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Audited Group Results and dividend declaration for the year ended 30 September 2012
Oceana Group Limited
Incorporated in the Republic of South Africa
(Registration number: 1939/001730/06)
JSE Share Code: OCE
NSX Share Code: OCG
ISIN Number: ZAE000025284
("Oceana" or "the group" or "the company")
AUDITED GROUP RESULTS
and dividend declaration for the year ended 30 September 2012
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
Audited Audited
year ended year ended
30 Sept 30 Sept
2012 2011 Change
Notes R'000 R'000 %
Revenue 4 647 951 3 657 196 27
Cost of sales 2 875 765 2 299 778 25
Gross profit 1 772 186 1 357 418 31
Sales and distribution expenditure 428 870 338 927 27
Marketing expenditure 51 323 44 389 16
Overhead expenditure 599 363 461 487 30
Net foreign exchange gain (18 395) (74)
Operating profit before abnormal items 711 025 512 689 39
Abnormal items 3 (47 955)
Operating profit 663 070 512 689 29
Investment income 36 279 25 826 40
Interest paid (3 108) (2 872) 8
Profit before taxation 696 241 535 643 30
Taxation 232 315 189 426 23
Profit after taxation 463 926 346 217 34
Other comprehensive income
Movement on foreign currency translation
reserve 1 826 3 512
Movement on cash flow hedging reserve (1 522) 9 853
Other comprehensive income, net of taxation 304 13 365
Total comprehensive income for the year 464 230 359 582 29
Profit after taxation attributable to:
Shareholders of Oceana Group Limited 443 790 333 170 33
Non-controlling interests 20 136 13 047 54
463 926 346 217 34
Total comprehensive income attributable to:
Shareholders of Oceana Group Limited 444 094 346 535 28
Non-controlling interests 20 136 13 047 54
464 230 359 582 29
Weighted average number of shares on which
earnings per share is based (000's) 7 100 100 99 868
Adjusted weighted average number of shares on
which diluted earnings per share is based (000's) 108 659 106 544
Earnings per share (cents)
Basic 443,3 333,6 33
Diluted 408,4 312,7 31
Dividends per share (cents) 301,0 220,0 37
Headline earnings per share (cents)
Basic 455,7 333,7 37
Diluted 419,8 312,7 34
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
Audited Audited
30 Sept 30 Sept
2012 2011
R'000 R'000
Assets
Non-current assets 690 615 600 373
Property, plant and equipment 435 850 415 623
Goodwill 10 000
Trademark 6 229 18 101
Fishing rights 72 409
Deferred taxation 23 187 13 204
Investments and loans 142 940 153 445
Current assets 1 878 113 1 422 623
Inventories 777 979 489 850
Accounts receivable 823 956 536 913
Cash and cash equivalents 276 178 395 860
Total assets 2 568 728 2 022 996
Equity and liabilities
Capital and reserves
Share capital and premium 30 692 26 293
Foreign currency translation reserve (721) (2 547)
Capital redemption reserve 130 130
Cash flow hedging reserve 400 1 922
Share-based payment reserve 57 144 49 599
Distributable reserves 1 496 895 1 283 031
Interest of own shareholders 1 584 540 1 358 428
Non-controlling interests 48 702 40 923
Total capital and reserves 1 633 242 1 399 351
Non-current liabilities 139 270 95 363
Liability for share-based payments 97 427 53 694
Deferred taxation 41 843 41 669
Current liabilities 796 216 528 282
Accounts payable and provisions 751 642 516 966
Bank overdrafts 44 574 11 316
Total equity and liabilities 2 568 728 2 022 996
Number of shares in issue net of treasury
shares (000's) 100 219 99 939
Net asset value per ordinary share (cents) 1 581 1 359
Total liabilities excluding deferred taxation:
Total equity (%) 55 42
Total borrowings: Total equity (%) 3 1
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
Audited Audited
year ended year ended
30 Sept 30 Sept
2012 2011
R'000 R'000
Balance at the beginning of the year 1 399 351 1 246 470
Total comprehensive income for
the year 464 230 359 582
Profit after taxation 463 926 346 217
Movement on foreign currency translation reserve 1 826 3 512
Movement on cash flow hedging reserve (1 522) 9 853
Shares issued 3 524 2 524
Movement in treasury shares held by share trusts 875 640
Recognition of share-based payments 7 614 9 628
Loss on sale of treasury shares (130) (52)
Additional non-controlling interest arising on
acquisition 552
Dividends declared (242 222) (219 993)
Balance at the end of the year 1 633 242 1 399 351
Comprising:
Share capital and premium 30 692 26 293
Foreign currency translation reserve (721) (2 547)
Capital redemption reserve 130 130
Cash flow hedging reserve 400 1 922
Share-based payment reserve 57 144 49 599
Distributable reserves 1 496 895 1 283 031
Non-controlling interests 48 702 40 923
Balance at the end of the year 1 633 242 1 399 351
CONDENSED GROUP STATEMENT OF CASH FLOWS
Audited Audited
year ended year ended
30 Sept 30 Sept
2012 2011
Note R'000 R'000
Cash flows from operating activities
Operating profit before abnormal items 711 025 512 689
Adjustment for non-cash and other items 102 832 97 647
Cash operating profit before working capital
changes 813 857 610 336
Working capital changes (357 295) 118 875
Cash generated from operations 456 562 729 211
Investment income received 25 312 14 320
Interest paid (3 108) (2 872)
Taxation paid (242 588) (169 132)
Dividends paid (242 222) (219 993)
Cash (outflow)/inflow from operating
activities (6 044) 351 534
Cash outflow from investing activities (153 331) (115 827)
Capital expenditure (69 746) (125 988)
Proceeds on disposal of property, plant and
equipment 1 536 460
Acquisition of businesses 8 (105 296) (258)
Acquisition of fishing rights (1 296)
Repayment received on preference shares 11 949 22 829
Net movement on loans and advances 9 718 (12 870)
Acquisition of investment (196)
Cash inflow from financing activities 7 987 4 902
Proceeds from issue of share capital 4 270 3 112
Short-term borrowings raised 3 717 1 790
Net (decrease)/increase in cash and cash
equivalents (151 388) 240 609
Cash and cash equivalents at the beginning of
the year 384 544 145 116
Effect of exchange rate changes (1 552) (1 181)
Cash and cash equivalents at the end of the
year 231 604 384 544
Notes
1. Basis of preparation
The condensed financial information has been prepared in accordance with the framework
concepts and the measurement and recognition requirements of International Financial
Reporting Standards (IFRS) of the International Accounting Standards Board, the AC 500
standards as issued by the Accounting Practices Board, the information as required by
IAS 34: Interim Financial Reporting and the requirements of the Companies Act of
South Africa. The report has been prepared using accounting policies that comply with
IFRS which are consistent with those applied in the financial statements for the year
ended 30 September 2011. The condensed financial information was prepared under the
supervision of the group financial director, RG Nicol CA(SA), and has been audited
in compliance with the Companies Act.
The auditors, Deloitte & Touche, have issued their opinion on the group financial
statements for the year ended 30 September 2012. The audit was conducted in accordance
with International Standards on Auditing. They have issued an unmodified audit opinion.
These condensed financial statements have been derived from the group financial
statements and are consistent, in all material respects, with the group financial
statements. A copy of their audit report is available for inspection at the company's
registered office. The audit report does not necessarily cover all the information
contained in this announcement. Shareholders are therefore advised that in order to
obtain a full understanding of the nature of the auditors' work they should obtain a copy
of that report together with the accompanying financial information from the registered
office of the company. Any reference to future financial performance included in this
announcement, has not been reviewed or reported on by the company's auditors.
Audited Audited
year ended year ended
30 Sept 30 Sept
2012 2011
R'000 R'000
2. Segmental results
Revenue
Canned fish and fishmeal 2 582 636 1 981 722
Lobster, squid and French fries 350 443 286 574
Horse mackerel and hake 1 435 082 1 170 907
Commercial cold storage 279 790 217 993
Total 4 647 951 3 657 196
Operating profit before abnormal items
Canned fish and fishmeal 318 941 171 761
Lobster, squid and French fries 29 538 13 399
Horse mackerel and hake 296 578 273 795
Commercial cold storage 65 968 53 734
Total 711 025 512 689
Total assets
Canned fish and fishmeal 1 362 685 789 994
Lobster, squid and French fries 95 680 136 782
Horse mackerel and hake 427 057 319 370
Commercial cold storage 241 002 214 342
Financing 419 117 549 304
2 545 541 2 009 792
Deferred taxation 23 187 13 204
Total 2 568 728 2 022 996
Total liabilities
Canned fish and fishmeal 515 752 250 063
Lobster, squid and French fries 44 808 60 169
Horse mackerel and hake 220 055 212 653
Commercial cold storage 60 456 43 493
Financing 52 572 15 598
893 643 581 976
Deferred taxation 41 843 41 669
Total 935 486 623 645
3. Abnormal items
Competition Commission administrative penalty (34 750)
Trademark impairment (13 205)
Abnormal expense before taxation (47 955)
Taxation
Abnormal expense after taxation (47 955)
4. Determination of headline earnings
Profit after taxation attributable
to own shareholders 443 790 333 170
Adjusted for:
Trademark impairment 13 205
Net (surplus)/loss on disposal of property,
plant and equipment (1 193) 57
Total tax effect of adjustments 356 (17)
Headline earnings for the year 456 158 333 210
5. Dividends
Estimated dividend declared after reporting date 256 560 182 906
Dividend on shares issued prior to last day to trade 213
Actual dividend declared after reporting date 183 119
6. Supplementary information
Amortisation 853
Depreciation 86 339 77 209
Operating lease charges 39 615 28 763
Capital expenditure 69 746 125 988
Expansion 2 085 23 321
Replacement 67 661 102 667
Budgeted capital commitments 181 159 141 545
Contracted 21 879 23 981
Not contracted 159 280 117 564
Number Number
of shares of shares
'000 '000
7. Elimination of treasury shares
Weighted average number of shares in issue 119 332 119 157
Less: treasury shares held by share trusts (14 138) (14 195)
Less: treasury shares held by subsidiary
company (5 094) (5 094)
Weighted average number of shares on which
earnings per share and headline earnings per
share are based 100 100 99 868
Audited Audited
year ended year ended
30 Sept 30 Sept
2012 2011
R'000 R'000
8. Acquisition of businesses
Property, plant and equipment (37 400) (2 817)
Goodwill (10 000)
Fishing rights (68 860)
Inventories (2 187)
Accounts receivable (2 232)
Accounts payable and provisions 514 3 001
Contingent purchase consideration 10 450
Taxation 1 200
Deferred taxation 2 225
Non-controlling interest 552
Cash movement on acquisition of businesses (105 296) (258)
Transfer of the hake, horse mackerel and cold storage businesses acquired from the
Lusitania group and associated companies took place on 18 September 2012. As a result of
the acquisition Oceana's percentage ownership in the deep-sea and inshore trawl hake TAC
increased from 1,0% to 3,3% and in the horse mackerel TAC from 30,7% to 34,7%. Approval
for transfer of an additional hake quota representing 0,8% of the TAC is still
outstanding. Included in the acquisition were two trawlers and quayside premises with a
4 400 pallet cold store. A decision by the Department of Agriculture, Forestry and
Fisheries for transfer of the south coast rock lobster fishing rights was not obtained
and accordingly this element of the transaction has not been given effect.
The fair value of the acquired fishing rights and assets is provisional and may be
adjusted upon transfer of an additional fishing right and catch agreements, which is
represented by the contingent purchase consideration. Goodwill arose on the acquisition
of the V&A Cold Store. As the business combination was primarily effected through the
acquisition of assets, it is not practicable to determine and disclose pro forma revenue
and profit or loss information for the combined entity as if the acquisitions occurred at
the beginning of the year.
9. Events after the reporting date
No events occurred after the reporting date that may have an impact on the group's
reported financial position at 30 September 2012.
The company entered into an agreement regarding a call option for a potential specific
repurchase of its shares, the details of which were announced on 7 November 2012.
COMMENTS
Financial results
Headline earnings per share for the year ended 30 September 2012 increased by 37% compared to
the previous year. Earnings per share increased by 33%.
Group operating profit before abnormal items increased by 39%. Improved results were achieved
by each of the business segments on the back of 27% higher turnover. The canned fish business
performed particularly well and, together with the turnaround in the fishmeal operation, was
the main contributor to the rise in profit. Abnormal items consisted of the administrative
penalty paid to the Competition Commission and impairment of the Glenryck trademark in the
United Kingdom.
A final dividend of 256 cents per share has been declared which, together with the interim
dividend of 45 cents, brings the total dividend for the year to 301 cents per share, an
increase of 37% on the 2011 total dividend of 220 cents.
Review of operations
Canned fish and fishmeal
Canned fish sales volumes on the domestic market were considerably higher than the previous
year. The business continued to benefit from its market leading brand Lucky Star, which is
well positioned as an affordable protein in the lower LSM segments of the market. Further
progress was made in securing a reliable international supply chain which translated into
substantially higher working capital requirements. This was necessary to ensure availability
of product which is dependent on the vagaries of worldwide pilchard fisheries. Although
additional suppliers were contracted locally and in Namibia, imports increased as a
proportion of total supplies.
The 2012 Total Allowable Catch (TAC) for pilchard in South Africa was 100 595 tons
(2011: 90 000 tons). Pilchard landings and processing yields at the St Helena Bay cannery were
good and the company's quota is expected to be landed in full by the close of the season. The
Namibian pilchard TAC was 31 000 tons (2011: 25 000 tons) and all quotas contracted to the
Etosha Fishing cannery were completed by the financial year-end.
Overall, profitability from canned fish operations was well above the prior year.
The anchovy A season TAC which ended on 31 August was 352 718 tons and B season 120 000 tons
(2011: A season 270 291 tons; B season 120 000 tons). Oceana landed 75% of its A season quota
and 30% of its B season quota which resulted in significantly higher fishmeal and fish oil
volumes than the previous year when only 47% of the A season quota was landed. Selling prices
in rand terms were slightly higher on average over the year and the business returned to
profitability having made a substantial loss last year.
Lobster, squid and French fries
The TAC for west coast lobster increased to 2 425 tons (2011: 2 286 tons). Quota available to
Oceana for the season to 30 September 2012 amounted to 327 tons (2011: 325 tons) which was
landed in full. Although the foreign selling prices were lower on average compared to the
previous year, the weaker currency translated into improved selling prices in rand terms. The
business also benefited from increased sales volumes from its high opening stockholding and
profits were accordingly higher.
Oceana's poor squid catches over the last summer season continued in the second half of the
year with industry catches being the lowest experienced in the last decade. Selling prices
increased in euro and rand terms, however, the business recorded a loss for the year.
French fries performed well, driven mainly by strong volume growth in the quick service
restaurant and value added segments. Higher volumes and improved production efficiencies
reduced cost per unit. This resulted in a return to profitability for this business.
Horse mackerel and hake
The Namibian horse mackerel TAC increased to 320 000 tons (2011: 310 000 tons). New rights
holders were allocated 41% of the TAC directed to midwater trawl resulting in a reduced
allocation to the existing rights holders. In South Africa the precautionary maximum catch
limit for directed catch of horse mackerel remained at 31 500 tons.
Catches in Namibia in the second half of the year were similar to the comparative period and
overall for the full year they were higher due to the additional quota made available in the
final quarter of calendar 2011. The benefit of increased volumes and the more favourable
exchange rate was partially offset by higher quota costs incurred as a consequence of the
reallocation of rights.
Fishing conditions off the South African coast were poor during the second half of the year.
Catch volumes declined and fuel and employee costs were higher, increasing the cost per ton of
fish caught. Selling prices were firmer particularly for large sized fish and effectively
offset the higher fishing costs.
Profit from horse mackerel showed a moderate increase.
The hake business showed an improvement on the previous year due to better catch rates, higher
local and export selling prices and the favourable effect of the weaker rand.
Cold Storage
The cold storage business experienced very good occupancy rates and high volumes handled at
most of the stores in the second half of the year, primarily driven by poultry and fish. The
additional capacity at the City Deep store was well utilised and proved to be a timely
expansion. However, the fruit handling side of the business in the port of Durban was again
disappointing, and although volumes increased the activity made a loss.
Overall, profit for the business improved considerably over the previous year.
Prospects
The group is well positioned to take advantage of opportunities for further organic and
acquisitive growth.
On behalf of the board
MA Brey FP Kuttel
Chairman Chief executive officer
8 November 2012
CASH DIVIDEND DECLARATION
Notice is hereby given of dividend number 138. A gross final dividend amounting to 256 cents
per share, in respect of the year ended 30 September 2012, was declared on Thursday,
8 November 2012. Where applicable, the deduction of dividends withholding tax at a rate of 15%
will result in a net dividend amounting to 217,6 cents per share.
The company has no credits available in respect of secondary tax on companies. The number of
ordinary shares in issue at the date of this declaration is 119 429 157. The company's tax
reference number is 9675/139/71/2. Relevant dates are as follows:
Last day to trade cum dividend Friday, 4 January 2013
Commence trading ex dividend Monday, 7 January 2013
Record date Friday, 11 January 2013
Dividend payable Monday, 14 January 2013
Share certificates may not be dematerialised or rematerialised between Monday, 7 January 2013,
and Friday, 11 January 2013, both dates inclusive.
By order of the board
JC Marais
Company secretary
8 November 2012
Company information
Directors:
MA Brey (chairman), FP Kuttel* (chief executive officer), ZBM Bassa, PG de Beyer, ABA Conrad*,
PB Matlare, RG Nicol*, S Pather, PM Roux, NV Simamane, TJ Tapela (*executive)
Registered Office:
9th Floor, Oceana House, 25 Jan Smuts Street, Foreshore, Cape Town, 8001
Transfer Secretaries:
Computershare Investor Services (Proprietary) Limited, 70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Sponsor South Africa:
The Standard Bank of South Africa Limited
Sponsor Namibia:
Old Mutual Investment Services (Namibia) (Proprietary) Limited
Company Secretary: JC Marais
Date: 08/11/2012 03:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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