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Audited preliminary group results and dividend declaration for the year ended 30 September 2013
Oceana Group Limited
Incorporated in the Republic of South Africa
(Registration Number 1939/001730/06)
("Oceana" or "the company" or "the group")
AUDITED PRELIMINARY GROUP RESULTS AND DIVIDEND DECLARATION
FOR THE YEAR ENDED 30 SEPTEMBER 2013
HEADLINE EARNINGS PER SHARE INCREASE BY 7 %
DIVIDENDS PER SHARE INCREASE BY 7 %
PRELIMINARY SUMMARISED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Audited Audited
year ended year ended
30 Sept 30 Sept
2013 2012 Change
Notes R'000 R'000 %
Revenue 4 997 354 4 647 951 8
Cost of sales 3 049 222 2 875 765 6
Gross profit 1 948 132 1 772 186 10
Sales and distribution expenditure 491 756 428 870 15
Marketing expenditure 63 503 51 323 24
Overhead expenditure 687 622 599 363 15
Net foreign exchange gain (43 428) (18 395)
Operating profit before abnormal items 748 679 711 025 5
Abnormal items 3 (47 955)
Operating profit 748 679 663 070 13
Investment income 16 330 36 279 (55)
Interest paid (10 282) (3 108)
Profit before taxation 754 727 696 241 8
Taxation 230 337 232 315 (1)
Profit after taxation 524 390 463 926 13
Other comprehensive income
Items that may be re-classified subsequently to profit or loss
Movement on foreign currency translation reserve 6 228 1 826
Movement on cash flow hedging reserve 8 788 (1 522)
Other comprehensive income, net of taxation 15 016 304
Total comprehensive income for the year 539 406 464 230 16
Profit after taxation attributable to:
Shareholders of Oceana Group Limited 491 016 443 790 11
Non-controlling interests 33 374 20 136 66
524 390 463 926 13
Total comprehensive income attributable to:
Shareholders of Oceana Group Limited 506 032 444 094 14
Non-controlling interests 33 374 20 136 66
539 406 464 230 16
Weighted average number of shares on which earnings
per share is based (000's) 7 100 302 100 100
Adjusted weighted average number of shares on which
diluted earnings per share is based (000's) 110 402 108 659
Earnings per share (cents)
Basic 489.5 443.3 10
Diluted 444.8 408.4 9
Dividends per share (cents) 322,0 301.0 7
Headline earnings per share (cents) 4
Basic 487.9 455.7 7
Diluted 443.2 419.8 6
PRELIMINARY SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Audited Audited
30 Sept 30 Sept
2013 2012
R'000 R'000
Assets
Non-current assets 725 407 690 615
Property, plant and equipment 473 821 435 850
Goodwill 10 000 10 000
Trademark 8 873 6 229
Fishing rights 83 929 72 409
Deferred taxation 30 360 23 187
Investments and loans 118 424 142 940
Current assets 2 169 999 1 878 113
Inventories 1 277 781 777 979
Accounts receivable 751 327 819 164
Taxation 14 456 4 792
Non-current assets held for sale 2 618
Cash and cash equivalents 123 817 276 178
Total assets 2 895 406 2 568 728
Equity and liabilities
Capital and reserves 1 789 375 1 633 242
Share capital and premium 33 770 30 692
Foreign currency translation reserve 5 507 (721)
Capital redemption reserve 130 130
Cash flow hedging reserve 9 188 400
Share-based payment reserve 59 337 57 144
Distributable reserves 1 620 682 1 496 895
Interest of own shareholders 1 728 614 1 584 540
Non-controlling interests 60 761 48 702
Non-current liabilities 183 688 139 270
Liability for share-based payments 143 891 97 427
Deferred taxation 39 797 41 843
Current liabilities 922 343 796 216
Accounts payable and provisions 628 550 751 642
Bank overdrafts 293 793 44 574
Total equity and liabilities 2 895 406 2 568 728
Number of shares in issue net of treasury shares (000's) 100 416 100 219
Net asset value per ordinary share (cents) 1 721 1 581
Total liabilities excluding deferred taxation: Total equity (%) 60 55
Total borrowings: Total equity (%) 16 3
PRELIMINARY SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Audited Audited
year ended year ended
30 Sept 30 Sept
2013 2012
R'000 R'000
Balance at the beginning of the year 1 633 242 1 399 351
Total comprehensive income for the year 539 406 464 230
Profit after taxation 524 390 463 926
Movement on foreign currency translation reserve 6 228 1 826
Movement on cash flow hedging reserve 8 788 (1 522)
Shares issued 1 365 3 524
Movement in treasury shares held by share trusts 1 713 875
Recognition of share-based payments 2 211 7 614
Loss on sale of treasury shares (470) (130)
Acquisition of additional shares in subsidiary (7 158)
Dividends paid (380 934) (242 222)
Balance at the end of the year 1 789 375 1 633 242
Comprising:
Share capital and premium 33 770 30 692
Foreign currency translation reserve 5 507 (721)
Capital redemption reserve 130 130
Cash flow hedging reserve 9 188 400
Share-based payment reserve 59 337 57 144
Distributable reserves 1 620 682 1 496 895
Non-controlling interests 60 761 48 702
Balance at the end of the year 1 789 375 1 633 242
PRELIMINARY SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS
Audited Audited
year ended year ended
30 Sept 30 Sept
2013 2012
Notes R'000 R'000
Cash flows from operating activities
Operating profit before abnormal items 748 679 711 025
Adjustment for non-cash and other items 149 943 102 832
Cash operating profit before working capital changes 898 622 813 857
Working capital changes (473 865) (357 295)
Cash generated from operations 424 757 456 562
Investment income received 7 317 25 312
Interest paid (10 282) (3 108)
Taxation paid (320 209) (242 588)
Dividends paid (380 934) (242 222)
Cash outflow from operating activities (279 351) (6 044)
Cash outflow from investing activities (135 719) (153 331)
Capital expenditure (132 908) (69 746)
Proceeds on disposal of property, plant, equipment
and fishing right 6 218 1 536
Acquisition of businesses 8 (10 450) (105 296)
Acquisition of additional shares in subsidiary (7 158)
Acquisition of fishing rights (26 695) (1 296)
Repayment received on preference shares 39 377 11 949
Net movement on loans and advances (5 848) 9 718
Loss of control over subsidiary 9 3 490
Acquisition of joint venture 9 (1 745)
Acquisition of investment (196)
Cash inflow from financing activities 11 797 7 987
Proceeds from issue of share capital 2 608 4 270
Short-term borrowings raised 9 189 3 717
Net decrease in cash and cash equivalents (403 273) (151 388)
Cash and cash equivalents at the beginning of the year 231 604 384 544
Effect of exchange rate changes 1 693 (1 552)
Cash and cash equivalents at the end of the year (169 976) 231 604
NOTES
1. Basis of preparation
The preliminary summarised financial statements have been prepared and presented in accordance with the framework
concepts and the measurement and recognition requirements of International Financial Reporting Standards ("IFRS"),
the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting
Pronouncements as issued by the Financial Reporting Standards Council, the Listings Requirements of the JSE Limited
("JSE"), the information as required by IAS 34: Interim Financial Reporting and the requirements of the South African
Companies Act 71 of 2008, as amended ("Companies Act"). 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 with the exception of the adoption of IAS1 - Presentation of Financial Statements: Presentation of other
Comprehensive Income and Circular 2/2013 Headline Earnings. The preliminary summarised financial statements were
prepared under the supervision of the group financial director, I Soomra CA(SA) and have been audited in compliance
with the Companies Act.
The auditors, Deloitte & Touche, have issued their unmodified audit opinion on the consolidated financial statements
for the year ended 30 September 2013. The audit was conducted in accordance with International Standards on Auditing.
These preliminary summarised financial statements have been derived from the consolidated financial statements, with
which they are consistent in all material respects. These preliminary summarised financial statements have been audited
by the company's auditors who have issued an unmodified opinion. A copy of the 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
auditor's work they should obtain a copy of that report together with the accompanying financial information from the
company's website or 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 year
ended ended
30 Sept 30 Sept
2013 2012
R'000 R'000
2. Segmental results
Revenue
Canned fish and fishmeal 2 657 106 2 582 636
Horse mackerel and hake 1 639 556 1 435 082
Lobster, squid and French fries 374 372 350 443
Commercial cold storage 326 320 279 790
Total 4 997 354 4 647 951
Operating profit before abnormal items
Canned fish and fishmeal 219 646 318 941
Horse mackerel and hake 422 906 296 578
Lobster, squid and French fries 23 329 29 538
Commercial cold storage 82 798 65 968
Total 748 679 711 025
Total assets
Canned fish and fishmeal 1 773 289 1 362 685
Horse mackerel and hake 509 979 427 057
Lobster, squid and French fries 103 930 95 680
Commercial cold storage 235 608 241 002
Financing 242 240 419 117
2 865 046 2 545 541
Deferred taxation 30 360 23 187
Total 2 895 406 2 568 728
Total liabilities
Canned fish and fishmeal 467 077 515 752
Horse mackerel and hake 177 684 220 055
Lobster, squid and French fries 43 364 44 808
Commercial cold storage 67 129 60 456
Financing 310 980 52 572
1 066 234 893 643
Deferred taxation 39 797 41 843
Total 1 106 031 935 486
Audited Audited
year year
ended ended
30 Sept 30 Sept
2013 2012
R'000 R'000
3. Abnormal items
Competition Commission administrative penalty (34 750)
Trademark impairment (13 205)
Abnormal expenses before and after taxation (47 955)
4. Determination of headline earnings
Profit after taxation attributable to shareholders
of Oceana Group Limited 491 016 443 790
Adjusted for:
Trademark impairment 13 205
Net surplus on disposal of property, plant, equipment and fishing right (2 351) (1 193)
Total tax effect of adjustments 660 356
Headline earnings for the year 489 325 456 158
5. Dividends
Estimated dividend declared after reporting date 222 951 256 560
Dividend on shares issued prior to last day to trade 83
Actual dividend declared after reporting date 256 643
6. Supplementary information
Amortisation 15 175 853
Depreciation 88 444 86 339
Operating lease charges 53 752 39 615
Share-based expenses 154 587 83 197
Cash-settled compensation scheme 152 376 75 583
Oceana Empowerment Trust 2 211 7 614
Capital expenditure 132 908 69 746
Expansion 23 182 2 085
Replacement 109 726 67 661
Budgeted capital commitments 218 529 181 159
Contracted 44 005 21 879
Not contracted 174 524 159 280
Number of Number of
shares shares
'000 '000
7. Elimination of treasury shares
Weighted average number of shares in issue 119 451 119 332
Less: treasury shares held by share trusts (14 055) (14 138)
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 100 302 100 100
Audited Audited
year year
ended ended
30 Sept 30 Sept
2013 2012
R'000 R'000
8. Acquisition of businesses
Property, plant and equipment (37 400)
Goodwill (10 000)
Fishing rights (68 860)
Accounts payable and provisions 514
Contingent purchase consideration (10 450) 10 450
Cash movement on acquisition of businesses (10 450) (105 296)
9. Reduction of interest in subsidiary
With effect from 31 January 2013, the group's interest in Oceana International Limited ("OI") reduced from 100%
to 50% through the issue of new shares to an outside party. OI has been proportionately consolidated since the
change in shareholding.
10. 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 2013.
COMMENTS
Financial results
Group earnings for the year ended 30 September 2013 reflects the benefit of Oceanas diversified portfolio and continued
execution of strategy.
Earnings per share for the year ended 30 September 2013 increased by 10% and headline earnings per share increased
by 7% compared to the previous year.
Group revenue has improved by 8% to R4,997 million in 2013. This growth has been achieved from improvements in each
of our four operating segments, led primarily by an increase of 14% in the horse mackerel and hake division.
Revenue growth in the second half of the year has been affected by the continued constraints felt by South African
consumers, resulting in a slowdown in canned fish sales volumes and a significant decline in industrial fish landings.
Overhead expenditure includes a charge to the statement of comprehensive income of R152,4 million compared to R75,6
million in 2012, arising from IFRS2 share-based expenses. This increase, which is a direct result of the significant
improvement in Oceanas share price during the period under review, has had a material impact on the operating profit
for the year.
Operating profit before abnormal items increased by 5% compared to the previous year.
Inventory levels have increased by 64% in 2013 as a direct result of intentional canned fish stock build in anticipation
of continued demand, further impacted by a downturn in domestic canned fish volumes in the second half of the year as a
consequence of pressure on consumers. This has adversely impacted stock holding costs and working capital requirements.
A final dividend of 222 cents per share has been declared which together with the interim dividend of 100 cents brings
the total dividend for the year to 322 cents per share, an increase of 7% on the 2012 total dividend of 301 cents
per share.
Review of operations
Canned fish and fishmeal
Canned fish sales volumes of 8.6 million cartons were marginally below 2012 levels of 8.7 million cartons. Strong first
half growth was offset by a slowdown in the second half of the year primarily due to destocking by major retailers
coupled with a general decline in overall consumption patterns of protein products. Lower than expected sales, together
with higher import costs affected by a weaker currency, adversely impacted operating profit and also contributed to the
increase in canned fish inventories.
The South African Total Allowable Catch (TAC) for pilchard in 2013 was 90 000 tons (2012: 100 595 tons). Additional pilchard
quota was contracted to offset the shortfall in TAC and maintain production volumes at the St Helena Bay cannery. The Namibian
pilchard TAC for 2013 was 25 000 tons (2012: 31 000 tons). The full Namibian quota was landed before year end. This, in
addition to improved cannery performance and yields, resulted in an overall increase in local supply during the period.
The South African anchovy TAC for 2013 was 450 000 tons (2012: 472 718 tons). Landings of anchovy and redeye herring were
extremely poor during the reporting period, the lowest historically in 50 years, largely due to unfavourable climatic conditions.
The lower volumes resulted in higher costs per ton of fishmeal and fish oil produced. Selling prices were higher due to
firm international market prices and the weaker rand exchange rate, however this was not sufficient to compensate for lower
sales volumes. Consequently, the fishmeal business suffered a loss for the year.
Horse mackerel and hake
The Namibian horse mackerel TAC for 2013 was increased to 350 000 tons (2012: 320 000 tons). The Ministry of Fisheries and
Marine Resources continued to allocate further quota to new rights holders. This resulted in lower managed quota in Namibia
of 87 709 tons (2012: 107 761 tons). Catch rates in Namibia remained good.
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). Catch rates in South Africa improved significantly contributing to higher sales volumes.
The resource in both countries remains healthy and well managed.
Horse mackerel prices remained reasonably firm in our major markets with higher prices being achieved for certain sizes.
Revenue was further enhanced by a favourable exchange rate. As a result, profit from horse mackerel showed an increase.
Hake quota available to Oceana for deep-sea trawl was improved due to an increase in TAC of 7.8% as well as the
acquisition of the Lusitania hake business. This contributed to an increase in sales volumes to 9 396 tons compared to
3 800 tons in 2012.
The successful integration of the businesses in addition to the abovementioned factors resulted in an increase in
profitability.
Lobster, squid and French fries
The TAC for West coast lobster remained the same as in 2012 at 2 425 tons and quota available to Oceana for the current
season amounted to 327 tons (2012: 327 tons), which was landed in full. Catch rates were in line with those of last year.
Improved pricing and a favourable exchange rate positively impacted revenue growth. Profits from lobster were higher
than the prior year.
Squid catches were lower than those of last year. The effect of lower sales volumes was partly offset by higher prices.
The French fries business incurred a loss due to the effect of poor quality potatoes on production yields.
Commercial cold storage
Revenue increased by 15% due to improved and consistent occupancy levels at most stores, additional capacity secured
in the prior year and higher volumes of fruit handled. Revenue growth, coupled with a focus on cost efficiencies,
contributed to a material improvement in operating profit.
Prospects
In light of the prevailing economic environment our ability to extract further volume growth in South Africa will remain
under pressure. We continue to explore growth opportunities in the rest of Africa.
Operational efficiency and working capital management will remain focus areas. Procurement of canned fish from foreign
suppliers, which has a six month lead time, has been cut-back in order to compensate for current inventory levels. We
anticipate that this will have a positive effect on working capital during the second half of the year once the lead time
effect has been taken into account.
Foodcorp acquisition
Further to the announcement released on the Stock Exchange News Service of the JSE on 4 June 2013 in respect of Oceanas
acquisition of the fishing interests of Foodcorp (Pty) Limited (Foodcorp), the Competition Commission has approved the
acquisition, subject to certain conditions. One of these conditions is not acceptable to both Oceana and Foodcorp.
Accordingly, the parties will file a Request for Consideration with the Competition Tribunal challenging the condition in
question. In the interim Oceana and Foodcorp have agreed to extend the sale of business agreement for a further three
months to 31 January 2014.
On behalf of the board
MA Brey
Chairman
FP Kuttel
Chief executive officer
07 November 2013
CASH DIVIDEND DECLARATION
Notice is hereby given of dividend number 140. A gross final dividend amounting to 222,0 cents per share, in respect of
the year ended 30 September 2013, was declared on Thursday, 07 November 2013, out of current earnings. Where applicable
the deduction of dividends withholding tax at a rate of 15% will result in a net dividend amounting to 188,7 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 119 526 157. The company's tax reference
number is 9675/139/71/2. Relevant dates are as follows:
Last day to trade cum dividend Friday, 03 January 2014
Commence trading ex dividend Monday, 06 January 2014
Record date Friday, 10 January 2014
Dividend payable Monday, 13 January 2014
Share certificates may not be dematerialised or re-materialised between Monday, 06 January 2014 and Friday,
10 January 2014, both dates inclusive.
By order of the board
JC Marais
Company secretary
07 November 2013
Directors:
MA Brey (chairman), FP Kuttel* (chief executive officer), ZBM Bassa, PG de Beyer, ABA Conrad*, NP Doyle, PB Matlare,
S Pather, NV Simamane, I Soomra*, 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
(P.O. 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
JSE Share Code:
OCE
NSX Share Code:
OCG
ISIN Number:
ZAE000025284
Date: 07/11/2013 05:45:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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