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Trading Statement
Pioneer Food Group Limited
Incorporated in the Republic of South Africa
Registration number: 1996/017676/06
Share code: PFG
ISIN code: ZAE000118279
(“Pioneer Foods” or “the Group”)
TRADING STATEMENT AND UPDATE FOR THE YEAR ENDED 30 SEPTEMBER 2017
Trading statement
The following disclosure is made in accordance with Section 3.4 (b) of the Listings Requirements of the JSE
Limited. Pioneer Foods advises that for the year ended 30 September 2017, a reasonable degree of certainty
exists that earnings will be as follows:
30 September 2017 30 September 2016
Expectation (cents) and Reported (cents)
% decrease
Attributable Earnings per Share 383 (58%) – 456 (50%) 912
Headline Earnings per Share 398 (56%) – 470 (48%) 904
Adjusted Headline Earnings per Share (Note 1) 433 (51%) – 503 (43%) 883
1. Adjusted for the IFRS 2 share-based payment charge relating to the Phase 1 (2006) B-BBEE transaction
and the effect of the forward purchase contracts hedge entered into relating to this scheme (amounting
on a net basis to a loss of R42 million after tax). The major reason for this loss is the fact that the hedge
is valued at 100% of the mark-to-market value, whilst the liability is phased in over the expected period
of the transaction as per IFRS 2. An adjustment is also made for specific once-off merger and acquisition
costs.
Trading update
Revenue decreased by between 4% and 6% from the R20.6 billion in the comparative period due to a
combination of deflation, volume declines and resistance to price increases.
The unfavourable maize procurement position entered into in 2016 muted the performance of the maize
category until June. Maize has since been milled at market related cost.
Fruit export performance, given the shortage of raisin stock in the first half of the financial year, was further
impacted by the lower US dollar prices realised and a stronger rand.
The weak beverage exports experienced in key African markets in the first half continued through the latter half
of this period. This is due to the unfavourable economic situation in many of these markets together with
prudent credit management. Local beverages volumes and margins suffered from reduced year on year demand
as well as increased competition.
The share of profit from joint ventures contracted materially during the period. The performance in Botswana
was significantly impacted by the Group’s unfavourable maize hedge position. Heinz’s volumes lagged
expectations, and together with an inability to adjust its cost base to this volume reality, led to a poor profit
performance.
The balance of categories showed resilience during this difficult period. Bakeries sustained performance with
the Aeroton bakery upgrade successfully commissioned in the second half of the fiscal. Snacks and Treats
delivered a stellar performance.
Continuing actions to support margin while managing costs and improving efficiencies, together with the
deflation in maize specifically, have underpinned the steady cash flow generation in the year under review.
Pioneer Foods is due to release annual results for the year ended 30 September 2017 on or about 20 November
2017.
The information above has not been reviewed or reported on by the Group’s auditors.
Tyger Valley
23 October 2017
Sponsor: PSG Capital (Pty) Ltd
Date: 23/10/2017 08:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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