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AVI LIMITED - Unaudited Interim Results for the Six Months Ended 31 December 2014

Release Date: 09/03/2015 07:05
Code(s): AVI     PDF:  
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Unaudited Interim Results for the Six Months Ended 31 December 2014

AVI Limited
AVI Limited (“AVI” or "the Group" or "the Company")
Reg no: 1944/017201/06
Share code: AVI
ISIN: ZAE000049433

For more information please visit our website www.avi.co.za

Unaudited interim results for the six months ended 31 December 2014

Key features

  Strong brand portfolio underpinned a sound performance in a challenging trading environment   
  Revenue up 11% to R6,00 billion
  Operating profit up 13% to R1,15 billion
  Cash from operations up 16% to R1,31 billion
  Return on capital employed of 27,7%
  Headline earnings per share up 10% to 253 cents
  Interim dividend up 10% to 132 cents per share
  Special dividend of 200 cents per share


Group overview
AVI’s results for the six months ended 31 December 2014 reflect strong overall performance in a period 
of increasing pressure on consumer spending and rising input costs stemming largely from the weaker Rand.

Revenue increased by 11,1%, from R5,40 billion to R6,00 billion with the group realising higher selling
prices in all categories following significant accumulated cost pressure as a result of the weaker Rand. 
In addition, volume growth was achieved in many of our categories and I&J’s export revenue benefitted 
from the Rand weakness. Gross profit rose by 11,6% to R2,67 billion with the consolidated gross profit 
margin improving from 44,3% to 44,5%. Operating profit increased by 12,9%, from R1,02 billion to 
R1,15 billion with the growth in gross profit supported by good containment of selling and administrative 
expenses across the group. The operating profit margin increased from 18,9% to 19,2%.

Entyce delivered a strong result for the semester, recovering some of the profit margin given up in the
tough trading conditions experienced over the last few years and achieving good volume growth in Creamer.
Snackworks continued to perform well with volume growth in both Biscuits and Snacks and a small improvement 
in profit margin. I&J benefitted materially from the weaker Rand as well as sound fishing and processing 
efficiencies, however, profit growth for the semester was constrained by unrealised losses on fuel hedges 
following the significant decline in oil prices. At Indigo, owned brands performed well in a competitive 
environment and the Coty profit contribution was preserved in the new relationship. Margins in the Footwear 
and Apparel businesses have stabilised and profit grew as a result of a strong performance from Spitz, with 
growth in both footwear and clothing volumes. 

Headline earnings rose by 12,0%, from R718,2 million to R804,8 million with the growth in operating profit
tempered by lower earnings from I&J’s joint venture with Simplot in Australia. Headline earnings per share
increased 9,7% from 230,6 cents to 252,9 cents with a 2,2% increase in the weighted average number of shares 
in issue due to the vesting of employee share options, including the AVI Black Staff Empowerment Scheme.

Attributable earnings, including capital items, were 4,3% lower than the first semester last year, which
included a capital payment of R150,0 million from Coty to Indigo on revision of the trading relationship 
between them. 

Cash generated by operations before working capital changes increased 15,7% to R1,31 billion. Working
capital rose R355,5 million, reflecting strong trading at the end of the period as well as the higher stock 
value from rising input costs. Capital expenditure of R225,8 million incorporated capacity and efficiency 
projects in the manufacturing operations and new and refurbished stores in the retail businesses. Other 
material cash outflows during the period were dividends of R574,3 million and taxation of R253,0 million. 
Net debt at the end of December 2014 was R456,4 million compared to R539,9 million at the end of 
December 2013.

DIVIDEND 
A normal interim dividend of 132 cents per share has been declared, an increase of 10,0% on last year’s
interim dividend.

In addition, in line with AVI’s ongoing commitment to return excess cash to shareholders, the Board has
approved a special dividend of 200 cents per share.


Segmental review
Six months ended 31 December
                                      Segmental revenue                   Segmental operating profit                                       
                                   2014       2013         %               2014       2013         %   
                                     Rm         Rm    change                 Rm         Rm    change   
  Food & Beverage Brands        4 376,1    3 854,6      13,5              749,7      631,1      18,8   
  Entyce Beverages              1 568,9    1 416,1      10,8              312,1      258,9      20,5   
  Snackworks                    1 825,1    1 614,0      13,1              339,5      297,9      14,0   
  I&J                             982,1      824,5      19,1               98,1       74,3      32,0   
  Fashion Brands                1 622,1    1 540,6       5,3              411,3      393,2       4,6   
  Personal Care*                  541,4      574,4      (5,7)             102,6       97,2       5,6   
  Footwear & Apparel            1 080,7      966,2      11,9              308,7      296,0       4,3   
  Corporate                         4,0        5,1                         (8,7)      (3,6)            
  Group                         6 002,2    5 400,3      11,1            1 152,3    1 020,7      12,9   
  * decrease in revenue due to revision of commercial relationship with Coty effective 31 October 2013.
  
  
Entyce Beverages
Revenue increased 10,8% to R1,57 billion while operating profit increased by 20,5% to R312,1 million with
the operating profit margin at 19,9% compared to 18,3% in the prior period.

Tea revenue increased 9,0% due to price increases necessary to offset rising black tea and rooibos tea 
input costs. Coffee revenue was 5,5% up with price increases to ameliorate the impact of the weaker Rand 
on raw material costs partially offset by lower sales volumes. Creamer revenue benefitted from higher 
selling prices and sales volumes, rising by 23,9%.

Gross profit margin improved with higher selling prices recovering some of the accumulated margin pressure
from rising input costs. Selling and administrative cost increases were well contained, and Tea, Coffee 
and Creamer all grew their operating profit and operating profit margin.

Snackworks
Revenue of R1,83 billion was 13,1% higher than last year while operating profit rose by 14,0%, from 
R297,9 million to R339,5 million. The operating profit margin increased from 18,5% to 18,6%.

Biscuits revenue grew 14,2% with higher selling prices and a 3,5% increase in sales volumes. Snacks 
revenue increased 9,4% with higher pricing in the category supported by volume growth of 1,2%.

Gross profit margin improved due to higher selling prices and higher sales volumes. This was partially
offset by increased marketing spend to support new product innovation, mostly in biscuits, resulting 
in a slight improvement in operating profit margin.

I&J
Revenue increased by 19,1% from R824,5 million to R982,1 million while operating profit increased from 
R74,3 million to R98,1 million. The operating profit margin increased from 9,0% to 10,0%.

Revenue growth largely reflects the benefit of the weaker Rand on export sales, supported by increases 
in selling prices and a 7,5% increase in sales volumes. Fishing and processing performances were sound 
and  gross profit margin improved. However, unrealised losses on fuel hedges and foreign currency 
balances resulted in a significant increase in selling and administrative expenses that tempered I&J’s 
result for the period. I&J hedges its fuel price and foreign currency exposure on a consistent basis, 
and the significant decline in oil prices and weakening of the Euro towards the end of the first 
semester resulted in the recognition of unrealised losses, compared to unrealised gains in the first 
half of last year.

Fashion Brands (Personal Care, Footwear and Apparel)
Revenue rose by 5,3% to R1,62 billion while operating profit increased 4,6% to R411,3 million. The 
operating profit margin decreased slightly from 25,5% to 25,4%.

In the Personal Care category, Indigo’s revenue from owned brands grew by 8,7% due to volume growth 
and price increases, although total revenue declined following the commencement of new trading terms 
with Coty with effect from November 2013. Operating profit grew 5,5% to R102,6 million and the 
operating profit margin increased from 16,9% to 19,0%, partly because of the revised Coty trading 
terms which result in lower revenue. Gross profit margin was preserved by well managed selling and 
administrative expenses. 

The Footwear and Apparel category increased revenue by 11,9% to R1,08 billion while operating profit
increased by 4,3% from R296,0 million to R308,7 million. The operating profit margin decreased from 
30,6% to 28,6%. 

In the Spitz business revenue grew 13,2% as a result of higher selling prices as well as increased 
footwear and clothing sales volumes. Core brands performed strongly notwithstanding the constrained 
consumer environment, with record sales in December, while price increases taken in the last financial 
year stabilised gross profit margin. Gross profit margin was slightly down on last year, having 
normalised from the very high levels achieved when the Rand was relatively stable for a protracted 
period. Operating profit increased from R258,9 million to R282,7 million and the operating profit 
margin declined from 33,1% to 31,9%.

In Green Cross revenue growth was inhibited by poor wholesale demand and the refurbishment of six of 
the retail stores during the semester, growing just 5,0% to R171,4 million. Apart from the lost sales 
from refurbishments, retail stores performed well with consumers reacting favourably to the new store 
design. Gross profit margin declined, partly because of the weaker Rand, and also due to the cost of 
high stock levels resulting from changes in product ranging and low wholesale demand. Overall revenue 
growth was insufficient to recover the additional fixed costs and operating profit decreased from 
R34,3 million to R23,6 million. 

Outlook
We expect the current constrained consumer demand environment to persist. The weaker Rand will put
additional pressure on input costs and selling prices will need to be adjusted during the second half 
of the year, with due cognisance of the impact that this could have on demand. 

We have installed full back?up power capabilities at many of our manufacturing sites, with further
mitigation in progress in both our manufacturing and retail activities. Consequently the irregular 
power supply in the first semester did not have a material impact on our results, however, prolonged 
and severe load shedding or major power outages could result in significantly higher operating costs 
and lost sales.

I&J has secured the majority of its foreign currency exchange rates for the second half and will 
benefit from lower fuel prices. Provided catch rates are maintained at sound levels, this business 
should have a strong second half.

Entyce and Snackworks have well established capabilities to defend market share and profit margins 
and will be seeking to protect gross profit margin and grow sales volumes where there is opportunity. 
Indigo is maintaining its strong aerosol and colour cosmetics positions and is performing well in 
export markets. Spitz, Kurt Geiger and Green Cross retail stores will benefit from refurbishments and 
measured space growth, and the decline in the Green Cross wholesale business has been stemmed. Our 
international business is achieving good revenue growth and continues to focus on growing profitable, 
branded market positions supported by our South African manufacturing capability.

Notwithstanding expectations of a difficult trading environment we remain confident that our unique 
brand portfolio can continue to deliver growth in key categories. This will be supported by ongoing 
improvements in manufacturing capability and procurement activity. 

Accordingly the Board is confident that AVI is well positioned to weather a difficult trading 
environment while continuing to pursue growth opportunities from the current brand portfolio and 
remaining vigilant for brand acquisition opportunities, both domestically and regionally.

The above outlook statements have not been reviewed or reported on by AVI’s auditors.
              
Gavin Tipper            Simon Crutchley
Chairman                CEO

9 March 2015


Condensed group balance sheet
                                                                    Unaudited at            Audited   
                                                                     31 December         at 30 June   
                                                                  2014           2013          2014   
                                                                    Rm             Rm            Rm   
  Assets                                                                                              
  Non?current assets                                                                                  
  Property, plant and equipment                                2 386,0        2 142,6       2 317,1   
  Intangible assets and goodwill                               1 144,9        1 144,2       1 146,6   
  Investments                                                    385,9          380,4         406,8   
  Deferred taxation                                               24,3           38,9          41,8   
                                                               3 941,1        3 706,1       3 912,3   
  Current assets                                                                                      
  Inventories and biological assets                            1 463,5        1 308,2       1 382,7   
  Trade and other receivables including derivatives            1 819,7        1 666,6       1 509,1   
  Cash and cash equivalents                                      323,7          358,3         298,5   
                                                                            
  Other assets classified as held?for?sale*                          -            5,9             -   
                                                               3 606,9        3 339,0       3 190,3   
  Total assets                                                 7 548,0        7 045,1       7 102,6   
  Equity and liabilities                                                                              
  Capital and reserves                                                                                
  Total equity                                                 4 474,7        4 018,3       4 216,2   
  Non?current liabilities                                                                             
  Operating lease straight?line liabilities                       15,2           17,3          16,2   
  Employee benefits                                              358,5          354,1         348,5   
  Deferred taxation                                              292,6          267,0         269,8   
                                                                 666,3          638,4         634,5   
  Current liabilities                                                                                 
  Current borrowings                                             764,9          880,9         647,5   
  Trade and other payables including derivatives               1 580,3        1 422,7       1 599,8   
  Corporate taxation                                              61,8           84,6           4,6   
  Other liabilities classified as held?for?sale                      ?            0,2             ?   
                                                               2 407,0        2 388,4       2 251,9   
  Total equity and liabilities                                 7 548,0        7 045,1       7 102,6   
  Net debt**                                                     456,4          539,9         365,2   
  *  Other assets held?for?sale comprise equipment and property held for disposal. 
  ** Comprises operating lease straight?line liabilities and current borrowings, less cash and cash 
     equivalents.                                                    
                                                                                                      
                                                                                                      
 Condensed group statement of comprehensive income
                                                                      Unaudited                             Audited   
                                                                  six months ended                       year ended   
                                                                     31 December                            30 June   
                                                               2014             2013          %                2014  
                                                                 Rm               Rm     change                  Rm   
  Revenue                                                   6 002,2          5 400,3         11            10 267,4   
  Cost of sales                                             3 331,2          3 006,1         11             5 839,6   
  Gross profit                                              2 671,0          2 394,2         12             4 427,8   
  Selling and administrative expenses                       1 518,7          1 373,5         11             2 715,3   
  Operating profit before capital items                     1 152,3          1 020,7         13             1 712,5   
  Income from investments                                       2,9              2,8          4                 7,6   
  Finance costs                                               (32,6)           (33,5)        (3)              (56,0)   
  Share of equity?accounted earnings of                   
  joint ventures                                                5,8             11,7        (50)               28,5   
  Capital items                                                (1,9)           149,2       (101)              138,0   
  Profit before taxation                                    1 126,5          1 150,9         (2)            1 830,6   
  Taxation                                                    323,1            311,2          4               514,9   
  Profit for the period                                       803,4            839,7         (4)            1 315,7   
  Profit attributable to:                                                                                             
  Owners of AVI                                               803,4            839,7         (4)            1 315,7   
  Other comprehensive income, net of tax                       (4,9)             6,4       (177)               17,5   
  Items that are or may be subsequently                    
  reclassified to profit or loss                                                     
  Foreign currency translation differences                    (19,1)            21,3       (190)               41,3   
  Cash flow hedging reserve                                    20,6            (20,1)      (202)              (31,3)   
  Taxation on items that are or may be subsequently                                                      
  reclassified to profit or loss                               (5,8)             5,6                            8,8   
                                                                            Page 5
                                                 AVI interim results for the six months ended 31 December 2014
  Items that will never be reclassified to  profit or loss                                                            
  Actuarial loss recognised                                    (0,8)            (0,6)                          (1,8)   
  Taxation on items that will never be                                                                   
  reclassified to profit or loss                                0,2              0,2          0                 0,5   
  Total comprehensive income for the period                   798,5            846,1         (6)            1 333,2   
  Total comprehensive income attributable to:                                                                         
  Owners of AVI                                               798,5            846,1         (6)            1 333,2   
  Depreciation and amortisation of property,                                                             
  plant and equipment, fishing rights and                                                                
  trademarks included in operating profit                     151,2            138,8          9               286,1   
  Earnings per share                                                                                                  
  Basic earnings per share (cents)#                           252,5            269,6         (6)              419,3   
  Diluted basic earnings per share (cents)##                  247,5            261,6         (5)              409,3   
  Headline earnings per share (cents)#                        252,9            230,6         10               383,6   
  Diluted headline earnings per share (cents)##               247,9            223,8         11               374,5   
  #  Basic earnings and headline earnings per share are calculated on a weighted average of 318 170 151 
     (31 December 2013: 311 458 224 and 30 June 2014: 313 804 047) ordinary shares in issue.
  ## Diluted basic earnings and headline earnings per share are calculated on a weighted average of 324 580 376 
     (31 December 2013: 320 932 285 and 30 June 2014: 321 421 910) ordinary shares in issue.



 Condensed group statement of cash flows
                                                                            Unaudited                       Audited   
                                                                         six months ended                year ended   
                                                                            31 December                     30 June   
                                                                      2014             2013         %          2014   
                                                                        Rm               Rm    change            Rm   
  Operating activities                                                                                                
  Cash generated by operations before working 
  capital changes                                                  1 309,6          1 132,0        16       2 102,8   
  Increase in working capital                                       (355,3)          (190,3)       87        (101,1)   
  Cash generated by operations                                       954,3            941,7         1       2 001,7   
  Interest paid                                                      (32,6)           (33,5)       (3)        (56,0)   
  Taxation paid                                                     (253,0)          (220,4)       15        (465,1)   
  Net cash available from operating activities                       668,7            687,8        (3)      1 480,6   
  Investing activities                                                                                                 
  Interest received                                                    2,9              2,8         4           7,6   
  Property, plant and equipment acquired                            (225,8)          (199,9)       13        (531,9)   
  Additions to intangible assets                                         ?                ?                    (4,0)   
  Proceeds from disposals of property, plant and equipment             5,8              8,1       (28)         13,8   
  Payment from Coty on revision of commercial relationship               ?            150,0                   150,0   
  Movement in joint ventures and other investments                     1,6             12,7       (87)         27,1   
  Net cash used in investing activities                             (215,5)           (26,3)      719        (337,4)   
  Financing activities                                                                                                 
  Proceeds from shareholder funding                                   26,9             21,2        27          93,9   
  Short?term funding raised/(repaid)                                 117,4            (12,6)                 (246,1)   
  Dividends paid                                                    (574,3)          (531,0)        8        (910,2)   
  Net cash used in financing activities                             (430,0)          (522,4)      (18)     (1 062,4)   
  Increase in cash and cash equivalents                               23,2            139,1       (83)         80,8   
  Cash and cash equivalents at beginning of period                   298,5            212,4        41         212,4   
                                                                     321,7            351,5                   293,2   
                                                                            Page 6
                                                 AVI interim results for the six months ended 31 December 2014
  Translation of cash equivalents of foreign subsidiaries         
  at beginning of period                                               2,0              6,8       (71)          5,3   
  Cash and cash equivalents at end of period                         323,7            358,3                   298,5   
  
  
 Condensed group statement of changes in equity
                                                              Share     
                                                         capital and     Treasury                  Retained        Total  
                                                             premium       shares     Reserves     earnings       equity  
                                                                  Rm           Rm           Rm           Rm           Rm   
  Six months ended 31 December 2014                                                                                      
  Balance at 1 July 2014                                        29,5       (448,1)       347,5      4 287,3      4 216,2   
  Profit for the period                                                                               803,4        803,4   
  Other comprehensive income                                                                                               
  Foreign currency translation differences                                               (19,1)                    (19,1)   
  Actuarial losses recognised, net of tax                                                 (0,6)                     (0,6)   
  Cash flow hedging reserve, net of tax                                                   14,8                      14,8   
  Total other comprehensive income                                 -            -         (4,9)           -         (4,9)   
  Total comprehensive income for the period                        -            -         (4,9)       803,4        798,5   
  Transactions with owners, recorded directly in equity                                                                    
  Share?based payments                                                                     6,2                       6,2   
  Deferred taxation on Group share scheme recharge                                         2,9                       2,9   
  Dividends paid                                                                                     (574,3)      (574,3)   
  Issue of ordinary shares to AVI Share Trusts                  10,5        (10,5)                                     ?   
  Own ordinary shares sold by AVI Share Trusts                               23,7                       1,5         25,2   
  Total contributions by and distributions to owners            10,5         13,2          9,1       (572,8)      (540,0)   
  Balance at 31 December 2014                                   40,0       (434,9)       351,7      4 517,9      4 474,7   
  Six months ended 31 December 2013                                                                                        
  Balance at 1 July 2013                                        29,5       (538,2)       309,0      3 877,3      3 677,6   
  Profit for the period                                                                               839,7        839,7   
  Other comprehensive income                                                                                               
  Foreign currency translation differences                                                21,3                      21,3   
  Actuarial losses recognised, net of tax                                                 (0,4)                     (0,4)   
  Cash flow hedging reserve, net of tax                                                  (14,5)                    (14,5)   
  Total other comprehensive income                                 -            -          6,4            -          6,4   
  Total comprehensive income for the period                        -            -          6,4        839,7        846,1   
  Transactions with owners, recorded directly in equity                                                                    
  Share?based payments                                                                     7,6                       7,6   
  Deferred taxation on Group share scheme recharge                                        (2,7)                     (2,7)   
  Dividends paid                                                                                     (531,0)      (531,0)   
  Own ordinary shares sold by AVI Share Trusts                               17,6                       3,1         20,7   
  Total contributions by and distributions to owners               -         17,6          4,9       (527,9)      (505,4)   
  Balance at 31 December 2013                                   29,5       (520,6)       320,3      4 189,1      4 018,3   
  Year ended 30 June 2014                                                                                                  
  Balance at 1 July 2013                                        29,5       (538,2)       309,0      3 877,3      3 677,6   
  Profit for the year                                                                               1 315,7      1 315,7   
  Other comprehensive income                                                                                               
  Foreign currency translation differences                                                41,3                      41,3   
  Actuarial losses recognised, net of tax                                                 (1,3)                     (1,3)   
  Cash flow hedging reserve, net of tax                                                  (22,5)                    (22,5)   
  Total other comprehensive income                                 -            -         17,5            -         17,5   
  Total comprehensive income for the period                        -            -         17,5      1 315,7      1 333,2   
                                                                        
  Transactions with owners, recorded directly in equity                                                                    
  Share?based payments                                                                    13,0                      13,0   
  Deferred taxation on Group share scheme recharge                                         8,0                       8,0   
  Dividends paid                                                                                     (910,2)      (910,2)   
  Own ordinary shares sold by AVI Share Trusts                               90,1                       4,5         94,6   
  Total contributions by and distributions to owners               -         90,1         21,0       (905,7)      (794,6)   
  Balance at 30 June 2014                                       29,5       (448,1)       347,5      4 287,3      4 216,2   


Supplementary notes to the condensed consolidated interim financial statements
For the six months ended 31 December 2014
  AVI Limited (“AVI” or the “Company”) is a South African registered company. These condensed consolidated interim financial 
  statements comprise the Company and its subsidiaries (together referred to as the “Group”) and the Group’s interest in 
  joint ventures.
  
  1.   Statement of compliance
       The condensed consolidated interim financial statements have been prepared in accordance with the recognition and 
       measurement criteria of International Financial Reporting Standards, the presentation and disclosure requirements 
       of IAS 34 Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices 
       Committee, the Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, the 
       Listings Requirements of the JSE Limited (the “JSE”) and the Companies Act of South Africa. These condensed 
       consolidated interim financial statements have not been reviewed or audited by the Group’s auditors.  
   
  2.   Basis of preparation
       The condensed consolidated interim financial statements are prepared in millions of South African Rands (“Rm”) on 
       the historical cost basis, except for derivative financial instruments, biological assets and liabilities for 
       cash?settled share?based payment arrangements, which are measured at fair value, and non?current assets and disposal 
       groups held?for?sale which are stated at the lower of carrying amount and fair value less costs to sell.       
   
       The accounting policies used in the preparation of these interim financial statements are in terms of International 
       Financial Reporting Standards and are consistent with those applied in preparing the annual financial statements 
       for the year ended 30 June 2014.
   
       The Group adopted all new, revised or amended accounting pronouncements, which were effective and applicable to the 
       Group from 1 July 2014, none of which had any material impact on the Group’s financial results for the period.
 

  3.    Segmental results
                                                                      Unaudited                          Audited   
                                                                   six months ended                   year ended   
                                                                   31 December                           30 June   
                                                                2014             2013         %             2014 
                                                                  Rm               Rm    change               Rm      
        Segmental revenue                                                                                       
        Food & Beverage Brands                               4 376,1          3 854,6        14          7 598,4   
        Entyce Beverages                                     1 568,9          1 416,1        11          2 717,4   
        Snackworks                                           1 825,1          1 614,0        13          3 057,9   
        I&J                                                    982,1            824,5        19          1 823,1   
        Fashion Brands                                       1 622,1          1 540,6         5          2 659,3   
        Personal Care*                                         541,4            574,4        (6)         1 043,8   
        Footwear & Apparel                                   1 080,7            966,2        12          1 615,5   
        Corporate and consolidation                              4,0              5,1                        9,7   
                                                                            
        Group                                                6 002,2          5 400,3        11         10 267,4   
        Segmental operating profit before capital items                                              
        Food & Beverage Brands                                 749,7            631,1        19          1 161,5   
        Entyce Beverages                                       312,1            258,9        21            442,4   
        Snackworks                                             339,5            297,9        14            474,5   
        I&J                                                     98,1             74,3        32            244,6   
        Fashion Brands                                         411,3            393,2         5            560,1   
        Personal Care                                          102,6             97,2         6            172,0   
        Footwear & Apparel                                     308,7            296,0         4            388,1   
        Corporate and consolidation                             (8,7)            (3,6)                      (9,1)   
        Group                                                1 152,3          1 020,7        13          1 712,5   
        *Decrease due to revision of commercial relationship with Coty effective 31 October 2013 ? see note 4.     
                                                                                                                    
 
  4.    Determination of headline earnings    
                                                                    Unaudited                            Audited   
                                                                 six months ended                     year ended   
                                                                    31 December                          30 June   
                                                                     2014          2013          %          2014   
                                                                       Rm            Rm     change            Rm          
        Profit for the year attributable to owners of AVI           803,0         839,7         (4)      1 315,7   
        Total capital items after taxation                           (1,4)        121,4                    111,9   
        Net loss on disposal of investments                      
        and property, plant and equipment                            (1,9)         (0,8)                    (5,1)  
        Payment from Coty on revision of commercial relationship*       ?         150,0                    150,0   
        Impairment of assets                                            ?             ?                     (6,9)  
        Taxation attributable to capital items                        0,5         (27,8)                   (26,1)  
        Headline earnings                                           804,8         718,3         12       1 203,8   
        Headline earnings per ordinary share (cents)                252,9         230,6         10         383,6   
        Diluted headline earnings per ordinary share (cents)        247,9         223,8         11         374,5   
                                                                                                                  

                                                     Number             Number         %         Number    
                                                  of shares          of shares    change      of shares   
        Weighted average number of 
        ordinary shares                         318 170 151        311 458 224         2    313 804 047   
        Weighted average diluted 
        number of ordinary shares               324 580 376        320 932 285         1    321 421 910
        *Payment from Coty on revision of commercial relationship
                                     
       Effective 31 October 2013, AVI Limited and Coty Inc. agreed to a revision of their existing commercial 
       relationship whereby AVI ceased to be the exclusive licensee of Coty in South Africa and was appointed 
       as the exclusive manufacturer, importer, distributor and marketer of Coty’s value brand portfolio in 
       South Africa and 13 other African countries. As compensation for the revision, Coty made a once?off 
       pre?tax payment to Indigo of R150,0 million in November 2013.

       Following the revision Indigo no longer reports revenue and profit associated with the sale of Coty 
       branded product but instead recognises revenue and profit in relation to the services provided to Coty 
       by Indigo. The impact on the individual lines disclosed in AVI’s consolidated statement of comprehensive 
       income for the periods ended 31 December 2014, 30 June 2014 and 31 December 2013 is not significant and 
       is not expected to be significant going forward. 
   
                                                                            
       The impact on Group prior year results is as follows: 
                                                    Rm   
        Payment from Coty on revision of 
        commercial relationships                 150,0   
        Less: Capital gains taxation             (28,0)  
        Net capital profit                       122,0   
 

  5.    Commitments                                                                             
                                                                Unaudited             Audited   
                                                              six months ended     year ended   
                                                                31 December           30 June   
                                                              2014         2013          2014   
                                                                Rm           Rm            Rm     
        Capital expenditure commitments for 
        property, plant and equipment                        598,4        187,3         562,1   
        Contracted for                                       485,8        170,1         436,9   
        Authorised but not contracted for                    112,6         17,2         125,2   
       It is anticipated that this expenditure will be financed by cash resources, cash generated from 
       activities and existing borrowing facilities. Other contractual commitments have been entered 
       into in the normal course of business.
   
 6.    Post-reporting date events
       No significant events that meet the requirements of IAS 10 have occurred since the 
       reporting date.

 7.    Dividend declaration
       Notice is hereby given that a gross interim ordinary dividend No 82 of 132 cents per share 
       for the six months ended 31 December 2014 and gross special dividend No 83 of 200 cents per 
       share have been declared payable to shareholders of ordinary shares. Both dividends have been declared 
       out of income reserves and will be subject to dividend withholding tax at a rate of 15%. The Company has 
       no secondary tax credits available and consequently a net interim dividend of 112,2 cents per share 
       and a net special dividend of 170 cents per share will be distributed to those shareholders who 
       are not exempt from paying dividend tax. In terms of dividend tax legislation, the dividend tax amount due 
       will be withheld and paid over to the South African Revenue Service by a nominee company, stockbroker or 
       Central Securities Depository Participant (“CSDP”) (collectively “Regulated Intermediary”) on behalf of 
       shareholders. However, all shareholders should declare their status to their Regulated Intermediary, as 
       they may qualify for a reduced dividend tax rate or exemption. AVI’s issued share capital at the declaration 
       date is 346 113 309 ordinary shares. AVI’s tax reference number is 9500/046/71/0. The salient dates relating 
       to the payment of the dividend are as follows:

       Last day to trade cum dividend on the JSE       Thursday, 26 March 2015
       First trading day ex dividend on the JSE        Friday, 27 March 2015
       Record date                                     Thursday, 2 April 2015
       Payment date                                    Tuesday, 7 April 2015
       In accordance with the requirements of Strate Limited, no share certificates may be dematerialised or 
       rematerialised between Friday, 27 March 2015 and Thursday, 2 April 2015, both days inclusive.
       Dividends in respect of certificated shareholders will be transferred electronically to shareholders’ bank 
       accounts on payment date. In the absence of specific mandates, dividend cheques will be posted to 
       shareholders. Shareholders who hold dematerialised shares will have their accounts at their CSDP or broker 
       credited on Tuesday, 7 April 2015.

 8.    Preparation of financial statements
       These condensed consolidated interim financial statements have been prepared under the supervision of 
       Owen Cressey CA(SA), the AVI Group Chief Financial Officer.

   
Administration and principal subsidiaries
Administration 
Company registration
AVI Limited (“AVI”)
Reg no: 1944/017201/06
Share code: AVI
ISIN: ZAE000049433

Directors
Executive
Simon Crutchley (Chief Executive Officer)
Owen Cressey (Chief Financial Officer)
Michael Koursaris (Business Development Director)

Independent non?executive
Gavin Tipper (1) (Chairman)
James Hersov (2)
Adriaan Nühn (1, 4)
Mike Bosman (2)
Andisiwe Kawa (1)
Abe Thebyane (1)
Neo Dongwana (2, 3)
Barry Smith (3) (Resigned 30 October 2014)
Richard Inskip

1 Member of the Remuneration, Nomination and Appointments Committee
2 Member of the Audit and Risk Committee
3 Member of the Social and Ethics Committee
4 Dutch


Company Secretary
Sureya Naidoo

Business address and registered office
2 Harries Road
Illovo
Johannesburg 2196
South Africa

Postal address
PO Box 1897
Saxonwold 2132
South Africa

Telephone: +27 (0)11 502 1300
Telefax: +27 (0)11 502 1301
E?mail: info@avi.co.za
Website: www.avi.co.za
                                                                            

Auditors
KPMG Inc.

Sponsor
The Standard Bank of South Africa Limited

Commercial bankers
Standard Bank
FirstRand Bank

Transfer secretaries
Computershare Investor Services Proprietary Limited
Business address
70 Marshall Street
Marshalltown
Johannesburg 2001
South Africa

Postal address
PO Box 61051
Marshalltown 2107
South Africa
Telephone: +27 (0)11 370 5000
Telefax: +27 (0)11 370 5271

Principal subsidiaries
Food & Beverage Brands
National Brands Limited
Reg no: 1948/029389/06
(incorporating Entyce Beverages & Snackworks)

30 Sloane Street
Bryanston 2021

PO Box 5159
Rivonia 2128

Managing Directors
Sarah?Anne Orphanides (Entyce beverages)
Telephone: +27 (0)11 707 7100
Telefax: +27 (0)11 707 7799

Gaynor Poretti (Snackworks)
Telephone: +27 (0)11 707 7200
Telefax: +27 (0)11 707 7799

I&J
Irvin & Johnson Holding Company Proprietary Limited
Reg no: 2004/013127/07

1 Davidson Street
Woodstock
Cape Town 7925

PO Box 1628
Cape Town 8000

Managing Director
Jonty Jankovich
Telephone: +27 (0)21 440 7800
Telefax: +27 (0)21 440 7270

Fashion Brands
Personal Care
Indigo Brands Proprietary Limited
Reg no: 2003/009934/07

16 ? 20 Evans Avenue
Epping 1 7460

PO Box 3460
Cape Town 8000

Managing Director 
Robert Lunt
Telephone: +27 (0)21 507 8500
Telefax: +27 (0)21 507 8501

Footwear & Apparel
A&D Spitz Proprietary Limited
Reg no: 1999/025520/07

29 Eaton Avenue 
Bryanston 2021

PO Box 782916
Sandton 2145

Acting Managing Director
Simon Crutchley
Telephone: +27 (0)11 707 7300
Telefax: +27 (0)11 707 7763

Green Cross Manufacturers Proprietary Limited 
Reg no: 1994/08549/07

26 ? 30 Benbow Avenue
Epping Industria 7460

PO Box 396
Epping Industria 7475

Managing Director
                                                                            
Greg Smith
Telephone: +27 (0)21 507 9700
Telefax: +27 (0)21 507 9707




                                                           
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