Wrap Text
Unaudited group results and dividend declaration for the six months ended 31 March 2017
TIGER BRANDS LIMITED
Registration number: 1944/017881/06
Incorporated in the Republic of South Africa
Share code: TBS ISIN: ZAE000071080
UNAUDITED GROUP RESULTS AND DIVIDEND DECLARATION
FOR THE SIX MONTHS ENDED 31 MARCH 2017
Salient features
- Group turnover**= up 7% to R16,4 billion
- Group operating income#= up 10% to R2,2 billion
- Solid domestic results with operating margin expanding by 90 bps to 14,2%�
- Exports and International negatively impacted by foreign exchange liquidity and rand strength�
- HEPS up 7% to 1 036 cents=
- Disposal of EATBI concluded, Haco disposal on track
= From continuing operations.
** Restated for the early adoption of IFRS 15.
# Before impairments and abonormal items.
Commentary
Overview
The group achieved solid results for the six month period ended 31 March 2017. A strong domestic performance
was partially diluted by tough trading conditions in Exports and International coupled with a decline in
income from associates.
Shareholders are referred to the SENS announcements of 9 June 2016 and 21 February 2017 relating to the
disposals of East African Tiger Brands Industries Plc (EATBI) and Haco Tiger Brands (E.A.) Limited (Haco),
respectively. The disposal of EATBI has been concluded with an effective date of 4 April 2017, while the
disposal of Haco is well progressed. Consequently, both operations have been treated as discontinued
operations in these results, with the comparative information restated accordingly.
Group turnover from continuing operations increased by 7% to R16,4 billion (2016: R15,3 billion), whilst
operating income from continuing operations, before IFRS 2 charges, impairments and abnormal items,
increased by 10% to R2,2 billion (2016: R2,0 billion). Turnover growth was driven by pricing whilst
overall volumes declined by 3%. There was positive operating leverage as a result of improved pricing
and efficiencies, particularly in the domestic business.
Turnover in the domestic business increased by 8% to R14,3 billion (2016: R13,2 billion), driven primarily
by the Grains division. Operating income grew by 15% to R2,0 billion (2016: R1,8 billion), whilst the operating
margin increased to 14,2%. Overall volumes in the domestic business declined by 4% due, in part, to the
Easter period falling in March last year compared to April in the current year.
The group's overall operating performance was negatively impacted by the underperformance of Exports and
International. Turnover was unchanged at R2,1 billion whilst operating income decreased by 25% to R194 million.
The performance of the Exports division was negatively impacted by the lack of foreign exchange liquidity in
many of the countries to which we export, the strict imposition of credit terms as well as an unfavourable
product mix. The strengthening of the rand impacted negatively on the performance of the Deciduous Fruit
business relative to the prior period.
Abnormal income of R23 million comprises income in respect of insurance claim proceeds and certain
warranty claims, offset by costs relating to the ongoing strategic review. Income from associates decreased
by 36% to R239 million (2016: R371 million). The comparative period included once-off capital profits of
R73 million relating primarily to the disposal of certain assets by our Chilean based associate, Empresas
Carozzi (Carozzi). After adjusting for these once-off capital profits, associate income decreased by 20%,
reflecting the challenging operating conditions facing Oceana and Carozzi, as well as the impact of the
stronger rand.
Net financing costs of R120 million (2016: R112 million), reflect a reduction in financing costs of
R35 million, driven by lower debt levels, offset by foreign exchange losses on foreign cash and loan balances
of R10 million (2016: foreign exchange gain of R33 million).
Profit before tax from continuing operations increased by 4% to R2,3 billion.
Earnings per share from continuing operations increased by 2% to 1 036 cents (2016: 1 013 cents), whilst
headline earnings per share from continuing operations was up 7% to 1 036 cents (2016: 970 cents) due to the
once-off capital profits from associates of R73 million in the comparative period. Earnings per share from
total operations declined by 1% to 1 036 cents (2016: 1 049 cents). However, headline earnings per share
from total operations increased by 6% to 1 036 cents due to the inclusion of capital profits from associates
and the profit on disposal of TBCG (Dangote Flour Mills) of R50 million in the comparative period.
Operating performance
Grains division
Turnover in the Grains division rose by 13%, whilst operating income increased by 16% to R1,0 billion.
Milling and Baking delivered 14% turnover growth, supported by a 3% increase in volumes. Operating income
rose by 12% to R792 million, driven primarily by the wheat-to-bread value chain benefiting from market share
gains, improved execution and enhanced quality. Profitability in Maize, however, was negatively affected by
higher raw material costs, which were not fully recovered in selling prices.
Other Grains reflected strong growth, increasing turnover by 11% to R2,0 billion and operating income by
33% to R228 million. The stronger rand contributed positively to improved margins.
Consumer Brands - Food
A good performance was delivered in the period under review, driven primarily by Groceries. Overall
turnover increased by 3% to R5,9 billion, whilst operating income grew by 12%. The focus on recovering cost
push inflation experienced in the previous financial year resulted in an overall margin improvement from
10,6% to 11,5%.
The Groceries business continued to focus on margin recovery and delivered a strong operating performance,
albeit at the cost of volumes and market share in the short term. Turnover increased to R2,7 billion, while
operating income increased by 32% to R310 million, resulting in an operating margin of 11,5%, up from 9,1%
in the comparative period.
Snacks & Treats delivered a marginal increase in turnover to R1,1 billion, underpinned by higher
realisations and an improved mix. This was offset by volume declines in a contracting market as well as the
impact of a product rationalisation exercise. An improvement in margins resulted in enhanced profitability,
with operating income increasing by 10% to R162 million.
The Beverages business delivered lower volumes in the period under review. This was largely due to
industrial action in the first quarter as well as drought-related water restrictions and electricity
disruptions in the second quarter, which negatively impacted service levels. This led to turnover reducing
by 8%. Operating income declined by 11% to R93 million, reflecting the lower volumes. This was offset in
part by improved realisations and a positive sales mix.
The performance of Value-added Meat Products was impacted by lower sales volumes. This was primarily due to
price increases and lower promotional activity by retailers. Turnover increased by 5% to R1,1 billion, whilst
operating income declined by 21%, primarily attributable to price increases only partially offsetting higher
raw material costs.
Home, personal care and baby (HPCB)
HPCB's performance was driven by another strong contribution from the Home Care category, with overall
turnover increasing by 8% to R1,4 billion and operating income growing by 25% to R341 million.
Volumes in the Personal Care category were negatively affected by price inflation, reduced promotional
activity and constrained consumer spending, which resulted in turnover declining by 4%. Notwithstanding this,
operating income increased by 40% to R66 million, benefiting from an improved product mix, the phasing of
marketing investment and sound cost control.
Volumes in Baby Care declined as a result of down-trading within the cereals and jarred baby food segments
in favour of more affordable options, as well as due to stock supply shortages in the medicinal segment, which
have subsequently been resolved. Turnover decreased marginally to R434 million, whilst operating income
declined by 18% due to an unfavourable product mix.
The Home Care category (excluding stationery) produced another strong performance with turnover growth of
24% and an improvement in operating income of 71%. This was underpinned by excellent volume growth across all
brands in the pest category, driven by strong market demand, effective in-store execution, successful innovation
and optimal pricing. Volumes in sanitation and home enhancement have come under pressure due to aggressive
competitor pricing. However, operating margins remain healthy and were ahead of the prior period in both
segments.
Exports and International
The Exports and International businesses were negatively impacted by challenging trading conditions and rand
strength. Exports, in particular, were impacted by ongoing foreign currency shortages, resulting in tighter
credit terms and slower replenishment of stocks by distributors. Total turnover for the Exports and
International businesses was unchanged at R2,1 billion compared with the corresponding period last year.
Operating income decreased by 25%, driven largely by Exports and Deciduous Fruit.
Chococam recorded a 10% decline in turnover due to the period-on-period strengthening of the rand. However,
turnover in constant currency terms increased by 1,2% underpinned by 11% volume growth. Operating income
increased by 10% in constant currency assisted by tight cost management but, decreased by 4% on translation
due to the stronger rand.
Volumes at Deli Foods were severely impacted by price increases taken during the period to recover
significant input cost inflation. This, together with an improved product mix and effective cost control
measures, resulted in the operating loss reducing by 23% in constant currency terms. Furthermore, on
translation, the operating loss of R15 million showed an improvement of 54% compared to the previous
period loss (2016: R33 million).
In the Exports business, revenue in the corresponding period last year was negatively affected by the
absence of a distributor in Mozambique for a period. With the new distributor now in place, turnover
increased by 11% to R877 million. However, an unfavourable product mix impacted negatively on
operating income.
The Deciduous Fruit business was adversely affected by the strengthening of the rand, recording
turnover growth of 3% despite volume growth of 9%. This was aggravated by an adverse customer
mix, which contributed to a 67% reduction in operating income to R30 million.
Cash flow and capital expenditure
Net debt decreased by R885 million from September 2016. Cash generated from operations increased by 63% to
R3,0 billion, driven primarily as a result of enhanced working capital management. Capital expenditure
incurred during the period amounted to R383 million (2016: R257 million) and is likely to be lower than
initially budgeted for the balance of the year.
Interim dividend
The company has declared an interim dividend of 378 cents per share for the six month period ended
31 March 2017, which represents an increase of 4% compared to the previous interim dividend of
363 cents per share. Shareholders are referred to the dividend announcement below for further details.
Outlook
The outlook for the balance of the year is particularly challenging, with volumes in the domestic
market having significantly slowed in the second quarter, while a recovery on the balance of the
continent is not imminent. Having largely been successful in correcting margins and recovering
exceptional cost push, the key challenge will be to manage market share and volume growth without
compromising profitability. This will be driven by focused execution, targeted marketing investment
to sustain the strength of the company's power brands and appropriate cost control measures.
Our associate companies also face similar challenges for the remainder of the year.
Strategic review update
The implementation of the recommendations of the strategic review has commenced. Relevant strategies
and resources will be deployed to ensure the smooth running of the business while simultaneously
implementing the necessary changes.
Shareholders are referred to the accompanying SENS announcement which is being released simultaneously with
this announcement.
By order of the board
KDK Mokhele LC Mac Dougall
Chairman Chief executive officer
Bryanston
24 May 2017
Date of release: 25 May 2017
Declaration of interim dividend
The board has approved and declared an interim dividend of 378 cents per ordinary share (gross)
in respect of the six months ended 31 March 2017.
The dividend will be subject to the Dividends Tax that was introduced with effect from 1 April 2012.
In accordance with paragraphs 11.17 (a) (i) to (x) and 11.17 (c) of the JSE Listings Requirements
the following additional information is disclosed:
- The dividend has been declared out of income reserves
- The local Dividends Tax rate is 20% (twenty percent) effective 22 February 2017
- The gross local dividend amount is 378 cents per ordinary share for shareholders exempt from
the Dividends Tax
- The net local dividend amount is 302,40 cents per ordinary share for shareholders liable to pay
the Dividends Tax
- Tiger Brands has 192 069 868 ordinary shares in issue (which includes 10 326 758 treasury shares)
- Tiger Brands Limited's income tax reference number is 9325/110/71/7.
Shareholders are advised of the following dates in respect of the interim dividend:
Last day to trade cum the interim dividend Tuesday, 27 June 2017
Shares commence trading ex the interim dividend Wednesday, 28 June 2017
Record date to determine those shareholders entitled
to the interim dividend Friday, 30 June 2017
Payment in respect of the interim dividend Monday, 3 July 2017
Share certificates may not be dematerialised or re-materialised between Wednesday, 28 June 2017 and
Friday, 30 June 2017, both days inclusive.
By order of the board
T Naidoo
Secretary
Bryanston
25 May 2017
Interim condensed consolidated income statement
Unaudited Unaudited
Unaudited six months year
six months ended ended
ended 31 March 30 September
31 March 2016 2016
R'million Notes 2017 Restated*# Restated*#
Continuing operations
Turnover 7 16 394,4 15 309,6 30 588,2
Cost of sales (11 067,3) (10 411,0) (20 869,6)
Gross profit 5 327,1 4 898,6 9 718,6
Sales and distribution expenses (1 840,1) (1 746,6) (3 465,0)
Marketing expenses (471,1) (453,5) (765,2)
Other operating expenses (846,6) (725,0) (1 385,2)
Operating income before impairments and
abnormal items 2 2 169,3 1 973,5 4 103,2
Impairments 3 - (3,2) (334,8)
Abnormal items 4 22,6 - 11,0
Operating income after impairments and
abnormal items 2 191,9 1 970,3 3 779,4
Net finance costs 8 (120,3) (112,3) (168,4)
Investment income 2,0 0,4 6,3
Income from associated companies 238,5 370,6 860,7
Profit before taxation 2 312,1 2 229,0 4 478,0
Taxation (613,8) (571,2) (1 209,2)
Profit for the period from continuing operations 1 698,3 1 657,8 3 268,8
Discontinued operations
(Loss)/profit for the period from discontinued
operations 6 (1,1) 49,8 52,9
Profit for the period 1 697,2 1 707,6 3 321,7
Attributable to:
Owners of the parent 1 686,6 1 703,3 3 305,6
- Continuing operations 1 686,4 1 645,9 3 243,1
- Discontinued operations 0,2 57,4 62,5
Non-controlling interest 10,6 4,3 16,1
- Continuing operations 11,9 11,9 25,7
- Discontinued operations (1,3) (7,6) (9,6)
1 697,2 1 707,6 3 321,7
Basic earnings per share (cents) 1 035,9 1 048,6 2 034,4
- Continuing operations 1 035,8 1 013,3 1 996,0
- Discontinued operations 0,1 35,3 38,4
Diluted basic earnings per share (cents) 1 012,8 1 034,7 1 991,5
- Continuing operations 1 012,7 999,8 1 953,9
- Discontinued operations 0,1 34,9 37,6
Headline earnings per share (cents) 1 035,6 974,6 2 127,1
- Continuing operations 1 035,7 969,8 2 119,2
- Discontinued operations (0,1) 4,8 7,9
Diluted headline earnings per share (cents) 1 012,6 961,5 2 082,2
- Continuing operations 1 012,7 956,8 2 074,4
- Discontinued operations (0,1) 4,7 7,8
* Restated for the early adoption of IFRS 15 Revenue from Contracts with Customers and as a consequence,
the 30 September 2016 results are reflected as unaudited. Refer note 7 for further details.
# Restated as required by IFRS 5 in relation to the treatment of East Africa Tiger Brands Industries Plc.
(EATBI) and Haco Tiger Brands (E.A.) Limited (Haco) as discontinued operations.
Interim condensed consolidated statement of comprehensive income
Unaudited Unaudited Unaudited
six months six months year
ended ended ended
31 March 31 March 30 September
R'million 2017 2016 2016
Profit for the period 1 697,2 1 707,6 3 321,7
Other comprehensive (loss)/income, net of tax (213,6) 61,4 (86,9)
Net gain/(loss) on hedge of net
investment in foreign operation^ 4,6 0,4 (42,9)
Foreign currency translation adjustments^ (57,0) (44,9) (147,7)
Share of associates' other comprehensive
(loss)/income^ (177,9) 131,7 127,7
Net loss on cash flow hedges^ (4,7) (14,7) (45,6)
Net gain/(loss) on available-for-sale
financial assets^ 20,2 (11,1) 15,7
Remeasurement raised in terms of IAS 19R - - (1,2)
Tax effect 1,2 - 7,1
Total comprehensive income for the period 1 483,6 1 769,0 3 234,8
Attributable to:
Owners of the parent 1 494,6 1 766,1 3 252,4
Non-controlling interest (11,0) 2,9 (17,6)
1 483,6 1 769,0 3 234,8
^ Items that may be subsequently reclassified to profit or loss. During the current period, R0,9 million
(31 March 2016: R0,5 million) on the available-for-sale financial asset was derecognised in terms of the
Black Managers Trust Participation Rights Scheme and was reclassified to profit or loss.
Interim condensed consolidated segmental information
Unaudited Unaudited
Unaudited six months year
six months ended ended
ended 31 March 30 September
31 March 2016 2016
R'million 2017 Restated* Restated*
Turnover
Domestic operations 14 270,9 13 181,9 26 160,1
Grains 6 909,1 6 103,3 12 724,8
Milling and baking 4 877,9 4 279,9 9 161,1
Other Grains 2 031,2 1 823,4 3 563,7
Consumer Brands - Food 5 940,3 5 762,1 10 999,7
Groceries 2 695,4 2 561,9 4 698,7
Snacks & Treats 1 134,6 1 114,0 2 263,0
Beverages 698,1 755,1 1 321,3
Value Added Meat Products 1 141,6 1 091,3 2 215,0
Out of Home 270,6 239,8 501,7
Home, Personal Care and Baby (HPCB) 1 421,5 1 316,5 2 435,6
Personal Care 291,6 303,4 682,4
Baby Care 434,1 443,4 862,1
Home Care 695,8 569,7 891,1
Exports and International 2 123,5 2 127,7 4 428,1
Exports 876,6 790,2 1 625,7
International operations - Central Africa (Chococam) 395,6 439,5 883,8
International operations - West Africa (Deli Foods) 184,8 241,9 476,7
Deciduous Fruit (LAF) 829,0 807,6 1 683,3
Other intergroup sales (162,5) (151,5) (241,4)
Continuing operations 16 394,4 15 309,6 30 588,2
Discontinued operations - East Africa** and TBCG 387,1 2 111,6 2 556,8
Total turnover 16 781,5 17 421,2 33 145,0
* Restated for the early adoption of IFRS 15 Revenue from Contracts with Customers and as a consequence,
the 30 September 2016 results are reflected as unaudited. Refer note 7 for further details.
** Previously reported �International operations - East Africa* segment has now been classified as
discontinued operations.
Interim condensed consolidated segmental information (continued)
Unaudited Unaudited
Unaudited six months year
six months ended ended
ended 31 March 30 September
31 March 2016 2016
R'million 2017 Restated Restated
Operating income before impairments and abnormal items
Domestic operations 2 029,7 1 758,7 3 695,8
Grains 1 020,2 881,1 2 001,9
Milling and baking 792,4 709,8 1 596,2
Other Grains 227,8 171,3 405,7
Consumer Brands - Food 681,5 609,2 1 194,8
Groceries 309,7 234,2 465,6
Snacks & Treats 161,6 147,0 316,0
Beverages 93,3 105,2 156,8
Value Added Meat Products 60,8 76,9 158,0
Out of Home 56,1 45,9 98,4
Home, Personal Care and Baby (HPCB) 341,3 272,0 533,7
Personal Care 65,9 47,0 134,2
Baby Care 94,3 115,0 211,3
Home Care 181,1 110,0 188,2
Other*** (13,3) (3,6) (34,6)
Exports and International 193,6 256,7 496,3
Exports 112,6 128,4 247,0
International operations - Central Africa (Chococam) 65,6 68,0 150,2
International operations - West Africa (Deli Foods) (14,8) (32,5) (48,5)
Deciduous Fruit (LAF) 30,2 92,8 147,6
Total operating income before IFRS 2 charges 2 223,3 2 015,4 4 192,1
IFRS 2 charges (54,0) (41,9) (88,9)
Total operating income after IFRS 2 charges 2 169,3 1 973,5 4 103,2
Discontinued operations - East Africa** and TBCG (0,2) 98,9 114,1
Total operating income 2 169,1 2 072,4 4 217,3
** Previously reported �International operations - East Africa* segment has now been classified as
discontinued operations.
*** Includes corporate office and management expenses relating to international investments.
Interim condensed consolidated statement of financial position
Unaudited Unaudited Unaudited
as at as at as at
31 March 31 March 30 September
R'million 2017 2016 2016
ASSETS
Non-current assets 13 050,6 13 160,6 13 429,8
Property, plant and equipment 4 351,8 4 227,1 4 541,9
Goodwill 2 070,7 2 243,2 2 098,6
Intangible assets 1 831,9 1 991,8 1 841,9
Investments 4 773,5 4 641,5 4 904,8
Deferred taxation asset 22,7 57,0 42,6
Current assets 10 698,3 11 416,2 11 099,1
Inventories 5 117,8 5 856,7 5 769,8
Trade and other receivables 4 473,7 4 690,5 4 592,3
Cash and cash equivalents 1 106,8 869,0 737,0
Assets classified as held-for-sale 837,2 - -
Total assets 24 586,1 24 576,8 24 528,9
EQUITY AND LIABILITIES
Total equity 16 295,8 15 151,1 16 033,9
Issued capital and reserves 15 849,0 14 616,2 15 547,6
Non-controlling interests 446,8 534,9 486,3
Non-current liabilities 1 999,5 2 033,0 1 988,8
Deferred taxation liability 275,3 243,5 253,5
Provision for post-retirement medical aid 676,1 651,5 666,0
Long-term borrowings 1 048,1 1 138,0 1 069,3
Current liabilities 6 146,8 7 392,7 6 506,2
Trade and other payables 4 296,5 4 539,7 4 157,1
Provisions 555,3 395,4 525,3
Taxation 93,3 30,8 128,1
Short-term borrowings 1 201,7 2 426,8 1 695,7
Liabilities directly associated with assets
classified as held-for-sale 144,0 - -
Total equity and liabilities 24 586,1 24 576,8 24 528,9
Net debt 1 143,0 2 695,8 2 028,0
Interim condensed consolidated statement of cash flows
Unaudited Unaudited Unaudited
six months six months year
ended ended ended
31 March 31 March 30 September
R'million 2017 2016 2016
Cash operating profit 2 631,3 2 344,3 4 836,8
Working capital changes 401,0 (482,5) (604,0)
Cash generated from operations 3 032,3 1 861,8 4 232,8
Finance cost net of dividends received 93,2 15,9 109,1
Taxation paid (583,0) (601,3) (1 107,4)
Cash available from operations 2 542,5 1 276,4 3 234,5
Dividends paid (1 182,1) (1 025,3) (1 661,1)
Net cash inflow from operating activities 1 360,4 251,1 1 573,4
Purchase of property, plant and equipment (383,0) (257,0) (945,4)
Net cash on disposal of subsidiary - 1 075,7 1 075,7
Black Managers Trust (BMT) shares exercised 19,5 12,6 38,7
Acquisition of business - - (69,7)
Proceeds from disposal of property, plant and equipment 0,3 - 15,4
Other - (5,7) 0,2
Net cash (outflow)/inflow from investing activities (363,2) 825,6 114,9
Reduction in non-controlling interest in empowerment shares (22,4) - -
Long and short-term borrowings raised/(repaid) 1,8 (8,7) (562,2)
Net cash outflow from financing activities (20,6) (8,7) (562,2)
Net increase in cash and cash equivalents 976,6 1 068,0 1 126,1
Effect of exchange rate changes on cash and cash equivalents (21,3) 7,3 125,7
Cash and cash equivalents at the beginning of the period (875,0) (2 126,8) (2 126,8)
Cash and cash equivalents at the end of the period 80,3 (1 051,5) (875,0)
Cash resources* 1 206,2 869,0 737,0
Short-term borrowings regarded as cash and cash equivalents (1 125,9) (1 920,5) (1 612,0)
80,3 (1 051,5) (875,0)
* Included in cash resources as at 31 March 2017 is R99,4 million relating to assets classified as
held-for-sale.
Interim condensed consolidated statement of changes in equity
Shares held by Total
Share Non- subsidiary and Share-based attributable Non-
capital and distributable Accumulated empowerment payment to owners controlling Total
R'million premium reserves profits entities reserve of the parent interests equity
Balance at 1 October 2015 148,5 2 644,1 13 152,9 (2 538,9) 423,5 13 830,1 (52,5) 13 777,6
Profit for the period - - 1 703,3 - - 1 703,3 4,3 1 707,6
Other comprehensive
income/(loss)*** - 62,8 - - - 62,8 (1,4) 61,4
Total comprehensive income - 62,8 1 703,3 - - 1 766,1 2,9 1 769,0
Transfers between reserves - 205,8 (205,8) - - - - -
Share-based payment - - - - 30,9 30,9 - 30,9
Dividends on ordinary
shares (net of dividend on
treasury shares) - - (1 022,2) - - (1 022,2) - (1 022,2)
Disposal of subsidiary - - - - - - 587,6 587,6
Sale of empowerment shares* - - - 11,3 - 11,3 (3,1) 8,2
Balance at 31 March 2016 148,5 2 912,7 13 628,2 (2 527,6) 454,4 14 616,2 534,9 15 151,1
Profit for the period - - 1 602,3 - - 1 602,3 11,8 1 614,1
Other comprehensive
income/(loss)*** - (115,1) (0,9) - - (116,0) (32,3) (148,3)
Total comprehensive income - (115,1) 1 601,4 - - 1 486,3 (20,5) 1 465,8
Transfers between reserves - 248,5 (248,5) - - - - -
Share-based payment** - - - - 34,1 34,1 - 34,1
Dividends on ordinary
shares (net of dividend on
treasury shares) - - (607,7) - - (607,7) (19,7) (627,4)
Sale of empowerment shares* - - - 18,7 - 18,7 (8,4) 10,3
Balance at 30 September 2016 148,5 3 046,1 14 373,4 (2 508,9) 488,5 15 547,6 486,3 16 033,9
Profit for the period - - 1 686,6 - - 1 686,6 10,6 1 697,2
Other comprehensive
income/(loss)*** - (192,0) - - - (192,0) (21,6) (213,6)
Total comprehensive income - (192,0) 1 686,6 - - 1 494,6 (11,0) 1 483,6
Transfers between reserves - 34,6 (85,1) - 50,5 - - -
Share-based payment** - - - - (31,7) (31,7) - (31,7)
Dividends on ordinary
shares (net of dividend
on treasury shares) - - (1 176,1) - - (1 176,1) - (1 176,1)
Reduction in non-controlling
interest in empowerment
shares - - - - - - (22,4) (22,4)
Sale of empowerment shares* - - - 14,6 - 14,6 (6,1) 8,5
Balance at 31 March 2017 148,5 2 888,7 14 798,8 (2 494,3) 507,3 15 849,0 446,8 16 295,8
* Relates to the exercising of options vested post the December 2014 lock-in period in terms of the Black Managers
Participation Right Scheme (BMT).
** Included in the movement of the share based payment are options exercised amounting to R74,4 million (2016: R3,4 million).
*** Other comprehensive (loss)/income within FCTR includes amounts related to associates of a R177,9 million loss
(2016: R131,7 million income).
Other salient features
Unaudited Unaudited Unaudited
six months six months year
ended ended ended
31 March 31 March 30 September
R'million 2017 2016 2016
Capital commitments 649,8 730,3 1 133,7
- contracted 54,7 80,0 92,0
- approved 595,1 650,3 1 041,7
Capital commitments will be funded from normal
operating cash flows and the utilisation of
existing borrowing facilities. At 31 March 2017,
the total capital commitments proposed but not
yet approved amounted to R880,6 million
(31 March 2016: R789,8 million).
Capital expenditure 383,0 257,0 945,4
- replacement 294,1 235,2 638,9
- expansion 88,9 21,8 306,5
Contingent liabilities
- guarantees and contingent liabilities 12,7 3,0 12,8
Notes
1. Basis of preparation and changes to the group's accounting policies
The preparation of these results have been supervised by Noel Doyle, Chief Financial Officer of
Tiger Brands Limited.
The condensed consolidated interim results for the six months ended 31 March 2017 are prepared in
accordance with IAS 34 Interim Financial Reporting as issued by the IASB, the South African Companies
Act No 71 of 2008 and the Listings Requirements of the JSE Limited. These statements have not been
audited or reviewed.
The accounting policies applied in the preparation of the condensed consolidated interim results are
in terms of IFRS and are consistent with those applied in preparation of the group's annual consolidated
financial statements for the year ended 30 September 2016, except for the impact resulting from the
early adoption of IFRS 15. The majority of the group's financial instruments measured at fair value in
terms of IFRS 13, are noted as level 1 hierarchy, which are valued based on quoted market prices.
Unaudited Unaudited
Unaudited six months year
six months ended ended
ended 31 March 30 September
31 March 2016 2016
R'million 2017 Restated# Restated#
2. Operating income before impairments
and abnormal items
Depreciation (included in cost of sales
and other operating expenses) (280,5) (260,1) (524,5)
Amortisation (6,1) (6,0) (11,6)
IFRS 2 (included in other operating expenses)
- Equity settled (42,7) (30,9) (70,9)
- Cash settled (11,3) (11,0) (18,0)
3. Impairments
Goodwill and indefinite useful life intangible
assets are tested for impairment annually
(as at 30 September) and when circumstances
indicate the carrying value may be impaired.
The group's impairment tests for goodwill and
intangible assets with indefinite useful lives
are based on the value-in-use calculations.
The key assumptions used to determine the
recoverable amount for the different
cash-generating units were disclosed in the
annual consolidated financial statements for
the year ended 30 September 2016. No
impairment was recognised at 31 March 2017
relating to goodwill and indefinite useful
life intangible assets.
Impairment of property, plant and equipment - (3,2) (34,8)
Impairment of intangible assets - - (300,0)
- (3,2) (334,8)
4. Abnormal items
Once-off consulting fees (91,5) - -
Proceeds from warranty claim settlement 28,4 - -
Proceeds from insurance claim 85,7 - -
Profit on disposal of property, plant and
equipment - - 11,0
22,6 - 11,0
5. Reconciliation between profit for the
period and headline earnings
Continuing operations
Profit for the year attributable to owners
of the parent 1 686,4 1 645,9 3 243,1
Loss/(profit) on disposal of property,
plant and equipment - 0,1 (8,3)
Impairment of property, plant and equipment - 2,3 25,3
Impairment of intangible assets - - 300,0
Headline earnings adjustment - associates
- Profit on disposal of property, plant,
equipment and intangible assets (0,1) (73,1) (116,9)
Headline earnings for the period 1 686,3 1 575,2 3 443,2
Tax effect of headline earnings adjustments - 19,5 (7,0)
Attributable to non-controlling interest - - -
Discontinued operations
Profit for the year attributable to
owners of the parent 0,2 57,4 62,5
(Profit)/loss on sale of property,
plant and equipment (0,4) 0,1 0,1
Profit on disposal of subsidiary - (49,7) (49,7)
Headline earnings for the period (0,2) 7,8 12,9
Tax effect of headline earnings adjustments 0,2 - -
Attributable to non-controlling interest (0,3) - -
# Restated as required by IFRS 5 in relation to the treatment of East African Tiger Brands Industries
Plc. (EATBI) and Haco Tiger Brands (E.A.) Limited (Haco) as discontinued operations.
6. Analysis of (loss)/profit from discontinued operations
(Loss)/profit for the period from discontinued operations
Turnover 387,1 2 111,6 2 556,8
Expenses (387,3) (2 012,7) (2 442,7)
Operating (loss)/income before impairments and
abnormal items (0,2) 98,9 114,1
Impairments - - -
Abnormal items (1,2) 49,7 49,7
Operating (loss)/income after impairments
and abnormal items (1,4) 148,6 163,8
Finance costs (0,3) (90,6) (99,5)
(Loss)/profit before taxation (1,7) 58,0 64,3
Taxation 0,6 (8,2) (11,4)
(Loss)/profit for the period from
discontinued operations (1,1) 49,8 52,9
Attributable to non-controlling interest 1,3 7,6 9,6
Attributable to owners of parent 0,2 57,4 62,5
Cash flows from discontinued operations
Net cash inflows from operating activities 68,3 61,8 363,6
Net cash outflows from investing activities (12,7) (21,1) (65,9)
Net cash (outflows)/inflows from financing
activities (3,6) (0,1) 90,5
Net cash inflows 52,0 40,6 388,2
# Restated as required by IFRS 5 in relation to the treatment of East African Tiger Brands
Industries Plc. (EATBI) and Haco Tiger Brands (E.A.) Limited (Haco) as discontinued operations.
7. Restatement of turnover
The group has early adopted IFRS 15 Revenue
from Contracts with Customers and therefore
restated the comparatives applying the full
retrospective transition method as allowed
in the transition provisions of IFRS 15.
The impact of early adopting IFRS 15 resulted
in a reallocation of costs from selling and
distribution in March 2016 of R51,3 million
(September 2016: R105,6 million), marketing of
R18,0 million in March 2016 (September 2016:
R41,3 million) and cost of sales of R1,5 million
in March 2016 (September 2016: R4,1 million)
to turnover, totalling R70,8 million in March
2016 (September 2016: R151,0 million). There
has been no impact on the basic earnings or
basic headline earnings per share. The
reconciliation of the adjustments to the
turnover comparatives are as follows:
As previously reported 15 893,5 31 697,5
Reclassified to discontinued operations (513,1) (958,3)
Reallocation of costs due to early adoption of IFRS 15 (70,8) (151,0)
Restated turnover after reclassification 15 309,6 30 588,2
8. Net financing costs
Net interest paid (110,4) (145,0) (297,0)
Net foreign exchange (loss)/profit (9,9) 32,7 128,6
Net financing costs (120,3) (112,3) (168,4)
9. Subsequent events
Effective 4 April 2017, Tiger Brands Limited disposed of its 51% shareholding in East African Tiger
Brands Industries Plc. (EATBI) to its existing Ethiopian partner, East African Group (ETH.) Plc.
for USD18,55 million. The estimated profit or loss on disposal is not expected to be material.
# Restated as required by IFRS 5 in relation to the treatment of East African Tiger Brands
Industries Plc. (EATBI) and Haco Tiger Brands (E.A.) Limited (Haco) as discontinued operations.
Corporate information
Independent non-executive directors
KDK Mokhele (chairman), BL Sibiya (deputy chairman), YGH Suleman, SL Botha,
MP Nyama, RD Nisbet, M Makanjee, M J Bowman, MO Ajukwu, TE Mashilwane (appointed 1 December 2016)
Executive directors
LC Mac Dougall (chief executive officer)
CFH Vaux, NP Doyle (chief financial officer)
Company Secretary
T Naidoo
Investor Relations
N Catrakilis-Wagner
Telephone: 011 840 4841
Physical address:
Tiger Brands Limited
3010 William Nicol Drive, Bryanston
Postal address
PO Box 78056, Sandton, 2146, South Africa
Telephone: 011 840 4000
Facsimile: 011 514 0477
Sponsor
JP Morgan Equities South Africa (Pty) Limited
1 Fricker Road, Corner Hurlingham Road, Illovo, 2196
Share registrars
Computershare Investor Services (Pty) Limited
Rosebank Towers, 15 Biermann Avenue, Rosebank, Johannesburg, 2196
PO Box 61051, Marshalltown 2107, South Africa.
Telephone: (011) 370 5000
Website: http://www.tigerbrands.com
Date: 25/05/2017 07:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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