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Audited results and dividend declaration
CROOKES BROTHERS LIMITED
Registration No. 1913/000290/06
Share code : CKS ISIN No: ZAE000001434
PROVISIONAL SUMMARY AUDITED GROUP RESULTS
FOR THE YEAR ENDED 31 MARCH 2014 AND FINAL DIVIDEND DECLARATION
The audited results of the group for the year ended 31 March 2014 together with those of the previous year are
set out below:
PROVISIONAL SUMMARY CONSOLIDATED
STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME 31 March 31 March
(R000's) 2014 2013*
Notes audited audited
Continuing operations:
Revenue 439 019 362 348
Operating profit 90 765 85 843
Share of profit of associate companies 1 121 158
Investment income 4 504 35 271
Finance costs (4 538) (2 183)
Capital items 7 430 -
Profit before taxation 99 282 119 089
Taxation (19 692) (30 726)
Profit for the year from continuing operations 79 590 88 363
Discontinued operations:
Operating profit for the year from discontinued operations 8 793 5 550
Capital profit for the year from discontinued operations 114 314 -
Profit for the year 202 697 93 913
Other comprehensive income/(loss)
Remeasurement of post employment obligations 5 977 418
Realised net fair value gain on available-for-sale financial assets (7 430) -
Investment revaluation 2 052 2 821
Exchange differences on translating foreign operations (257) 8 776
Other comprehensive income for the year, net of tax 342 12 015
Total comprehensive income for the year 203 039 105 928
Profit/(loss) for the year attributable to:
Shareholders of the company 201 146 94 220
Non-controlling interests 1 551 (307)
202 697 93 913
Total comprehensive income/(loss) attributable to:
Shareholders of the company 201 488 106 235
Non-controlling interests 1 551 (307)
203 039 105 928
Earnings per share (cents)
From continuing and discontinued operations
Basic 1 609.0 760.8
Diluted 1 580.4 749.3
From continuing operations
Basic 633.1 711.7
Diluted 621.9 701.0
* Restated to account for discontinued operations and accounting standard changes
RECONCILIATION OF HEADLINE EARNINGS 31 March 31 March
(R000's) 2014 2013*
audited audited
Profit for the year attributable to shareholders of the company 201 146 94 220
Adjusted for:
Capital profit on disposal of land, buildings, plant and equipment (126 398) (1 178)
Profit on disposal of shares (7 430) -
Loss on disposal of subsidiary 2 815 -
Tax effect of the adjustments 14 470 285
Headline earnings 84 603 93 327
Headline earnings per share (cents)
Headline earnings per share 676.8 753.5
Headline earnings per share (diluted) 664.7 742.2
DIVIDEND DECLARATION 31 March 31 March
2014 2013*
audited audited
Dividends per share (cents)
Ordinary dividends declared per share - interim 80.0 80.0
Ordinary dividends declared per share - final 120.0 160.0
200.0 240.0
PROVISIONAL SUMMARY CONSOLIDATED
STATEMENT OF CHANGES IN EQUITY 31 March 31 March
2014 2013*
(R000's) audited audited
Shareholders' equity at beginning of year 584 549 505 080
Movements in:
Share capital and premium - scrip dividend 8 901 -
Share-based payment reserve 72 169
Other comprehensive (loss)/income for the year (5 635) 11 597
Changes in retained earnings 175 891 67 703
Net profit attributable to owners of the company 201 146 94 220
Remeasurement of post-employment obligations 5 977 418
Net profit/(loss) attributable to non-controlling interests 1 551 (307)
Change in non-controlling shareholding (2 930) -
Dividends paid (29 853) (26 628)
Shareholders' equity at end of year 763 778 584 549
* Restated to account for discontinued operations
and accounting standard changes.
PROVISIONAL SUMMARY CONSOLIDATED
STATEMENT OF FINANCIAL POSITION 31 March 31 March
2014 2013*
(R000's) audited audited
ASSETS
Non-current assets 680 148 453 162
Property, plant and equipment 460 961 285 614
Bearer biological assets 192 883 145 518
Unlisted investments 979 5 517
Investment in associates 18 681 15 310
Retirement benefit surplus 5 990 -
Unsecured loan - long term 654 1 203
Current assets 345 722 350 281
Inventories 52 808 29 444
Biological assets - crops and livestock 190 762 180 476
Trade and other receivables 58 669 29 487
Taxation - 491
Cash and cash equivalents 28 847 36 620
Other financial assets 14 636 52 926
Assets classified as held for sale - 20 837
Total assets 1 025 870 803 443
EQUITY AND LIABILITIES
Capital and reserves 763 778 584 549
Share capital and premium 12 109 3 208
Retained earnings 742 804 565 534
Investment revaluation reserve 1 058 6 436
Foreign currency translation reserve 4 846 5 103
Share-based payment reserve 792 720
Equity attributable to owners of the company 761 609 581 001
Non-controlling interests 2 169 3 548
Non-current liabilities 178 535 164 089
Deferred taxation 107 199 88 427
Long term borrowings - interest bearing 19 955 13 513
Long term liability - interest free 41 763 51 635
Post-employment obligations 9 618 10 514
Current liabilities 83 557 54 805
Trade and other payables and provisions 49 379 38 894
Short term borrowings - interest bearing 34 178 15 911
Total equity and liabilities 1 025 870 803 443
Net asset value per share (cents) 6 087 4 720
* Restated to account for discontinued operations
and accounting standard changes.
PROVISIONAL SUMMARY CONSOLIDATED
STATEMENT OF CASH FLOWS 31 March 31 March
2014 2013*
(R000's) audited audited
Operating profit for the year - continuing operations 90 765 85 843
- discontinued operations 16 063 7 698
Adjustment for non-cash items (37 595) (28 208)
69 233 65 333
Net working capital changes (49 782) 11 840
Cash generated from operations 19 451 77 173
Cash flows from operating activities (1 868) 57 559
Cash generated from operations 19 451 77 173
Finance costs (4 538) (2 183)
Taxation paid (16 781) (17 431)
Cash flows from investing activities (29 033) 7 543
Proceeds on disposal of property, plant, equipment and biological assets 148 240 1 968
Proceeds on disposal of investments 42 533 62 204
Interest received 8 146 33 754
Acquisition of land rights, property, plant, equipment and biological assets (214 572) (78 601)
Expansion of area under crop (2 034) (11 326)
Other investing activities (11 346) (456)
Cash flows from financing activities 23 128 (47 865)
Dividends paid (20 953) (26 628)
Net increase/(decrease) in borrowings 44 081 (21 237)
Net (decrease)/increase in cash and cash equivalents (7 773) 17 237
Cash and cash equivalents at beginning of year 36 620 19 383
Cash and cash equivalents at end of year 28 847 36 620
Cash flow from operating activities - per share (cents) (14.9) 464.9
* Restated to account for discontinued operations
and accounting standard changes.
OTHER GROUP SALIENT FEATURES 31 March 31 March
2014 2013*
(R000's) Notes audited audited
Depreciation 24 953 18 656
Capital expenditure 201 973 78 484
Capital commitments
- Contracted 11 183 15 182
- Authorised but not contracted 89 644 47 993
100 827 63 175
Guarantees 86 747
Number of shares in issue 12 546 817 12 385 000
Weighted average number of shares on which earnings per share
(and headline earnings per share) are based 12 501 154 12 385 000
PROVISIONAL SUMMARY CONSOLIDATED
SEGMENTAL ANALYSIS - Continuing operations 31 March 31 March
2014 2013*
(R000's) audited audited
Revenue
Sugar cane 270 811 222 354
Bananas 66 408 53 406
Deciduous fruit 90 605 76 046
Other operations 11 195 10 542
439 019 362 348
Operating profit
Sugar cane 88 728 86 600
Bananas 6 871 6 312
Deciduous fruit 38 617 24 727
Other operations/sundry income 7 124 3 518
Profit on disposal of plant and equipment 230 1 178
Unallocated corporate expenses (50 805) (36 492)
90 765 85 843
* Restated to account for discontinued operation sand accounting standard changes
DISCONTINUED OPERATIONS 31 March 31 March
2014 2013*
(R000's) audited audited
Revenue 51 400 48 357
Operating profit before taxation 16 063 7 698
Net finance income 3 720 15
Profit on sale of land, buildings, plant and equipment 126 168 -
Loss on sale of a subsidiary (2 815) -
143 136 7 713
Income tax expense (20 029) (2 163)
Profit for the year 123 107 5 550
* Restated to account for discontinued operations
and accounting standard changes.
COMMENTS ON THE RESULTS
In line with expectations group revenue from continuing operations increased from R362m in 2013 to R439 million and
profit for the year increased from R93.9 million to R202.7 million. The large increase in profit for the year is predominantly
due to the capital profit on disposal of the fixed assets of the discontinued operations highlighted below.
Operating profit from continuing operations increased from R85.8 million in 2013 to R90.8 million in the period under
review, assisted by earnings from the newly acquired deciduous fruit farm.
Headline earnings of R84.6 million were lower than those of the previous year due to the inclusion in the comparative 2013
figure of a non-recurring after tax accrual for interest receivable of R22.3 million. Adjusting for this interest accrual,
recurring headline earnings were 19% higher than those of the previous period.
The operating cash outflow of R1.9 million was a significant swing from the R57.6 million inflow reported in 2013, having
been influenced by the large working capital requirements on newly acquired and developing operations.
Corporate activities:
The following investments and divestments were concluded during the year under review:
- The purchase of High Noon Estate, a premier deciduous fruit operation located near Villiersdorp in the Western
Cape, comprising 200 hectares under crop and a further 40 hectares available for development;
- The disposal of Quarrie Farms and the discontinuation of the grain and sheep operation in the Napier area of the
Western Cape, the assets thereof having been reported as held-for-sale at the end of the previous financial year;
- The successful transfer of control of KwaCele Farming, the sugar cane operation in KwaZulu-Natal, to our joint
venture partners, the Cele-Nhlangwini community; and
- The sale of the group’s shareholding in Overberg Agri, realising gains previously accounted for in the revaluation
reserve.
Substantial projects currently being implemented include:
- The development of the 3 200 hectare property located near Gurue in northern Mozambique with 200 hectares of
the planned 700 hectares of macadamia orchards having been planted to date and the initiation of an annual crop
strategy to fully utilise available arable land; and
- The rezoning of the Renishaw farm near Scottburgh for mixed use development, with the recent receipt of
environmental authorisation from the Department of Agriculture and Environmental Affairs;
Operational activities:
Sugar cane - Although production from South African cane operations was higher than that of the previous year, the
decline of the RV price and significant increases in the costs of labour, fertiliser and fuel put profitability under pressure.
The Swaziland cane operation benefitted from the recently completed expansion with a 35% increase in production, which
combined with an increased sucrose price resulted in a significant increase in cash generation by that estate. However the
decrease in the carrying value of the cane, due to a reduction in projected price, impacted profit negatively.
Bananas - The recent large scale replant of bananas had a positive impact on both production volumes and quality,
although this was largely offset by depressed market conditions.
Deciduous - Profit from the deciduous fruit operation was boosted by the excellent 2013 growing season and firm prices
due to both the weakening of the Rand and strong export markets. In addition, the purchase of the High Noon farm in the
Villiersdorp area assisted this operation to produce very good results this past year.
Prospects:
The agricultural environment in southern Africa, although not without challenges, continues to offer great potential for
development arising from global food security and renewable energy concerns. With several profit-enhancing projects
under implementation and recent orchard developments moving towards maturity, the group’s prospects remain positive.
Capital planning:
The board is mindful of the preference of shareholders to receive a cash yield from their investment in the group,
particularly given the relative illiquidity of the share on the JSE. However the cash component of earnings has reduced and
a marked expansion investment programme is under way. Accordingly the board has declared a reduced dividend and
cautions shareholders against the expectation of increased dividends in the medium term as the investment cycle plays out
for the realignment and regionalisation of the business.
CASH DIVIDEND DECLARATION
Shareholders are advised that the board of directors ("the board") has resolved to declare a final gross cash dividend of
120.0 cents per ordinary share ("the cash dividend") to ordinary shareholders recorded in the register of the company at
the close of business on Friday, 11 July 2014.
In respect of the final gross cash dividend the following further information is provided:
- The dividend has been declared from income reserves,
- Secondary tax on companies (STC) credits available amount to 0.61914 cents per share,
- The dividend withholding tax rate is 15% resulting in a net dividend of 102.09287 cents
per share to those shareholders who are not exempt from the dividend withholding tax,
- Crookes tax reference number is 9696/001/71/9,
- The issued number of shares as at declaration date is 12 546 817.
The cash dividend will be paid on Monday 14 July 2014 to shareholders recorded in the books of the company at close of
business on the record date Friday 11 July 2014.
The salient dates of the declaration and payment of these dividends are as follows:
Last day to trade cum-dividend Friday 4 July 2014
Shares commence trading ex-dividend Monday 7 July 2014
Record date Friday 11 July 2014
Payment date Monday 14 July 2014
Share certificates may not be dematerialised or re-materialised between Monday 7 July 2014 and Friday 11 July 2014, both
days inclusive.
The above dividend is in addition to the interim dividend of 80,0 cents per share which was declared on 3 December 2013
and brings the aggregate dividend in respect of the year ended 31 March 2014 to 200,0 cents (2013: 240,0 cents) per
share.
ACCOUNTING POLICIES
The provisional summary consolidated financial statements are prepared in accordance with the requirements of the JSE
Limited Listings Requirements ("Listing Requirements") for provisional reports, and the requirements of the Companies Act
of South Africa applicable to summary financial statements. The Listings Requirements require provisional reports to be
prepared 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 Pronouncements as issued by the Financial Reporting Standards Council], and to also, as a
minimum, contain the information required by IAS 34, Interim Financial Reporting. The accounting policies applied in the
preparation of the consolidated financial statements, from which the summary consolidated financial statements were
derived, are in terms of IFRS, except as described below, and are consistent with the accounting policies applied in the preparation
of the 31 March 2013 consolidated financial statements.
Crookes has adopted all the new or revised accounting pronouncements as issued by the IASB which were effective for
Crookes Brothers Limited from 1 January 2013. The adoption of these standards, in particular IFRS 7 Financial Instruments:
Disclosures and IFRS 13 Fair value Measurement which require additional disclosure that will be included in the annual
financial statements published on the company website and in the integrated annual report, had no recognition and
measurement impact on the financial results, other than for the adoption of the revised IAS 19 Employee Benefits which
requires that post-retirement benefit accounting actuarial gains and losses be recognised immediately in other
comprehensive income and no longer be amortised through profit or loss.
The results have been prepared by Mr BD Penney CA (SA) under the supervision of Mr PJ Barker, BA, ACMA, CGMA, the
group financial director.
The financial information has been prepared on the historical cost basis except for the revaluation of available-for-sale
financial assets and the valuation of biological assets and share-based payments at fair value. The principal accounting
policies are consistent with those of the previous year.
AUDITED RESULTS
These provisional summary consolidated financial statements for the year ended 31 March 2014 have been audited by
Deloitte and Touche who expressed an unmodified opinion thereon. The auditor has expressed an unmodified opinion on
the consolidated annual financial statements from which these provisional summary consolidated financial statements
were derived.
A copy of the auditor's report on the provisional summary consolidated financial statements and of the auditor's report on
the consolidated annual financial statements are available for inspection at the company's registered office, together with
the financial statements identified in the respective auditor's reports.
SUBSEQUENT EVENTS
There have been no major changes in the affairs or financial position of the group or its subsidiary companies since the end
of the period under review.
NOTICE OF THE ANNUAL GENERAL MEETING AND POSTING OF ANNUAL REPORT
The annual report will be posted to shareholders on or about 30 June 2014.
Notice is hereby given that the annual general meeting of the company will be held at 11:00 on Friday 1 August 2014, at
the Durban Country Club, to transact the business as stated in the annual general meeting notice forming part of the
annual financial statements.
For and on behalf of the Board:
Guy Wayne Guy Clarke
(Chairman) (Managing Director)
Renishaw 30 May 2014
Registered office and postal address Transfer secretaries
Renishaw, KwaZulu-Natal Computershare Investor Services (Pty) Ltd.
P O Renishaw, KwaZulu-Natal, 4181 P O Box 61051, Marshalltown, 2107
Sponsor Website
Sasfin Capital www.cbl.co.za
A division of Sasfin Bank Limited
Directors:
G P Wayne* (Chairman), G S Clarke (Managing), P J Barker (Financial), J R Barton*, P Bhengu*, C J H Chance*, J A F Hewat*,
P Mnganga*, M T Rutherford*, R E Stewart*, G Vaughan-Smith*#, T Denton*# (alternate).
* Non-executive director #British
Secretary:
Highway Corporate Services (Pty) Limited
3 June 2014
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
Date: 03/06/2014 05:25:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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