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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)
Share code: ARL ISIN: ZAE000029757
("the group")
INTERIM RESULTS AND DIVIDEND DECLARATION
for the six months ended 31 March 2003
* Revenue increase 22%
* Operating profit increase 44%
* Headline earnings per share increase 34%
* Interim dividend increase 23%
* Net debt:equity ratio down to 6%
Consolidated Income Statements
Unaudited Audited
Six months ended Year ended
31 March 31 March 30 Sept
2003 2002 % 2002
R"000 R"000 change R"000
Revenue 2 066 287 1 687 704 22 3 692 129
Operating profit (note 1) 166 460 115 701 44 219 647
Net finance costs (12 575) (9 282) (22 157)
Income from associate - 4 823 4 823
Profit before tax 153 885 111 242 38 202 313
Taxation (49 346) (35 139) (62 061)
Profit after tax 104 539 76 103 37 140 252
Minority interests (1 113) (799) (1 721)
Net profit for the period 103 426 75 304 37 138 531
Headline earnings for the period 101 594 75 709 34 140 032
Calculation of headline earnings
Net profit for the period 103 426 75 304 138 531
Profit on sale of interests
in a subsidiary (2 430) - -
Profit on sale of plant and equipment (404) (195) (2 092)
Amortisation of goodwill 1 002 600 1 200
Write-off of loan - - 2 393
Headline earnings for the period 101 594 75 709 140 032
Weighted average number of
ordinary shares for
- basic earnings per share 42 854 663 42 924 000 42 916 475
- diluted earnings per share 46 206 263 46 287 500 46 268 075
Number of shares in issue 42 840 573 42 924 000 42 866 780
Basic earnings per share (cents)
- Earnings per share 241,3 175,4 38 322,8
- Headline earnings per share 237,1 176,4 34 326,3
Diluted earnings per share (cents)
- Earnings per share 226,4 165,5 37 307,7
- Headline earnings per share 222,5 166,4 34 310.9
Dividend per share (cents) 58,0 47,0 23 108,0
Net asset value per share (cents) 1 246,1 977,1 28 1 078,7
Consolidated Balance Sheets
ASSETS
Non-current assets 487 352 414 355 490 180
Property, plant and equipment 460 476 364 170 468 995
Goodwill 16 304 6 840 17 026
Investments and loans 10 572 30 378 4 159
Deferred tax - 12 967 -
Current assets 789 549 732 399 898 601
Inventories 333 669 279 472 358 089
Receivables and pre-payments 437 482 439 975 512 038
Cash and cash equivalents 18 398 12 952 28 474
Total assets 1 276 901 1 146 754 1 388 781
Equity and liabilities
Capital and reserves 533 815 419 426 462 417
Issued capital 264 769 266 038 265 206
Reserves 269 046 153 388 197 211
Minority interests 7 908 - 4 195
Non-current liabilities 136 108 101 298 140 557
Long-term borrowings 6 663 - 14 856
Deferred tax 79 405 60 106 80 012
Post-retirement medical aid
obligations 50 040 41 192 45 689
Current liabilities 599 070 626 030 781 612
Trade and other payables 525 329 505 389 624 542
Provision for tax 31 516 33 700 40 624
Short term borrowings 42 225 86 941 116 446
Total equity and liabilities 1 276 901 1 146 754 1 388 781
Consolidated Cash Flow Statements
Cash operating profit 200 227 140 407 287 415
Working capital changes (1 409) 4 437 8 713
Capital investment to maintain
operations (14 797) (20 227) (52 649)
Cash generated from operations 184 021 124 617 243 479
Finance costs (12 575) (9 292) (22 157)
Tax paid (58 718) (37 542) (50 910)
Dividends paid (25 862) (23 179) (43 376)
Cash inflow from operating
activities 86 866 54 604 127 036
Net cash outflow to investing
activities (9 591) (33 430) (104 629)
Net cash outflow to financing
activities (82 414) (24 199) (14 710)
Net increase in cash and cash
equivalents (5 139) (3 025) 7 697
Effects of exchange rate changes (4 937) 1 281 105
Cash from acquisition of subsidiaries - - 5 976
Cash and cash equivalent balances
at beginning of period 28 474 14 696 14 696
Cash and cash equivalent balances
at end of period 18 398 12 952 28 474
Statements of Changes in Equity
Balance beginning of period 462 417 366 020 366 020
Profit for period 103 426 75 304 138 531
Movement in currency differences
during period (5 442) 1 281 2 051
Dividends (26 149) (23 179) (43 353)
Decrease in share capital as result
of buy-back of shares (437) - -
Net decrease in share capital as
result of odd-lot offer - - (832)
Balance at end of period 533 815 419 426 462 417
Segmental Reporting
Revenue
Animal feed - South Africa 1 386 244 1 160 729 2 521 862
Animal feed - Other Africa 53 264 93 719 166 759
Poultry 1 097 791 712 544 1 721 432
Inter-segment (471 012) (279 288) (717 924)
2 066 287 1 687 704 3 692 129
Operating profit
Animal feed - South Africa 67 211 48 645 130 725
Animal feed - Other Africa 1 375 4 233 (1 149)
Poultry 97 874 62 823 90 071
166 460 115 701 219 647
Notes
1. Operating profit
The following items have been
accounted in the operating profit:
Depreciation on property, plant
and equipment 33 229 23 417 57 283
Profit on sale of interest
in business unit 2 430 - -
Amortisation of goodwill 1 002 600 1 200
2. Accounting policies
The unaudited results for the period have been prepared in accordance with AC
127 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 at 30 September 2002.
Financial Overview
The group reported a gratifying increase in headline earnings by 34% to R102
million (2002: R76 million).
Revenue increased by 22% to R2 066 million (2002: R1 688 million), operating
profit increased by 44% to R166 million (2002: R116 million) whilst net margins
improved from 6,9% to 8,1%.
Net financing costs of R13 million were up from the previous period"s R9
million, mainly due to the National Chick Limited acquisition, effective April
2002.
The tax rate of 32,1% was up on the previous period"s 31,6% due to last
year"s utilisation of STC credits carried over from previous years.
The group"s balance sheet was further strengthened with net asset value per
share of 1 246 cents (2002: 977 cents). The group"s solid cash generation was
demonstrated by a net cash inflow from operating activities of R87 million
(2002: R55 million). The net debt/equity ratio was down from 22% at September
2002 to 6%.
Operational Overview
Animal Feed division
The anticipated drop in the maize price occurred in the period under review
as the perceived shortages of maize did not materialise. This together with the
strengthening of the Rand, caused the Safex year-on-year spot prices of yellow
maize to drop substantially from R1 420/ton to R860/ton on 31 March compared to
the marginal decrease in average prices over the corresponding period of R1
380/ton to R1 305/ton. The full effect of the reduced maize prices has not yet
been passed on to producers due to the delay caused by stockholdings in the
production process.
Animal Feeds"s operating profits increased by 26% following good procurement
strategies and a continuation of strict margin management. Operating margins
improved from 4,2% to 4,8%. The group continued to import maize for its coastal
operations due to higher local prices.
Poultry division
Revenue increased by 54% to R1 098 million (2002: R713 million) and operating
profits by 56% to R98 million (2002: R63 million). This was mainly due to the
consolidation of National Chicks (previously equity accounted), as well as the
full effect of the additional processing of 134 000 birds per week following the
lease of the Paarl Poultry facility from 1 June 2002. Following the
disappointing second half of the previous year this division made a strong
turnaround in the first half of this year, resulting in operating margin being
maintained at the same level as the corresponding period the previous year. The
improvement was due to increased realisations of 12% and better production and
processing efficiencies. Imports of poultry meat during the latter part of the
period resulted in an oversupply in the market and a softening in realisations.
Prospects
A reasonably stable Rand around current levels will translate into lower feed
related costs with welcome relief on present margins. General expectations are
that interest rates and inflation will reduce, resulting in increased consumer
confidence and spending. Accordingly, satisfactory earnings growth against the
comparable period is expected for the remainder of the year.
Declaration of Ordinary Dividend No. 5
Notice is hereby given that an interim dividend of 58 cents per ordinary
share has been declared in respect of the financial period ended 31 March 2003.
Last date to trade cum-dividend Friday, 11 July 2003
Shares commence trading ex-dividend Monday, 14 July 2003
Record date Friday, 18 July 2003
Payment of dividend Monday, 21 July 2003
Share certificates may not be dematerialised or rematerialised between Monday,
14 July 2003 and Friday, 18 July 2003, both days inclusive.
On behalf of the board
J L van den Berg N C Wentzel
Chairman Managing director
Pretoria
22 May 2003
Registered office:
Block E, Castle Walk Office Park
Erasmuskloof, Pretoria
Postnet 329, Private Bag X10
Elarduspark, 0047
Telephone: 012-347-5077
Transfer secretaries:
Computershare Investor Services Limited
PO Box 1053
Johannesburg, 2000
Telephone: 011-370-5000
Website address: www.astralfoods.com
Sponsor:
HSBC Investment Services (Africa) (Pty) Limited
HSBC Place, 6 - 9 Riviera Road, Houghton, 2198
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: 22/05/2003 07:00:10 AM Supplied by www.sharenet.co.za
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