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Astral Foods Limited - Interim Results And Dividend Declaration
ASTRAL FOODS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1978/003194/06)
JSE Share code: ARL
ISIN Code : ZAE000029757
("Astral Foods" or "the company")
* Revenue up 27%
* Operating profit up 17%
* Operating margin down 7%
* Headline earnings per share up 39%
* Dividends up 31%
INTERIM RESULTS AND DIVIDEND DECLARATION
for the six months ended 31 March 2002
Consolidated Balance Sheets
Unaudited Audited
Six months ended Year ended
31 March 31 March 30 Sept
2002 2001 2001
Note R`000 R`000 R`000
Assets
Non-current assets 414 355 356 627 382 697
Property plant and equipment 364 170 328 385 334 191
Goodwill 6 840 - 7 440
Investments and loans 30 378 28 242 28 099
Deferred tax 12 967 - 12 967
Current assets 732 399 657 422 644 622
Inventories 279 472 202 729 218 428
Receivables and prepayments 439 975 427 596 411 498
Cash and cash equivalents 12 952 27 097 14 696
Total assets 1 146 754 1 014 049 1 027 319
Equity and Liabilities
Capital and reserves 419 426 323 404 366 020
Issued capital 266 038 266 034 266 038
Reserves 153 388 57 370 99 982
Minority interests - (2 259) 46
Non-current liabilities 101 298 107 046 101 298
Deferred tax 60 106 68 490 60 106
Post-retirement
medical aid obligations 41 192 38 556 41 192
Current liabilities 626 030 585 858 559 955
Trade and other payables 505 389 354 566 411 431
Short-term borrowings 86 941 220 469 111 140
Provision for tax 33 700 10 823 37 384
Total equity and liabilities 1 146 754 1 014 049 1 027 319
Consolidated Income Statements
Revenue 1 687 704 1 328 227 2 792 490
Operating profit 2 115 701 98 829 203 190
Net finance costs (9 282) (19 851) (34 976)
Income from associate 4 823 2 976 5 466
Profit before tax 111 242 81 954 173 680
Taxation (35 139) (26 778) (58 758)
Profit after tax 76 103 55 176 114 922
Minority interests (799) (681) (799)
Net profit for the period 75 304 54 495 114 123
Headline earnings for the period 75 709 54 366 116 523
Calculation of headline earnings
Net profit for the period 75 304 54 495 114 123
Loss on sale of operations - - 23
Profit on sale of plant and equipment (195) (129) (834)
Debt restructuring costs - - 750
Share of associate`s headline earnings
adjustment - - 1 221
Amortisation of goodwill 600 - 1 240
Headline earnings for the period 75 709 54 366 116 523
Weighted average number of ordinary
shares for
- basic earnings per share 42 924 000 42 924 000 42 924 000
- diluted earnings per share 46 287 500 42 924 000 46 287 500
Number of shares in issue 42 924 000 42 924 000 42 924 000
Basic earnings per share (cents)
Earnings per share 175,4 127,0 265,9
Headline earnings per share 176,4 126,7 271,5
Diluted earnings per share (cents)
Earnings per share 165,5 127,0 251,4
Headline earnings per share 166,4 126,7 256,6
Net asset value per share (cents) 977,1 753,4 852,7
Consolidated Cash Flow Statements
Cash operating profit 140 407 119 533 241 458
Working capital changes 4 437 (24 188) 35 328
Capital investment
to maintain operations (20 227) (12 067) (18 443)
Cash generated from operations 124 617 83 278 258 343
Finance costs (9 292) (19 851) (34 976)
Tax paid (37 542) (24 387) (43 873)
Dividends paid (23 179) (10 300) (25 730)
Cash inflow
from operating activities 54 604 28 740 153 764
Net cash outflow
from investing activities (33 430) - (29 280)
Net cash outflow
to financing activities (24 199) (25 029) (134 332)
Net decrease in cash and
cash equivalents (3 025) 3 711 (9 848)
Effects of exchange rate changes 1 281 - 1 158
Cash and cash equivalent balances
at beginning of period 14 696 23 386 23 386
Cash and cash equivalent balances
at end of period 12 952 27 097 14 696
Statement of changes in Equity
Unaudited Audited
Six months ended Year ended
31 March 31 March 30 Sept
2002 2001 2001
R`000 R`000 R`000
Balance beginning of period 366 020 266 034 266 034
Profit for the period 75 304 54 495 114 123
Movement in foreign exchange
differences 1 281 2 875 1 312
Dividend paid (23 179) - (15 453)
Reverse excess provision for
share issue expenses - - 4
Balance at end of period 419 426 323 404 366 020
Segmental Reporting
Revenue
Animal feed - South Africa 1 160 729 863 069 1 840 582
Animal feed - Other Africa 93 719 60 118 141 944
Poultry 712 544 617 610 1 269 340
Inter segment (279 288) (212 570) (459 376)
Total 1 687 704 1 328 227 2 792 490
Operating profit
Animal feed - South Africa 48 645 33 704 75 217
Animal feed - Other Africa 4 233 3 881 4 153
Poultry 62 823 61 244 123 820
Total 115 701 98 829 203 190
Notes
1. Accounting policies
The results for the period have been prepared on the historical cost
basis and in compliance with South African Generally Accepted Accounting
Practice. The same accounting policies and method of computations are
followed in the interim financial statements as compared with the financial
statements as at 30 September 2001.
2. Operating profit
The following items have been charged to the operating profit:
Depreciation on property, plant
and equipment 23 417 20 808 43 202
Amortisation of goodwill 600 - 1 240
Group overview
Operating margins of 6,9% were down on the previous year`s 7,4%, a direct
result of the drastic increase in raw material prices following the sharp
decline in the value of the rand against the US Dollar. Spot prices of the
group`s major input cost, yellow maize, increased by 70% in the past year to
R1,470/ton after touching a high of R1,801/ton in January 2002. The impact
of these increases was partly sheltered by procurement strategies, forward
contracts and hedging mechanisms.
The Animal Feed division benefited from these strategies as well as the
realisation of restructuring and operational steps implemented during the
past 18 months. Operating profit of this division increased by 40,7% in
spite of almost static margins at 4,2% (2001: 4,1%). The inability of the
Animal Feed division timeously to pass on the high raw material prices was
partly offset by increased volumes due to competitors withdrawing from the
market.
The Poultry division felt the brunt of the high feed prices and in spite
of a 4% volume increase, was not fully able to pass these increased costs on
to customers. The operating profit of this division increased by 2,6% whilst
margins reduced from 9,9% to 8,8%, in spite of the best production
efficiencies ever recorded. The low operating structure of the Poultry
division has improved further and underpins an otherwise excellent
performance.
The increase in group operating profits by 17,1% from R98,8 million to
R115,7 million during difficult trading conditions demonstrates the
balancing effect on the results of the two divisions.
The net finance cost of R9,3 million was substantially lower than the
previous year`s R19,9 million due to the new supply agreements entered into
with key raw material suppliers during the second half of 2001, as well as
strong internally generated funds.
The group`s 34,9% share in associate National Chick Limited generated a
healthy profit before taxation of R4,8 million (2001: R3,0 million).
The tax rate of 31,6% is slightly down on the previous year`s 32,7%.
Headline earnings for the interim period of R75,7 million (2001: R54,4
million) represents 176,4 cents (2001: 126,7 cents) per share, an increase
of 39,2% on the previous year.
The balance sheet was further strengthened. Net borrowings were reduced
by a further R22,5 million to R74,0 million, resulting in a net debt :
equity ratio of 17,6%. Working capital days improved from last year`s 36
days (September 2001: 24 days) to 20 days.
Capital expenditure of R53,5 million compares with full 2001 year`s R47,7
million. Expansion capital expenditure includes R27,7 million to address the
capacity constraints in County Fair. Capital expenditure of R21,2 million
has been approved but is not yet recognised in the financial statements.
Post balance sheet event
The Competition Tribunal gave its conditional approval to the National
Chick Limited acquisition on 2 April 2002. The company is currently
implementing the Scheme of Arrangement. Although the effective date of the
transaction is 1 October 2001, Generally Accepted Accounting Practice
dictates that the full results of this company can only be recorded as
income from the date of acquiring control, being 2 April 2002.
Prospects
For the remainder of this year and especially the next three months,
margins will be subjected to further pressure. This situation is expected to
improve when the new season`s maize prices come into effect. Consequently,
it is expected that the growth in the second half of the year will not match
that of the first half, but real earnings growth will still be achieved.
Declaration of Ordinary Dividend No 3
Notice is hereby given that an interim dividend of 47 cents per ordinary
share has been declared in respect of the financial period ended 31 March
2002.
The following timetable will apply:
Last date to trade cum-dividend Friday, 12 July 2002
Shares commence trading ex-dividend Monday, 15 July 2002
Record date Friday, 19 July 2002
Payment of dividend Monday, 22 July 2002
Share certificates may not dematerialised or rematerialised between Monday,
8 July 2002 and Friday, 19 July 2002, both days inclusive.
On behalf of the board
J L van den Berg N C Wentzel
Chairman Managing director
Pretoria
22 May 2002
Registered office
Block E, Castle Walk Office Park,
Erasmuskloof, Pretoria
Postnet 329, Private Bag X10, Elarduspark, 0047
Telephone: 012-347-5077
Website address: www@astralfoods.com
Transfer secretaries
Computershare Investor Services Limited
PO Box 1053, Johannesburg, 2001
Telephone: 011-370-5000
Sponsor
ING Bank N.V. South Africa Branch
2 Merchant Place, Fredman Drive, Sandton, 2196
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)
Date: 23/05/2002 07:01:00 AM Produced by the SENS Department
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