AVI LIMITED - Voluntary Trading Update and Statement for the year ended 30 June 2017

Voluntary Trading Update and Statement for the year ended 30 June 2017

AVI Limited
(Incorporated in the Republic of South Africa)
(Registration number 1944/017201/06)
Share code: AVI
ISIN: ZAE000049433
(“AVI” or “the Group”)


VOLUNTARY TRADING UPDATE AND STATEMENT FOR THE YEAR ENDED 30 JUNE 2017


The Group’s brands performed acceptably in a challenging demand environment caused by increasingly
weak macroeconomic conditions and ongoing political uncertainty.

Group revenue for the year rose by 8,2% largely due to selling price increases necessary to off-set the effect
of a weaker Rand exchange rate and rising raw material costs. The consolidated gross profit margin improved
in the second semester benefiting from ongoing management of selling prices and some recovery of
accumulated cost pressure from the weaker Rand as the exchange rate improved over the year. All business
units achieved operating profit growth and the Group’s consolidated operating profit margin improved over the
prior year.

Despite a competitive environment both Entyce and Snackworks delivered sound operating profit growth. I&J
achieved strong growth in operating profit in the second semester, underpinned by favourable exchange rates
secured when the Rand was weaker. Indigo Brands performed solidly extending gains in core category
market shares. Spitz had a much improved second semester which contributed to contextually credible full
year operating profit growth. Green Cross continued to make progress in growing retail space and revenue,
but operating profit for the year fell below expectations in the face of increased competition and constrained
consumer spending in the mid-priced footwear market. Green Cross remains profitable and cash generative,
and profitability is expected to improve from the current base, however an after tax impairment of R108,0
million has been made against this investment in recognition of the longer period required to grow the
business to AVI’s target profitability. The impairment will be recorded as a non-cash capital item in the current
year results.

I&J’s profitability was impacted by a three week long unprotected strike at the fishing operations in August
2016 which reduced operating profit by approximately R25 million and constrained the Group’s operating
profit growth for the full year.

The weighted average number of shares in issue during the period was 0,8% higher than in the same period
last year due to the issue of new shares in terms of the Group’s various share incentive schemes,
including the black staff empowerment share scheme.

The following disclosure is made in accordance with Section 3.4(b) of the Listings Requirements of the JSE
Limited:

-   Consolidated headline earnings per share for the year ended 30 June 2017 are expected to increase
    by between 8% and 10% over the prior year, translating into an increase from last year’s 464,1 cents
    to a range between 501 and 510 cents per share; and

-   Consolidated earnings per share for the year ended 30 June 2017, including capital gains and losses,
    are expected to increase by between 3% and 5% over the prior year, translating into an increase
    from last year’s 460,7 cents to a range between 475 and 484 cents per share.

It is expected that AVI will release its results for the year ended 30 June 2017 on or about 11
September 2017.

The information above has not been reviewed and reported on by the Group’s auditors.


Illovo
24 July 2017

Sponsor                  The Standard Bank of South Africa Limited
Enquiries                +(27) 11 502 1300

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