Wrap Text
Unaudited Condensed Interim Group Results For The Six Months Ended 28 February 2017
Premier Food and Fishing Limited
(Incorporated in the Republic of South Africa)
Registration number 1998/018598/06
Share code: PFF and ISIN: ZAE000238309
("PFF" or "the Group" or "the Company")
Unaudited Condensed Interim Group results for the six months ended 28 February 2017
Highlights compared to the prior year interim period:
- Revenue increased by 7% from R170 million to R182 million.
- Operating profit increased by 12% from R16 million to R18 million.
- Earnings per share and headline earnings per share increased by 33% to 12.68 cents per share and 12.70 cents per share respectively.
- Cash generated from operations were lower than that of the prior period due to increased investments in working capital which impacted the current reporting period.
PFF was listed on the main board of the Johannesburg Stock Exchange ("JSE") on 2 March 2017. The interim results are for a period which is before the listing date.
The results therefore do not contain the effects of the listing. In preparation for the listing, on 1 February 2017, there was a subdivision of the authorised and
issued shares of PFF in which one share was subdivided into 1 430 000 shares. The issued share capital of PFF increased from 100 ordinary shares to 143 000 000 shares
on that date. The earnings per share and headline earnings per share have been calculated taking into account the subdivision of the shares.
CONDENSED GROUP STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Unaudited Unaudited Audited
Group Group Group
28 February 29 February 31 August
2017 2016 2016
6 months 6 months 12 months
R'000 R'000 R'000
Revenue 182 667 170 500 401 692
Cost of sales (111 800) (112 236) (239 098)
Gross profit 70 867 58 264 162 594
Other income 1 997 1 036 2 647
Other expenses (55 072) (43 413) (100 085)
Operating profit 17 792 15 887 65 156
Investment revenue 7 326 4 290 11 349
Finance cost (1 199) (1 228) (2 986)
Profit before tax 23 919 18 949 73 519
Tax (5 793) (5 336) (21 411)
Profit for the year 18 126 13 613 52 108
Other comprehensive income - - -
Total comprehensive income 18 126 13 613 52 108
Basic and diluted earnings per share (cents) (see note 1) 12.68 9.52 36.44
Headline and diluted headline earnings per share (cents) (see note 1) 12.70 9.52 36.73
Weighted average number of shares used in the calculation of earnings per share (OOOs) 143 000 143 000 143 000
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
Group Group Group
28 February 29 February 31 August
2017 2016 2016
6 months 6 months 12 months
R'000 R'000 R'000
Assets
Non-current assets 217 763 234 925 221 262
Property, plant and equipment 126 136 128 058 124 596
Goodwill 18 165 18 165 18 165
Intangible assets 65 239 41
Loans to group companies 73 345 82 173 78 396
Deferred tax 52 6 290 64
Current assets 185 666 135 239 163 553
Inventory 39 127 40 838 42 379
Other financial assets 7 392 1 639 1 065
Current tax receivable 154 154 154
Trade and other receivables 59 762 37 085 48 270
Biological assets 48 359 46 262 48 169
Cash and cash equivalents 30 872 9 261 23 516
Total assets 403 429 370 164 384 815
Equity and liabilities
Equity
Share capital - - -
Reserves 8 014 8 014 8 014
Retained income 205 592 203 072 217 466
Total equity 213 606 211 086 225 480
Non-current liabilities 87 290 77 434 85 871
Other financial liabilities 10 162 2 100 10 764
Operating lease liability 1 653 2 238 2 065
Post-employment medical costs 1 007 1 190 1 153
Deferred tax 74 468 71 906 71 889
Current liabilities 102 533 81 644 73 464
Loans from group companies - - 1 478
Other financial liabilities 3 245 331 3 280
Current tax payable 7 217 4 179 8 119
Trade and other payables 56 915 50 411 53 243
Provisions 8 953 7 438 7 344
Bank overdraft 26 203 19 285 -
Total liabilities 189 823 159 078 159 335
Total equity and liabilities 403 429 370 164 384 815
Net asset value per share (cents) 149.38 147.61 157.68
CONDENSED STATEMENT OF CHANGES IN EQUITY
Share Capital Reserves Retained income Total equity
R'000 R'000 R'000 R'000
Balance at 1 September 2015 - 8 014 189 358 197 372
Profit for the period - - 52 108 52 108
Dividends - - (24 000) (24 000)
Balance at 31 August 2016 - 8 014 217 466 225 480
Profit for the period - - 18 126 18 126
Dividends - - (30 000) (30 000)
Balance at 28 February 2017 - 8 014 205 592 213 606
CONDENSED GROUP STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
Group Group Group
28 February 29 February 31 August
2017 2016 2016
6 months 6 months 12 months
R'000 R'000 R'000
Cash generated from operations 21 043 23 863 68 381
Investment revenue 825 403 1 357
Finance cost (1 199) (1 228) (2 830)
Tax paid (4 105) (2 951) (8 876)
Net cash flows from operating activities 16 564 20 087 58 032
Cash flows from investing activities
Net movement in property, plant and equipment (8 495) (5 485) (9 295)
Net movement in intangible assets (27) - -
Movement in other investing activities (19 924) (17 916) (30 698)
Movement in other financial assets (5 152) (532) 42
Net cash to investing activities (33 598) (23 933) (39 951)
Cash flows from financing activities
Repayment of other financial liabilities (1 813) (1 751) (2 686)
Proceeds from other financial liabilities - - 12 548
Net cash to financing activities (1 813) (1 751) 9 862
Total cash movement for the period (18 847) (5 597) 27 943
Cash and cash equivalent at the beginning of the period 23 516 (4 427) (4 427)
Cash and cash equivalent at the end of the period 4 669 (10 024) 23 516
Segmental Revenue Segmental Profit
Unaudited Unaudited Audited Unaudited Unaudited Audited
28 February 29 February 31 August 28 February 29 February 31 August
2017 2016 2016 2017 2016 2016
6 months 6 months 12 months 6 months 6 months 12 months
R'000 R'000 R'000 R'000 R'000 R'000
Lobster 85 997 83 012 190 110 15 800 12 349 46 446
Pelagics 27 808 31 245 93 670 6 012 8 920 33 406
Hake 15 143 12 604 31 110 5 036 3 441 9 794
Squid 18 048 13 252 23 541 4 602 2 604 4 360
Abalone 18 765 19 037 39 697 6 136 6 449 13 015
Cold storage 4 552 4 284 8 720 2 462 2 308 303
Seagro 1 667 1 071 2 717 397 250 701
Processing and marketing 12 778 7 973 15 959 2 215 1 243 3 860
Total 184 758 172 478 405 524 42 660 37 564 111 885
Less inter-segmental sales (2 091) (1 978) (3 832)
Administration and support services - - - (25 058) (21 777) (48 864)
Fair value gains - - - 190 100 2 007
Interest income - - - 7 326 4 290 11 477
Finance costs - - - (1 199) (1 228) (2 986)
Total 182 667 170 500 401 692 23 919 18 949 73 519
The inter-segmental sales are in respect of cold storage charges to the Lobster segment.
Segmental profit represents the profit before tax earned by each segment without the allocation of central administration costs, fair value adjustments,
interest income and finance costs.
Segment Assets
Unaudited Unaudited Audited
28 February 29 February 31 August
2017 2016 2016
6 months 6 months 12 months
R'000 R'000 R'000
Lobster 72 902 63 267 69 106
Pelagics 79 158 74 193 82 448
Hake 8 224 5 051 11 624
Squid 17 103 9 009 6 047
Abalone 72 303 72 259 78 113
Cold storage 1 074 978 1 038
Seagro 2 579 2 816 2 312
Processing and marketing 29 593 22 761 20 726
Administration and support services 150 441 113 540 113 339
Total segment assets 433 377 363 874 384 753
Unallocated 52 6 290 62
Total consolidated assets 433 429 370 164 384 815
Segment Liabilities
Unaudited Unaudited Audited
28 February 29 February 31 August
2017 2016 2016
6 months 6 months 12 months
R'000 R'000 R'000
Lobster 11 698 8 516 6 421
Pelagics 9 280 6 208 7 625
Hake 5 257 3 355 3 711
Squid 6 547 5 556 371
Abalone 2 782 4 540 3 440
Processing and marketing 15 820 14 814 9 969
Administration and support services 63 971 44 183 55 908
Total segment liabilities 115 355 87 172 87 446
Unallocated 74 468 71 906 71 889
Total consolidated liabilities 189 823 159 078 159 335
For the purposes of monitoring segmental performances and resource allocations between segments all assets and liabilities are allocated to reportable segments other
than deferred tax assets and liabilities.
Included in the segmental results are:
Additions to property, plant
Depreciation and amortisation and equipment
Unaudited Unaudited Audited Unaudited Unaudited Audited
28 February 29 February 31 August 28 February 29 February 31 August
2017 2016 2016 2017 2016 2016
6 months 6 months 12 months 6 months 6 months 12 months
R'000 R'000 R'000 R'000 R'000 R'000
Lobster 2 781 3 106 6 366 2 783 2 416 2 930
Pelagics 3 100 2 676 4 959 4 606 1 339 2 711
Squid 280 226 457 735 163 805
Abalone 536 490 1 237 271 1 538 2 489
Cold storage 40 38 77 - - 234
Seagro - - 252 - - -
Processing and marketing 1 2 4 - - -
Administration and support services 131 135 256 100 29 127
Total 6 869 6 673 13 608 8 495 5 485 9 295
Revenue per region
Unaudited Unaudited Audited
28 February 29 February 31 August
2017 2016 2016
R'000 R'000 R'000
6 months 6 months 12 months
R'000 R'000 R'000
United States of America 64 576 48 052 105 476
Far East 45 508 46 511 111 248
Europe 31 509 22 561 53 587
South Africa 41 074 53 376 131 381
Total 182 667 170 500 401 692
Number of shares in issue (000s) 143 000 - -
Weighted number of shares in issue (000s) 143 000 143 000 143 000
Diluted number of shares in issue (000s) 143 000 143 000 143 000
Determination of Headline Earnings Unaudited Unaudited Audited
Group Group Group
28 February 29 February 31 August
2017 2016 2016
6 months 6 months 12 months
R'000 R'000 R'000
Earnings attributable to ordinary equity holders of parent entity 18 126 13 613 52 108
Adjusted for:
- Effect of loss/(gain) on disposal of property, plant and equipment 40 (1) 410
Headline earnings 18 166 13 612 52 518
Headline earnings per share (cents) 12.70 9.52 36.73
1. Earnings per share was calculated after taking into account the subdivision of shares which occurred on 1 February 2017 and the number of shares in issue
for the prior comparative period has also been adjusted as per the requirements of IAS33: Earnings per share.
Group Profile
PFF through its subsidiaries operates a vertically integrated food and fishing business which specialises in the harvesting,
processing and marketing of fish and fish-related products, as well as general food products. The Group is one of the largest black-owned and managed food and fishing
business in South Africa and the most transformed in terms of its management and employees. The Group holds medium to long-term fishing rights in west coast rock
lobster, south coast rock lobster, small pelagics, hake deep-sea trawl, hake longline, swordfish and tuna, and squid. The Group also owns an abalone farm and invests
in organic agriculture through the "Seagro" range of products.
Group Overview
The Group achieved a solid performance for the six months ended 28 February 2017 despite the economic environment impacting the industry. Increased sales
volumes in the lobster and squid business have contributed significantly to the strong performance and growth.
Group revenue increased by 7% from R170 million to R182 million compared to the prior period mainly as a result of increased sales volumes in the lobster
and squid segments.
The Group's operating profit increased by 12% from R16 million to R18 million mainly due to efficiencies achieved across all segments.
The Group's profit before tax for the six months to 28 February 2017 increased by 26% from R19 million to R24 million as a result of the increased sales volumes in
the lobster and squid segments as well as efficiencies achieved in all segments.
Group headline earnings increased by 22% from R14 million to R18 million. Headline earnings per share ("HEPS") increased from 9.52 cents per share to 12.70 cents per
share and earnings per share ("EPS") increased from 9.52 cents per share to 12.68 cents per share.
Net asset value ("NAV") of the Group increased to R214 million from R211 million as a result of the excellent operational performance.
Review of operations
Lobster
The Group experienced increased landings due to good catch rates as well as a good size mix in the lobster segment for the period under review. This resulted
in increased revenue and operating profit for the segment increasing from R12 million in 2016 to R16 million in 2017.
Small Pelagics
Industrial fish landings were up by 20% compared to the prior period. Pilchard landings for the period under review were down compared to the prior year resulting in
lower revenue and operating profit.
Hake
Due to improved sales volumes, the profitability of the hake segment increased during the current period. Profit for the current period increased due to the
combination of increased sales volumes and improved catch rates.
Squid
The squid segment experienced higher catch rates as well as higher sales volumes compared to the prior period. This resulted in increased revenue and
operating profit for the period under review.
Abalone
The segment continued to focus on increasing production capacity and efficiencies. The sales volumes for the period were in line with our expectation when compared
to the prior period. Sales volumes are expected to be higher than those of the prior year at year-end.
Cold Storage
Occupation levels in the cold store segment achieved an average of more than 90% year on year. The performance of the segment is in line with management's
expectation.
Seagro
Seagro is an organic fertiliser produced from the fishmeal process concentrate. Higher production levels led to increased stock volumes as a result of
good catches in the industrial fish sector. This resulted in increased sales volumes in the current period as well as increased profitability compared to the prior period.
Processing and marketing
Revenue is generated from the processing and marketing of external quota holders fish. There was an increased volume of third party fish processed and marketed by the
Group during the period under review which resulted in an increase in revenue and profits for the segment.
Reporting entity
PFF is a company domiciled in South Africa. These condensed unaudited consolidated interim financial statements ("interim financial statements") as at and for the six
months ended 28 February 2017, comprises of PFF the Company, its subsidiaries and interests in joint venture operations.
Basis of preparation
The interim financial statements are prepared in accordance with International Accounting Standard 34 ("IAS34"), the Listings Requirements of the JSE
("the Listings Requirements"), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and the Financial Reporting Pronouncements as
issued by the Financial Reporting Standards Council and the requirements of the Companies Act of South Africa (No. 71 of 2008), as amended, applicable to summarised
financial statements.
The accounting policies applied in the preparation of the interim financial statements, which are based on reasonable judgement and estimates, are in accordance with
International Financial Reporting Standards ("IFRS") and are consistent with those applied in the audited annual financial statements for the year ended 31 August
2016. The interim financial statements have been prepared by Brent Robertson CA(SA), Head of Finance under the supervision of Isaiah Tatenda Bundo CA(SA), the Finance
Director and were not reviewed or audited by the Group's external auditors, Grant Thornton Cape Inc.
These interim financial statements were authorised for issue by the Company's Board of Directors on 3 May 2017.
Use of judgements and estimates
In preparing these interim financial statements, management made judgements, estimates and assumptions that affect the application of accounting policies and the
reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.
The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that
were applied to the audited consolidated financial statements for the year ended 31 August 2016.
Measurement of fair values
The Group has an established control framework with respect to the measurement of fair values. The fair-valuation calculations are performed by the Group's finance
department and operational team on an annual basis. The finance department reports to the Group's chief financial officer. The valuation reports are approved by the
investment committee in accordance with the Group's reporting policies.
Related parties
The Group, in the ordinary course of business, entered into various sales and purchases transactions on an arm's length basis with related parties.
Events after the reporting period
On 2 March 2017, PFF was listed on the main board of the JSE. The Company was able to raise capital in the amount of R526 million on the listing date through
the issue of 117 million new shares to the public hence increasing the issued shares of the company from 143 million ordinary shares to 260 million ordinary
shares in issue. The reported EPS, HEPS and NAV has not been adjusted for an issue of shares for cash as the transaction does not affect the amount of capital
used to generate the profit for the period.
The capital raised will be used for the expansion of the Group's abalone farm as well as for potential acquisitions of other fishing companies.
Future prospects
The Group submitted its fishing rights applications for west coast rock lobster ("WCRL"), horse mackerel and hake inshore to the Department of Agriculture,
Forest and Fisheries ("DAFF") in February 2016. The Group was successful in its application for horse mackerel and was awarded a quota which is equivalent
to 1.8% of the Total Allowable Catch. As at the end of the reporting period, the Group had not yet commenced with the catching of its horse mackerel quota
but anticipates catching the full quota by year-end which should result in increased revenue and profits for the 2017 financial year compared to the prior
financial year.
The Group still awaits the outcome of its application for WCRL fishing rights and DAFF has not yet provided the industry with a date on which the outcome
is expected to be announced.
Following the successful listing of the Group on the JSE, the Group is well positioned for organic and acquisitive growth. The expansion of the abalone farm is
expected to commence shortly which will add to the production output of the abalone farm.
Appreciation
We wish to thank our staff, the Group executives, management, our Board of directors, as well as our strategic partners, stakeholders and business partners for their
loyalty and dedication in contributing to the success of the Group.
Prof Vukile Mehana Mr Mogamat Samir Saban
Non-executive chairman Chief executive officer
Cape Town
4 May 2017
Directors
Prof Vukile Mehana (Non-executive chairman); * Mogamat Samir Saban (Chief executive officer); * Khalid Abdulla; Salim Young; Aziza Amod; Takudzwa Hove; *Cherie
Felicity Hendricks; *Isaiah Tatenda Bundo; *Rushaan Isaacs; Arthur Johnson; Clifford van der Venter; Fredelaine Brand; Lavendra Naidoo and Rosemary Mosia
*Executive directors
Company secretary: Nobulungisa Mbaliseli
Registered address: Quay 7, East Pier, Breakwater Boulevard, Victoria & Alfred Waterfront, Cape Town 8001
Email: Nobulungisa@aeei.co.za
Transfer secretaries: Link Market Services South Africa (Pty) Ltd,
19 Ameshoff Street, 13th Floor, Rennie House, Braamfontein, Johannesburg 2000
Auditors: Grant Thornton Cape Inc.
Sponsor: PSG Capital, Stellenbosch
Date: 04/05/2017 11:00:00 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 
