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Earnings Guidance For The Year Ended 30 September 2014
Pioneer Food Group Limited
Incorporated in the Republic of South Africa
Registration number: 1996/017676/06
Share code: PFG
ISIN code: ZAE000118279
(“Pioneer Foods” or “the Company” or “the Group”)
EARNINGS GUIDANCE FOR THE YEAR ENDED 30 SEPTEMBER 2014
Shareholders are hereby advised that revenue growth from continuing operations has been
sustained at similar levels as reported at the six months ended 31 March 2014. This was
confirmed in a trading statement published on 4 September 2014.
Earnings growth benefited from value enhancement initiatives implemented and the
continued focus on cost reduction and efficiencies. The strong performance from exports
and joint ventures further contributed to the increase in profitability.
A reasonable degree of certainty exists that for the year ended 30 September 2014 the
results will be as follows:
• Earnings per share (“EPS”) of between 514 cents per share and 536 cents per share
(2013: 275 cents per share), being an increase of between 87% and 95%;
• Headline earnings per share (“HEPS”) of between 562 cents per share and 585 cents
per share (2013: 390 cents per share), being an increase of between 44% and 50%;
and
• Adjusted HEPS from continuing operations of between 625 cents per share and 648
cents per share (2013: 453 cents per share), being an increase of between 38% and
43%.
Adjustments were made for the impact of the Phase I (2006) B-BBEE transaction and
Quantum Foods Holdings Limited (“Quantum Foods”) being accounted for as a discontinued
operation. The comparative numbers for 30 September 2013 were also adjusted for the
impact of once-off re-organisation costs and for the recognition of a deferred income tax
asset. Adjusted HEPS from continuing operations is disclosed to provide shareholders with a
consistent perspective of the operational performance.
The cash-settled Phase 1 (2006) B-BEE transaction is accounted for in terms of IFRS 2 and
impacted by the relative movement in the Group’s share price and the number of scheme
participants (“Phase 1 BEE”). A Phase 1 BEE charge of R187 million (2013: R146 million) is
accounted for in the financial results due to the share price of Pioneer Foods increasing by
35% from R87.50 to R118.00 during the reporting period, compounded by the impact of
Quantum Foods participants exiting the scheme after year-end.
In terms of IFRS 5, Quantum Foods is accounted for as “an asset held for sale” and a
“discontinued operation” by Pioneer Foods. Accordingly, the net assets of Quantum Foods
have been valued at the lower of the carrying amount or the fair value less costs to sell as at
the reporting date. An independent valuation of Quantum Foods resulted in a further
impairment of R57 million to the consolidated net asset value, indicative of the continuing
challenges in the broiler industry. For the avoidance of doubt, the aforementioned
impairment was already accounted for in the interim results for the 6 months ended 31
March 2014.
The aforementioned adjustments do not have any cash flow implications for Pioneer Foods.
The financial results for the twelve months ending 30 September 2014 is expected to be
announced on 24 November 2014. The information provided in this earnings guidance has
not been reviewed or reported on by the Group’s independent external auditors.
Bellville
6 November 2014
Sponsor
PSG Capital
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