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CROOKES BROTHERS LIMITED - Acquisition of the farming enterprise known as High Noon Farm

Release Date: 23/12/2013 14:50
Code(s): CKS     PDF:  
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Acquisition of the farming enterprise known as High Noon Farm

CROOKES BROTHERS LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 1913/000290/06)
SHARE CODE: CKS ISIN: ZAE000001434
(“CROOKES” OR “THE COMPANY”)


ACQUISITION OF THE FARMING ENTERPRISE KNOWN AS HIGH NOON FARM

1.       Introduction and terms

         Shareholders are advised that an agreement has been concluded between CBL Agri
         Services (Pty) Limited, a wholly-owned subsidiary of Crookes (“the Purchaser”), and
         Ovenstone Farms (Pty) Limited (“the Seller”), for the acquisition of the farming enterprise
         known as High Noon Farm in the Villiersdorp area of the Western Cape, inclusive of the
         properties, the biological assets, the movables and the shares as a going concern (“High
         Noon Farm”), for a purchase consideration of R103 million payable in cash on registration
         of transfer of the properties into the Purchaser’s name (“the consideration”) (“the
         acquisition”).

         The effective date will be the date of registration of transfer of the High Noon Farm into
         the Purchaser’s name.

2.       Description of High Noon Farm

         The High Noon Farm properties comprise the following:

         -   Farm Klein Tafelberg No. 524, in the Theewaterskloof Municipality, in the division of
             Worcester, Western Cape Province
             In extent 319,1662 (three hundred and nineteen comma one six six two) hectares;

         -   Remainder of Portion 4 of the Farm Elands Kloof No. 5, in the Theewaterskloof Municipality,
             in the division of Caledon, Western Cape Province
              In extent 828,9646 (eight hundred and twenty eight comma nine six four six) hectares;

         -   Portion 17 (a Portion of Portion 4) of the Farm Elands Kloof No. 5, in the Theewaterskloof
             Municipality, in the division of Caledon, Western Cape Province
             In extent 138,4433 (one hundred and thirty eight comma four four three three) hectares;

         -   Portion 7 (a Portion of Portion 5) of the Farm Elands Kloof No. 5, in the Theewaterskloof
             Municipality, in the division of Caledon, Western Cape Province
             In extent 66,7506 (sixty six comma seven five nought six) hectares; and

         -   Portion 2 (Sterfontein) of the Farm Elands Kloof No. 5, in the Theewaterskloof Municipality,
             in the division of Caledon, Western Cape Province
              In extent 462,3845 (four hundred and sixty two comma three eight four five) hectares

              The High Noon Farm is being acquired free of all liabilities.


3. Rationale for the acquisition

  The High Noon farm has 180 hectares planted to deciduous fruit, with a further 60 hectares
  available for planting, and will be integrated into Crookes’ existing Western Cape deciduous
  fruit operation. The farm is located on the Elands River in the Kaaimansgat Valley, considered
  to be a prime deciduous producing area due to its unique micro climate and high-potential
  soils. The acquisition will increase the area under deciduous fruit owned by Crookes to more
  than 600 hectares, enabling the Company to take advantage of resultant economies of scale.


4. Suspensive conditions

   The acquisition is subject to conditions that are considered normal for transactions of this
   nature, of which the following remain outstanding:
    - regulatory approval, where necessary; and
    - the registration of transfer of the properties.


5. Warranties

The acquisition is subject to warranties that are considered normal for transactions of this nature.


6. Financial effects

The unaudited pro forma financial effects of the acquisition are set out below. These unaudited
pro forma financial effects have been prepared for illustrative purposes only to provide
information on how the acquisition may have impacted on the results and financial position of
Crookes. Preparation of the unaudited pro forma financial effects is the responsibility of the
directors. Because of their nature, the unaudited pro forma financial effects may not fairly present
Crookes’s financial position after the acquisition or the effects on future earnings.

Pro forma financial effects of the                          Before the       After the
acquisition on the Crookes published                        acquisition    acquisition    Change
unaudited interim results for the 6 months
ended 30 September 2013.                                      6 months     Pro Forma
                                                                 ended
                                                          30 Sept 2013
Earnings per share (cents)                                        375.2          381.3       1.6%
Headline earnings per share (cents)                               372.5          378.6       1.6%

Net asset value per share (cents)                                 5013           5013             -
Net tangible asset value per share (cents)                        5013           5013             -


Number of shares in issue                                   12 546 817     12 546 817             -
Weighted average number of                                                                        -
                                                            12 452 424     12 452 424
shares in issue

Assumptions and Notes:

1. These unaudited pro forma figures, as shown in the table above, illustrate the possible
   financial effects for the 6 months ended 30 September 2013 if the acquisition had been made
   on 1 April 2013, having been financed largely from existing cash, near-cash and other easily
   convertible financial reserves.
       2. We caution readers that a major portion of the annual revenue of this crop is received
          in the second half of the financial year and that this may result in the pro forma
          financial effect of the acquisition on the interim earnings, as presented above, being
          an unreliable indicator of the earnings potential for the financial year to 31 March 2014
          and for future years.

       3. For the reason provided above we have elected to include a second set of pro forma
          financial information relating to the effects of the acquisition. Below is a table setting
          out the unaudited pro forma effects on the published annual financial accounts for the
          year ended 31 March 2013.

       4. The unaudited pro forma figures, shown in the table directly below, illustrate the
          possible financial effects for the year ended 31 March 2013 if the acquisition had been
          made on 1 April 2012, having been financed largely from existing cash, near-cash and
          other easily convertible financial reserves.


Pro forma financial effects on the final                    Before the      After the
results for the year ended 31 March 2013.                   acquisition   acquisition    Change

                                                            12 months     Pro Forma
                                                                ended
                                               Notes      31 Mar 2013
Earnings per share (cents)                                       757.1          789.2       4.2%
Headline earnings per share (cents)                              749.9          782.0       4.3%

Net asset value per share (cents)                                4701           4701            -
Net tangible asset value per share (cents)                       4701           4701            -


Number of shares in issue                                  12 385 000     12 385 000            -
Weighted average number of                                                                      -
                                                           12 385 000     12 385 000
shares in issue




7. Categorisation of the acquisition

The acquisition is categorised as a Category 2 transaction in terms of the Listings Requirements
of the JSE Limited and is therefore not subject to shareholder approval.




Renishaw
23 December 2013

Corporate Advisor and Sponsor: Sasfin Capital
A division of Sasfin Bank Limited

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