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CBH - Country Bird Holdings Limited - Country Bird Holdings reports 2010
annual financial results
Country Bird Holdings Limited
www.cbhltd.co.za
Country Bird Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number: 2005/008505/06
ISIN: ZAE000094835
JSE Share code: CBH
("CBH" or "the group")
COUNTRY BIRD HOLDINGS REPORTS 2010 ANNUAL FINANCIAL RESULTS
Country Bird Holdings Limited (CBH), South Africa`s third largest poultry
producer, reported a 9% increase in revenue to R2,43 billion (2009: R2,24
billion) for the year to 30 June 2010. Gross profit increased by 8% to R274,4
million (2009: R253.9 million). Operating profit of R122,2 million was
achieved for the year ended 30 June 2010, which when compared to last year`s
figure of R186,6 million is a decline of 35%. However, after stripping out the
effects of the sale of Elite and the net effect of the fair value adjustments
of Sovereign Foods (Sovereign) in 2009 and 2010 the reduction is 11,5% which
given the industry`s overall market conditions is satisfactory.
The Group sold its 22,7% interest in Sovereign once it became clear it would
not be able to fulfil its strategic objective with regard to the Sovereign
investment. The Sovereign shareholding was acquired during the previous
financial year with a view to building a more substantial poultry producer
with a national footprint.
The South African poultry division reported an 8% increase in volumes sold for
the period. This, together with a 9% improvement in the cost of feed and
substantial improvements in operational efficiencies, was more than offset by
the 8% reduction in realisations over last year. The non-recurring items
mentioned above and in note two to the condensed consolidated financial
statements were accounted for in Supreme Poultry (Supreme), and after
stripping them out the adjusted operating profit for the period was R102,9
million versus R120,9 million - a drop of 15%.
CFO Robbie Taylor says Supreme`s financial performance does not do justice to
its very solid operating performance in raising internal efficiencies and its
productivity gains across the board. "Supreme is now a very competitive low
cost producer in terms of food conversion ratios, on-farm mortalities and
carcass yields. At the same time the focus has been to improve animal welfare
practices and maintain the highest standards in hygiene monitoring to continue
our supply of the most discerning markets."
Nutri Feeds reported an improvement of 16,2% in volumes sold for the period
under review. The bearish trend on the maize prices translated to a 5% drop in
selling prices and the combined effect was a 10,3% increase in turnover. Nutri
Feeds was able to contain costs effectively during the year through efficient
procurement - essentially, remaining short on maize at a time when Safex grain
prices were falling - and through internal efficiencies. Internal sales (to
Supreme Poultry) account for 65% of the volume sold from Nutri Feeds.
The Africa Poultry division, comprising a grandparent breeding operation in
Zambia and a parent breeding and broiler operation in Botswana, reported a
loss of R5,2 million, while revenues also decreased by 14,3% in very difficult
trading conditions. Taylor says the African Poultry operations are returning
to profitability and some restructuring and strategic acquisitions are under
consideration.
Animal Nutrition Africa, comprising the new mills in Zambia and Botswana, is
on target for penetration into these markets, and operations in these
businesses are running smoothly. The re-establishment of a key customer`s
Botswana poultry abattoir that had burnt down is under way but this has
resulted in reduced feed sales in Botswana for the period. Revenues for the
combined operations were flat at R190,6 million (2009: 190,8 million) but
operating profit has increased 26,3% to R10,8 million (2009: R8,6 million).
In the red meat business, the efficiency and rationalisation improvement
programmes continue successfully in a very difficult trading environment. New
product launches and penetration into new markets have seen volumes increase
by 11% and realisations increase by 50% giving a total increase in turnover of
67% to R294,0 million (2009: R175,7 million). However, margins remain under
intense pressure and there was an operating loss for the period of R1,0
million (2009: R3,2 million profit).
Looking forward, Taylor says realisations for the poultry industry for the
medium term will remain under pressure from weak demand and higher levels of
imported poultry brought about by the strong Rand. Continued efficient grain
procurement, further improvements in operational efficiencies and cost control
should result in improved operating margins, whilst on the marketing side,
focus will remain on driving exports and the quick service restaurant
business. A key market, exports to Zimbabwe, was lost for a period whilst the
borders were closed to poultry imports, but these sales have resumed in
August.
A final capital distribution of 1.47 cents per share has been declared for the
year.
About Country Bird Holdings Limited (CBH)
CBH, which listed on the JSE in May 2007, is a holding company incorporating
integrated poultry, stock feed and beef businesses in South Africa, operating
as Supreme Poultry, Nutri Feeds and Long Iron Meats, as well as poultry
breeding and broiler operations in the southern African region, operating as
Ross Africa and Master Farmer. CBH is currently active in South Africa,
Botswana and Zambia.
Issued for: Country Bird Holdings Limited (CBH)
Contact: Robbie Taylor, Group Financial Director: 011 778 0658 / 082 809
9506
Fax No: 086 660 0917
Email: Robbie@countrybird.co.za
Website: www.cbhltd.co.za
Issued by: Tish Stewart Corporate and Investor Communications
Contact Tish Stewart: 082 4436399 / 011 442 5536
Fax No: 011 447 9317
Email: tishstewart@mweb.co.za
Date: 20 August 2010
20 August 2010
Sponsor:
Investec Bank Limited
Date: 20/08/2010 16:01:06 Supplied by www.sharenet.co.za
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