Wrap Text
CBH - Country Bird Holdings Limited - Audited results for the year ended
30 June 2011
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")
Audited results for the year ended 30 June 2011
REVENUE UP 16%
OPERATING PROFIT UP 81%
HEPS UP 178%
TOTAL CAPITAL DISTRIBUTION UP 178%
NET CASH GENERATED FROM OPERATING ACTIVITIES UP R121,7 MILLION
Audited condensed consolidated statement of comprehensive income
30 June 2011 % 30 June 2010
Audited change Audited
R`000 R`000
Revenue 2 834 659 16 2 433 660
Cost of sales (2 477 360) 15 (2 159 296)
Gross profit 357 299 30 274 364
Other expenses (148 923) (6) (157 751)
Other gains and losses 12 462 122 5 614
Operating profit 220 838 81 122 227
Finance income 1 841 (10) 2 042
Finance costs (47 402) (15) (55 452)
Share of loss of associates (297) (29) (417)
Profit before income tax 174 980 156 68 400
Income tax expense (52 129) 144 (21 395)
Profit for the year 122 851 161 47 005
Other comprehensive income
Currency translation differences (13 526) 665 (1 769)
Total comprehensive income for the 109 325 142 45 236
year
Profit attributable to:
Owners of the parent 122 638 177 44 353
Non-controlling interest 213 (92) 2 652
122 851 161 47 005
Total comprehensive income
attributable to:
Owners of the parent 109 112 156 42 584
Non-controlling interest 213 (92) 2 652
109 325 142 45 236
Earnings per share (cents)
-'basic 65,21 175 23,71
-'diluted 63,98 175 23,31
Additional information to condensed
consolidated financial statements
Profit for the year attributable to 122 638 177 44 353
owners of the parent
Reversal of non-recurring items per - (100) 12 750
note 2
Adjusted profit attributable to 122 638 115 57 103
owners of the parent
Adjusted earnings per share (cents)
-'basic 65,21 114 30,52
-'diluted 63,98 113 30,01
Ordinary shares
-'Issued net of treasury shares 188 772 313 187 099 313
-'Weighted average number of ordinary 188 071 896 187 099 313
shares
-'Diluted number of ordinary shares 191 674 288 190 296 036
Headline earnings per ordinary share
(cents)
-'basic 65,81 178 23,64
-'diluted 64,57 178 23,25
Dividend/capital distribution per 11,10 73 6,41
share - interim (cents)
Capital distribution per share - 10,84 637 1,47
final (cents)
Net asset value per share 251,28 23 204,62
Tangible asset value per share 201,46 31 154,17
Gearing ratio (net of cash and cash 1,57 (26) 2,12
equivalents)
Audited condensed consolidated statement of financial position
As at % As at
30 June 2011 change 30 June 2010
Audited Audited
R`000 R`000
ASSETS
Non-current assets 509 098 (6) 541 377
Property, plant and equipment 387 647 (2) 397 156
Intangible assets 93 706 (1) 94 395
Financial assets and other 405 6 384
investments
Investment in associates 10 096 10 9 213
Deferred income tax assets 17 244 (57) 40 229
Current assets 862 743 11 775 075
Inventories 143 119 12 128 170
Biological assets 158 253 21 131 266
Trade and other receivables 398 578 4 384 143
Current income tax receivable 3 239 (58) 7 696
Cash and cash equivalents 159 554 29 123 800
Total assets 1 371 841 4 1 316 452
EQUITY
Total equity 472 592 23 382 850
Ordinary shares 1 888 1 1 871
Share premium 772 167 (3) 795 887
Other reserves 8 029 (54) 17 435
Retained earnings 497 715 33 375 077
Common control deficit (832 110) - (832 110)
Equity attributable to the owners of 447 689 25 358 160
the parent
Non-controlling interest 24 903 1 24 690
LIABILITIES
Non-current liabilities 355 004 (18) 435 171
Borrowings 269 592 (22) 345 655
Employee share scheme liability 1 467 100 -
Deferred income tax liabilities 83 945 (6) 89 516
Current liabilities 544 245 9 498 431
Trade and other payables 372 637 14 326 257
Current income tax liabilities 2 799 67 1 672
Borrowings 168 779 - 169 419
Provision for other liabilities and 30 (97) 1 083
charges
Total liabilities 899 249 (4) 933 602
Total equity and liabilities 1 371 841 4 1 316 452
Audited condensed consolidated cash flow statement
30 June 2011 30 June 2010
Audited Audited
R`000 R`000
Cash flows from operating activities
Net cash generated from operating activities 179 613 57 920
Cash receipts from customers 2 820 224 2 396 032
Cash paid to suppliers and employees (2 564 051) (2 276 981)
Cash generated from operations 256 173 119 051
Interest paid (47 402) (55 452)
Income tax paid (29 158) (5 679)
Cash flows from investing activities
Net cash used in investing activities (42 287) (12 893)
Purchases of property, plant and equipment (43 799) (73 796)
Proceeds from sale of property, plant and 873 1 162
equipment
Purchases of intangible asset - (41)
Realisation of financial assets and - 59 189
investments
Purchases of financial assets and investments (22) (278)
Increase of investment in associates - (1 171)
Interest received 661 2 042
Cash flows from financing activities
Net cash used in financing activities (103 693) (50 036)
Proceeds from the issuance of ordinary shares 1 673 -
Share issue and listing expenses - (29)
Proceeds from borrowings 104 458 57 333
Repayments of borrowings (186 104) (76 953)
Capital repayments to shareholders (23 720) (29 805)
Acquisition of BEE share option - (583)
Net increase/(decrease) in cash and cash 33 633 (5 009)
equivalents
Cash and cash equivalents at beginning of (14 513) (6 951)
year
Exchange gains on cash and bank overdrafts (2 821) (2 553)
Cash and cash equivalents at end of year 16 299 (14 513)
Audited condensed consolidated statement of changes in equity
Share Share Other Retained
capital premium reserves earnings
R`000 R`000 R`000 R`000
Balance at 1 July 2009 1 871 825 721 15 021 330 723
Total comprehensive income - - (1 769) 44 354
Transactions with owners
Proceeds from issue of 150 14 820 - -
treasury shares
Treasury shares held by CBH (150) (14 820) - -
Share Trust
Share issue and listing - (29) - -
expenses
Acquisition of BEE share - - (582) -
option
Employee share scheme - - 4 765 -
Capital distribution to - (29 805) - -
shareholders
Total transactions with owners - (29 834) 4 183 -
Balance at 30 June 2010 1 871 795 887 17 435 375 077
Balance at 1 July 2010 1 871 795 887 17 435 375 077
Total comprehensive income - - (13 526) 122 638
Transactions with owners
Proceeds from shares issued 17 - 1 656 -
Employee share scheme - - 2 464 -
Capital distribution to - (23 720) - -
shareholders
Total transactions with owners 17 (23 720) 4 120 -
Balance at 30 June 2011 1 888 772 167 8 029 497 715
Audited condensed consolidated statement of changes in equity
(continued)
Common Total Non- Total
control attribu- con- equity
deficit table to trolling R`000
R`000 owners interest
of the R`000
parent
R`000
Balance at 1 July 2009 (832 110) 341 226 22 038 363 264
Total comprehensive income - 42 585 2 652 45 237
Transactions with owners
Proceeds from issue of - 14 970 - 14 970
treasury shares
Treasury shares held by CBH - (14 970) - (14 970)
Share Trust
Share issue and listing - (29) - (29)
expenses
Acquisition of BEE share - (582) - (582)
option
Employee share scheme - 4 765 - 4 765
Capital distribution to - (29 805) - (29 805)
shareholders
Total transactions with - (25 651) - (25 651)
owners
Balance at 30 June 2010 (832 110) 358 160 24 690 382 850
Balance at 1 July 2010 (832 110) 358 160 24 690 382 850
Total comprehensive income - 109 112 213 109 325
Transactions with owners
Proceeds from shares issued - 1 673 - 1 673
Employee share scheme - 2 464 - 2 464
Capital distribution to - (23 720) - (23 720)
shareholders
Total transactions with - (19 583) - (19 583)
owners
Balance at 30 June 2011 (832 110) 447 689 24 903 472 592
Audited condensed segment report
Revenue Operating profit Assets
30 June 30 June 30 June 30 June 30 June 30 June
2011 2010 2011 2010 2011 2010
Audited Audited Audited Audited Audited Audited
R`000 R`000 R`000 R`000 R`000 R`000
Poultry 1 811 519 1 646 239 159 735 84 907 919 031 811 997
-'South 1 674 377 1 514 098 142 114 90 121 726 303 682 484
Africa
-'Other 145 478 144 706 17 621 (5 214) 192 728 129 513
Africa
Intersegm (8 336) (12 565) - - - -
ent
revenue
Animal 677 031 493 431 63 510 38 141 419 495 476 018
nutrition
-'South 1 048 651 927 210 48 950 27 205 367 970 359 272
Africa
-'Other 309 496 190 551 14 560 10 936 51 525 116 746
Africa
Intersegm (681 116) (624 330) - - - -
ent
revenue
Beef 346 109 293 990 (2 407) (821) 33 315 28 437
2 834 659 2 433 660 220 838 122 227 1 371 841 1 316 452
Revenues of approximately R342 million (2010: R230,8 million) are
derived from a single external customer. These revenues are
attributable to the South African Poultry segment.
Notes to the condensed consolidated financial statements
1. Basis of preparation
The audited condensed consolidated financial information
announcement for the year ended 30 June 2011 was prepared in
accordance with International Financial Reporting Standards (IFRS),
International Accounting Standard 34, the Listing Requirements of
the JSE Limited and the South African Companies Act of 2008. The
condensed consolidated financial statements were supervised by RJ
Taylor (BCom, CA(Z)). The accounting policies are consistent with
those of the previous financial year and comply with IFRS. These
financial statements do not include all the information required
for full annual financial statements and should be read in
conjunction with the consolidated financial statements as at and
for the year ended 30 June 2011. These results have been audited by
PricewaterhouseCoopers Inc, Chartered Accountants (SA), Registered
Auditors. Their unqualified audit opinion is available for
inspection at the company`s registered office.
These audited condensed consolidated financial statements were
approved by the board of directors on 23 August 2011.
30 June 2011 30 June 2010
Audited Audited
R`000 R`000
2. Operating profit
The following amounts have been
accounted for in the operating profit:
Profit/(loss) on sale of investment - (4 552)
Fair value gains/(losses) on financial - (8 198)
assets at fair value through profit or
loss
3. Reconciliation to headline earnings
Profit attributable to owners of parent 122 638 44 353
Adjusted for:
(Profit)/loss on disposal of property, 1 135 (117)
plant and equipment
Adjusted headline earnings 123 773 44 235
4. Capital expenditure and depreciation
Capital expenditure 43 799 73 796
Depreciation 37 832 31 131
Amortisation of intangible assets 553 553
5. Capital and other commitments
Inventories contracted for 136 752 69 702
6. Cash and cash equivalents
Bank balances, deposits and cash 159 554 123 800
Short-term borrowings (143 255) (138 313)
16 299 (14 513)
7. Declaration of capital distribution
Notice is hereby given that a capital distribution out of share
premium of 10,84 cents per ordinary share in respect of the year
ended 30 June 2011 has been declared by the board. The total
capital distribution for the period is three times covered by
headlines earnings per share.
The salient dates of the declaration and payment of this capital
distribution is as follows:
Last date to trade ordinary shares cum Friday, 11 November 2011
distribution
Ordinary shares trade ex distribution Monday, 14 November 2011
Record date Friday, 18 November 2011
Payment date Monday, 21 November 2011
Share certificates may not be dematerialised or rematerialised
between Monday, 14 November 2011 and Friday, 18 November 2011 (both
dates inclusive).
The board of directors was given the general authority to make
payments to shareholders out of the company`s share premium account
at the annual general meeting held on 22 November 2010.
The illustrative financial effects of the distribution set out
below have been prepared to assist shareholders in assessing the
impact of the distribution of capital out of share premium on the
Net Asset Value per share ("NAV") and Tangible Net Asset Value per
share ("TNAV").
Impact of the Pro forma
distribution after
of 10,84 cents the
per share on distribution
Assets (20 387) 139 167
Cash and cash equivalents
Equity and liabilities (20 387) 427 302
Equity attributable to owners of the
parent
NAV (cents per share) (10,84) 240,44
TNAV (cents per share) (35,01) 166,45
Commentary on results
Profile
Country Bird Holdings Limited (CBH) is an agricultural group comprising:
- integrated poultry and stock feed business operations in South Africa
trading as Supreme Poultry and Nutri Feeds;
- poultry breeding, broiler and stock feed operations in the southern African
region trading as Ross Africa and Master Farmer; and
- a South African red meat abattoir and trading operation trading as Long
Iron Meats.
CBH currently operates in South Africa, Botswana, Namibia and Zambia.
Financial review
Operating profit of R220,8 million was achieved for the year ended 30 June 2011,
which when compared to last year`s figure of R122,2 million is an increase of
81%. This was the result of a combination of factors predominated by good
performances in the poultry and feed sectors both locally and abroad. Revenue
was up 16% to R2,83 billion for the period (2010: R2,43 billion), with gross
profit increasing by 30% to R357,3 million (2010: R274,4 million) after
accounting for a 15% increase in cost of sales attributable to volume growth.
Profit before income tax rose 156% to R175,0 million (2010: R68,4 million)
primarily as a result of cost control as well as a reduction in finance costs
through reduced interest rates and strict financial discipline. The tight
control over capital expenditure continued through from the first half of the
year and the net increase in cash and cash equivalents for the whole period was
R33,6 million even after repaying R81,6 million of borrowings.
Operational review
Poultry - South Africa
The South African poultry division reported an 11% increase in volumes sold for
the period. This, together with a 4% reduction in the cost of feed, continuous
progress in operational efficiencies and disciplined cost control, resulted in a
58% improvement in operating profit for the period to R142,1 million (2010:
R90,1 million). Average poultry selling prices over the year have remained
unchanged.
Poultry - Other Africa
This comprises a grandparent breeding operation in Zambia and a parent breeding
operation and broiler operation in Botswana. Revenues for the year increased
through volume growth in both Zambia and Botswana. Day-old chick demand and
pricing in Zambia were both strong and stable, while at the same time production
was efficient and effective. The new abattoir in Francistown has benefited from
the group`s management systems. These factors have combined to provide an
increase in operating profit of 238% for the segment of R17,6 million (2010:
R5,2 million loss).
Animal Nutrition - South Africa
Nutri Feeds reported a further improvement of 18% in volumes sold for the period
under review. This was offset by a 4% drop in selling prices giving a net 13%
increase in revenue. Disciplined cost control and improved capacity usage
resulted in an 80% enhancement in operating profit to R48,9 million (2010: R27,2
million).
Animal Nutrition - Other Africa
Both mills in Zambia and Botswana are now well established and performing well.
Revenues for the combined operations increased 62% to R309,5 million (2010:
R190,6 million) and the focus on operational efficiency and group procurement
practices yielded a 33% increase in operating profit to R14,6 million (2010:
R10,9 million).
Red Meat
New product launches and penetration into new markets saw volumes increase by
44%, but pricing pressure dropped the average selling price per kilogram by
18,3%. Challenges resulting from the prevailing labour environment in the
country as well as the generally tough conditions in the beef industry have seen
the operating loss in this segment deteriorate to R2,4 million (2010: R0,8
million loss).
Prospects
Even though poultry pricing at the start of the financial year has been under
pressure production results stay in sharp focus to ensure that Supreme remains
an industry leader. Subsequent weakening of the Rand and anti-dumping
initiatives by The South African Poultry Association (SAPA) should have further
positive impact.
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 levels to
an optimum level of efficiency.
The feed mills in Zambia and Botswana are performing well and the re-
establishment of Tswana Pride`s Abattoir that had burnt down will result in good
growth in feed volume and market penetration. Operational efficiency and margin
improvement remain the focus going forward.
A supply and demand balance has returned to the poultry markets in Zambia
following a period of oversupply as new competitors tried to establish
themselves. In Botswana the new Tswana Pride Abattoir is operational and volumes
are increasing as a result. It is expected that current favourable conditions
will persist, and management shall continue to focus on efficient production.
All of the above should result in an improved performance for the year.
Capital distribution
In line with the group`s dividend policy of three times cover, a capital
distribution of 10,84 cents per share for the period has been declared for
payment on 21 November 2011.
By order of the board
JD Wright
Chief executive officer
23 August 2011
DIRECTORS OF CBH Limited BH Kent (Chairman)#, R Gibbson#, GP Heath, IWM Isdale#,
KW James, CD Stein#, RJ Taylor, JD Wright #Independent non-executive
REGISTERED OFFICE 269 Oxford Road, Corner Harries Road, Illovo, Johannesburg,
2196
ATTORNEYS Ramsay Webber Inc., 269 Oxford Road, Illovo, 2196 (PO Box 55232
Northlands, 2116)
INVESTMENT BANK and SPONSOR Investec Bank Limited, (Registration number
1969/004763/06) 2nd Floor, 100 Grayston Drive, Sandton, 2196 (PO Box 785700,
Sandton, 2146)
COMPANY SECRETARY MJC Antunes, 15 Coro Street, Bloemfontein, 9301
(PO Box 6851, Bloemfontein, 9300)
AUDITORS PricewaterhouseCoopers Inc. 61 Second Avenue, Westdene, Bloemfontein,
9301 (PO Box 818, Bloemfontein, 9300)
TRANSFER SECRETARIES Computershare Investor Services (Proprietary) Limited
(Registration number 2004/003647/07) Ground Floor, 70 Marshall Street
Johannesburg, 2001 (PO Box 61051 Marshalltown, 2107)
www.cbhltd.co.za
Date: 23/08/2011 16:26:01 Supplied by www.sharenet.co.za
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