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CBH - Country Bird reports significant growth at interim stage

Release Date: 26/01/2011 16:01
Code(s): CBH
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CBH - Country Bird reports significant growth at interim stage Country Bird Holdings Limited' (Incorporated in the Republic of South Africa) Registration number: 2005/008505/06' ISIN: ZAE000094835' JSE Share code: CBH' ("CBH" or "the group") COUNTRY BIRD REPORTS SIGNIFICANT GROWTH AT INTERIM STAGE Country Bird Holdings (CBH) has announced a 37% rise in operating profit to R112,8 million for the six months ended 31 December 2010. This compares with operating profit of R82,4 million for the comparable period in 2009. Revenue was up 13% to R1,42 billion for the period (2009: R1,26 billion), while gross profit increased by 20% to R183,8 million (2009: R152,6 million). Profit before income tax rose 63% to R91,4 million (2009: R56,1 million) primarily as a result of a reduction in finance costs through reduced interest rates and strict financial discipline, specifically in respect of capital expenditure. The net increase in cash and cash equivalents for the period was R67,5 million. Commenting on the results, Group Financial Director Robbie Taylor says the improved results are attributable to a combination of factors, notably good performances in the African businesses, a strong showing from the Animal Nutrition Division and an overall improvement in market conditions. The South African Poultry Division reported an 8% increase in volumes sold for the period. This, together with a 9% improvement in the cost of feed, improvements in operational efficiencies and disciplined cost control, more than offset the 2% reduction in realisations of the previous year. Operating profit improved 8% to R73,1 million (2009: R67,6 million). The African Poultry business, which comprises a grandparent breeding operation in Zambia and a parent breeding operation and broiler operation in Botswana, saw revenues decrease slightly by 3%. However, improved market conditions in Zambia, driven by favourable economic conditions, resulted in a return to better margins and operating profit was R9,3 million (2009: R0,7 million). As regards animal nutrition, "Nutri Feeds reported an improvement of 16% in volumes sold for the period under review," says Taylor. "As a result of input price reductions, revenues increased by only 5%. However, volumes are approaching optimum and the resultant efficiencies improved the operating profit to R21,0 million from R6,65 million in 2009." Regarding Animal Nutrition in other African countries, Taylor says the mills in both Zambia and Botswana are now well established and performing to expectation. Revenues for the combined operations increased 23% to R146,6 million (2009: R119,0 million) and the focus on operation efficiency and procurement practices yielded a 64% increase in operating profit to R11,5 million (2009: R7,0 million). New Red Meat product launches and penetration into new markets saw volumes increase by 23% and realisations increase by 2%, giving a total increase in turnover of 25% to R199,9 million (2009: R159,9 million). However, margins were under intense pressure resulting in an operating loss for the period of R2,1 million (2009: R0,6 million profit). Looking ahead, Taylor says that realisastions for the South African poultry industry have shown encouraging signs of recovery in recent months. "Continued efficient grain procurement, further improvements in operational efficiencies and cost control should result in improved operating margins, while the marketing focus will remain on driving exports and the quick service restaurant business. "In the South African feed business, the scientific development of bespoke feed rations has assisted Supreme Poultry and its customers to achieve outstanding growing results. This has attracted new customers, taking production up to an optimum level of efficiency due to capacity utilisation. "The African Poultry operations have returned to profitability and continued focus on efficient production remains the priority," concludes Taylor. In line with the group`s dividend policy of three times cover, a capital distribution of 11,1 cents per share has been declared for the period, payable on 16 May 2011. Ends/ About Country Bird Holdings Limited (CBH) CBH, which listed on the JSE in May 2007, is an agricultural group comprising integrated poultry, stock feed and beef businesses in South Africa, trading as Supreme Poultry, Nutri Feeds and Long Iron Meats respectively, as well as poultry breeding, broiler and stock feed operations in the southern African region, trading as Ross Africa and Master Farmer. CBH is currently active in South Africa, Botswana and Zambia. Issued for: Country Bird Holdings Limited (CBH) Contact: Robbie Taylor, Group Financial Director: 011 778 0658 / 082 809 9506 Fax No: 086 660 0917 Email: Robbie@countrybird.co.za Website: www.cbh.co.za Issue by: CBH Corporate and Investor Communications Contact: Tish Stewart: 082 4436399 / 011 442 5536 Fax No: 011 447 9317 Email: tishstewart@mweb.co.za Date: 26 January 2011 Sponsor: Investec Bank Limited Date: 26/01/2011 16:01:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. 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