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ASTRAL FOODS LTD
(Incorporated in the Republic of South Africa)
(Registration number 1978/003194/06)
Share code: ARL ISIN: ZAE000029757
("Astral Foods" or "the company")
AUDITED RESULTS
for the year ended 30 September 2001
* Revenue increase 14% to R2,8 billion
* Net debt : equity ratio down to 26% from 84%
* Operating profit margin 7,3%
* Economic value added R56 million
* Headline earnings per share increase 29%
* Annual dividend 90 cents per share
Consolidated Balance Sheet
Audited Pro forma
Year ended Year ended
30 Sept 2001 30 Sept 2000
Note R'000 R'000
Assets
Non-current assets 382 697 373 116
Property, plant and equipment 334 191 336 490
Goodwill 4 7 440 -
Investments and loans 28 099 24 112
Deferred tax 12 967 12 514
Current assets 644 622 611 570
Inventories 218 428 193 482
Receivables and
pre-payments 411 498 394 702
Cash and cash equivalents 14 696 23 386
Total assets 1 027 319 984 686
Equity and Liabilities
Capital and reserves 2 366 020 266 034
Issued capital 266 038 266 034
Reserves 99 982 -
Minority interest 46 (2 733)
Non-current liabilities 102 058 115 840
Interest bearing borrowings 760 1 669
Deferred tax 60 106 75 615
Post-retirement medical
aid obligations 41 192 38 556
Current liabilities 559 195 605 545
Trade and other payables 411 431 336 613
Short-term borrowings 110 380 243 829
Provision for tax 37 384 14 803
Provision for dividends - 10 300
Total equity and liabilities 1 027 319 984 686
Consolidated Income Statement
Revenue 2 792 490 2 441 594
Operating profit 203 190 173 554
Finance costs (34 976) (39 763)
Exceptional items - 1 327
Income from associates 5 466 -
Profit before tax 173 680 135 118
Income tax expense (58 758) (43 550)
Profit after tax 114 922 91 568
Minority interest (799) (584)
Profit for year 114 123 90 984
Headline earnings for year 3 116 523 90 336
Number of ordinary shares
in issue and on which headline
earnings and net earnings per
share are based 42 924 000 42 924 000
Net earnings per share (cents) 265,9 212,0
Headline earnings per share (cents) 271,5 210,5
Net asset value per share (cents) 852,7 619,8
Consolidated Cash Flow Statement
Cash operating profit 241 458
Working capital changes 35 328
Capital investment to
maintain operations (18 443)
Cash generated from operations 258 343
Finance costs (34 976)
Tax paid (43 873)
Dividends paid (25 730)
Cash inflow from operating activities 153 764
Net cash outflow from investing
activities (29 280)
Net cash outflow to financing
activities (134 332)
Net decrease in cash and
cash equivalents (9 848)
Effects of exchange rate changes 1 158
Cash and cash equivalent
balances at beginning of year 23 386
Cash and cash equivalent
balances at end of year 14 696
Segmental Reporting
Operating Total Depre-
Revenue profit assets ciation
Rm Rm Rm Rm
2001 audited
Animal feed -
South Africa 1 840,6 75,3 452,8 9,8
Animal feed -
Other Africa 141,9 4,1 65,8 2,0
Poultry 1 269,3 123,8 551,3 31,4
Inter-segment (459,3) (50,1)
2 792,5 203,2 1 019,8 43,2
2000 pro forma
Animal feed -
South Africa 1 687,0 97,4 474,8 8,3
Animal feed -
Other Africa 81,7 7,2 59,8 1,0
Poultry 1 072,8 68,9 555,0 28,3
Inter-segment (399,9) (104,9)
2 441,6 173,5 984,7 37,6
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
2001 financial statements as compared with the pro forma financial
statements as at 30 September 2000, with the exception of the calculation of
cost of sales, more fully described in the results section.
Audited Pro forma
Year ended Year ended
30 Sept 2001 30 Sept 2000
R'000 R'000
2.Changes in equity
Balance beginning of year -
pro forma 266 034
Profit for year 114 123
Movement in foreign exchange
differences 1 312
Interim dividend paid (15 453)
Reverse excess provision for share
issue expenses 4
Balance at end of year 366 020
3. Calculation of headline earnings
Profit for the year 114 123 90 984
(Profit)/Loss on sale of operations 23 (1 011)
(Profit)/Loss on sale of plant
and equipment (834) 271
Debt restructuring costs 750 -
Share of associate's headline earnings
adjustment 1 221 -
Amortisation of goodwill 1 240 -
Other - 92
Headline earnings for year 116 523 90 336
4. Goodwill
Goodwill arose during the year as a result of a fair value adjustment in
the respect of the net assets as at 30 September 2000. Goodwill is amortised
over 10 years.
5. 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 group was not constituted at 30 September 2000
and due to the change in the capital structure, the cash flow statement is
not given.
Results
The group's operating profit of R203,2 million is 17,1% up on the pro
forma result of R173,5 million.
The group operating profit margin of 7,3% is up on last year's 7,1% as a
result of an excellent performance by poultry. This division, which has now
become the dominant profit generator, contributes 39% (2000: 38%) of total
revenue but 61% (2000: 40%) of operating profit.
Poultry operating profit of R123,8 million (2000: R68,9 million) was
supported by continued improvements during the second half of the year.
Operating margins for the year at 9,8% are the same as at the interim level
but well up on last year's 6,4%. Realisations continue to be at higher
levels than the previous year with volumes up 3% in spite of capacity
constraints in County Fair.
The animal feeds division's results for the second half of the year of
R41,8 million are up on the first half's R37,6 million. The operating profit
margin for the year of 4,1% is at the same level as for the first half. The
4% loss of volumes experienced during the first half was recovered during
the second half with overall volumes for the year attaining the same level
as the previous year. However, operating profits and margins for the full
year were down on the previous year. Trading conditions were difficult due
to an industry over-capacity and the high cost of imported raw materials
following the weakening of the Rand. In addition, the treatment of deemed 30-
day settlement discount from raw material suppliers was previously disclosed
as part of cost of sales, resulting in an overstatement of operating profits
and margins in the prior year if compared to the current year.
Profit before taxation of R5,5 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 net financing cost of R35,0 million is down on the pro forma figure
of R40,0 million of the prior year due to the reduction in debt.
The tax rate of 33,9% (2000: 32,2%) includes an amount of R7,0 million
Secondary Tax on Companies in respect of dividends paid by joint venture
Earlybird Farm (Pty) Ltd.
Headline earnings for the year of R116,5 million represents earnings of
271,5 cents per share and 29% up on the 2000 pro forma results.
Much effort was put into the strengthening of the group's balance sheet.
New 30-day supply agreements were negotiated, which together with the strong
internally generated funds, enabled the reduction of the net debt level from
R221,1 million to R96,5 million.
Capital expenditure was R42,3 million, of which R23,9 million was spent
on expansion projects.
Expansion
Astral Foods recently made an offer to acquire, through a scheme of
arrangement, all the remaining shares in National Chick Limited in addition
to its existing 34,9% shareholding. The outstanding matter before the
transaction can be concluded is the decision of the Competition Commission,
which is expected by 7 December 2001. Further expansion of capacity is
envisaged to satisfy growing consumer demand.
Prospects
Raw material costs are expected to remain high during the coming year.
The growth trend in poultry consumption is expected to continue and this,
together with further improvements in production efficiencies, should
contribute to results. The animal feeds division is expected to further
benefit from steps taken to improve profitability. Reduced interest costs
should further enhance profits. These factors should contribute to real
earnings growth in the year ahead.
Declaration of ordinary Dividend no 2
Notice is hereby given that a final dividend of 54 cents per ordinary
share has been declared in respect of the year ended 30 September 2001.
In compliance with the requirements of STRATE, the electronic settlement
and custody system used by the JSE Securities Exchange South Africa, the
company has determined the following timetable:
Last day to trade cum-dividend and
to qualify for the dividend Friday, 11 January 2002
Shares commence trading ex-dividend Monday, 14 January 2002
Record date by which settlement of trade
has to be made Friday, 18 January 2002
Payment of dividend Monday, 21 January 2002
Certificated shareholders will not be permitted to dematerialise their
share certificates between Monday, 7 January 2002 and Friday, 18 January
2002, both days inclusive.
On behalf of the board
J L van den Berg N C Wentzel
Chairman Managing director
Pretoria
22 November 2001
Registered office
Block E, Castle Walk Office Park, Erasmuskloof, Pretoria.
Postnet 329, Privatebag X10, Elarduspark, 0047
Telephone: 012-347-5077 Website address: www@astralfoods.com
Directors
J L van den Berg (Chairman), *N C Wentzel (Managing director),
#T Pritchard (Financial director) *M A Kingston, J J Geldenhuys, E M
Groeneweg, C G van Veyeren (*Executive director) (#Company secretary)
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