Wrap Text
Unaudited interim results
Oceana Group Limited
Incorporated in the Republic of South Africa
(Registration number: 1939/001730/06)
JSE share code: OCE
NSX share code: OCG
ISIN: ZAE000025284
("Oceana" or "the Group" or "the Company")
Interim report and dividend declaration for the six months ended 31 March 2013
and further cautionary announcement
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited
six months six Months Audited
ended ended year ended
31 March 31 March 30 Sept
2013 2012 Change 2012
Notes R'000 R'000 % R'000
Revenue 2 561 396 2 132 271 20 4 647 951
Cost of sales 1 622 182 1 342 227 21 2 875 765
Gross profit 939 214 790 044 19 1 772 186
Sales and distribution expenditure 230 789 203 621 13 428 870
Marketing expenditure 22 329 17 577 27 51 323
Overhead expenditure 328 358 268 314 22 599 363
Net foreign exchange (gain)/loss (8 536) 729 (18 395)
Operating profit before abnormal items 366 274 299 803 22 711 025
Abnormal items 3 (34 750) (47 955)
Operating profit 366 274 265 053 38 663 070
Investment income 10 335 18 763 (45) 36 279
Interest paid (2 190) (1 213) 81 (3 108)
Profit before taxation 374 419 282 603 32 696 241
Taxation 116 124 102 835 13 232 315
Profit after taxation 258 295 179 768 44 463 926
Other comprehensive income
Movement on foreign currency translation
reserve 2 380 (433) 1 826
Movement on cash flow hedging reserve 232 (1 168) (1 522)
Other comprehensive income, net of taxation 2 612 (1 601) 304
Total comprehensive income for the period 260 907 178 167 46 464 230
Profit after taxation attributable to:
Shareholders of Oceana Group Limited 240 112 168 088 43 443 790
Non-controlling interests 18 183 11 680 56 20 136
258 295 179 768 44 463 926
Total comprehensive income for the period
attributable to:
Shareholders of Oceana Group Limited 242 724 166 487 46 444 094
Non-controlling interests 18 183 11 680 56 20 136
260 907 178 167 46 464 230
Weighted average number of shares on which
earnings per share are based (000's) 7 100 290 100 069 100 100
Adjusted weighted average number of shares
on which diluted earnings per share are based
(000's) 110 387 107 964 108 659
Earnings per share (cents)
Basic 239,4 168,0 43 443,3
Diluted 217,5 155,7 40 408,4
Dividends per share (cents) 100,0 45,0 122 301,0
Headline earnings per share (cents)
Basic 239,3 167,9 43 455,7
Diluted 217,4 155,6 40 419,8
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited
six months six months Audited
ended ended year ended
31 March 31 March 30 Sept
2013 2012 2012
R'000 R'000 R'000
Balance at the beginning of the period 1 633 242 1 399 351 1 399 351
Total comprehensive income for the period 260 907 178 167 464 230
Profit after taxation 258 295 179 768 463 926
Movement on foreign currency translation reserve 2 380 (433) 1 826
Movement on cash flow hedging reserve 232 (1 168) (1 522)
Recognition of share-based payments 2 567 3 713 7 614
Share options exercised 325 2 713 3 524
Decrease in shares held by share trust 1 370 875
Loss on sale of shares by share trust (353) (130)
Shares in subsidiary purchased from
non-controlling interest (7 158)
Dividends declared (275 130) (195 148) (242 222)
Balance at the end of the period 1 615 770 1 388 796 1 633 242
Comprising:
Share capital and premium 32 387 29 006 30 692
Foreign currency translation reserve 1 659 (2 980) (721)
Capital redemption reserve 130 130 130
Cash flow hedging reserve 632 753 400
Share-based payment reserve 59 688 53 278 57 144
Distributable reserves 1 470 226 1 266 408 1 496 895
Non-controlling interests 51 048 42 201 48 702
Balance at the end of the period 1 615 770 1 388 796 1 633 242
CONDENSED GROUP STATEMENT OF CASH FLOWS
Unaudited Unaudited
six months six months Audited
ended ended year ended
31 March 31 March 30 Sept
2013 2012 2012
R'000 R'000 R'000
Cash flows from operating activities
Operating profit before abnormal items 366 274 299 803 711 025
Adjustment for non-cash and other items 53 757 17 547 102 832
Cash operating profit before working capital changes 420 031 317 350 813 857
Working capital changes (226 947) (9 805) (357 295)
Cash generated from operations 193 084 307 545 456 562
Investment income received 5 474 13 211 25 312
Interest paid (2 190) (1 213) (3 108)
Taxation paid (154 952) (78 032) (242 588)
Dividends paid (277 008) (195 230) (242 222)
Cash (outflow)/inflow from operating activities (235 592) 46 281 (6 044)
Cash outflow from investing activities (28 687) (12 434) (153 331)
Capital expenditure (52 584) (23 468) (69 746)
Proceeds on disposal of property, plant and
equipment 608 118 1 536
Repayment received on preference shares 28 653 7 677 11 949
Net movement on loans and advances 1 794 3 239 9 718
Acquisition of additional shares in subsidiary (7 158)
Acquisition of businesses (105 296)
Acquisition of fishing rights (1 296)
Acquisition of investment (196)
Cash inflow from financing activities 5 059 5 860 7 987
Proceeds from issue of share capital 1 342 2 713 4 270
Short-term borrowings raised 3 717 3 147 3 717
Net (decrease)/increase in cash and cash equivalents (259 220) 39 707 (151 388)
Cash and cash equivalents at the beginning of the
period 231 604 384 544 384 544
Effect of exchange rate changes (219) 611 (1 552)
Cash and cash equivalents at the end of the period (27 835) 424 862 231 604
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
31 March 31 March 30 Sept
2013 2012 2012
R'000 R'000 R'000
Assets
Non-current assets 671 685 584 116 690 615
Property, plant and equipment 447 525 400 601 435 850
Goodwill 10 000 10 000
Trademark 7 276 17 961 6 229
Fishing rights 65 658 2 912 72 409
Deferred taxation 23 874 14 561 23 187
Investments and loans 117 352 148 081 142 940
Current assets 1 834 945 1 540 607 1 878 113
Inventories 943 985 517 318 777 979
Accounts receivable 776 862 554 136 823 956
Cash and cash equivalents 114 098 469 153 276 178
Total assets 2 506 630 2 124 723 2 568 728
Equity and liabilities
Capital and reserves
Share capital and premium 32 387 29 006 30 692
Foreign currency translation reserve 1 659 (2 980) (721)
Capital redemption reserve 130 130 130
Cash flow hedging reserve 632 753 400
Share-based payment reserve 59 688 53 278 57 144
Distributable reserves 1 470 226 1 266 408 1 496 895
Interest of own shareholders 1 564 722 1 346 595 1 584 540
Non-controlling interests 51 048 42 201 48 702
Total capital and reserves 1 615 770 1 388 796 1 633 242
Non-current liabilities 136 401 101 379 139 270
Liability for share-based payments 101 564 63 713 97 427
Deferred taxation 34 837 37 666 41 843
Current liabilities 754 459 634 548 796 216
Accounts payable and provisions 612 526 590 257 751 642
Bank overdrafts 141 933 44 291 44 574
Total equity and liabilities 2 506 630 2 124 723 2 568 728
Number of shares in issue net of
treasury shares (000's) 100 329 100 113 100 219
Net asset value per ordinary share (cents) 1 560 1 345 1 581
Total liabilities excluding deferred taxation:
Total equity (%) 53 50 55
Total borrowings: Total equity (%) 9 3 3
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), SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, Financial
Reporting Pronouncements as issued by the Financial Reporting Standards Council, the information
as required by IAS 34: Interim Financial Reporting and 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 2012. The condensed financial
information was prepared under the supervision of the group financial director, RG Nicol CA(SA).
The results have not been audited or reviewed by the Group's auditors, Deloitte & Touche.
Unaudited Unaudited
six months six months Audited
ended ended year ended
31 March 31 March 30 Sept
2013 2012 2012
R'000 R'000 R'000
2. Segmental results
Revenue
Canned fish and fishmeal 1 396 141 1 107 367 2 582 636
Horse mackerel and hake 853 078 747 980 1 435 082
Lobster, squid and French fries 174 978 167 276 350 443
Commercial cold storage 137 199 109 648 279 790
Total 2 561 396 2 132 271 4 647 951
Operating profit/(loss) before abnormal items
Canned fish and fishmeal 103 759 101 852 318 941
Horse mackerel and hake 239 635 173 914 296 578
Lobster, squid and French fries (899) 7 441 29 538
Commercial cold storage 23 779 16 596 65 968
Total 366 274 299 803 711 025
Total assets
Canned fish and fishmeal 1 386 815 832 193 1 362 685
Horse mackerel and hake 517 808 348 440 427 057
Lobster, squid and French fries 127 312 101 922 95 680
Commercial cold storage 219 371 210 374 241 002
Financing 231 450 617 233 419 117
2 482 756 2 110 162 2 545 541
Deferred taxation 23 874 14 561 23 187
Total 2 506 630 2 124 723 2 568 728
Total liabilities
Canned fish and fishmeal 361 705 288 813 515 752
Horse mackerel and hake 262 278 283 184 220 055
Lobster, squid and French fries 32 950 34 401 44 808
Commercial cold storage 45 442 40 144 60 456
Financing 153 648 51 719 52 572
856 023 698 261 893 643
Deferred taxation 34 837 37 666 41 843
Total 890 860 735 927 935 486
3. Abnormal items
Competition Commission administrative penalty (34 750) (34 750)
Trademark impairment (13 205)
Abnormal loss before and after taxation (34 750) (47 955)
4. Determination of headline earnings
Profit after taxation attributable to shareholders
of Oceana Group Limited 240 112 168 088 443 790
Adjusted for:
Trademark impairment 13 205
Net surplus on disposal of property, plant
and equipment (151) (68) (1 193)
Total tax effect of adjustments 43 20 356
Headline earnings for the period 240 004 168 040 456 158
5. Dividends
Estimated dividend declared after reporting date 100 329 45 061 256 560
Dividend on shares issued prior to last day to trade 8 83
Actual dividend declared after reporting date 45 069 256 643
6. Supplementary information
Amortisation of fishing rights 6 752 194 853
Depreciation 40 452 38 439 86 339
Operating lease charges 22 705 17 499 39 615
Capital expenditure 52 585 23 468 69 746
Expansion 11 242 2 006 2 085
Replacement 41 343 21 462 67 661
Budgeted capital commitments 157 277 82 737 181 159
Contracted 49 939 32 822 21 879
Not contracted 107 338 49 915 159 280
Number of Number of Number of
shares shares shares
'000 '000 '000
7. Elimination of treasury shares
Weighted average number of shares in issue 119 440 119 308 119 332
Less: shares held by share trusts (14 056) (14 145) (14 138)
Less: treasury shares held by subsidiary company (5 094) (5 094) (5 094)
Weighted average number of shares on
which earnings per share and headline earnings
per share are based 100 290 100 069 100 100
8. 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 31 March 2013.
COMMENTS
Financial results
Basic earnings per share and basic headline earnings per share for the six months ended 31 March 2013 increased
by 43% over those of the comparative six months to 31 March 2012.
Revenue for the period increased by 20%. Operating profit before abnormal items increased by 22% due to good results
in the horse mackerel and hake, and commercial cold storage segments. Operating profit including abnormal items rose
by 38% as the prior year comparative figures included an abnormal charge relating to the Competition Commission
administrative penalty. In order to address the imbalance between the interim and final dividend for the financial
year, an interim dividend of 100 cents per share has been declared (2012: 45 cents per share). The increase in the
interim dividend should not be construed as an indicator of dividends increase for the full year.
Review of operations
Canned fish and fishmeal
The Total Allowable Catch (TAC) for pilchard in 2013 is 90 000 tons (2012: 100 595 tons). Pilchard landings at
the St Helena Bay cannery have been good and are currently significantly higher than at the same stage last season.
The Namibian pilchard TAC for 2013 is 25 000 tons (2012: 31 000 tons). The season in Namibia commenced on 8 April
and catches to date have been satisfactory. The Company enhanced its international supply chain for canned fish
over the last six months through the conclusion of further supply contracts and investment in working capital.
Canned fish sales on the domestic market increased by 30%. This was achieved through a 17% increase in volume
and price adjustments necessitated by the impact of the weaker rand exchange rate on the landed cost of imported
product.
Profit from canned fish operations was above that for the same period last year.
The initial anchovy A season TAC for 2013 is 247 500 tons (final A season TAC for 2012: 352 718 tons). Landings
of anchovy and redeye herring were extremely poor during the reporting period and significantly lower than in the
previous season. An improvement has, however, been evident in April and May to date. The lower volumes resulted
in higher costs per ton of fishmeal and fish oil produced. Selling prices were high due to firm international
market prices and the weaker rand exchange rate. The loss for the period was higher than the prior year.
Horse mackerel and hake
The Namibian horse mackerel TAC for 2013 was increased to 350 000 tons (2012: 320 000 tons). The initial 2013
quota allocation to rights holders who were first granted rights in 2012 was 115 000 tons (2012: 100 000 tons)
and all other rights holders received 109 400 tons (2012: 100 000 tons). An amount of 84 600 tons of the TAC is
still to be allocated by the Minister of Fisheries. In South Africa the Precautionary Maximum Catch Limit for
directed catch of horse mackerel increased by 10% to 34 650 tons (2012: 31 500 tons).
Although catch rates in Namibia have been very good the overall tonnage caught was lower than for the comparative
six month period, which included additional quota made available to our South African vessel in the final quarter
of calendar 2011. One of our three Namibian trawlers has been operating successfully in Angola since February.
This arrangement may be extended depending on catch rates and the availability of quota in Namibia for the
remainder of the year. Catch rates in South Africa were higher than in the previous year which resulted in a
small decrease in vessel operating costs per ton.
Prices remained firm in our major markets with higher prices being achieved for certain fish sizes. Revenue
was further enhanced in rand terms due to the currency exchange rate.
Profit from horse mackerel showed a significant increase.
Profit from hake operations rose by 50% primarily due to the successful integration of the business acquired
from Lusitania in September 2012.
Lobster, squid and French fries
The TAC for West coast lobster remains the same as 2012 at 2 425 tons, and quota available to Oceana for the
current season amounts to 327 tons (2012: 327 tons). Catch rates were in line with those of last year. Export
prices in US dollar terms declined slightly, however, rand prices improved due to the effect of the weaker
currency. Profits from lobster were higher for the six month period.
The squid business incurred a loss due to very poor catches which were even lower than those of last year. The
effect of lower sales volumes was partly offset by higher prices.
The French fry business incurred a loss due to the effect of poor quality potatoes on already thin operating margins.
Commercial cold storage
Revenue increased by 25% due to improved occupancy levels at most of the stores and the additional capacity secured
last year. Overall profit from the cold storage business improved considerably.
Further cautionary announcement
Shareholders are referred to the announcement dated 27 March 2013 and are advised that Oceana remains in negotiations
regarding a potential acquisition. Accordingly, shareholders are advised to continue to exercise caution when dealing
in the Companys securities until a further announcement in this regard is made.
Directorate changes
Phil Roux resigned from the board of directors ("the Board") on 22 February 2013 having served as a director since 2011.
The Board wishes to thank Phil for his contribution during this period. Noel Doyle, who holds an executive position
at Tiger Brands, was appointed to the Board on 8 April 2013.
Rod Nicol has elected to take early retirement and will be resigning as a director of the Company on 30 June 2013. The
Board wishes to thank Rod for his contribution to the Company over the past 27 years. Imraan Soomra will be appointed
Financial Director with effect from 1 July 2013. Imraan is a Chartered Accountant (SA) and joins Oceana having been
the Financial Director of the Hospital Division of Netcare Limited and prior to that the Head of Channels at Supersport
International.
Prospects
The Group is well positioned to take advantage of opportunities for growth. Given the increase at half year, earnings
for the full year are expected to exceed those of last year. The forecast information has not been audited or reviewed
by the Groups auditors.
On behalf of the board
MA Brey FP Kuttel
Chairman Chief executive officer
9 May 2013
CASH DIVIDEND DECLARATION
Notice is hereby given of dividend number 139. A gross interim dividend amounting to 100 cents per share,
for the six months ended 31 March 2013, was declared on Thursday, 9 May 2013. Where applicable the deduction
of dividend withholding tax at a rate of 15% will result in a net dividend amounting to 85 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 119 449 157.
The Company's tax reference number is 9675/139/71/2.
Last day to trade cum dividend - Friday, 21 June 2013
Commence trading ex dividend - Monday, 24 June 2013
Record date - Friday, 28 June 2013
Dividend payable - Monday, 1 July 2013
Share certificates may not be dematerialised or re-materialised between Monday, 24 June 2013, and
Friday, 28 June 2013, both dates inclusive.
By order of the board
JC Marais
Company secretary
9 May 2013
COMPANY INFORMATION
Directors:
MA Brey (chairman), FP Kuttel* (chief executive officer), ZBM Bassa, PG de Beyer, ABA Conrad*, NP Doyle,
PB Matlare, RG Nicol*, S Pather, 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
See www.oceana.co.za for more details
Date: 09/05/2013 05:16:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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