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Astral Foods Limited - Unaudited Interim Results and Dividend Declaration for

Release Date: 16/05/2006 08:00
Code(s): ARL
Wrap Text

Astral Foods Limited - Unaudited Interim Results and Dividend Declaration for the six months ended 31 March 2006 Astral Foods Limited ("Astral Foods") Registration number: 1978/003194/06 JSE Code: ARL & ISIN: ZAE000029757 Unaudited Interim Results and Dividend Declaration for the six months ended 31 March 2006 Operating profit increase 54% Headline earnings per share increase 60% Interim dividend increase 88% Condensed Income Statement Restated Restated Unaudited Unaudited Unaudited 6 months 6 months 12 months ended ended ended
31 March 31 March 30 Sept Change 2006 2005 2005 % R"000 R"000 R"000 Revenue 4 2 432 759 2 331 298 4 613 287 Operating profit (note 54 414 445 268 318 596 709 4) Net interest 2 381 (7 948) (11 323) received/(paid) Profit before income 60 416 826 260 370 585 386 tax Income tax expense for (135 524) (78 179) (169 852) the period Profit for the period 54 281 302 182 191 415 534 Attributable to: Minority interests 59 3 256 2 050 5 292 Equity holders of the 54 278 046 180 141 410 242 company Earnings per share (cents) - basic 60 693 432 989 - diluted 63 674 413 961 Additional Information Headline earnings 54 277 551 179 906 397 466 (R"000) Headline earnings per share (cents) - basic 60 692 432 958 - diluted 63 673 412 932 Dividend per share (cents) - declared out of earnings for the period 88 225 120 380 Ordinary shares - Issued net of 39 632 41 516 40 569 treasury shares 174 365 574 - Weighted-average 40 128 41 653 41 482 845 141 050 - Diluted weighted- 41 239 43 636 42 668 76 average 073 513 Condensed Balance Sheet Restated Restated Unaudited Unaudited Unaudited 6 months 6 months 12 months
ended ended ended 31 March 31 March 30 Sept 2006 2005 2005 R"000 R"000 R"000
Assets Non-current assets 1 031 974 887 478 977 606 Property, plant and equipment 889 989 748 585 833 477 Goodwill 123 548 121 053 123 548 Intangible assets 16 130 11 053 17 434 Investments and loans 2 307 6 787 2 284 Deferred income tax assets - - 863 Current assets 943 138 883 348 918 307 Inventories 190 630 172 904 155 200 Biological assets 193 438 207 548 198 474 Trade and other receivables 486 358 465 531 499 100 Cash and cash equivalents 72 712 37 365 65 533 Total assets 1 975 112 1 770 826 1 895 913 Equity and liabilities Capital and reserves 1 081 070 919 614 983 192 Issued capital 206 697 258 004 253 765 Reserves 857 062 643 992 712 838 Equity holders of the 1 063 759 901 996 966 603 company"s interest Minority interests 17 311 17 618 16 589 Non-current liabilities 229 475 226 315 209 278 Long-term liabilities 10 239 1 720 1 759 Deferred income tax liability 156 897 163 098 146 095 Post-employment medical aid 62 339 61 497 61 424 obligations Current liabilities 664 567 624 897 703 443 Trade and other liabilities 635 785 549 113 642 254 Current income tax liabilities 25 901 913 58 965 Short-term borrowings 2 881 74 871 2 224 Total equity and liabilities 1 975 112 1 770 826 1 895 913 Net cash/(debt) 59 592 (39 226) 61 550 Condensed Cash Flow Statement Restated Restated Unaudited Unaudited Unaudited 6 months 6 months 12 months ended ended ended
31 March 31 March 30 Sept 2006 2005 2005 R"000 R"000 R"000 Cash operating profit 458 657 302 930 659 817 Working capital changes (24 187) 86 955 170 466 Cash flows from operating 434 470 389 885 830 283 activities Interest received/(paid) 2 381 (7 948) (11 323) Tax paid (157 670) (141 892) (196 055) Net cash generated from 279 181 240 045 622 905 operating activities Net cash outflow to investing (97 769) (42 272) (154 863) activities Net cash inflow for the period 181 412 197 773 468 042 Shares issued 921 1 324 8 209 Buy-back of shares (79 434) (17 379) (140 675) Dividends paid (106 291) (64 915) (117 180) - own equity (103 757) (64 015) (112 009) - minorities (2 534) (900) (5 171) Increase/(decrease) in 9 137 (124 971) (197 624) borrowings Net increase/(decrease) in 5 745 (8 168) 20 772 cash and cash equivalents Effects of exchange rate 1 434 252 (520) changes Cash and cash equivalent 65 533 45 281 45 281 balances at beginning of year Cash and cash equivalent 72 712 37 365 65 533 balances at end of period Condensed Statement of Changes in Equity Restated Restated Unaudited Unaudited Unaudited
6 months 6 months 12 months ended ended ended 31 March 31 March 30 Sept 2006 2005 2005
R"000 R"000 R"000 Balance beginning of year as 915 371 764 828 764 828 previously stated Revised depreciation on 61 280 46 642 46 642 property, plant and equipment Full consolidation of 6 541 5 908 5 908 partnership Restated balance beginning of 983 192 817 378 817 378 year Profit for the period 281 302 182 191 415 534 Movement in currency 1 446 917 19 translation difference during the period Dividends paid during the (106 357) (63 917) (117 273) period Decrease in equity as result (79 434) (17 379) (140 675) of buy-back of shares Shares issued 921 1 324 8 209 Balance at end of period 1 081 070 920 514 983 192 Segmental Information Restated Restated Unaudited Unaudited Unaudited 6 months 6 months 12 months ended ended ended
31 March 31 March 30 Sept Change 2006 2005 2005 % R"m R"m R"m Revenue Animal Nutrition (7) 1 244 1 331 2 516 Poultry 12 1 838 1 639 3 356 Inter group (649) (639) (1 259) 4 2 433 2 331 4 613
Operating profit Animal Nutrition 11 121 109 224 Poultry 84 293 159 373 54 414 268 597
Notes 1. Basis of preparation The financial statements of the Group are prepared for the first time under the International Financial Reporting Standards (IFRS) for the year ending 30 September 2006, and accordingly, comparative figures have been restated. The Group has made the following elections in terms of IFRS 1 (First-time Adoption of International Financial Reporting Standards) as at the transition date (1 October 2004): * Cumulative translation losses of foreign operations at date of transition to IFRS amounting to R8 004 000, were set to zero. * Goodwill items resulting from acquisitions prior to the date of transition to IFRS were not restated, and represent the written down value as previously recorded under SA GAAP. Goodwill was tested for impairment at date of transition. The accounting policies of the Group are consistent in all material respects with those applied in the previous financial year except for those changes presented in note 2. 2. Changes in accounting policies The following changes in accounting policies were applied: * IFRS adjustment - Depreciation of property, plant and equipment based on historical costs, by component, and being re-assessed with due regard to useful life and residual value. * SA GAAP adjustment - Consolidation of a partnership at 100% (previously proportionately consolidated at 82%). Restated Restated Unaudited Unaudited Unaudited 6 months 6 months 12 months ended ended ended
31 March 31 March 30 Sept 2006 2005 2005 R"000 R"000 R"000 3. Reconciliation of profit for the period The reconciliation of profit previously reported in accordance with SA GAAP, to profit as restated in accordance with IFRS, is set out below: Profit previously reported 164 675 397 768 Revised depreciation on 10 278 15 423 property, plant and equipment Full consolidation of 1 004 2 343 partnership Amortisation of goodwill 6 234 - Profit restated 182 191 415 534 4. Operating profit The following items have been accounted for in the operating profit: Biological assets - fair 727 (3) (218) value gain/(loss) Amortisation of intangible 2 252 - 1 026 assets Depreciation on property, 41 743 35 185 76 685 plant and equipment Profit on disposal of 698 331 15 287 property, plant and equipment Foreign exchange (280) - 2 283 (loss)/profit 5. Reconciliation to headline earnings Earnings for the period 278 046 180 141 410 242 Profit on sale of property, (495) (235) (13 875) plant and equipment Loss related to sale of - - 1 099 business unit Headline earnings for the 277 551 179 906 397 466 period 6. Share capital In terms of the share buy-back programme 1 045 000 shares were acquired during the period under review at a total cost of R79 434 000. (Average cost R76 per share). In terms of the Group"s share incentive scheme, 107 600 shares were issued in respect of share options exercised during the period under review. 7. Capital commitments Capital expenditure approved 114 155 32 462 23 484 not contracted Capital expenditure 107 - 44 814 contracted not recognised in 611 financial statements Financial overview Headline earnings for the first half showed a 60% improvement to 692 cents per share from last year"s 432 cents per share as a result of the excellent trading results and the effect of the share buy-back programme. Revenue increased by 4% to R2,4 billion (2005: R2,3 billion) with the impact of lower maize prices and feed revenues offsetting the strong growth in poultry revenue. Operating profit increased by 54% to R414 million (2005: R268 million), 71% of which was contributed by the poultry results. Operating margin increased from 11,5% to 17,0%. As a result of the strong cashflow net interest of R2,4 million was earned compared with net interest paid of R7,9 million last year. The effective tax rate of 32,5% includes STC on last year"s increased final dividend, compared with last year"s 30,0% which benefited from the 1% reduction in company tax. Net cashflow increased by R6 million despite capital expenditure of R98 million and increased share buy-backs of R79 million (2005: R17 million). The increased capital commitment of R222 million (2005: R32 million) relates mainly to the current Earlybird expansion programme. Operational overview Animal Nutrition Division The South African maize industry is experiencing a second, but very different, crisis. Whereas last year"s crop of 11 million tons was a near record resulting in domestic price declines, a reduction in production is forecast for the current season following significantly lower plantings and the wettest season for many years. The stock carry-over at the end of this season is expected to drop from last year"s 4,2 million tons to as low as 1,5 million tons. The maize price has consequently increased strongly from R750 per ton from October to R1 050 per ton in March this year. Revenue dropped by 7% to R1,2 billion as selling prices dropped in line with lower commodity prices. However, operating profit increased by 11% to R121 million and net margin from 8,2% to 9,7% due to careful cost control and effective procurement policy. Poultry Division The benefit of last season"s low maize prices continues into the period under review. The market was driven by continuing strong consumer spending especially during the first four months of the first half. Sporadic outbreaks of Newcastle disease in the industry created a supply shortage at times despite high levels of imports. Volumes also increased by 5% as a result of increased production. Together these factors resulted in a 7% increase (2005: 1%) in selling prices with margins up from 9,7% to 15,9%. Revenue increased by 12% to R1,8 billion and operating profit by 84% from R159 million to R293 million. The South African anti-dumping duties against USA producers are still under review. So far the avian flu epidemic has not impacted on the South African poultry industry. However, it does pose a risk and we have implemented additional controls to mitigate our exposure. Prospects Poultry profits are not expected to continue at the level of the past six months and as a result second half earnings are not expected to match the first half. Declaration of Ordinary Dividend No. 11 Notice is hereby given that dividend no.11 of 225 cents per ordinary share has been declared in respect of the six months ended 31 March 2006. Last date to trade cum-dividend Friday, 30 June 2006 Shares commence trading ex-dividend Monday, 3 July 2006 Record date Friday, 7 July 2006 Payment of dividend Monday, 10 July 2006 Share certificates may not be dematerialised or rematerialised between Monday, 3 July 2006 and Friday, 7 July 2006, both days inclusive. On behalf of the board J L van den Berg N C Wentzel Chairman Chief Executive Officer Pretoria 15 May 2006 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 Incorporated in the Republic of South Africa Registration no 1978/003194/06 Share code ARL ISIN ZAE000029757 Directors J L van den Berg (Chairman) *N C Wentzel (Chief Executive Officer) *#T Pritchard (Financial Director) *M A Kingston *C E Schutte, *C A du Toit, J J Geldenhuys C G van Veyeren, M Macdonald, T C C Mampane (*Executive director) Company Secretary M Eloff Transfer secretaries Computershare Investor Services 2004 (Pty) Limited PO Box 61051 Marshalltown, 2107 Telephone: (011) 370-5000 Sponsor JP Morgan Chase Bank NA (Johannesburg Branch) 1 Fricker Road, Illovo Johannesburg, 2146 Private Bag X9936 Sandton, 2146 Telephone: (011) 507-0430 Date: 16/05/2006 08:01:12 AM Supplied by www.sharenet.co.za Produced by the JSE SENS Department

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