year ended
30 September 30 September
Rm 2013 2012
Turnover 27 003,5 22 677,0
Cost of sales (18 565,7) (14 465,9)
Gross profit 8 437,8 8 211,1
Sales and distribution expenses (3 143,4) (2 863,1)
Marketing expenses (649,9) (592,9)
Other operating expenses (1 572,1) (1 280,8)
Operating income before abnormal items 1 3 072,4 3 474,3
Abnormal items 2 (2,4) 4,8
Operating income after abnormal items 3 070,0 3 479,1
Finance costs (399,4) (191,0)
Interest received 20,6 52,8
Investment income 17,0 19,9
Income from associated companies 515,1 415,7
Profit before taxation 3 223,3 3 776,5
Taxation (833,7) (1 028,7)
Profit for the year from continuing operations 2 389,6 2 747,8
Profit for the year from discontinued operation 6 158,0 -
Profit for the year 2 547,6 2 747,8
Attributable to:
Owners of the parent 2 569,2 2 718,2
- Continuing operations 2 508,5 2 718,2
- Discontinued operation 60,7 -
Non-controlling interest (21,6) 29,6
- Continuing operations (118,9) 29,6
- Discontinued operation 97,3 -
Profit for the year 2 547,6 2 747,8
Basic earnings per share (cents) 1 608 1 707
- Continuing operations 1 570 1 707
- Discontinued operation 38 -
Diluted earnings per share (cents) 1 568 1 672
- Continuing operations 1 531 1 672
- Discontinued operation 37 -
Headline earnings per share (cents) 1 624 1 689
- Continuing operations 1 570 1 689
- Discontinued operation 54 -
Diluted headline earnings per share (cents) 1 584 1 654
- Continuing operations 1 531 1 654
- Discontinued operation 53 -
Headline earnings per share excluding DFM
Headline earnings per share (cents) 1 781 1 689
Diluted headline earnings per share (cents) 1 737 1 654
Statement of comprehensive income
Audited Audited
Year ended Year ended
30 September 30 September
Rm 2013 2012
Profit for the year 2 547,6 2 747,8
Other comprehensive income, net of tax* 492,6 51,1
Net loss on hedge of net investment in foreign operation (40,1) (5,0)
Foreign currency translation adjustments 512,5 (2,3)
Net (loss)/gain on cash flow hedges (57,3) 59,0
Net gain/(loss) on available for sale financial assets 53,0 (1,2)
Tax effect 24,5 0,6
Total comprehensive income for the year, net of tax 3 040,2 2 798,9
Attributable to:
Owners of the parent 2 935,8 2 769,3
Non-controlling interests 104,4 29,6
3 040,2 2 798,9
*Items that may subsequently be reclassified to profit or loss.
Condensed statement of financial position
as at 30 September 2013
Audited Audited
Year ended Year ended
30 September 30 September
Rm 2013 2012
ASSETS
Non-current assets 14 474,8 10 069,9
Property, plant and equipment 5 498,7 3 359,2
Goodwill 3 173,2 2 361,1
Intangible assets 2 251,4 1 651,0
Investments 3 413,3 2 654,7
Deferred taxation asset 138,2 43,9
Current assets 9 464,0 7 783,5
Inventories 4 652,7 3 657,3
Trade and other receivables 4 178,4 3 755,1
Cash and cash equivalents 632,9 371,1
Assets classified as held-for-sale 5 1 280,7 -
TOTAL ASSETS 25 219,5 17 853,4
EQUITY AND LIABILITIES
Issued capital and reserves 12 878,1 11 302,8
Non-controlling interests 1 028,4 392,7
TOTAL EQUITY 13 906,5 11 695,5
Non-current liabilities 2 284,1 935,8
Deferred taxation liability 398,8 294,0
Provision for post-retirement medical aid 432,6 406,8
Long-term borrowings 1 452,7 235,0
Current liabilities 8 330,3 5 222,1
Trade and other payables 3 987,6 3 256,6
Provisions 561,0 515,4
Taxation 131,5 132,3
Short-term borrowings 3 650,2 1 317,8
Liabilities directly associated with assets
classified as held-for-sale 5 698,6 -
TOTAL EQUITY AND LIABILITIES 25 219,5 17 853,4
Net debt 4 470,0 1 181,7
Condensed statement of cash flows
Audited Audited
Year ended Year ended
30 September 30 September
Rm 2013 2012
Cash operating profit 4 311,3 4 224,5
Working capital changes (337,2) (592,3)
Cash generated from operations 3 974,1 3 632,2
Finance cost net of dividends received (108,6) 57,6
Taxation paid (986,2) (1 057,6)
Cash available from operations 2 879,3 2 632,2
Dividends paid (1 426,1) (1 318,2)
Net cash inflow from operating activities 1 453,2 1 314,0
Purchase of property, plant and equipment (727,6) (480,3)
Proceeds from disposal of property, plant,
equipment and intangible assets 31,1 60,8
Acquisitions 4 (2 586,4) (316,4)
Other 1,1 3,5
Net cash outflow from investing activities (3 281,8) (732,4)
Proceeds from issue of share capital 17,8 24,0
Acquisition of minority shareholding in
Langeberg and Ashton Foods - (90,1)
Long and short-term borrowings raised/(repaid) 407,7 (230,8)
Other - 0,1
Net cash inflow/(outflow) from financing activities 425,5 (296,8)
Net (decrease)/increase in cash and cash equivalents (1 403,1) 284,8
Cash and cash equivalents transferred to assets
held-for-sale (20,4) -
Effect of exchange rate changes 64,6 (8,0)
Cash and cash equivalents at the beginning of
the period (735,0) (1 011,8)
Cash and cash equivalents at the end of the period (2 093,9) (735,0)
Cash resources 632,9 371,1
Short-term borrowings regarded as cash and cash
equivalents (2 726,8) (1 106,1)
(2 093,9) (735,0)
Other salient features
Audited Audited
Year ended Year ended
30 September 30 September
Rm 2013 2012
Capital commitments (R million)* 780,3 420,8
- contracted 372,2 104,5
- approved 408,1 316,3
Capital commitments will be funded from normal
operating cash flows and the utilisation of
existing borrowing facilities.
Capital expenditure (R million) 727,6 480,3
- replacement 540,3 303,0
- expansion 187,3 177,3
Contingent liabilities (R million)
- guarantees and contingent liabilities 78,8 18,7
Inventories carried at net realisable value 73,3 78,0
Write-down of inventories recognised as
an expense 125,3 43,5
*Excluding R922 million of capital expenditure proposed but not yet approved.
Condensed segmental information
Audited Audited
Year ended Year ended
30 September 30 September
Rm 2013 2012
Turnover
Domestic Operations 20 250,7 19 043,0
Grains 9 736,6 8 854,0
Milling and Baking 7 243,3 6 681,9
Other Grains 2 493,3 2 172,1
Consumer Brands 10 515,0 10 190,1
Groceries 3 706,6 3 771,7
Snacks & Treats 1 924,0 1 762,2
Beverages 1 020,3 990,3
Value Added Meat Products 1 584,4 1 450,2
Out of Home 402,7 350,6
Home, Personal care and Baby (HPCB) 1 877,0 1 865,1
Domestic intergroup sales (0,9) (1,1)
International & Exports 6 752,8 3 634,0
Exports and international* 3 944,0 3 244,0
Nigeria 2 808,8 390,0
Discontinued operation - Agrosacks 1 087,8 -
Total turnover 28 091,3 22 677,0
Operating income before abnormal items
Domestic Operations 2 881,6 3 023,3
Grains 1 632,7 1 731,7
Milling and Baking 1 396,2 1 472,9
Other Grains 236,5 258,8
Consumer Brands 1 395,2 1 522,2
Groceries 360,9 539,1
Snacks & Treats 304,1 266,9
Beverages 107,4 101,4
Value Added Meat Products 103,0 92,6
Out of Home 80,4 68,2
Home, Personal care and Baby (HPCB) 439,4 454,0
Other (146,3) (230,6)
International & Exports 190,8 451,0
Exports and international* 574,8 459,0
Nigeria (384,0) (8,0)
Discontinued operation Agrosacks 196,9 -
Total 3 269,3 3 474,3
* Excludes Nigerian businesses, comparatives restated accordingly.
Condensed statement of changes in equity
for the year ended 30 September 2013
Shares held by
subsidiary and
Share capital Non-distributable Accumulated empowerment
(Rands in millions) and premium reserves profits entities
Balance at 30 September 2011 69,7 1 189,2 10 978,6 (2 675,7)
Net profit - - 2 718,2 -
Other comprehensive income - 51,1 - -
69,7 1 240,3 13 696,8 (2 675,7)
Issue of shares 24,8 - - -
Acquisition of minority interest - (71,6) - -
Transfers between reserves - 240,2 (240,2) -
Share-based payment - - - -
Dividends on ordinary shares - - (1 314,1) -
Total dividends - - (1 483,9) -
Less: Dividends on empowerment shares - - 169,8 -
Sale of shares by empowerment entity - - - 0,1
Balance at 30 September 2012 94,5 1 408,9 12 142,5 (2 675,6)
Net profit - - 2 569,2 -
Other comprehensive income - 366,6 - -
94,5 1 775,5 14 711,7 (2 675,6)
Issue of shares 22,8 - - -
Acquisition of business - - - -
Transfers between reserves - 214,3 (214,3) -
Share-based payment - - - -
Dividends on ordinary shares - - (1 416,2) -
Total dividends - - (1 597,5) -
Less: Dividends on empowerment shares - - 181,3 -
Sale of shares by empowerment entity - - - 1,6
Balance at 30 September 2013 117,3 1 989,8 13 081,2 (2 674,0)
Condensed statement of changes in equity continued
for the year ended 30 September 2013
Total
attributable Non-
Share-based to owners controlling
(Rands in millions) payment reserve of the parent interests Total equity
Balance at 30 September 2011 298,0 9 859,8 385,7 10 245,5
Net profit - 2 718,2 29,6 2 747,8
Other comprehensive income - 51,1 - 51,1
298,0 12 629,1 415,3 13 044,4
Issue of shares - 24,8 - 24,8
Acquisition of minority interest - (71,6) (18,5) (90,1)
Transfers between reserves - - - -
Share-based payment 34,5 34,5 - 34,5
Dividends on ordinary shares - (1 314,1) (4,1) (1 318,2)
Total dividends - (1 483,9) (4,1) (1 488,0)
Less: Dividends on empowerment shares - 169,8 - 169,8
Sale of shares by empowerment entity - 0,1 - 0,1
Balance at 30 September 2012 332,5 11 302,8 392,7 11 695,5
Net profit - 2 569,2 (21,6) 2 547,6
Other comprehensive income - 366,6 126,0 492,6
332,5 14 238,6 497,1 14 735,7
Issue of shares - 22,8 - 22,8
Acquisition of business - - 541,2 541,2
Transfers between reserves - - - -
Share-based payment 31,3 31,3 - 31,3
Dividends on ordinary shares - (1 416,2) (9,9) (1 426,1)
Total dividends - (1 597,5) (9,9) (1 607,4)
Less: Dividends on empowerment shares - 181,3 - 181,3
Sale of shares by empowerment entity - 1,6 - 1,6
Balance at 30 September 2013 363,8 12 878,1 1 028,4 13 906,5
Notes
Audited Audited
Year ended Year ended
30 September 30 September
Rm 2013 2012
1. Operating income before abnormal items
Depreciation (included in cost of sales and other operating expenses) 640,1 425,6
Amortisation 47,4 19,5
IFRS 2 (included in other operating expenses)
- Equity settled 36,2 35,6
- Cash settled 98,0 142,1
2. Abnormal items
Acquisition cost (15,0) (25,3)
Profit on disposal of property, plant and equipment and intangibles 11,1 36,2
Impairment of property, plant and equipment - (0,9)
Write-off of intangible assets (2,9) -
Other 4,4 (5,2)
(2,4) 4,8
3. Reconciliation between profit for the year and headline earnings
Continuing operations
Profit for the year attributable to owners of the parent 2 508,5 2 718,2
Profit on disposal of property, plant and equipment and intangibles (3,0) (34,3)
Impairment of property, plant and equipment - 0,6
Write-off of intangible assets 2,9 -
Headline earnings adjustment - Associates
- Impairment of intangible assets - 5,9
- Profit on disposal of property, plant and equipment and intangible assets (0,9) (0,4)
Headline earnings for the year 2 507,5 2 690,0
Tax effect of headline earnings adjustments 2,3 5,3
Attributable to non-controlling interest (2,9) -
Discontinued operation
Profit for the year attributable to owners of the parent 60,7 -
Loss on disposal of property, plant and equipment 9,7 -
Loss on remeasurement to fair value of transfer of net asset to held-for-sale 16,3 -
86,7 -
Tax effect of headline earnings adjustments - -
Attributable to non-controlling interest (15,3) -
Headline earnings excluding DFM
Profit attributable to owners of the parent 2 508,5 2 718,2
Negative contribution from DFM 342,7 -
2 851,2 2 718,2
Profit on disposal of property, plant and equipment and intangible assets (7,9) (34,3)
Impairment of property, plant and equipment - 0,6
Write-off of intangible assets 2,9 -
Headline earnings adjustment - associates (0,9) -
2 845,3 2 684,5
Tax effect 2,4 5,3
Attributable to non-controlling interest - -
4. Business combinations and other acquisitions
The purchase consideration of acquisitons accounted for in terms of
IFRS 3 - Business combinations comprised the following:
Property, plant and equipment 2 370,8 2,5
Goodwill 646,3 -
Intangible assets 134,1 -
Inventories 868,0 5,7
Trade and other receivables 728,9 12,6
Cash and cash equivalents (32,4) -
Non-controlling interest (529,6) -
Borrowings (1 465,4) -
Deferred taxation (140,1) -
Trade and other payables (1 064,5) (10,3)
Taxation (31,1) -
Fair value of assets acquired 1 485,0 10,5
Amount owing from vendors 27,6 -
Cash and cash equivalents 32,4 -
Purchase consideration of business combinations 1 545,0 10,5
Other acquistions:
Acquisition of intangible assets 485,0 207,0
Increased investment in associate companies 556,4 97,1
Other acquistions and repayment of loans - 1,8
Total purchase consideration 2 586,4 316,4
On 4 October 2012, Tiger Brands acquired 63,35% of the issued share capital of Dangote Flour Mills Plc, a company based in
Nigeria and engaged mainly in the manufacturing of flour, pasta and noodles, for a purchase consideration of R1,5 billion.
Details of other acquisitions are discussed in the commentary.
5. Assets transferred to held-for-sale
Salt River factory held-for-sale 6,5 -
Assets related to Dangote Agrosacks Limited, held-for-sale 1 274,2 -
Assets classified as held-for-sale 1 280,7 -
The major classes of assets and liabilities of the Agrosacks business at the end of the reporting period are as follows:
Property, plant and equipment 561,1 -
Deferred asset 36,7 -
Inventories 243,6 -
Trade and other receivables 412,4 -
Cash and cash equivalents 20,4 -
1 274,2 -
Liabilities directly associated with assets classified as held-for-sale
Borrowings (199,0) -
Trade and other payables (491,3) -
Deferred liability (8,3) -
(698,6) -
Foreign currency translation reserve related to assets classified as (73,1) -
held-for-sale
Non-controlling interest related to assets classified as held-for-sale (129,4) -
Net assets of Dangote Agrosacks, classified as held-for-sale 373,1 -
The group intends to dispose of its Salt River factory, out of the Beverages operating segment, within the next 12 months.
No impairment loss was recognised on the reclassification of the factory as held-for-sale as the expected fair value less
cost to sell is higher than the carrying value.
The group plans to dispose of its subsidiary, Dangote Agrosacks Limited, out of the Nigerian operating segment, due to the
non-strategic fit within the Tiger Brands group, and anticipates that the disposal will be completed by December 2013. As
the expected fair value less cost to sell is lower than the carrying value, an impairment loss of R25,8 million has been
recognised on reclassification of the business as held-for-sale.
6. Analysis of profit from discontinued operation
The results of the discontinued operations included in the profit for the year are set out below:
Turnover 1 087,8 -
Expenses (890,9) -
Operating income before abnormal items 196,9 -
Loss on remeasurement to fair value on transfer of net assets to held-for-sale (25,8) -
Operating income after abnormal items 171,1 -
Finance costs (47,6) -
Profit before taxation 123,5 -
Taxation 34,5 -
Profit for the year from discontinued operation 158,0 -
Attributable to non-controlling interests (97,3) -
Attributable to owners of parent 60,7 -
Cash flows from discontinued operation
Net cash inflows from operating activities 266,1 -
Net cash outflows from investing activities (178,6) -
Net cash outflows from financing activites (227,8) -
Net cash outflows (140,3) -
The Dangote Agrosacks Limited business was acquired effective 4 October 2012 as part of the Dangote Flour Mills Plc
acquisition per note 4 and as a result there are no comparatives which require restatement. A decision was made to
dispose of the business during the year, resulting in Dangote Agrosacks Limited being classified and accounted for
at 30 September 2013 as a disposal group held-for-sale - refer note 5.
7. Preparation of results
The condensed results for the year ended 30 September 2013 have been prepared in accordance with IAS 34 - Interim Financial
Reporting - and the Listings Requirements of the JSE Limited. The principal accounting policies and methods of computation
are consistent with those used in the audited Annual Financial Statements for the year ended 30 September 2012.The preparation
of these results has been supervised by O Ighodaro, Chief Financial Officer of Tiger Brands Limited.
Ernst & Young Inc., Tiger Brands Limiteds independent auditors, have audited the consolidated annual financial statements
of Tiger Brands Limited from which the condensed consolidated financial results have been derived.
The auditors have expressed an unmodified audit opinion on the consolidated annual financial statements. The condensed
consolidated financial results comprise the condensed consolidated statement of financial position at 30 September 2013,
condensed consolidated statement of comprehensive income, condensed consolidated statement of changes in equity and condensed
consolidated statement of cash flows for the year then ended, and selected explanatory notes. Although derived from consolidated
annual financial statements, the condensed annual financial statements themselves have not been audited. The preparation of
the condensed financial statements are the responsibility of the directors and have been correctly extracted from the
underlying audited numbers.
The audit report of the consolidated annual financial statements is available for inspection at Tiger Brands Limiteds
registered office.
Independent non-executive directors
A C Parker (Chairman), B L Sibiya (Deputy Chairman), S L Botha,
R M W Dunne (British), K D K Mokhele, M P Nyama, R D Nisbet, M Makanjee, M J Bowman
Executive directors
P B Matlare (Chief Executive Officer), C F H Vaux,
O Ighodaro (Chief Financial Officer) (Nigerian)
Company Secretary
I W M Isdale
Sponsor: J.P. Morgan Equities South Africa (Pty) Ltd
Share registrars
Computershare Investor Services (Pty) Limited, 70 Marshall Street, Johannesburg, 2001
Postal address
PO Box 61051, Marshalltown, 2107, South Africa.
Telephone
(011) 370 5000
Tiger Brands Limited
Physical address:
Tiger Brands Limited, 3010 William Nicol Drive, Bryanston
Postal address:
PO Box 78056, Sandton, 2146, South Africa
Registration number 1944/017881/06
Incorporated in the Republic of South Africa
Share code: TBS ISIN:ZAE000071080
Telephone:
011 840 4000
Facsimile:
011 514 0477
Website: www.tigerbrands.com
Date: 20/11/2013 07:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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