Wrap Text
Summarised Audited Results and Dividend Declaration for the Year Ended 30 September 2014
Oceana Group Limited
Incorporated in the Republic of South Africa
(Registration Number 1939/001730/06)
("Oceana" or "the company" or "the group")
SUMMARISED AUDITED RESULTS AND DIVIDEND DECLARATION FOR THE YEAR ENDED 30 SEPTEMBER 2014
HEADLINE EARNINGS PER SHARE INCREASE BY 16 %
DIVIDENDS PER SHARE INCREASE BY 17 %
SUMMARISED GROUP STATEMENT OF COMPREHENSIVE INCOME
Audited *Audited
year ended year ended
30 Sept 30 Sept
2014 2013 Change
Note R'000 R'000 %
Revenue 5 039 134 4 701 224 7
Cost of sales 3 062 606 2 833 604 8
Gross profit 1 976 528 1 867 620 6
Sales and distribution expenditure 500 320 458 384 9
Marketing expenditure 57 804 63 489 (9)
Overhead expenditure 599 358 675 526 (11)
Net foreign exchange gain (37 196) (43 292) (14)
Operating profit before joint venture income 856 242 713 513 20
Joint venture income 23 324 30 046 (22)
Operating profit 879 566 743 559 18
Investment income 13 273 16 451 (19)
Interest paid (17 102) (7 485) 128
Profit before taxation 875 737 752 525 16
Taxation 266 818 228 135 17
Profit after taxation 608 919 524 390 16
Other comprehensive income
Items that may be re-classified subsequently to
profit or loss
Movement on foreign currency translation reserve 6 205 6 223
Movement on cash flow hedging reserve (7 346) 8 787
Other comprehensive income, net of taxation (1 141) 15 010
Total comprehensive income for the year 607 778 539 400 13
Profit after taxation attributable to:
Shareholders of Oceana Group Limited 573 931 491 016 17
Non-controlling interests 34 988 33 374 5
608 919 524 390 16
Total comprehensive income attributable to:
Shareholders of Oceana Group Limited 572 790 506 026 13
Non-controlling interests 34 988 33 374 5
607 778 539 400 13
Weighted average number of shares on which
earnings per share is based (000's) 7 100 400 100 302
Adjusted weighted average number of shares on
which diluted earnings per share is based (000's) 111 009 110 402
Earnings per share (cents)
- Basic 571.6 489.5 17
- Diluted 517.0 444.8 16
Dividends per share (cents) 377.0 322.0 17
Headline earnings per share (cents)
- Basic 565.0 487.9 16
- Diluted 511.0 443.2 15
SUMMARISED GROUP STATEMENT OF FINANCIAL POSITION
Audited *Audited
30 Sept 30 Sept
2014 2013
R'000 R'000
Assets
Non-current assets 859 640 814 277
Property, plant and equipment 512 342 458 200
Intangible assets 97 625 102 802
Deferred taxation 24 119 28 502
Investments and loans 225 554 224 773
Current assets 2 115 657 2 019 292
Inventories 838 615 1 213 169
Accounts receivable 933 039 694 920
Cash and cash equivalents 344 003 111 203
Total assets 2 975 297 2 833 569
Equity and liabilities
Capital and reserves 1 746 906 1 789 371
Share capital and premium 35 245 33 770
Foreign currency translation reserve 11 708 5 503
Capital redemption reserve 130 130
Cash flow hedging reserve 1 842 9 188
Share-based payment reserve 65 202 59 337
Distributable reserves 1 563 243 1 620 682
Interest of own shareholders 1 677 370 1 728 610
Non-controlling interests 69 536 60 761
Non-current liabilities 439 403 180 577
Liability for share-based payments 81 188 143 891
Long-term loan 300 000
Deferred taxation 58 215 36 686
Current liabilities 788 988 863 621
Accounts payable and provisions 788 988 606 621
Bank overdrafts 257 000
Total equity and liabilities 2 975 297 2 833 569
Number of shares in issue net of treasury shares (000's) 100 512 100 416
Net asset value per ordinary share (cents) 1 669 1 721
Total liabilities excluding deferred taxation: Total equity (%) 67 56
Total borrowings: Total equity (%) 17 14
SUMMARISED GROUP STATEMENT OF CHANGES IN EQUITY Audited *Audited
30 Sept 30 Sept
2014 2013
R'000 R'000
Balance at the beginning of the year 1 789 371 1 633 242
Total comprehensive income for the year 607 778 539 400
Profit after taxation 608 919 524 390
Movement on foreign currency translation reserve 6 205 6 223
Movement on cash flow hedging reserve (7 346) 8 787
Movement in treasury shares held by share trusts 1 280 1 713
Recognition of share-based payments 5 875 2 211
Share options exercised 195 1 365
Loss on sale of treasury shares (189) (470)
Acquisition of additional shares in subsidiary (7 158)
Distribution to Oceana Empowerment Trust beneficiaries (291 524)
Dividends declared (365 880) (380 932)
Balance at the end of the year 1 746 906 1 789 371
Comprising:
Share capital and premium 35 245 33 770
Foreign currency translation reserve 11 708 5 503
Capital redemption reserve 130 130
Cash flow hedging reserve 1 842 9 188
Share-based payment reserve 65 202 59 337
Distributable reserve 1 563 243 1 620 682
Non-controlling interests 69 536 60 761
Balance at the end of the year 1 746 906 1 789 371
SUMMARISED GROUP STATEMENT OF CASH FLOWS
Audited *Audited
30 Sept 30 Sept
2014 2013
R'000 R'000
Cash flows from operating activities
Operating profit before joint venture income 856 242 713 513
Adjustment for non-cash and other items 56 335 148 692
Cash operating profit before working capital changes 912 577 862 205
Working capital changes 325 800 (468 732)
Cash generated from operations 1 238 377 393 473
Investment income received 24 476 9 886
Interest paid (17 102) (7 485)
Taxation paid (264 090) (317 873)
Distribution to Oceana Empowerment Trust beneficiaries (291 524)
Dividends paid (365 880) (380 932)
Cash inflow/(outflow) from operating activities 324 257 (302 931)
Cash outflow from investing activities (147 383) (128 265)
Capital expenditure (163 386) (127 172)
Proceeds on disposal of property, plant and equipment 990 3 800
Acquisition of business (10 450)
Acquisition of additional shares in subsidiary (7 158)
Acquisition of fishing rights (26 695)
Repayment received on preference shares 8 573 39 377
Net movement on loans and advances 6 172 (5 848)
Change in status of subsidiary to joint venture 3 490
Proceeds on disposal of fishing rights 2 418
Disposal/(acquisition) of joint venture 268 (27)
Cash inflow from financing activities 310 471 10 908
Proceeds from issue of share capital 1 286 2 608
Long-term loan raised 300 000
Short-term borrowings raised 9 185 8 300
Net increase/(decrease) in cash and cash equivalents 487 345 (420 288)
Cash and cash equivalents at the beginning of the year (145 797) 272 872
Effect of exchange rate changes 2 455 1 619
Cash and cash equivalents at the end of the year 344 003 (145 797)
NOTES
1. Basis of preparation
The summarised consolidated financial statements are prepared in accordance with the requirements of the
JSE Limited Listings Requirements for preliminary reports, and the requirements of the Companies Act, 71
of 2008, applicable to summary financial statements. The Listings Requirements require preliminary reports to be
prepared in accordance with the framework concepts and the measurement and recognition requirements of
International Financial Reporting Standards (IFRS) and the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee and Financial Pronouncements as issued by 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 International Financial Reporting Standards and are consistent
with those accounting policies applied in the preparation of the previous consolidated annual financial statements
except for the adoption of IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, IFRS 12
Disclosure of Interests in Other Entities, IAS 27 Separate Financial Statements and IAS 28 Investment in
Associates and Joint Ventures during the period under review. The group previously accounted for joint ventures
using the proportionate consolidation method. The group has applied IFRS 11 retrospectively in accordance with
the transitional provisions and the 2013 results and 2012 statement of financial position have been restated
accordingly.
The summarised financial information was prepared under the supervision of the group financial director,
I Soomra CA(SA).
The auditors, Deloitte & Touche, have issued their unmodified audit opinion on the consolidated financial
statements for the year ended 30 September 2014. 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. Copies of the audit
reports are 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.
2. Effect of restatement of prior periods
The adoption of IFRS 11 has resulted in the restatement of certain financial statement line items for the prior
periods disclosed. This restatement did not have a material impact on the net asset value of the group.
Audited *Audited
30 Sept 30 Sept
2014 2013
R'000 R'000
3. Segmental results
Revenue
Canned fish and fishmeal 3 086 476 2 631 686
Horse mackerel and hake 1 203 470 1 373 824
Lobster, squid and French fries 405 497 369 394
Commercial cold storage 343 691 326 320
Total 5 039 134 4 701 224
Operating profit
Canned fish and fishmeal 380 931 214 914
Horse mackerel and hake 347 251 422 504
Lobster, squid and French fries 44 870 23 343
Commercial cold storage 106 514 82 798
Total 879 566 743 559
Total assets
Canned fish and fishmeal 1 550 944 1 774 724
Horse mackerel and hake 588 916 462 955
Lobster, squid and French fries 112 746 100 257
Commercial cold storage 240 610 235 608
Financing 457 962 231 523
2 951 178 2 805 067
Deferred taxation 24 119 28 502
Total 2 975 297 2 833 569
Total liabilities
Canned fish and fishmeal 556 434 476 028
Horse mackerel and hake 183 108 149 596
Lobster, squid and French fries 49 402 41 460
Commercial cold storage 55 747 67 129
Financing 325 485 273 299
1 170 176 1 007 512
Deferred taxation 58 215 36 686
Total 1 228 391 1 044 198
4. Determination of headline earnings
Profit after taxation attributable to own shareholders 573 931 491 016
Adjusted for:
Compensation from third parties for property, plant and
equipment impaired (11 370)
Headline earnings adjustments - joint ventures 2 141
Net surplus on disposal of property, plant, and equipment
and intangible assets (192) (2 351)
Surplus on disposal of joint venture (268)
Total tax effect of adjustments 2 996 660
Headline earnings for the year 567 238 489 325
5. Dividends
Estimated dividend declared after reporting date 272 389 222 951
Dividend on shares issued prior to last day to trade
Actual dividend declared after reporting date 222 951
6. Supplementary information
Amortisation 22 421 15 175
Depreciation 91 202 87 193
Operating lease charges 54 454 53 226
Share-based payments: cash-settled compensation scheme 19 225 152 523
Share-based payments: equity-settled compensation scheme 2 379
Capital expenditure 163 386 127 172
Expansion 24 592 23 182
Replacement 138 794 103 990
Budgeted capital commitments 327 397 212 870
Contracted 22 479 40 809
Not contracted 304 918 172 061
Number Number
of of
shares shares
'000 '000
7. Elimination of treasury shares
Weighted average number of shares in issue 119 526 119 451
Less weighted average: treasury shares held by share trusts (14 032) (14 055)
Less weighted average: 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 100 400 100 302
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 30 September 2014.
Note
* Prior period disclosure has been restated to account for the adoption of new and revised accounting standards.
COMMENTS
Financial results
Group earnings per share for the year ended 30 September 2014 increased by 17% and headline earnings per share
increased by 16% compared to the previous year.
Group revenue has improved by 7% to R5,039 billion in 2014. This growth has been achieved from improvements in three
of our four divisions, led primarily by an increase of 17% in the canned fish and fishmeal division. Growth in the
second half of the year has been affected by lower horse mackerel catch rates which were offset by the positive effect
of a weaker rand exchange rate on exported products.
Overhead expenditure includes a charge to the statement of comprehensive income of R21,6 million compared to
R152,5 million in 2013, arising from IFRS 2 share-based expenses. This decrease is a direct result of the reduction
in Oceana's share price during the period under review.
Operating profit increased by 18% compared to the previous year.
Inventory levels have decreased significantly in 2014 in line with our canned fish procurement strategy. As a result,
the group has been cash generative to the extent of R487 million compared to a decrease in cash of R420 million for
the comparative period.
A final dividend of 271 cents per share has been declared which together with the interim dividend of 106 cents brings
the total dividend for the year to 377 cents per share, an increase of 17% on the 2013 total dividend of 322 cents per
share.
Review of operations
Canned fish and fishmeal
Canned fish volumes have grown from a strong base of 8,6 million cartons in 2013 to 8,8 million cartons in the current
year. Domestic volume growth of 3,3% has been satisfactory given current consumer pressures.
Revenue growth for canned fish has been achieved through price adjustments necessitated by the impact of the weaker
rand exchange rate on the landed cost of imported product.
The 2014 South African Total Allowable Catch ("TAC") for pilchard remains the same as 2013 at 90 000 tons. Pilchard
landings at the St Helena Bay cannery have been good for the period and additional pilchard quota were contracted to
increase production. The Namibian pilchard TAC for 2014 is 30 000 tons (2013: 25 000 tons).
The 2014 South Africa anchovy TAC is 450 000 tons (final TAC for 2013: 450 000 tons). Current season landings of anchovy
and redeye herring of 81 000 tons (2013: 36 700 tons) to the group's fishmeal plants were significantly higher than in
the previous season resulting in improved production efficiencies and lower costs per ton of manufactured product.
Selling prices were higher due to firm international market prices and the weaker rand exchange rate returning the business
to profitability after having made a substantial loss in the prior year.
Horse mackerel and hake
The 2014 Namibian horse mackerel TAC remains the same as 2013 at 350 000 tons. The Ministry of Fisheries and Marine
Resources continued to allocate further quota to new rights holders which resulted in a reduction of our quota. This
had a negative impact on the overall tonnage caught despite good catch rates. One of our three Namibian trawlers has
been operating successfully in Angola for a portion of the year.
In South Africa the Precautionary Maximum Catch Limit for targeted catch of horse mackerel increased by 10% to
38 115 tons (2013: 34 650 tons). Catch rates in South Africa have been significantly reduced due to unexpected
scarcity of horse mackerel in our traditional fishing grounds. This has had a material impact on revenue and cost
recovery.
Overall pricing remained firm in our major markets despite the impact of oversupply due to the Nigerian import
embargo. Higher prices have been achieved for certain fish sizes and revenue was further enhanced by favourable
currency exchange rates.
Profit from horse mackerel decreased as a direct result of lower tonnage caught for the period.
The 2014 hake TAC has remained unchanged at approximately 140 000 tons. Profit from hake operations showed a
substantial improvement as a consequence of stable prices, operating efficiencies and a favourable rand exchange
rate. Operations have been negatively impacted by extensive vessel maintenance and upgrades, some due to unforeseen
circumstances, resulting in reduced sea days.
Lobster, squid and French fries
The 2014 TAC for West coast lobster decreased by 11% to 2 167 tons (2013: 2 425 tons), and quota available to Oceana
for the current season amounts to 288 tons (2013: 327 tons). The effect of lower sales volumes has been offset by
higher sales prices and a favourable rand exchange rate resulting in profits being consistent with the prior year.
Following the 2013 commercial fishing rights allocation process in the squid sector, the fishing rights allocated to
Oceana remained unchanged. In the current year the squid business incurred a loss due to the continued decline in
landings. The effect of lower sales volumes was partly offset by higher prices.
The French fries operation has improved significantly with a return to profitability primarily due to increased
volumes driven by better raw material quality compared to the prior period and in addition, stronger pricing of
finished product.
Commercial cold storage
The commercial cold storage and logistics business continues to show improvement. Revenue increased by 5% due to
improved occupancy levels at most stores aided by the expansion of the Namibian store while cost efficiencies
have further contributed to growth in operating profit margins.
Foodcorp acquisition
Further to the announcement released on the Stock Exchange News Service of the JSE on 8 May 2014 in respect of Oceana’s
acquisition of the fishing interests of Foodcorp Proprietary Limited (“Foodcorp”), as at 6 November 2014 a decision by
the Competition Appeal Court was still pending.
Oceana Empowerment Trust (OET)
Oceana shareholders and trust beneficiaries voted in favour of an extension to the OET lock-in period by a further
four years from January 2017 to January 2021 and to a capital contribution of approximately R290 million to OET in
order to make a once-off cash distribution to the 2 650 employee beneficiaries. This resulted in an average after
tax distribution per employee beneficiary of R100,000. This distribution was made on 4 April 2014 and has been
positively received.
Prospects
The canned fish and fishmeal business has been restructured to allow management to effectively explore opportunities
for growth both domestically and in the rest of Africa and in addition to focus on extracting efficiencies. In
Namibia we continue to seek appropriately priced horse mackerel quota to supplement fishing of owned quota. We will
also continue to assess the viability of opportunities in Angola and have already commenced fishing, having obtained
a mid-water trawl license in October 2014. In addition, we expect to commission a fishmeal plant in Angola during 2015.
We continue to explore further opportunities for acquisitive growth both in South Africa and globally. In addition we
anticipate that a group wide implementation of shared service finance, procure to pay and human resource functions will
deliver operational efficiencies from 2015 onwards.
On behalf of the board
MA Brey
Chairman
FP Kuttel
Chief executive officer
6 November 2014
CASH DIVIDEND DECLARATION
Notice is hereby given of dividend number 142. A gross final dividend amounting to 271 cents per share, in respect
of the year ended 30 September 2014, was declared on Thursday, 06 November 2014, 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
230,35 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, 09 January 2015
Commence trading ex dividend Monday, 12 January 2015
Record date Friday, 16 January 2015
Dividend payable Monday, 19 January 2015
Share certificates may not be dematerialised or re-materialised between Monday, 12 January 2015 and Friday,
16 January 2015, both dates inclusive.
By order of the board
JC Marais
Company secretary
6 November 2014
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: 06/11/2014 03:40:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
