To view the PDF file, sign up for a MySharenet subscription.

AVI LIMITED - Preliminary results for the year ended 30 June 2012

Release Date: 10/09/2012 07:15
Code(s): AVI     PDF:  
Wrap Text
Preliminary results for the year ended 30 June 2012

AVI LIMITED

ISIN: ZAE000049433 
JSE share code: AVI
Registration number: 1944/017201/06
("AVI" or "the Group" or "the Company") 


Results for the year ended 30 June 2012


KEY FEATURES

Revenue from continuing operations up 11% to R8,29 billion

Operating profit from continuing operations up 23% to R1,37 billion

Headline earnings per share from continuing operations up 30% to 320 cents

Operating profit margin from continuing operations improved from 14,9% to 16,6%

Increased capital expenditure of R541,1 million to cover major capacity and 
efficiency projects

Green Cross acquisition concluded

Final dividend of 120 cents per share and total normal dividend up 62% to 
203 cents per share

Special dividend of 180 cents per share


GROUP OVERVIEW

AVI's portfolio of consumer businesses performed well in a year characterised by 
constrained consumer demand, increased competition and rising soft commodity input 
costs. Many of our brands grew sales volumes in the year and together with our on-going 
focus on, and investment in, manufacturing improvement drove good profit leverage.

The Fashion Brands businesses, Spitz and Indigo, achieved sound volume growth and 
realised strong gross profit margins supported by favourable import exchange rates 
that were secured before the rand weakened during the first half of the year. I&J 
benefitted materially from the weaker rand, supported by on-going good performance 
from its catching and processing operations. Snackworks had a strong second half 
driven by recovery in sales volumes and improving manufacturing performance, resulting 
in a material improvement in full year profits. Entyce had a better second half 
performance, benefitting from new coffee and creamer capacity as well as a recovery
in Ciro's out-of-home coffee business driven by volume growth. Revenue from the rest 
of Africa grew in line with the domestic market and healthy profit margins were 
maintained.

Revenue from continuing operations rose by 10,6%, from R7,49 billion to R8,29 
billion with selling price increases and volume growth in most categories as well 
as stronger export revenue in I&J due to the weaker rand. Gross profit rose by 
11,5% to R3,76 billion with the consolidated gross profit margin increasing from 
45,1% to 45,4%. A significant increase in commodity input costs was ameliorated
by volume leverage, on-going efficiency gains and favourable import exchange rates 
secured at the beginning of the year in line with our normal hedging practice. 
Operating profit increased by 22,8%, from R1,12 billion to R1,37 billion due to 
the higher gross profit margins and well managed selling and administrative costs, 
which rose by 5,9% compared to last year.

Headline earnings from continuing operations rose by 28,5%, from R745,4 million 
to R957,5 million due to the higher operating profit, lower net finance costs and 
higher earnings from I&J's joint venture with Simplot in Australia, which benefited 
from the strong Australian dollar. Headline earnings per share from continuing 
operations increased 29,9% from 246,4 cents to 320,0 cents with less shares in issue 
following the re-purchase of 9,0 million shares in June 2011.

Cash generated by operations was strong, increasing by 6,1% to R1,45 billion after 
working capital changes. Working capital increased by R226,3 million reflecting 
volume growth as well as stronger sales in the last few months of the year compared 
to the same period last year. Capital expenditure increased to R541,1 million with 
material expenditure on major projects to improve capacity, technology and efficiency. 
Other material cash outflows during the period were dividends of R475,5 million and 
taxation of R396,3 million. Net cash at the end of June 2012 was R175,0 million 
compared to net debt of R246,2 million at the end of June 2011.

On the project front, Indigo's new aerosol plant, the packaging automation at Isando 
biscuits and Entyce's new creamer tower and coffee granulation plant were all 
successfully commissioned during the year with benefits expected to accrue more 
materially in the 2013 financial year. In addition the expansion of the Isando 
distribution centre was successfully completed and SAP was implemented at Entyce and 
Snackworks with minimal disruption to sales volumes. A number of other material 
projects are on track to meet commissioning dates in 2013. 

The Green Cross acquisition was concluded in July 2012 and we are excited about the 
additional scale and growth opportunity this business brings to our Fashion Brands 
portfolio. AVI will consolidate Green Cross'  financial results with effect from 
1 July 2012.The initial payment of R382,5 million was made in July 2012.

In March 2012 AVI announced a change in the annual dividend payout ratio from 2,0 
to 1,5 times covered by diluted headline earnings  from continuing operations. In line 
with this new policy a final dividend of 120 cents per share has been declared, bringing 
the total normal dividend for the year to 203 cents. In addition the Board has approved 
a special dividend of 180 cents per share, resulting in an effective dividend yield of 
7,7% on the 30 June 2012 closing share price of R50,00.

Taking the initial payment for Green Cross of R382,5 million that was made in July 2012 
and the special dividend into account, AVI's debt to capital employed ratio is expected to 
increase above 20% in the 2013 year.

The AVI Black Staff Empowerment Share Scheme reached its first normal vesting date on 
31 December 2011 in respect of the first tranche of shares allocated in January 2007. 
AVI's strong share price performance has resulted in gains totalling R117,6 million 
accruing to 3 688 black employees at all levels across the Group since inception of 
the scheme.

On 1 July 2012 Mr Angus Band stepped down as chairman ahead of his retirement from the 
Board at the Company's next annual general meeting scheduled for 2 November 2012. Mr Band 
joined the Board in 1997 as an executive director and was appointed Chief Executive
Officer of National Brands Limited in 1998. He became AVI's Group Chief Executive Officer 
in 1999 and served in this role until 2005 when he stepped down and moved into the role of 
non-executive chairman. The Board wishes to express its sincere gratitude to Mr Band
for his outstanding 16 years of service to AVI and vital contribution to AVI's success.

SEGMENTAL REVIEW - CONTINUING OPERATIONS
Year ended 30 June   
                                                                                Segmental revenue                       Segmental operating profit
                                                                             2012   Restated*            %           2012   Restated*            %
                                                                              Rm          2011      change            Rm         2011       change
                                                                                           Rm                                      Rm
Food & beverage brands                                                   6 274,8      5 641,2         11,2         922,5        758,2         21,7
Entyce                                                                   2 330,7      2 112,2         10,3         415,4        402,2          3,3
Snackworks                                                               2 428,7      2 159,7         12,5         328,5        263,9         24,5
Chilled & frozen convenience brands                                      1 515,4      1 369,3         10,7         178,6         92,1         93,9
Fashion brands                                                           2 005,2      1 842,6          8,8         463,6        368,5         25,8
Personal care                                                              918,1        890,3          3,1         155,7        132,4         17,6
Footwear & apparel                                                       1 087,1        952,3         14,2         307,9        236,1         30,4
Corporate                                                       7,1          5,9                     (13,6)        (9,2)
Group                                                                    8 287,1      7 489,7         10,6       1 372,5      1 117,5         22,8
* = restated to exclude Real Juice now shown as a discontinued operation.

Entyce (excluding Real Juice now shown as discontinued)
Revenue increased 10,3% to R2,33 billion while operating profit increased by 3,3% from R402,2 
million to R415,4 million with the operating profit  margin at 17,8% compared to 19,0% in 
the prior period.

Growth in revenue came primarily from higher selling prices for tea, coffee and creamer in 
response to increased raw and wrapping material costs. Volume performance was pleasing in the 
context of constrained overall category performance, with volume declining in both the tea and 
coffee categories in the year.Tea volumes were 6,2% higher than last year due to effective 
promotional activity and tactical pricing. Coffee sales volumes for the second half showed growth 
on the same period in the prior year, however full year volumes declined without the additional 
demand that arose from  competitor supply problems in the first half of last year. Creamer volumes 
increased sharply in the second half with tactical pricing supported by the  capacity and lower 
costs from the new creamer tower and full year volumes were higher than last year despite additional 
demand that arose from competitor supply problems in the first half of last year. 

Gross profit margins decreased with significant increases in coffee, glucose and rooibos input 
costs not fully recovered given the constrained consumer environment and competitive pressures. 
However, volume increases and well-controlled selling and administration costs contributed to an
improvement in operating profit over last year's exceptional result. Profit margins in absolute 
terms remain at strong levels and the new creamer tower and coffee agglomeration plant at Isando 
are both expected to yield further benefits in the new financial year.

The Ciro out-of-home coffee business re-gained volume momentum and controlled costs tightly to 
deliver a material improvement in operating profit.

Snackworks
Revenue of R2,43 billion was 12,5% higher than last year while operating profit rose by 24,5%, 
from R263,9 million to R328,5 million. The operating profit margin increased from 12,2% to 13,5%.

The increase in revenue is attributable to higher selling prices and an 8,2% increase in biscuit 
sales volumes. Biscuit selling prices were higher on average following the increases implemented 
in the previous financial year, despite the re-alignment of price points for key products with 
consumer expectations. Better price points on key lines drove strong volume uplift in the second 
half and the resulting profit leverage, together with improved factory performance, enabled 
Snackworks to recover significant raw material cost increases and still improve operating 
profit margin. Factory performance improved during the year with higher throughput, improved product 
yields and more effective management of labour costs all contributing to the overall Snackworks 
result. Approximately 550 tons of production was lost at Westmead following an industry shortage of 
liquid petroleum gas in October and November, however the operating profit impact was largely covered 
by insurance proceeds.

The Snacks business benefited from better price points in the category, slightly higher sales 
volumes and tight control of selling and administrative costs, resulting in a meaningful improvement 
in operating profit. Sales volumes were slightly higher than last year despite lost sales attributable 
to temporary delistings during price negotiations with customers in the first half of the year.

The packaging automation project at Isando biscuits was successfully commissioned and is being extended 
to cover all major lines in the factory. Packaging automation is also being evaluated for the Westmead 
factory. New projects that will further improve capacity, yields and efficiency in both biscuit 
factories were approved during the semester.

Chilled & Frozen Convenience Brands (I&J excluding Alpesca)
Revenue increased by 10,7% from R1,37 billion to R1,52 billion while operating profit rose from R92,1 
million to R178,6 million. The operating profit margin increased from 6,7% to 11,8%.

Export exchange rates in the first semester were materially weaker than the same period in the prior 
year, and the resulting increase in revenue  was a key driver of I&J's improved result for the year. 
Export volumes increased with the benefit of increased quota, however prices remained under pressure 
with reduced demand from customers and increased supply from other fish resources. I&J improved its 
position in the domestic market, achieving both higher selling prices and an increase in volumes for 
the year.

High catch rates for the year and improved fishing and factory performance were offset by a significant 
increase in fuel costs, however tight cost control and the benefit of foreign exchange gains, compared 
to losses last year, contributed to the material improvement in operating profit for the year.

A major project to reconfigure and automate a large part of the Woodstock processing operation has been 
approved and is expected to be commissioned in the second half of the 2013 financial year. The project 
will cost R59 million and has a planned payback period of less than three years.

Fashion Brands (personal care, footwear and apparel)
Revenue rose by 8,8% to R2,01 billion and operating profit increased by 25,8%, from R368,5 million to 
R463,6 million with the operating profit margin increasing from 20,0% to 23,1%.

In the personal care category, Indigo's revenue grew by 3,1% to R918,1 million while operating profit 
increased 17,6% to R155,7 million. The operating  profit margin for the period improved from 14,9% to 17,0%. 
Revenue growth was constrained in a highly competitive environment, however Indigo maintained its strong 
position in aerosols and achieved good growth in Yardley colour cosmetics. Profit margin benefitted from 
lower input costs due to the favourable import exchange rates secured at the beginning of the year, higher 
volumes and tightly controlled selling and administrative costs.

In the footwear and apparel category, revenue increased by 14,2% to R1,09 billion and operating profit 
increased by 30,4% from R236,1 million to R307,9 million. The operating profit margin increased from 
24,8% to 28,3%. The improvement is largely attributable to strong sales volume growth and higher gross profit 
margins in Spitz resulting from higher selling prices on core ranges and favourable import exchange rates 
secured at the beginning of the year. Footwear sales volumes in Spitz increased by 9,5% with the core Carvela, 
Lacoste, and Kurt Geiger brands performing well. The expansion of the mono branded Kurt Geiger men's clothing 
stores has progressed well with 11 new stores opened during the year, bringing the total to 26 stores at the 
end of the year. These stores are contributing to Spitz's overall result and trading density will continue 
to improve over the next few years.

DISCONTINUED OPERATIONS (REAL JUICE,DENNY AND ALPESCA)
Year ended 30 June
                                                                              Segmental                     Segmental            Capital items
                                                                              revenue                     operating profit
                                                                            2012    Restated*         2012    Restated*         2012    Restated*
                                                                              Rm         2011           Rm         2011           Rm         2011
                                                                                           Rm                        Rm                        Rm
Real Juice                                                                 146,2        196,6          8,1         10,7          0,1       (12,8)
Denny                                                                          -        385,2            -         50,0         27,3        (0,4)
Alpesca                                                                        -        298,4            -       (37,5)            -       (53,6)
                                                                           146,2        880,2          8,1         23,2         27,4       (66,8)
* = restated to include Real Juice now shown as a discontinued operation.


In May 2012 AVI entered into an agreement in terms of which Clover will acquire 100% of Real Juice for R60 
million, subject to the approval of the South African Competition Authorities, which was received on 30 August 
2012. Revenue for the year decreased due to the sale of Sir Juice in November 2010, declining sales of the 
premium Real Juice brand and rationalisation of unprofitable product lines. The core Quali brand continues to 
perform well and together with excellent management of the manufacturing and distribution operations this 
enabled Real Juice to record a credible operating profit despite a significant increase in raw material costs 
during the year. 

Denny was sold with effect from 1 July 2011 resulting in a capital profit of R27,3 million before capital gains 
taxation of R10,3 million.

I&J concluded the sale of Alpesca in May 2011.

DIVIDENDS 
In March 2012 the Board approved a change in AVI's annual dividend pay-out ratio from 2,0 to 1,5 times covered 
by diluted headline earnings from continuing operations. This change is commensurate with the Group's strong 
cash-generating ability and also compensates shareholders for any dividend withholding tax that they may be liable 
for after 1 April 2012. In terms of this new policy a final dividend of 120 cents per share has been declared, 
bringing the total normal dividend for the year to 203 cents, 62,4% higher than last year.

In addition, in line with AVI's on-going commitment to return excess cash generated to shareholders the Board 
has approved a special dividend of 180 cents per share, resulting in an effective dividend yield of 7,7% on the 
30 June 2012 closing share price of R50,00.

OUTLOOK
We anticipate that the current constrained consumer demand environment will persist and consequently expect 
increased competition in our categories which, coupled with raw material and other cost pressures, will put 
pressure on margins in the FMCG sector generally. I&J has secured more than half of its export foreign exchange 
requirements at rates comparable to last year and Entyce and Snackworks have implemented selling price increases 
to help offset the impact of higher commodity prices and the strong US dollar.

The performance of key categories in the 2012 financial year reinforces our confidence that with our strong brand 
portfolio, improving manufacturing performance and effective sales and marketing activity we can continue to compete 
effectively in the year ahead. In addition the capital projects commissioned in the last year will make a greater 
contribution and we continue to work on new projects and other initiatives that should deliver organic profit growth 
over time. These include local and regional market opportunities, factory improvements and the on-going development 
of shared and support services. The establishment of our new AVI International structure during the year under review 
will help to accelerate the sound growth that our Africa business has achieved over the last few years. 

Green Cross' performance since the conclusion of the acquisition has been encouraging and will add meaningfully to the 
growth of our Fashion Brands portfolio.

The Board is confident that AVI is well-positioned to continue pursuing growth from the current brand portfolio 
while remaining vigilant for brand acquisition opportunities both domestically and regionally.

The above outlook statements have not been reviewed or reported on by AVI's auditors.

Gavin Tipper	Simon Crutchley
Chairman	CEO 

10 September 2012

PRELIMINARY SUMMARISED GROUP BALANCE SHEETS
                                                                                          Restated     Restated
                                                                                        Audited at   Audited at   Audited at
                                                                                           30 June      30 June      01 July
                                                                                              2012         2011         2010
                                                                                                Rm           Rm           Rm
Assets
Non-current assets
Property, plant and equipment                                                              1 756,9      1 459,5      1 340,4
Intangible assets and goodwill                                                               748,6        759,4        923,4
Investments                                                                                  328,4        310,0        304,1
Deferred taxation                                                                             47,2         83,3         78,9
                                                                                           2 881,1      2 612,2      2 646,8
Current assets
Inventories and biological assets                                                          1 042,0        943,1        918,4
Trade and other receivables including derivatives                                          1 315,6      1 116,9      1 189,5
Cash and cash equivalents                                                                    242,1        380,1        589,3
Assets of discontinued operations classified as held-for-sale*                                43,4        344,3        288,8
Other assets classified as held-for-sale**                                                     5,7          3,8          4,4
                                                                                           2 648,8      2 788,2      2 990,4
Total assets                                                                               5 529,9      5 400,4      5 637,2
Equity and liabilities
Capital and reserves
Attributable to equity holders of AVI                                                      3 615,1      2 866,7      2 905,7
Non-controlling interests                                                                   (17,8)       (19,8)       (19,8)
Total equity                                                                               3 597,3      2 846,9      2 885,9
Non-current liabilities
Financial liabilities, borrowings and operating lease                                         15,7         55,8         65,1
straight-line liabilities
Employee benefits                                                                            349,7        359,2        360,1
Deferred taxation                                                                             90,9         73,1        113,6
                                                                                             456,3        488,1        538,8
Current liabilities
Current borrowings                                                                            63,2        583,0        848,1
Trade and other payables including derivatives                                             1 338,7      1 279,1      1 183,4
Share buy-back liability                                                                         -        100,7            -
Corporate taxation                                                                            15,3         16,6         17,3
Liabilities of discontinued operations classified as held-for-sale*                           59,1         86,0        163,7
                                                                                           1 476,3      2 065,4      2 212,5
Total equity and liabilities                                                               5 529,9      5 400,4      5 637,2


Net (cash)/debt***                                                                         (175,0)        246,2        310,1

* Discontinued operations in 2010 comprised the Argentinian hake and shrimp operations conducted by Alpesca, a wholly owned 
subsidiary of I&J, that was sold in May 2011. In 2011 discontinued operations comprised the fresh, canned and value added
mushroom business conducted by Denny, which was disposed of with effect from 1 July 2011. In 2012 discontinued operations 
comprise the fresh fruit juice manufacturing business of Real Juice Co Holdings Proprietary Limited ("Real Juice") which 
will be disposed of with effect from 30 September 2012. 
** Other assets held-for-sale comprise equipment and properties held for disposal.
*** Comprises financial liabilities, borrowings and current borrowings less 
cash and cash equivalents.


PRELIMINARY SUMMARISED GROUP STATEMENTS OF COMPREHENSIVE INCOME
                                                                                                             Restated
                                                                                                Audited	      Audited
                                                                                             Year ended    Year ended
                                                                                                30 June       30 June
                                                                                                   2012          2011             %
                                                                                                     Rm            Rm        change
Continuing operations
Revenue                                                                                         8 287,1       7 489,7          10,6
Cost of sales                                                                                   4 524,3       4 114,7          10,0
Gross profit                                                                                    3 762,8       3 375,0          11,5
Selling and administrative expenses                                                             2 390,3       2 257,5           5,9
Operating profit before capital items                                                           1 372,5       1 117,5          22,8
Income from investments                                                                            13,8           9,4          46,8
Finance costs                                                                                    (28,1)        (49,6)        (43,3)
Share of equity-accounted earnings of joint ventures                                               46,8          36,1          29,6
Capital items                                                                                    (13,8)         (8,4)          64,3
Profit before taxation                                                                          1 391,2       1 105,0          25,9
Taxation                                                                                          443,6         365,9          21,2
Profit from continuing operations                                                                 947,6         739,1          28,2
Discontinued operations*
Revenue                                                                                           146,2         880,2        (83,4)
Operating profit before capital items                                                               8,1          23,2        (65,1)
Income from investments                                                                             2,2           7,8        (71,8)
Finance costs                                                                                     (2,5)        (13,7)        (81,8)
Capital items                                                                                      27,4        (66,8)       (141,0)
Profit/(loss) before taxation                                                                      35,2        (49,5)       (171,1)
Taxation                                                                                           10,3        (12,0)       (185,8)
Profit/(loss) from discontinued operations                                                         24,9        (37,5)       (166,4)
Profit for the year                                                                               972,5         701,6          38,6
Profit attributable to:
Owners of AVI                                                                                     970,5         701,6          38,3
Non-controlling interests                                                                           2,0             -
                                                                                                  972,5         701,6          38,6
Other comprehensive income/(expense), net of tax                                                  100,9          17,5         476,6
Foreign currency translation differences                                                           59,7          15,9         275,5
Actuarial gain/(loss) recognised                                                                   32,7        (10,5)       (411,4)
Cash flow hedging reserve                                                                          24,4          12,8          90,6
Income tax on other comprehensive income/(expense)                                               (15,9)         (0,7)       2 171,4
Total comprehensive income for the year                                                         1 073,4         719,1          49,3
Total comprehensive income attributable to:
Owners of AVI                                                                                   1 071,4         719,1          49,0
Non-controlling interests                                                                           2,0             -
                                                                                                1 073,4         719,1          49,3
Basic earnings per share from continuing operations (cents)#                                      316,7         244,3          29,6
Diluted earnings per share from continuing operations (cents)##                                   302,0         236,0          28,0
Basic earnings per share (cents)#                                                                 324,3         231,9          39,8
Diluted earnings per share (cents)##                                                              309,3         224,0          38,1
Depreciation and amortisation of property, plant and equipment, fishing rights and trademarks     220,7         192,8          14,5 
included in operating profit from continuing operations       
* Discontinued operations comprise the fresh fruit juice manufacturing business of Real Juice which will be disposed of with effect 
from 30 September 2012, the Argentinian hake and shrimp operations conducted by Alpesca, a wholly owned subsidiary of I&J, that was 
sold in May 2011 as well as the fresh, canned and value added mushroom business conducted by Denny, which was disposed of with 
effect from 1 July 2011.
Headline earnings per share from continuing operations (cents)#                                   320,0         246,4          29,9
Diluted headline earnings per share from continuing operations (cents)##                          305,2         238,0          28,2
# Basic earnings and headline earnings per share is calculated on a weighted average of 299 228 661 (30 June 2011: 302 547 792)
ordinary shares in issue.
## Diluted earnings and diluted headline earnings per share is calculated on a weighted average of 313 746 916 (30 June 2011 : 313 191 990) 
ordinary shares in issue.						


PRELIMINARY SUMMARISED GROUP STATEMENTS OF CASH FLOWS
                                                                                                             Restated             
                                                                                               Audited        Audited        
                                                                                            Year ended     Year ended
                                                                                               30 June        30 June
                                                                                                  2012           2011             %
                                                                                                    Rm             Rm        Change
Continuing operations
Operating activities
Cash generated by operations before working capital changes                                    1 678,9        1 358,6          23,6
(Increase)/decrease in working capital                                                         (226,3)           10,7     (2 215,0)
Cash generated by operations                                                                   1 452,6        1 369,3           6,1
Interest paid                                                                                   (28,1)         (49,6)        (43,3)
Taxation paid                                                                                  (396,3)        (327,6)          21,0
Net cash available from operating activities                                                   1 028,2          992,1           3,6
Investing activities
Interest received                                                                                 15,0           13,1          14,5
Property, plant and equipment acquired                                                         (541,1)        (410,2)          31,9
Proceeds from disposals of property, plant and equipment                                           8,4            4,9          71,4
and businesses
Movement in joint ventures and other investments                                                  66,7           52,2          27,8
Net cash used in investing activities                                                          (451,0)        (340,0)          32,6
Financing activities
Increase in shareholder funding                                                                   99,9           38,4         160,2
Short-term funding repaid                                                                      (524,2)        (179,5)         192,0
Own ordinary shares purchased by the Company                                                   (100,7)        (169,2)        (40,5)
Capital repayment                                                                                    -        (226,6)       (100,0)
Dividends paid                                                                                 (475,5)        (335,6)          41,7
Net cash used in financing activities                                                        (1 000,5)        (872,5)          14,7
Discontinued operations*
Cash flows from operating activities                                                             (3,4)           42,1       (108,1)
Cash flows from investing activities                                                               0,9           16,5        (94,5)
Cash flows from financing activities                                                             (6,0)        (105,0)        (94,3)
Proceeds on disposal of discontinued operation                                                   261,9           69,6         276,3
Cash flows from discontinued operations                                                          253,4           23,2         992,2
Decrease in cash and cash equivalents                                                          (169,9)        (197,2)        (13,8)
Cash and cash equivalents at beginning of year                                                   404,1          598,0        (32,4)
                                                                                                 234,2          400,8        (41,6)
Translation of cash equivalents of foreign subsidiaries                                            7,9            3,3         139,4
Cash and cash equivalents at end of year                                                         242,1          404,1        (40,1)
Attributable to:
Continuing operations                                                                            242,1          380,1        (36,3)
Discontinued operations**                                                                             -          24,0       (100,0)
* Discontinued operations comprise the fresh fruit juice manufacturing business of Real Juice which will be disposed of with effect from 
30 September 2012, the Argentinian hake and shrimp operations conducted by Alpesca, a wholly owned subsidiary of I&J, that was sold 
in May 2011 as well as the fresh, canned and value added mushroom business conducted by Denny, which was disposed of with effect 
from 1 July 2011.
** Cash flows between continuing and discontinued operations are eliminated on consolidation. These amounted to R277,4 million
(2011: R39,0 million) net cash flow from discontinued operations to continuing operations.


PRELIMINARY SUMMARISED GROUP STATEMENTS OF CHANGES IN EQUITY
                                                                                                  Share      Treasury      Reserves      Retained         Total          Non-         Total
                                                                                            capital and        shares            Rm      earnings            Rm   controlling        equity
                                                                                                premium            Rm                          Rm                   interests            Rm
                                                                                                     Rm                                                                    Rm

Year ended 30 June 2012
Balance at 1 July 2011 (Restated)                                                                  29,5       (707,8)          69,7       3 475,3       2 866,7        (19,8)       2 846,9
Profit for the year                                                                                                                         970,5         970,5           2,0         972,5
Other comprehensive income
Foreign currency translation differences                                                                                       59,7                        59,7                        59,7
Actuarial gains/(losses) recognised                                                                                            23,6                        23,6                        23,6
Cash flow hedging reserve                                                                                                      17,6                        17,6                        17,6
Total other comprehensive income                                                                      -             -         100,9             -         100,9             -         100,9
Total comprehensive income for the year                                                               -             -         100,9         970,5       1 071,4           2,0       1 073,4
Transactions with owners, recorded directly in equity
Share-based payments                                                                                                           18,1                        18,1                        18,1
Deferred taxation on Group share scheme recharge                                                                               34,5                        34,5                        34,5
Dividends paid                                                                                                                            (475,5)       (475,5)                     (475,5)
Own ordinary shares sold by AVI Share Trusts                                                                     86,6                        13,3          99,9                        99,9
Total contributions by and distributions to owners                                                    -          86,6          52,6       (462,2)       (323,0)             -       (323,0)
Total transactions with owners                                                                        -          86,6          52,6       (462,2)       (323,0)             -       (323,0)
Balance at 30 June 2012                                                                            29,5       (621,2)         223,2       3 983,6       3 615,1        (17,8)       3 597,3
Year ended 30 June 2011
Balance at 1 July 2010                                                                            183,9       (682,0)          70,5       3 381,7       2 954,1        (19,8)       2 934,3
Change in accounting policy (refer note 3)                                                                                   (53,9)           5,5        (48,4)                      (48,4)
Restated balance at 1 July 2010                                                                   183,9       (682,0)          16,6       3 387,2       2 905,7        (19,8)       2 885,9
Profit for the year                                                                                                                         701,6         701,6             -         701,6
Other comprehensive income
Foreign currency translation differences                                                                                       15,9                        15,9                        15,9
Actuarial gains/(losses) recognised                                                                                           (7,6)                       (7,6)                       (7,6)
Cash flow hedging reserve                                                                                                       9,2                         9,2                         9,2
Total other comprehensive income                                                                      -             -          17,5             -          17,5             -          17,5
Total comprehensive income for the year                                                               -             -          17,5         701,6         719,1             -         719,1
Transactions with owners, recorded directly in equity
Share-based payments                                                                                                           25,7                        25,7                        25,7
Deferred taxation on Group share scheme recharge                                                                                9,9                         9,9                         9,9
Dividends paid                                                                                                                            (335,6)       (335,6)                     (335,6)
Capital repayment                                                                               (261,8)          35,2                                   (226,6)                     (226,6)
Issue of ordinary shares to AVI Share Trusts                                                      107,8       (107,8)                                         -                           -
Own ordinary shares purchased by Company                                                          (0,4)                                   (269,5)       (269,9)                     (269,9)
Own ordinary shares sold by AVI Share Trusts                                                                     46,8                       (8,4)          38,4                        38,4
Total contributions by and distributions to owners                                              (154,4)        (25,8)          35,6       (613,5)       (758,1)             -       (758,1)
Total transactions with owners                                                                  (154,4)        (25,8)          35,6       (613,5)       (758,1)             -       (758,1)
Balance at 30 June 2011                                                                            29,5       (707,8)          69,7       3 475,3       2 866,7        (19,8)       2 846,9

 

SUPPLEMENTARY NOTES TO THE PRELIMINARY SUMMARISED CONSOLIDATED FINANCIAL STATEMENTS		

For the year ended 30 June 2012	
AVI Limited ("AVI" or the "Company") is a South African registered company. The preliminary summarised consolidated financial statements 
of the Company comprise the Company and its subsidiaries (together referred to as the "Group") and the Group's interest in jointly 
controlled entities.	

1. Statement of compliance
The preliminary summarised consolidated annual financial statements have been prepared in accordance with the recognition and measurement 
criteria of International Financial Reporting Standards ("IFRS"), the presentation and disclosure requirements of IAS 34 - Interim 
Financial Reporting, the AC 500 Standards issued by the Accounting Practices Board, the Listing Requirements of the JSE Limited (the "JSE") 
and the South African Companies Act.

2. Basis of preparation
The preliminary summarised consolidated financial statements are prepared in millions of South African Rands ("Rm") on the historical cost 
basis, except for derivative financial instruments, biological assets and liabilities for cash settled share-based payment arrangements 
which are measured at fair value and non-current assets and disposal groups held-for-sale which are stated at the lower of carrying amount 
and fair value less costs to sell. The accounting policies used in the preparation of these results are consistent with those presented in 
the annual financial statements for the year ended 30 June 2012 and have been applied consistently to the years presented in these 
preliminary summarised consolidated financial statements by all Group entities.

3. Changes in accounting policies
In the 2012 financial year the Group adopted the option to recognise immediately in other comprehensive income actuarial gains and losses 
arising from the defined benefit post retirement medical aid plan, in accordance with the allowed alternative under the existing IAS 19 - 
Employee Benefits. In prior years, the Group applied the corridor method to recognise actuarial gains or losses in profit or loss.
The change in accounting policy has been applied retrospectively with the restatement of comparatives. The table below summarises the 
adjustment made to the balance sheet and statement of comprehensive income on implementation.

                                                       Employee           Net      Retained     
                                                       benefits      deferred     earnings/          
                                                      liability      taxation     profit or
                                                            R'm        asset/          loss	Reserves
                                                                  (liability)           R'm	     R'm
                                                                          R'm
Balance as reported at 1 July 2010                      (292,8)        (53,6)     (3 381,7)       (70,5)
Effect of change in accounting policy                    (67,3)          18,9         (5,5)         53,9
Restated balance at 1 July 2010                         (360,1)        (34,7)     (3 387,2)       (16,6)
Balance as reported at 30 June 2011                     (286,7)        (10,1)     (3 466,0)      (131,2)
Effect of change in accounting policy                    (67,3)          18,9         (5,5)         53,9
Effect on profit or loss                                  (5,2)           1,4         (3,8)          7,6
Restated balance at 30 June 2011                        (359,2)          10,2     (3 475,3)       (69,7)

The effect on the statement of comprehensive income was as follows:


                                                           2012          2011
                                                            R'm           R'm

Selling and administrative expenses                       (2,7)         (5,3)
Taxation                                                    0,8           1,5
                                                          (1,9)         (3,8)

The effect on basic earnings per share and diluted earnings per share was as follows:
				
                                                                                        2012               2011
                                                                                       cents              cents
Basic earnings per share from total operations as previously reported                  323,7              230,6
Effect of change in accounting policy                                                    0,6                1,3
Restated basic earnings per share from total operations                                324,3              231,9
Diluted earnings per share from total operations as previously report                  308,7              222,8
Effect of change in accounting policy                                                    0,6                1,2
Restated diluted earnings per share from total operations                              309,3              224,0

For the year ended 30 June 2012
4. Determination of headline earnings
                                                                                                                              Restated
                                                                                                                 Audited       Audited             %
                                                                                                              Year ended    Year ended        change
                                                                                                                 30 June       30 June
                                                                                                                    2012          2011

                                                                                                                      Rm            Rm

Profit for the year attributable to owners of AVI                                                                  970,5         701,6          38,3
Total capital items after taxation                                                                                   7,1        (56,8)
Net loss on disposal of investments, properties and plant and equipment                                            (1,8)         (1,0)
Net profit/(loss) on disposal of assets of disposal                                                                  0,3         (0,2)
groups held-for-sale
Profit on disposal of Denny                                                                                         27,3             -
Loss on disposal of Sir Juice                                                                                          -        (12,4)
Loss on disposal of Alpesca                                                                                            -        (53,9)
Impairment of plant and equipment, investments, intangible assets and assets classified as held-for-sale          (13,5)         (7,7)
Other                                                                                                                1,3             -
Capital items attributable to non-controlling interests                                                            (0,1)           3,2
Taxation attributable to capital items                                                                             (6,4)          15,2
Headline earnings                                                                                                  963,4         758,4          27,0
Attributable to:
Continuing operations                                                                                              957,5         745,4          28,5
Discontinued operations                                                                                              5,9          13,0
                                                                                                                   963,4         758,4          27,0
Headline earnings per ordinary share (cents)                                                                       322,0         250,7          28,4
Continuing operations (cents)                                                                                      320,0         246,4          29,9
Discontinued operations (cents)                                                                                      2,0           4,3
Diluted headline earnings per ordinary share (cents)                                                               307,1         242,2          26,8
Continuing operations (cents)                                                                                      305,2         238,0          28,2
Discontinued operations (cents)											     1,9	   4,2		


5. Segmental results

Segmental results
                                                                                 Restated
                                                                    Audited       Audited
                                                                 Year ended    Year ended
                                                                    30 June       30 June
                                                                       2012          2011            %
                                                                         Rm            Rm        change
CONTINUING OPERATIONS
Segmental revenue
Food and beverage brands                                            6 274,8       5 641,2          11,2
Entyce                                                              2 330,7       2 112,2          10,3
Snackworks                                                          2 428,7       2 159,7          12,5
Chilled and frozen convenience brands                               1 515,4       1 369,3          10,7
Fashion brands                                                      2 005,2       1 842,6           8,8
Personal care                                                         918,1         890,3           3,1
Footwear and apparel                                                1 087,1         952,3          14,2
Corporate 		                                                7,1           5,9
Group                                                               8 287,1       7 489,7          10,6
Segmental operating profit before capital items
Food and beverage brands                                              922,5         758,2          21,7
Entyce                                                                415,4         402,2           3,3
Snackworks                                                            328,5         263,9          24,5
Chilled and frozen convenience brands                                 178,6          92,1          93,9
Fashion brands                                                        463,6         368,5          25,8
Personal care                                                         155,7         132,4          17,6
Footwear and apparel                                                  307,9         236,1          30,4
Corporate 		                                              (13,6)         (9,2)
Group                                                               1 372,5       1 117,5          22,8
Discontinued operations
Segmental revenue
Alpesca                                                                   -         298,4       (100,0)
Denny                                                                     -         385,2       (100,0)
Real Juice                                                            146,2         196,6        (25,6)

                                                                      146,2         880,2        (83,4)
Segmental operating profit before capital items
Alpesca                                                                   -        (37,5)       (100,0)
Denny                                                                     -          50,0       (100,0)
Real Juice                                                              8,1          10,7        (24,3)
                                                                        8,1          23,2        (65,1)

On 31 May 2012 AVI entered into an agreement in terms of which Clover will acquire 100% of the equity in and shareholders' loans against 
Real Juice. The transactionis subject to the approval of the South African Competition Authorities in terms of the Competition Act No 89 
of 1998, as amended, which was received on 30 August 2012. Real Juice has therefore been disclosed as a discontinued operation in AVI's 
results for the year ended 30 June 2012 and comparatives for the year ended 30 June 2011 in the statements of comprehensive income and 
cash flows have been restated accordingly.						
		
6. Investment activity
Effective 1 July 2011, the Group entered into an agreement in terms of which it sold 100% of the issued share capital of and AVI's  
shareholder claims against Denny to Blue Falcon 134 Trading Proprietary Limited ("Blue Falcon") for a consideration of R261,9 million 
(after adjustments and interest). Blue Falcon's shareholders include RMB Ventures Six Proprietary Limited, an indirect subsidiary of 
FirstRand Limited, which holds a 49,9% interest therein, and Denny's executive management team. The value of the net assets disposed 
at the effective date amounted to R234,6 million and consequently a capital profit of R27,3 million was earned, before attributing capital 
gains taxation of R10,3 million.

Other than the above transaction there were no significant changes to investments during the period.

7.Commitments	
                                                                                               Restated
                                                                                  Audited       Audited
                                                                               Year ended    Year ended
                                                                                  30 June       30 June
                                                                                     2012          2011
                                                                                       Rm            Rm
Capital expenditure commitments for property, plant and equipment*                  302,4         372,8
Contracted for                                                                      175,0         182,6
Authorised but not contracted for                                                   127,4         190,2

* Not included in capital commitments in respect of property, plant and equipment contracted for at 30 June 2011 are commitments of R1,6 
million relating to Denny. It is anticipated that this expenditure will be financed by cash resources, cash generated from activities and 
existing borrowing facilities. Other contractualcommitments have been entered into in the normal course of business.

8. Post balance sheet events
Acquisition of Green Cross
Effective 1 March 2012 AVI entered into an agreement in terms of which it acquired 100% of the issued share capital and shareholders' loans 
of Green Cross. Since the acquisition of A&D Spitz Proprietary Limited ("Spitz") in July 2005, AVI's premium branded footwear and apparel 
portfolio has contributed meaningfully to the Group's growth in profitability. The transaction represents a rare opportunity to acquire an 
established, category leading brand of relevant scale with a solid record of profitable operations.
			
The purchase consideration payable by AVI was an initial amount of R382,5 million plus a contingent earn-out payment up to a maximum amount 
of R35,0 million, payable in March 2013 subject to certain profit hurdles being achieved in Green Cross' financial year ending 28 February 
2013. The transaction was subject to the fulfilment of certain conditions precedent including the unconditional approval of the South African 
Competition Authorities in terms of the Competition Act No 89 of 1998, as amended, and the receipt by the parties of the written consent of 
certain landlords in respect of the transfer of certain leases over premises utilised by Green Cross in its retails operations. The conditions 
precedent were met shortly after year-end and consequently the transaction will be effective fom 1 July 2012.	
If the acquisition had occurred on 1 July 2011, Group revenue and profit after taxation would have been increased by a further R315,5 million 
and R42,7 million respectively. These amounts have been calculated using the Group's accounting policies and by adjusting the results of the 
business for the impact of funding the purchase consideration from existing cash resources. The purchase price allocation exercise has not yet 
been completed, however, it is expected that the intangible assets recognised will be of an indefinite life and will therefore not be amortised 
going forward but rather be assessed for impairment on an annual basis. 

                                                          Carrying
                                                            amount
                                                                Rm
Non-current assets                                            45,6
Current assets                                               134,2
Non-current liabilities                                     (97,9)
Current liabilities                                         (33,1)
Net identifiable assets and liabilities                       48,8
Premium paid                                                 377,3
Total consideration                                          426,1
Total consideration comprises:
Initial purchase consideration                               382,5
Interest payable on initial consideration                      8,6
Contingent purchase consideration                             35,0
								

Disposal of Real Juice Co Holdings Proprietary Limited
Effective 31 May 2012 AVI entered into an agreement with Clover S.A. Proprietary Limited ("Clover"), a subsidiary of Clover Industries Limited, 
in terms of which  100% of the equity in and shareholders' loans against Real Juice Co. Holdings Proprietary Limited ("Real Juice") will be disposed 
of for a consideration of R60 million.
								
Real Juice is a leading producer of fresh fruit juices, nectars and concentrates sold under the Quali and Real Juice brands predominantly in the 
Eastern, Western and Northern Cape. The only condition precedent to which the transaction is subject is the approval of the South African 
Competition Authorities in terms of the Competition Act No 89 of 1998, as amended. Approval was received on 30 August 2012 and consequently the 
transaction will be effective on the last day of the month following the receipt of such approval, being 30 September 2012. Real Juice has been 
disclosed as a discontinued operation in AVI's results for the year ended 30 June 2012 and comparatives for the year ended 30 June 2011 have been 
restated accordingly.
								
Other than the above acquisition and disposal there have been no significant events outside the ordinary course of business since the reporting date.

9. Dividend declaration
Notice is hereby given that a gross final dividend No 76 of 120 cents per share for the year ended 30 June 2012 and gross special dividend No 77 of 
180 cents per share have been declared payable to shareholders of ordinary shares. Both dividends have been declared out of income reserves and will be 
subject to dividend withholding tax at a rate of 15%. The Company has no secondary tax credits available and consequently a net final dividend of 102 
cents per share and a net special dividend of 153 cents per share will be distributed to those shareholders who are not exempt from paying dividend tax. 
In terms of the dividend tax legislation, the dividends tax amount due will be withheld and paid over to the South African Revenue Services by a nominee 
company, stockbroker or Central Securities Depository Participant ("CSDP") (collectively "Regulated Intermediary") on behalf of shareholders. However, 
all shareholders should declare their status to their Regulated Intermediary, as they may qualify for a reduced dividend tax rate or exemption. 
AVI's issued share capital at the declaration date is 342 144 990 ordinary shares. AVI's tax reference number is 9500/046/71/0. The salient dates 
relating to the payment of both dividends are as follows:

Last day to trade cum dividend on the JSE	Friday, 5 October 2012
First trading day ex dividend on the JSE	Monday, 8 October 2012
Record date				       Friday, 12 October 2012
Payment date				       Monday, 15 October 2012

In accordance with the requirements of Strate Limited, no share certificates may be dematerialised or rematerialised between Monday, 8 October 2012 
and Friday, 12 October 2012, both days inclusive.

Dividends in respect of certificated shareholders will be transferred electronically to shareholders' bank accounts on payment date. In the absence 
of specific mandates, dividend cheques will be posted to shareholders. Shareholders who hold dematerialised shares will have their accounts at their 
Central Securities Depository Participant ("CSDP") or broker credited on Monday, 15 October 2012.

10. Reports of the independent auditors
The unmodified audit reports of KPMG Inc., the independent auditors, on the annual financial statements and the preliminary summarised financial 
statements contained herein for the year ended 30 June 2012, dated 7 September 2012, are available for inspection at the registered office of the 
company. 

11. Preparer of financial statements
These preliminary summarised financial statements have been prepared under the supervision of Owen Cressey CA (SA), the AVI Group Chief Financial 
Officer.

12. Annual report
The annual report for the year ended 30 June 2012 will be posted to shareholders on or about Tuesday, 2 October 2012. The financial statements will 
include the notice of the annual general meeting of shareholders to be convened on Friday, 2 November 2012.

ADMINISTRATION AND PRINCIPAL SUBSIDIARIES
Administration
Company registration
AVI Limited ("AVI")
Reg no: 1944/017201/06
JSE share code: AVI
ISIN: ZAE000049433

Company secretary
Sureya Naidoo

Business address and registered office
2 Harries Road, Illovo
Johannesburg 2196
South Africa

Postal address
PO Box 1897, Saxonwold 2132
South Africa

Telephone: +27 (0)11 502 1300
Telefax: +27 (0)11 502 1301
e-mail: info@avi.co.za
Website: www.avi.co.za

Auditors
KPMG Inc.

Sponsor
The Standard Bank of South Africa Limited

Commercial bankers
Standard Bank
FirstRand Bank

Transfer secretaries
Computershare Investor Services 2004 (Pty) Limited

Business address
70 Marshall Street, Marshalltown
Johannesburg 2001
South Africa

Postal address
PO Box 61051, Marshalltown 2107
South Africa
Telephone: +27 (0)11 370 5000
Telefax: +27 (0)11 370 5271

Principal subsidiaries
Food and beverage brands
National Brands Limited
Reg no: 1948/029389/06
(incorporating Entyce Beverages, Snackworks and Ciro Beverage Solutions)

30 Sloane Street, Bryanston 2021
PO Box 5159, Rivonia 2128
Telefax: +27 (0)11 707 7799

Managing directors
Donnee MacDougall (Entyce Beverages)
Telephone: +27 (0)11 707 7100

Gaynor Poretti (Snackworks)
Telephone: +27 (0)11 707 7200

Paul Hanlon (Ciro Beverage Solutions)
Telephone: +27 (0)11 287 6700

The Real Juice Co Holdings (Pty) Limited
Reg no: 2001/001413/07
2 Harries Road, Illovo 2196
PO Box 1897, Saxonwold 2132

Managing director
Donnee MacDougall
Telephone: +27 (0)11 707 7100
Telefax: +27 (0)11 707 7808

Chilled and frozen convenience brands
Irvin & Johnson Holding Company (Pty) Limited
Reg no: 2004/013127/07

1 Davidson Street, Woodstock
Cape Town 8001
PO Box 1628, Cape Town 8000

Managing director
Ronald Fasol
Telephone: +27 (0)21 402 9200
Telefax: +27 (0)21 402 9282

Fashion brands
Indigo Brands (Pty) Limited
Reg no: 2003/009934/07
16-20 Evans Avenue, Epping 1 7460
PO Box 3460, Cape Town 8000

Managing director
Susan O'Keeffe
Telephone: +27 (0)21 507 8500
Telefax: +27 (0)21 507 8501

A&D Spitz (Pty) Limited
Reg no: 1999/025520/07
29 Eaton Avenue, Bryanston 2021
PO Box 782916, Sandton 2145

Managing director
Robert Lunt
Telephone: +27 (0)11 707 7300
Telefax: +27 (0)11 707 7763

Green Cross
Incorporating the following legal entities:
Green Cross Manufacturing (Pty) Limited
Reg no: 1994/08549/07
Green Cross Properties (Pty) Limited
Reg no: 1994/09874/07
Green Cross Retail Holdings (Pty) Limited
Reg no: 1998/003766/07
26 - 30 Benbow Avenue

Epping Industria 7460
PO Box 396
Eppindust 7475

Managing director
Gunter Zeppel
Telephone: +27 (0)21 507 9700
Telefax: +27 (0)21 507 9707

DIRECTORS
Executive
Simon Crutchley
(Chief executive officer)

Owen Cressey
(Chief financial officer)

Independent non-executive
Gavin Tipper 2
(Chairman)

Angus Band 2

James Hersov

Kim Macilwaine 5

Adriaan Nühn 4

Mike Bosman 1

Andisiwe Kawa 2

Abe Thebyane
Neo Dongwana 1,3

Barry Smith 3

1 Member of the Audit and Risk Committee
2 Member of the Remuneration, Nomination and Appointments Committee
3 Member of the Social and Ethics Committee
4 Dutch
5 British

For more information, please visit our website:
www.avi.co.za


Date: 10/09/2012 07:15:00 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. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

Share This Story