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Astral Foods Limited - Audited Results for the year ended 30 September 2004
Astral Foods Limited
(Incorporated in the Republic of South Africa)
(Registration number 1978/003194/06)
Share code: ARL
ISIN: ZAE000029757
("the Group")
AUDITED RESULTS for the year ended 30 September 2004
* Revenue up 3% to R4,1 billion
* Operating profit up 19% to R389 million
* Headline earnings per share up 30% to 631 cents
* Annual dividend up 37% to 230 cents
Consolidated Income Statement
Audited Audited
Year ended Year ended
30 Sept 2004 30 Sept 2003 Change
R"000 R"000 %
Revenue 4 053 142 3 947 030 3
Operating profit (note 5) 388 979 327 050 19
Net interest received/(paid) 1 339 (15 218)
Profit before tax 390 318 311 832 25
Tax (126 070) (101 936)
Net profit for year 264 248 209 896 26
Minority interests 1 845 1 708
Attributable profit
to ordinary shareholders 262 403 208 188 26
Earnings per share (cents) 630.2 487.1 29
Headline earnings
per share (cents) 631.4 486.5 30
Diluted earnings per share (cents) 603.3 456.3 32
Diluted headline earnings
per share (cents) 604.6 455.4 33
Dividends per share (cents)
- declared out of the earnings
for year 230.0 168.0 37
Net asset value per
share (Rand) 17.36 14.34 21
Shares in issue
- net of treasury shares
- (note 7) 41 654 032 42 260 903
Weighted average shares
in issue
- net of treasury shares 41 640 015 42 742 565
Consolidated Balance Sheet
ASSETS
Non- current assets 823 653 504 753
Property, plant and equipment 689 789 475 996
Goodwill 117 033 18 374
Loans 6 715 7 526
Deferred tax 10 116 2 857
Current assets 1 014 424 823 423
Inventories 199 592 137 267
Biological assets 202 778 146 401
Receivables and pre- payments 568 016 471 675
Cash and cash equivalents 44 038 68 080
Total assets 1 838 077 1 328 176
EQUITY AND LIABILITIES
Capital and reserves 764 828 614 695
Issued capital 258 590 261 455
Reserves 496 363 344 409
Ordinary shareholders" interest 754 953 605 864
Minority interests 9 875 8 831
Non- current liabilities 207 181 132 130
Long-term liabilities 2 748 2 742
Deferred tax 142 965 77 689
Post-retirement medical
aid obligations 61 468 51 699
Current liabilities 866 068 581 351
Trade and other payables 590 022 525 395
Provision for tax 77 232 49 659
Short- term borrowings 198 814 6 297
Total equity and liabilities 1 838 077 1 328 176
Net interest bearing
borrowings (cash) 157 524 (59 041)
Consolidated Cash Flow Statement
Cash operating profit 470 664 412 607
Working capital changes (57 041) 12 571
Cash generated from operations 413 623 425 178
Interest received/(p aid) 1 339 (15 218)
Tax paid (105 137) (90 415)
Dividends paid (79 539) (50 644)
Cash inflow from operating
activities 230 286 268 901
Net cash outflow to investing
activities (406 817) (88 812)
Net cash inflow for year (176 531) 180 089
Net cash inflow/ (outflow) from
financing activities 155 362 (133 687)
Net increase in cash and cash
equivalents (21 169) 46 402
Effects of exchange rate changes (2 873) (6 796)
Cash and cash equivalent balances
at beginning of year 68 080 28 474
Cash and cash equivalent balances
at end of year 44 038 68 080
Statement of Changes in Equity
Balance beginning of year 608 226 466 612
Change in accounting policy:
AC 137 - Agriculture 6 469 6 796
Balance beginning of year
- restated 614 695 473 408
Profit for year 264 24 8 209 896
Movement in currency translation
difference during year (3 348) (7 454)
Dividends paid during year (79 591) (51 130)
Shares issued 4 923 -
Decrease in share capital
as result of
buy - in of shares (36 099) (12 005)
Disposal of interests
in subsidiaries - 1 980
Balance end of year 764 828 614 695
Segmental Reporting
R"m R"m
Revenue
Animal Nutrition 2 703,2 2 681,0
Poultry 2 284,7 2 167,0
Inter-group (934,8) (901,9)
4 053,1 3 947,0
Operating profit
Animal Nutrition 151,4 153,4
Poultry 237,6 174,1
389,0 327,5
Notes
1. Audit review
PricewaterhouseCoopers Inc. has audited the comprehensive financial statements
from which the summarised results were derived as well as the summarised
announcement of annual results contained herein. The unqualified audit reports
on the comprehensive financial statements and the summarised financial results
are available for inspection at the Group"s registered office.
2. Accounting policies
The financial statements of the Group are prepared in accordance with and
comply with South African Statements of Generally Accepted Accounting
Practice.
The financial statements are prepared under the historical cost convention, as
modified by the restatement of certain financial instruments and biological
assets to fair value. The accounting policies of the Group are consistent in
all material respects with those applied in the previous financial year,
except for the adoption of the new agriculture accounting standard, AC 137,
which is effective for the 2004 financial year.
The carrying value of the biological assets has been based on the fair value
less point-of - sale costs for those assets - previously stated at cost.
2004 2003
R"000 R"000
3. Comparative figures
The comparative figures have been restated
to take into account the effects of the new
agriculture statement (AC 137), as follows:
Increase opening balance of equity 6 469 6 796
Increase/(Decrease) in net profit 488 (327)
4. Commitments
Capital expenditure commitments 9 242 39 111
Operating lease commitments 125 747 142 469
5. Operating profit
The following items have been accounted
for in the operating profit:
Auditors" remuneration 2 406 2 346
Amortisation of goodwill 3 405 2 000
Depreciation on property,
plant and equipment 71 247 6 6 744
Operating lease payments 23 499 20 333
Directors" remuneration 8 832 6 969
Profit on sale of interests
in business units - 2 726
6. Reconciliation to headline earnings
Net profit for year 262 403 208 188
Profit on sale of interest
in business units - (2 726)
Profit on sale of property,
plant and equipment (137) (1 580)
Amortisation of goodwill 3 405 2 000
(Recovery)/Write - off of loans (2 736) 2 048
Headline earnings for year 262 935 207 930
7. Share capital
In terms of a share buy- back programme 1 238 871 (2003: 605 877) shares were
acquired by a subsidiary of Astral Foods Limited at a total cost of R36,1
million (2003: R12,0 million). In terms of the Group"s share incentive scheme,
632 000 (2003: nil) options were exercised
Financial overview
The Group reported another strong financial performance with headline earnings
per share up 30%. Dividends declared out of reported earnings for the year
increased by 37% to 230 cents per share.
Revenue increased by 3% to R4,1 billion (2003: R3,9 billion) whilst sales
volumes for the Group increased by 1%.
Operating profit for the year increased by 19% from R327 million to R389
million. Poultry remains the major contributor to operating profit at R238
million (61%) whilst Animal Nutrition contributed R151 million (39%). Group
operating margins were at an all time high of 9,6%, well up on 2003 (8,3%).
Net finance income of R1,3 million was earned, compared to the previous year
when the Group paid interest of R15,2 million.
The Group acquired the remaining 50% of Earlybird. The results of this company
were fully consolidated from 1 September 2004. The Group invested a further
R142 million (2003: R80 million) in capital expenditure of which R78 million
(2003: R47 million) was on expanding current facilities. For the past three
years the Group has consistently re- invested in its existing businesses to
ensure they keep abreast with new technology and are maintained in good
working order. Net asset value per share increased by 21% from R14,34 to
R17,36.
Return on equity was at a satisfactory 35% (2003: 34%). Economic value added
improved from R119 million to R134 million based on a weighted average cost of
capital of 15%.
The financial structure of the Group remains sound with the net debt : equity
ratio at 21% (2003: ungeared). Working capital levels increased following the
acquisition of Earlybird.
Operational overview
Animal Nutrition Division
The past year was characterised by increasing raw material prices in the first
half followed by decreasing prices in the second half. This trend was the
result of anticipated world shortages of key raw materials driven by demand
from China. The US produced a record maize and soya crop and this, together
with an above average local crop and the strong Rand, resulted in lower local
prices. Realisations for animal feed followed this trend. The bearishness of
the markets resulted in fewer procurement opportunities becoming available.
As a result of the above operating margins reduced slightly from 5,7% to 5,6%.
Operating profit of R151 million was consequently down from last year"s R153
million. The strong Rand supported imports and reduced exports of agricultural
products with a resultant further market consolidation with smaller producers
exiting. Volumes for the year increased by 1%.
Meadow maintained its market leadership and share of the various market
segments. The animal feed industry was static for the third consecutive year
with growth of less than 1%.
Poultry Division
Turnover of the poultry operations increased by 5% from R2,2 billion to R2,3
billion. Earlybird"s results were proportionally (50%) consolidated for eleven
months and fully consolidated for the month of September 2004. Sales volumes
increased by 3% despite of below average farming performances experience d at
County Fair. Much effort has been put into rectifying this situation and
improved results have been observed towards the end of the financial year.
Poultry operating profit increased by 36% from R174 million to R238 million
whilst margins improved from 8,0% to 10,4%. The major reason for this record
performance was a reduction in feed cost of 8% compared to the prior year. For
the second consecutive year poultry supply and demand were in balance and at
no stage did significant industry stock levels distort this situation. Sales
of poultry meat benefited from increased consumer spending at the expense of
cheaper staple foods. Average realisations increased by 2%.
Prospects
The year ahead will again be characterised by weather conditions. This,
coupled with the normal uncertainty about the crop yield as well as the
USD/ZAR exchange rate, will pose a challenge for the Group to procure its raw
materials at market competitive prices.
The increased disposable income in the hands of consumers will ensure
continuing demand for the Group"s poultry products and this, together with the
Earlybird acquisition, should lead to improved results.
Declaration of ordinary dividend No. 8
Notice is hereby given that dividend No. 8 of 150 cents per ordinary share has
been declared in respect of the financial year ended 30 September 2004.
2005
Last date to trade cum-dividend Friday, 7 January
Shares commence trading ex-dividend Monday, 10 January
Record date Friday, 14 January
Payment of dividend Monday, 17 January
Share certificates may not be dematerialised or rematerialised between Monday,
10 January 2005 and Friday, 14 January 2005, both days inclusive.
On behalf of the board
J L van den Berg N C Wentzel
Chairman Chief Executive Officer
Pretoria
17 November 2004
Country Fair
Earlybird Farm
CAL Labs
Ross
Nutec Explicit Nutrition
Meadow
AVS
National Chicks
Registered office
Block E, Castle Walk Office Park
Erasmuskloof, Pretoria
Postnet 329, Private Bag X10, Elarduspark, 0048
Telephone: (012) 347-5077
Website address: www.astralfoods.com
Directors
J L van den Berg (Chairman),
*N C Wentzel (Chief Executive Officer),
*#T Pritchard (Financial Director) *M A Kingston,
J J Geldenhuys, E M Groeneweg,
C G van Veyeren, M Macdonald, T C C Mampane
(*Executive director) (# Company secretary)
Transfer secretaries
Computershare Investor Services 2004 (Pty) Ltd
PO Box 61051, Marshalltown 2107
Johannesburg 2000
Telephone: 011-370-5000
Sponsor
Cazenove South Africa (Pty) Ltd
PO Box 412468
Craighall, 2024
Telephone: 011-280-7938
Date: 18/11/2004 07:13:29 AM Supplied by www.sharenet.co.za
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