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Provisional summary audited group results and dividend declaration
CROOKES BROTHERS LIMITED
Registration number. 1913/000290/06
Share code: CKS ISIN No: ZAE000001434
PROVISIONAL SUMMARY AUDITED GROUP RESULTS
FOR THE YEAR ENDED 31 MARCH 2015 AND FINAL DIVIDEND DECLARATION
The audited results of the group for the year ended 31 March 2015 together with those of the previous year are
set out below:
SUMMARY CONSOLIDATED Year ended Year ended
STATEMENT OF COMPREHENSIVE INCOME 31 March 31 March
(R000's) 2015 2014
audited audited
Continuing operations:
Revenue 526,087 439,019
Operating profit 61,109 90,765
Share of profit of associate companies 655 1,121
Investment income 3,211 4,504
Finance costs (7,316) (4,538)
Capital items 251 7,430
Profit before taxation 57,910 99,282
Taxation (14,774) (19,692)
Profit for the year from continuing operations 43,136 79,590
Discontinued operations:
Operating profit for the year from discontinued operations - 8,793
Capital profit for the year from discontinued operations - 114,314
Profit for the year from discontinued operations - 123,107
Profit for the year 43,136 202,697
Other comprehensive (loss)/income
Remeasurement of post-employment obligations 1,086 5,977
Realised net fair value gain on available-for-sale financial assets (204) (7,430)
Investment revaluation 15 2,052
Exchange differences on translating foreign operations (2,121) (257)
Other comprehensive (loss)/income for the year, net of tax (1,224) 342
Total comprehensive income for the year 41,912 203,039
Profit for the year attributable to:
Shareholders of the company 40,697 201,146
Non-controlling interests 2,439 1,551
43,136 202,697
Total comprehensive income attributable to:
Shareholders of the company 39,473 201,488
Non-controlling interests 2,439 1,551
41,912 203,039
Earnings per share (cents)
From continuing and discontinued operations
Basic 323.9 1,609.0
Diluted 317.9 1,580.4
From continuing operations
Basic 323.9 633.1
Diluted 317.9 621.9
Year ended Year ended
RECONCILIATION OF HEADLINE EARNINGS 31 March 31 March
(R000's) 2015 2014
audited audited
Profit for the year attributable to shareholders of the company 40,697 201,146
Adjusted for:
Capital loss/(profit) on disposal of land, buildings, plant and equipment 1,165 (126,398)
Profit on disposal of shares (251) (7,430)
Loss on disposal of subsidiary - 2,815
Tax effect of the adjustments (80) 14,470
Headline earnings 41,531 84,603
Headline earnings per share (cents)
Headline earnings per share 330.6 676.8
Headline earnings per share (diluted) 324.5 664.7
Year ended Year ended
DIVIDEND DECLARATION 31 March 31 March
2015 2014
audited audited
Dividends per share (cents)
Ordinary dividends declared per share - interim 65.0 80.0
Ordinary dividends declared per share - final 85.0 120.0
150.0 200.0
SUMMARY CONSOLIDATED Year ended Year ended
STATEMENT OF CHANGES IN EQUITY 31 March 31 March
2015 2014
(R000's) audited audited
Shareholders' equity at beginning of year 763,778 584,549
Movements in:
Share capital and premium - exercise of share options and scrip dividend 900 8,901
Share-based payment reserve 244 72
Other comprehensive loss for the year (2,310) (5,635)
Changes in retained earnings 20,991 175,891
Net profit attributable to owners of the company 40,697 201,146
Remeasurement of post-employment obligations 1,086 5,977
Net profit attributable to non-controlling interests 2,439 1,551
Change in non-controlling shareholding - (2,930)
Dividends paid (23,231) (29,853)
Shareholders' equity at end of year 783,603 763,778
SUMMARY CONSOLIDATED Year ended Year ended
STATEMENT OF FINANCIAL POSITION 31 March 31 March
2015 2014
(R000's) audited audited
ASSETS
Non-current assets 798,048 680,148
Property, plant and equipment 514,116 460,961
Bearer biological assets 254,234 192,883
Unlisted investments 727 979
Investment in associates 19,336 18,681
Retirement benefit surplus 9,095 5,990
Unsecured loan – long term 540 654
Current assets 313,937 345,722
Inventories 60,655 52,808
Biological assets – crops and livestock 184,864 190,762
Trade and other receivables 45,659 58,669
Taxation 9,686 -
Cash and cash equivalents 13,073 28,847
Other financial assets - 14,636
Total assets 1,111,985 1,025,870
EQUITY AND LIABILITIES
Capital and reserves 783,603 763,778
Share capital and premium 13,009 12,109
Retained earnings 761,356 742,804
Investment revaluation reserve 869 1,058
Foreign currency translation reserve 2,725 4,846
Share-based payment reserve 1,036 792
Equity attributable to owners of the company 778,995 761,609
Non-controlling interests 4,608 2,169
Non-current liabilities 213,500 178,535
Deferred taxation 118,320 107,199
Long-term borrowings – interest-bearing 39,162 19,955
Long-term liability – interest-free 45,082 41,763
Post-employment obligations 10,936 9,618
Current liabilities 114,882 83,557
Trade and other payables and provisions 23,229 49,379
Short-term borrowings – interest-bearing 91,653 34,178
Total equity and liabilities 1,111,985 1,025,870
Net asset value per share (cents) 6,231 6,087
SUMMARY CONSOLIDATED Year ended Year ended
STATEMENT OF CASH FLOWS 31 March 31 March
2015 2014*
(R000's) audited audited
Operating profit for the year – continuing operations 61,109 90,765
– discontinued operations - 16,063
Adjustment for non-cash items 13,204 (37,595)
74,313 69,233
Net working capital changes (12,205) (49,782)
Cash generated from operations 62,108 19,451
Cash flows from operating activities 36,703 2,558
Cash generated from operations 62,108 19,451
Interest received* 3,045 4,426
Finance costs (7,316) (4,538)
Taxation paid (21,134) (16,781)
Cash flows from investing activities (106,896) (33,459)
Proceeds on disposal of property, plant, equipment and biological assets 1,178 148,240
Proceeds on disposal of investments 15,038 42,533
Occupational interest received* - 3,720
Acquisition of land rights, property, plant, equipment and biological assets (88,081) (214,572)
Expansion of area under crop (38,569) (2,034)
Other investing activities 3,538 (11,346)
Cash flows from financing activities 54,419 23,128
Dividends paid (23,231) (20,953)
Net increase in borrowings 77,650 44,081
Net decrease in cash and cash equivalents (15,774) (7,773)
Cash and cash equivalents at beginning of year 28,847 36,620
Cash and cash equivalents at end of year 13,073 28,847
Cash flow from operating activities - per share (cents) 292.1 20.5
* Prior year restated to reclassify interest received as an operating activity and occupational interest received
as an investing activity.
Year ended Year ended
OTHER GROUP SALIENT FEATURES 31 March 31 March
2015 2014
(R000's) audited audited
Depreciation 30,502 24,953
Capital expenditure and expansion of area under crop 126,650 216,606
Capital commitments
- Contracted 15,623 11,183
- Authorised but not contracted 26,457 89,644
42,080 100,827
Guarantees 86 86
Number of shares in issue 12,576,817 12,546,817
Weighted average number of shares on which earnings per share (and headline
earnings per share) are based 12,563,913 12,501,154
SUMMARY CONSOLIDATED Year ended Year ended
SEGMENTAL ANALYSIS - Continuing operations 31 March 31 March
2015 2014*
(R000's) audited audited
Revenue
Sugar cane 281,281 270,811
Deciduous fruit 141,851 90,605
Bananas 84,930 66,408
Other operations 18,025 11,195
526,087 439,019
Operating profit
Sugar cane 73,366 88,728
Deciduous fruit 16,183 38,617
Bananas 15,949 6,871
Macadamias* (5,183) (587)
Other operations/sundry income* 7,630 7,711
(Loss)/profit on disposal of plant and equipment (1,165) 230
Unallocated corporate expenses (45,671) (50,805)
61,109 90,765
Assets
Sugar cane 434,958 413,769
Deciduous fruit 294,764 284,516
Bananas 34,024 31,589
Macadamias 142,291 78,822
Other operations 9,010 35,910
Investments and loans 20,603 23,812
Short-term financial assets - 14,635
Unallocated corporate current assets 176,335 142,817
1,111,985 1,025,870
Liabilities
Unallocated corporate liabilities 328,382 262,092
* Prior year restated to reclassify macadamias as a separate operating segment.
Year ended Year ended
DISCONTINUED OPERATIONS 31 March 31 March
2015 2014
(R000's) audited audited
Revenue - 51,400
Operating profit before taxation - 16,063
Net finance income - 3,720
Profit on sale of land, buildings, plant and equipment - 126,168
Loss on sale of a subsidiary - (2,815)
Profit before taxation - 143,136
Income tax expense - (20,029)
Profit for the year - 123,107
COMMENTS ON THE RESULTS
Group revenue from continuing operations increased from R439 million in 2014 to
R526 million, predominantly due to the inclusion of a full year's revenue from the
High Noon deciduous fruit farm acquired towards the end of the previous financial
year.
The previous period's profit benefited from the inclusion of R123.1 million relating to
discontinued operations, chiefly the capital profit on disposal of the fixed assets and
investments of Quarrie Farms sold in November 2013. Nevertheless, profit for the year
decreased by a further R36.5 million to R43.1 million.
Difficult pricing and operating conditions in Swaziland, weak deciduous prices and
ongoing start-up issues in Mozambique were offset to some extent by a very good
performance from the Mpumalanga sugar cane and banana operations. As a
result, operating profit from continuing operations decreased from R90.8 million in
2014 to R61.1 million in the period under review. Further details relating to these issues
are shown in the operational activities section below.
Headline earnings of R41.5 million were significantly lower than the previous year's
R84.6 million, the reduction in operating profit being compounded by an increase in
finance and other costs.
The operating cash inflow of R36.7 million was an improvement on that of the prior
period, and the company continued to invest in line with its expansion strategy. Net
cash expended on investing activities increased to R106.9 million (2014: R33.5 million)
resulting in a net increase in borrowings of R77.7 million after payment of dividends of
R23.2 million.
Corporate activities
Substantial projects currently being implemented include:
- The development of the 3 200 hectare property located near Gurue in northern
Mozambique with 249 hectares of the planned 450 hectares of macadamia
orchards having been planted to date;
- the refinement of an annual crop strategy to fully utilise available arable land in
Mozambique;
- the continuous improvement programme to upgrade irrigation systems; and
- the rezoning of the Renishaw farm near Scottburgh for mixed use development,
with the application for rezoning being processed by the Department of
Agriculture.
Operational activities
Sugar cane – The farms in Mpumalanga benefitted from increased production and
an improved South African RV (relative sucrose value) price. However, the Swaziland
operation's earnings were severely impacted by a reduced sucrose price as a result
of the marked decline in sugar prices in the EU, as well as by increased costs
associated with the prolonged strike and expenditure incurred in combatting severe
pest infestations in the sugar cane. The reduced earnings from this operation was the
most significant contributor to the decline in group profitability.
Bananas - The recently completed large-scale replant of bananas continued to
have a positive effect on both production volumes and quality, with a substantial
impact on operating profit.
Deciduous – Prices in our major African markets were affected by demand
weakness as the oil price fell, and Russian sanctions resulted in an over-supply of fruit
in Europe. Revenue was consequently markedly lower than anticipated, and with
these lower prices, fruit stocks and biological assets did not achieve the levels at
which they were valued at the prior year-end.
Prospects
The agricultural environment in southern Africa, although not without its challenges,
continues to offer great potential arising from regional economic growth, global
food security concerns and renewable energy opportunities. With several profit-
enhancing projects under implementation and recent orchard developments
moving towards maturity, the group's prospects remain positive.
Capital planning
In order for the group to continue to pursue its approved strategy of expansion into
southern Africa and to drive its property development opportunities, the board has
resolved to embark on a capital raising exercise which is the subject of the
cautionary issued on 22 April 2015.
CASH DIVIDEND DECLARATION
The directors are mindful of the preference of certain shareholders to receive a cash
yield from their investment in the group. However, the cash component of earnings
remains low and a marked expansion investment programme continues.
Accordingly, the board has declared a reduced dividend. Shareholders are advised
that this trend is likely to continue in the medium term without a meaningful capital
injection to fund planned investment activities.
The board of directors ("the board") has resolved to declare a final gross cash
dividend of 85.0 cents per ordinary share ("the cash dividend") to ordinary
shareholders recorded in the register of the company at the close of business on
Friday, 10 July 2015.
In respect of the final gross cash dividend the following further information is
provided:
- the dividend has been declared from income reserves;
- the dividend withholding tax rate is 15% resulting in a net dividend of 72.25
cents per share to those shareholders who are not exempt from the
dividend withholding tax;
- Crookes Brothers Limited tax reference number is 9696/001/71/9; and
- the issued number of shares as at declaration date is 12 576 817.
The cash dividend will be paid on Monday, 13 July 2015 to shareholders recorded in
the books of the company at close of business on the record date Friday, 10 July
2015.
The salient dates of the declaration and payment of these dividends are as follows:
Last day to trade cum-dividend Friday 3 July 2015
Shares commence trading ex-dividend Monday 6 July 2015
Record date Friday 10 July 2015
Payment date Monday 13 July 2015
Share certificates may not be dematerialised or re-materialised between Monday, 6
July 2015 and Friday, 10 July 2015, both days inclusive.
The above dividend is in addition to the interim dividend of 65.0 cents per share,
which was declared on 3 December 2014 and brings the aggregate dividend in
respect of the year ended 31 March 2015 to 150.0 cents (2014: 200.0 cents) per
share.
ACCOUNTING POLICIES
The provisional summary consolidated financial statements are prepared in
accordance with the requirements of the JSE Listings Requirements (“Listings
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 and are consistent with the accounting policies
applied in the preparation of the 31 March 2014 consolidated financial statements.
The group has adopted all the new or revised accounting pronouncements as
issued by the IASB. The adoption of these standards had no recognition and
measurement impact on the financial results.
The results have been prepared by Mr N Naidoo 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 valuation of biological assets, certain financial instruments and share-based
payments, which are at fair value. The principal accounting policies are consistent
with those of the previous financial year.
FAIR VALUE DISCLOSURE
The JSE requires that all the disclosure mandated by IFRS13 ‘Fair Value
Measurement' be included in the annual financial statements as well as in the
provisional summary group results announcement. Please refer to Annexure A on the
company's website at the following link:
www.cbl.co.za/financials/ar2015/downloads/IFRS13.pdf for the full disclosure.
AUDITED RESULTS
These provisional summary consolidated financial statements for the year ended 31
March 2015 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.
The auditor's report does not necessarily report on all the information contained in
the financial results. Shareholders are therefore advised that in order to obtain a full
understanding of the nature of the auditor's engagement they should obtain a copy
of the auditor's report together with the accompanying financial information from
the company's registered office.
EVENTS AFTER THE REPORTING PERIOD
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.
CHANGES TO THE BOARD OF DIRECTORS
During the year under review, the following changes to the board took place:
- Mr XGS Sithole was appointed as a non-executive director on 30 May 2014;
- Mr GP Wayne retired as non-executive director and chairman on 1 August 2014;
and
- Mr P Bhengu retired as a non-executive director on 25 February 2015.
Subsequent to the year under review, Mr CJH Chance resigned as a non-executive
director on 29 May 2015.
NOTICE OF THE ANNUAL GENERAL MEETING AND POSTING OF ANNUAL REPORT
Notice is hereby given that the annual general meeting of the company will be held
at 11:00 on Friday 31 July 2015, at the Durban Country Club, to transact the business
as stated in the annual general meeting notice forming part of the annual financial
statements.
The annual report will be posted to shareholders on or about 30 June 2015.
For and on behalf of the Board:
John Barton Guy Clarke
(Chairman) (Managing Director)
Renishaw 29 May 2015
Registered office and postal address Transfer secretaries
Renishaw, KwaZulu-Natal Computershare Investor Services (Proprietary) Limited.
PO Renishaw, KwaZulu-Natal, 4181 PO Box 61051, Marshalltown, 2107
Sponsor Website
Sasfin Capital www.cbl.co.za
A division of Sasfin Bank Limited
Directors:
JR Barton * (Chairman), GS Clarke (Managing), PJ Barker (Financial), JAF Hewat*,
P Mnganga*, MT Rutherford*, RE Stewart*, G Vaughan-Smith*#, XGS Sithole*, TK Denton*#
(alternate).
* Non-executive director #British
Secretary:
Highway Corporate Services (Pty) Limited
2 June 2015
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