Sharenet Sites 
Sharenet Sites
Interim results for 6 months September 2014 and dividend declaration
CROOKES BROTHERS LIMITED
Incorporated in the Republic of South Africa
Registration number 1913/000290/06
Share code: CKS
ISIN: ZAE000001434
STABILITY CONSISTANCY GROWTH
INTERIM RESULTS AND DIVIDEND DECLARATION
FOR THE SIX MONTHS ENDED SEPTEMBER 2014
COMMENTARY
The board again cautions against using interim results to project full year
earnings, due to the influence of seasonality of the various crop revenues
on profitability.
Earnings for the first half of the current financial year have been adversely
impacted by a number of factors which have collectively resulted in
profit for the period reducing by 81% to R9,3 million, compared to
R49,1 million in the previous corresponding period.
A significant portion of the earnings decline relates to the timing of
seasonal results and the recognition of biological asset valuations and
stock accruals, which are expected to reverse in the second half of the
financial year. Operating cash flows of R65,2 million are considered to
provide a better reflection of interim performance.
The adverse impact of these timing differences is compounded by weak
results from Swaziland and start-up challenges at the development
project in Mozambique.
The increase in revenue to R310,4 million (2013: R289,4 million) includes
the results of the High Noon deciduous fruit farm in the Western Cape
acquired in December 2013. The full year profit from this acquisition will
only be realised in the last six months ending 31 March 2015.
Sugar cane:
Unfavourable climatic conditions, disease, prolonged strikes and a
significantly lower sucrose price have adversely affected the performance
of the Swaziland cane operation, resulting in a decrease in operating
profit of R20,1 million. Weak sugar prices, as projected by the Swazi Sugar
Association for the medium term due to the phasing out and elimination
of the EU quota system by 2017, are a cause for concern.
Operating profit from the Zambian operation shows a decrease of
R4,2 million on the prior year as a result of the reduced ERC (estimated
recoverable crystals) price in Rand terms and rising dollar denominated
input costs.
The South African operations in aggregate realised an improvement in
operating profits of R5,2 million due to an increased RV (relative value) price
and higher yields.
Bananas:
The completion of the large scale banana replant has continued to
yield positive results in terms of both production volumes and quality.
Operating profit has improved by R2,6 million compared to the previous
corresponding period.
Deciduous fruit:
Profits for the six-month period ended 30 September 2014 were R11 million
lower than the corresponding period last year, largely due to the timing
of stock accruals. This operation continues to experience good growth
with the acquisition of High Noon, the maturing of replanted orchards
and the benefit of good prices due to the weak Rand.
Other crops (Mozambique):
Due to adverse weather conditions during harvest and start-up challenges
experienced in the development phase of the estate, revenue from the
initial cash crop trials was lower than expected.
PROSPECTS
The group continues to seek expansion and acquisition opportunities in
South and Southern Africa in line with its long term strategy, with several
major projects in various phases of evaluation.
Substantial projects in progress are:
- Gurue, Mozambique: macadamias and cash crops
Despite initial setbacks, development of the group's 3 200 hectare
property located near Gurue in northern Mozambique has
maintained momentum during the period under review. The
upgrading and construction of infrastructure is largely complete and
the project is fully staffed. The project is still on track to establish
700 hectares of macadamias and a range of cash crops in
accordance with the development programme. In time, this
operation is expected to become a major contributor to group
profits;
- Renishaw property development
This project is progressing with the recent approval of the
environmental impact assessment and submission of an application
to rezone 442 hectares of land for phased residential and
commercial development.
CHANGES TO THE BOARD
Xola Sithole was appointed as a non-executive director of the company with
effect from 30 May 2014 and Guy Wayne retired as the Chairman on 1 August 2014.
INTERIM CASH DIVIDEND DECLARATION
The board is mindful of conserving cash to fund future growth. Taking
into account the increased capital investment requirements of the group,
as well as the muted prospects for the Swaziland sugar cane price, the
board has decided to reduce the interim dividend for the current
financial year.
A gross interim cash dividend of 65,0 cents (2013: 80,0 cents) per share,
for the six-month period ended 30 September 2014, has been declared
payable to shareholders recorded in the register of the company at the
close of business on the record date, Friday, 9 January 2015.
In respect of the gross interim cash dividend the following further
information is provided:
- The dividend has been declared from income reserves;
- There are no secondary tax on companies (STC) credits available for
utilisation;
- The dividend withholding tax rate is 15% resulting in a net dividend
of 55,25 cents per share to those shareholders who are not exempt
from the dividend withholding tax;
- The company's tax reference number is 9696/001/71/9; and
- The issued number of shares as at declaration date is 12 576 817.
The interim dividend will be paid on Monday, 12 January 2015 to
shareholders recorded in the register of the company at close of business
on the record date Friday, 9 January 2015.
The salient dates of the declaration and payment of these dividends are
as follows:
Last day to trade cum-dividend Friday, 2 January 2015
Shares commence trading ex-dividend Monday, 5 January 2015
Record date Friday, 9 January 2015
Payment date Monday, 12 January 2015
Share certificates may not be dematerialised or re-materialised between
Monday, 5 January 2015 and Friday 9 January 2015, both days inclusive.
Any reference to the group’s future financial performance included in this
announcement has not been reviewed nor reported on by the company’s auditors.
For and on behalf of the board
J R Barton G S Clarke
Chairman Managing Director
Renishaw 2 December 2014
Registered office Transfer secretaries
and postal address Computershare Investor Services (Pty) Ltd
Renishaw, KwaZulu-Natal PO Box 61051,
PO Box Renishaw, Marshalltown, 2107
KwaZulu-Natal, 4181
Sponsor Website
Sasfin Capital www.cbl.co.za
(a division of Sasfin Bank Limited)
Directors:
J R Barton* (Chairman), G S Clarke (Managing), P J Barker (Financial),
P Bhengu*, C J H Chance*, J A F Hewat*, P Mnganga*, M T Rutherford*,
R E Stewart*, G Vaughan-Smith*(#), X S Sithole*, T Denton*(#) (alternate).
*Non-executive director (#)British
Company secretary:
Highway Corporate Services (Pty) Limited
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS
Unaudited Unaudited Audited
Six months to Six months to 12 months to
30 September 30 September 31 March
2014 2013* 2014
R'000 R'000 R'000
Continuing operations
Revenue 310 406 266 922 439 019
Operating profit 14 543 52 481 90 765
Share of profit of associate companies – – 1 121
Dividend income – 72 78
Net finance costs (note 1) (2 293) (75) (112)
Capital items – – 7 430
Profit before tax 12 250 52 478 99 282
Tax expense (2 906) (11 025) (19 692)
Profit for the period from continuing operations 9 344 41 453 79 590
Discontinued operations
Profit for the period from discontinued operations – 7 617 123 107
Profit for the period 9 344 49 070 202 697
Profit from continuing and discontinued operations attributable to:
Owners of the company 8 434 47 076 201 146
Non-controlling interests 910 1 994 1 551
9 344 49 070 202 697
Earnings per share from continuing and discontinued operations:
Basic (cents) 67,2 375,2 1 609,0
Diluted (cents) 66,2 372,4 1 580,4
Earnings per share from continuing operations:
Basic (cents) 67,2 314,5 633,1
Diluted (cents) 66,2 312,1 621,9
Headline earnings per share:
Basic (cents) 66,0 372,5 676,8
Diluted (cents) 65,0 369,7 664,7
Dividends per share:
Interim (cents) 65 80 80
Final (cents) – – 160
* Re-presented to account for discontinued operations.
CONDENSED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
Unaudited Unaudited Audited
Six months to Six months to 12 months to
30 September 30 September 31 March
2014 2013* 2014
R'000 R'000 R'000
Net profit for the period 9 344 49 070 202 697
Other comprehensive income 1 895 8 669 342
Items that will not be reclassified to profit or loss, net of tax:
Remeasurement of defined benefit asset/obligation – – 4 746
Remeasurement of post-retirement medical obligation – – 1 231
Items that may be reclassified subsequently to profit or loss, net of tax:
Net fair value (loss)/gain on available-for-sale financial assets (18) 1 338 2 052
Reclassification adjustments on available-for-sale financial assets 28 – (7 430)
Exchange differences on translating foreign operations 1 885 7 331 (257)
Total comprehensive income for the period 11 239 57 739 203 039
Total comprehensive income from continuing and discontinued operations
attributable to:
Owners of the company 10 329 55 745 201 488
Non-controlling interests 910 1 994 1 551
11 239 57 739 203 039
* Re-presented to account for discontinued operations.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
30 September 30 September 31 March
2014 2013 2014
R'000 R'000 R'000
ASSETS
Non-current assets 747 890 515 933 680 148
Property, plant and equipment 503 555 327 781 460 961
Bearer biological assets 218 280 171 004 192 883
Unlisted investments 842 613 979
Investment in associate companies 18 683 15 310 18 681
Retirement benefit surplus 5 990 – 5 990
Unsecured loan: long term 540 1 225 654
Current assets 322 974 361 658 345 722
Inventories 21 435 19 140 52 808
Biological assets: crops and livestock 134 818 140 598 190 762
Trade and other receivables 127 574 81 134 55 171
Taxation 2 987 – –
Other financial assets 17 314 55 025 14 636
Cash and cash equivalents 18 845 27 719 28 847
Unsecured loan: short term – 253 3 498
322 974 323 869 345 722
Assets classified as held for sale – 37 789 –
Total assets 1 070 863 877 591 1 025 870
EQUITY AND LIABILITIES
Capital and reserves 760 860 629 021 763 778
Share capital and premium 13 008 12 109 12 109
Retained earnings 736 180 590 442 742 804
Investment revaluation reserve 1 068 7 774 1 058
Foreign currency translation reserve 6 731 12 435 4 846
Share-based payment reserve 792 720 792
Shareholders' interest 757 780 623 480 761 609
Outside shareholders in subsidiaries 3 080 5 541 2 169
Non-current liabilities 206 671 175 582 178 535
Deferred taxation 109 551 90 827 107 199
Long-term borrowings: interest-bearing 43 022 11 518 19 955
Long-term liability: interest free 44 789 59 052 41 763
Post-employment obligations 9 310 14 185 9 618
Current liabilities 103 332 72 988 83 557
Trade, other payables and provisions 43 328 35 303 39 856
Short-term borrowings 59 503 30 625 34 178
Outside shareholder's loans 501 441 470
Taxation – 6 619 9 053
Total equity and liabilities 1 070 863 877 591 1 025 870
Net asset value per share 6 050 5 013 6 087
Number of shares
In issue 12 576 817 12 546 817 12 546 817
Weighted average (basic) 12 551 079 12 452 424 12 501 154
Weighted average (diluted) 12 747 079 12 641 424 12 727 154
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
Six months to Six months to 12 months to
30 September 30 September 31 March
2014 2013* 2014
R'000 R'000 R'000
Operating profit from continuing operations 14 543 52 481 90 765
Operating profit from discontinued operations – 10 775 16 063
Other comprehensive income – – 8 301
Depreciation 14 522 10 032 24 953
Change in biological assets 35 903 10 837 (65 806)
Other non-cash items 197 1 967 (5 043)
Operating cash flows before movements in working capital 65 165 86 092 69 233
Net (outflow) from changes in working capital (37 558) (44 865) (49 782)
Finance costs (3 263) (1 739) (4 538)
Taxation paid (13 333) (3 968) (16 781)
Net cash flows from operating activities 11 011 35 520 (1 868)
Net investing activities
Net proceeds on redemption/(purchase) of investments 116 – 42 533
Consideration on disposal of property, plant and equipment 1 080 530 142 779
Other net investment activities (56 475) (46 798) (214 345)
Net cash flows before dividends and financing activities (44 268) (10 748) (30 901)
Dividends paid (15 056) (10 916) (20 953)
Proceeds from issue of share capital 899 – –
Net increase in borrowings 48 423 12 763 44 081
Net (decrease) in cash and cash equivalents (10 002) (8 901) (7 773)
Cash and cash equivalents at beginning of period 28 847 36 620 36 620
Cash and cash equivalents at end of period 18 845 27 719 28 847
* Re-presented to account for discontinued operations.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
Six months to Six months to 12 months to
30 September 30 September 31 March
2014 2013 2014
R'000 R'000 R'000
Balance at beginning of period 763 778 582 198 584 549
Share-based payment reserve movement – – 72
Total comprehensive income for the period 11 239 57 739 203 040
Dividends declared (15 056) (19 816) (29 853)
Share issue/scrip dividend 899 8 900 8 900
Change in non-controlling shareholding – – (2 930)
Total equity 760 860 629 021 763 778
CONDENSED CONSOLIDATED SEGMENTAL ANALYSIS
Unaudited Unaudited Audited
Six months to Six months to 12 months to
30 September 30 September 31 March
2014 2013* 2014
R'000 R'000 R'000
Revenue
Sugar cane 186 650 191 690 270 811
Bananas 34 295 21 385 66 408
Deciduous fruit 80 308 47 790 90 605
Other operations 7 566 6 057 11 195
Revenue from continuing operations 310 406 266 922 439 019
Discontinued operations – 22 497 51 400
310 406 289 419 490 419
Operating profit
Sugar cane 43 391 62 195 88 728
Bananas 2 168 (409) 6 871
Deciduous fruit (5 901) 5 807 38 617
Other operations/sundry income (3 450) 2 048 7 124
Group administration (21 573) (17 160) (50 575)
Operating profit from continuing operations 14 543 52 481 90 765
Discontinued operations – 10 635 16 063
14 543 63 116 106 828
* Re-presented to account for discontinued operations.
CONDENSED CONSOLIDATED NOTES
Unaudited Unaudited Audited
Six months to Six months to 12 months to
30 September 30 September 31 March
2014 2013 2014
R'000 R'000 R'000
1. NET FINANCE COSTS
Interest paid (3 263) (1 739) (4 538)
Interest received 970 1 664 4 426
(2 293) (75) (112)
2. HEADLINE EARNINGS
Profit for the period attributable to owners of the company 8 434 47 076 201 146
Adjusted for:
Gain on disposal of shares – – (7 430)
Tax effect of the disposal of shares – – (19)
Loss on disposal of subsidiary – – 2 815
Capital profit on disposal of property, plant and equipment – – (126 168)
Profit on disposal of plant and equipment (212) (435) (230)
Tax effect of the adjustments 59 99 14 489
Headline earnings 8 281 46 740 84 603
3. CAPITAL ITEMS
Capital expenditure
– Incurred 55 697 45 701 201 973
Capital commitments
– Contracted 20 936 21 529 11 183
– Authorised but not contracted 24 195 39 126 89 644
45 130 60 655 100 827
4. GUARANTEES AND CONTINGENT LIABILITIES
Guarantees 56 56 56
Contingent liabilities – 931 –
5. EXCHANGE RATES
Rand/US Dollar closing 11,16 9,96 10.74
Rand/US Dollar average 10,58 9,28 10,12
Rand/Metical closing 0,36 0,34 0,34
Rand/Metical average 0,34 0,32 0,33
Rand/Kwacha closing 1,80 1,90 1,69
Rand/Kwacha average 1,70 1,80 1,84
6. BASIS OF PREPARATION AND ACCOUNTING POLICIES
The condensed consolidated unaudited results for the half-year ended 30 September 2014 have been prepared in accordance with
the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS),
the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, Financial Reporting Pronouncements as
issued by the Financial Reporting Standards Council, the information as required by International Accounting Standard 34 Interim
Financial Reporting and the requirements of the Companies Act of South Africa, as amended.
The report has been prepared using accounting policies that comply with IFRS which are consistent with those applied in the financial
statements for the year ended 31 March 2014 and were prepared by Mr B D Penney CA(SA) under the supervision of the Group
Financial Director, Mr P J Barker BA, ACMA, CGMA.
Crookes Brothers Limited has adopted all the new or revised accounting pronouncements as issued by the IASB which were effective
for Crookes Brothers Limited from 1 January 2014. The adoption of these standards had no recognition and measurement impact on
the financial results.
www.cbl.co.za
2 December 2014
Sponsor
SASFIN CAPITAL (A DIVISION OF SASFIN BANK LIMITED)
Date: 02/12/2014 05:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
