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AVI LIMITED - Unaudited interim results for the six months ended 31 December 2016

Release Date: 06/03/2017 07:05
Code(s): AVI     PDF:  
 
Wrap Text
Unaudited interim results for the six months ended 31 December 2016

AVI Limited
ISIN: ZAE000049433 
Share code: AVI 
Registration number: 1944/017201/06
("AVI" or "the Group" or "the Company")

UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2016

KEY FEATURES
- Sound performance in a challenging environment                                     
- Revenue up 11,6% to R7,13 billion                                                  
- Operating profit up 8,1% to R1,41 billion                                          
- Gross margin pressure from weaker Rand and rising raw material prices              
- Cash from operations up 11,5% to R1,67 billion                                     
- Capital expenditure of R284,0 million on efficiency, capacity and retail stores    
- Return on capital employed of 27,0% for 12 months to December                      
- Headline earnings per share up 7,6% to 302,9 cents                                 
- Interim dividend up 8,0% to 162 cents per share                      

GROUP OVERVIEW
Group revenue for the first semester of the financial year increased by 11,6%, from R6,39 billion to R7,13 billion.
This growth reflects a combination of price increases in response to a weaker Rand exchange rate and higher raw material
costs, and volume growth in most of our grocery categories. Gross profit rose by 8,0% to R3,12 billion with the
consolidated gross profit margin dropping from 45,3% to 43,8% as some categories have yet to fully recover the input cost
pressures resulting from the weaker Rand exchange rate. Operating profit increased by 8,1%, from R1,30 billion to R1,41 billion
underpinned by the improvement in gross profit and the containment of selling and administrative expenses. The
operating profit margin decreased from 20,4% to 19,7% in line with the pressure on gross profit margins in some categories.

Entyce and Snackworks both performed soundly with good growth in operating profit for the semester notwithstanding
that selling prices have yet to fully recover rising input costs. The overall performance by AVI’s Fashion Brands was
satisfactory in the context of the difficult consumer environment. Demand during December for our core brands was strong,
with Spitz in particular achieving solid revenue growth compared to December last year. Both Spitz and Green Cross grew
operating profit for the semester despite pressure on footwear sales volumes at the materially higher price points
necessary to protect gross profit margin. Indigo Brands delivered a pleasing result for the semester with gains in market
shares in key categories. 

I&J achieved profit growth for the semester from favourable exchange rates and improved fishing in the second quarter,
although the result was tempered by an operating profit shortfall of approximately R25 million due to a three week
illegal strike at the trawling operations in August. The shortfall impacted negatively on the Group’s trading result 
for the first half.

Headline earnings rose 8,5%, from R903,4 million to R979,8 million with the growth in operating profit and an improved
result from I&J’s Australian joint venture partially offset by higher finance costs in line with higher interest rates.
Headline earnings per share increased 7,6% from 281,6 cents to 302,9 cents with a 0,8% increase in the weighted average
number of shares in issue due to the vesting of employee share options, including the AVI Black Staff Empowerment
Scheme.

Cash generated by operations, before working capital changes, increased 11,5% to R1,67 billion. Working capital rose
R433,4 million, reflecting good trading in December and higher stock values from rising input costs. Capital expenditure
of R284,0 million, which included capacity and efficiency projects in the manufacturing operations as well as new and
refurbished stores in the retail businesses, was materially lower than the first semester last year, which included 
R257,5 million for I&J’s new vessels. Other material cash outflows during the period were dividends of R716,0 million and
taxation of R289,2 million. Net debt at the end of December 2016 was R1,49 billion compared to R1,55 billion at the end of
December 2015.

DIVIDEND 
An interim dividend of 162 cents per share has been declared, an increase of 8,0% on last year’s interim dividend. 

SEGMENTAL REVIEW
Six months ended 31 December
                                                                                                          
                                    Segmental revenue              Segmental operating profit          
                              2016         2015           %       2016         2015           %    
                                Rm           Rm      change         Rm           Rm      change    
                                                                                                   
Food & Beverage brands     5 326,2      4 683,1        13,7      968,8        879,4        10,2    
Entyce Beverages           1 987,8      1 728,1        15,0      389,0        351,0        10,8    
Snackworks                 2 195,1      1 954,2        12,3      412,4        368,7        11,9    
I&J                        1 143,3      1 000,8        14,2      167,4        159,7         4,8    
Fashion brands             1 808,4      1 707,2         5,9      449,7        429,6         4,7    
Personal Care                620,9        569,1         9,1      140,1        124,0        13,0    
Footwear & Apparel         1 187,5      1 138,1         4,3      309,6        305,6         1,3    
Corporate                        -          2,7                  (10,8)        (6,9)               
Group                      7 134,6      6 393,0        11,6    1 407,7      1 302,1         8,1    

Entyce Beverages
Revenue increased 15,0% to R1,99 billion while operating profit increased 10,8% to R389,0 million with the operating
profit margin at 19,6% compared to 20,3% in the prior year.

Tea revenue increased 19,9% due to price increases necessary to offset significantly higher rooibos tea input costs
and the impact of the weaker Rand on other raw material costs. Coffee revenue was up 19,3% with price increases to
ameliorate the impact of the weaker Rand on raw coffee bean prices and an 8,3% increase in sales volumes. 
Following a strong performance and significant market share growth in the last financial year, Creamer revenue growth
was restricted to 4,0% by aggressive competitor activity that limited selling price increases and sales volumes. 

The gross profit margin declined in line with the competitive constraints on selling prices and Entyce did 
not adequately recover the significant increase in raw material costs, which include the impact of the weaker 
Rand on dollar denominated raw materials. However the growth in gross profit, supported by well controlled 
selling and administrative costs, was sufficient to yield a 10,8% growth in operating profit.

Snackworks
Revenue of R2,19 billion was 12,3% higher than last year while operating profit rose 11,9%, from R368,7 million to
R412,4 million. The operating profit margin decreased marginally from 18,9% to 18,8%.

Biscuits revenue grew 12,6% with higher selling prices and an increase of 1,8% in sales volumes. Snacks revenue
increased 11,3% with higher selling prices supported by a 3,7% increase in sales volumes.

Gross profit margin decreased, largely due to higher raw material costs not fully recovered in the biscuit category.
The Snacks category made good progress on the corn portfolio, gaining volumes profitably, although this was partially
offset by a shortage of potatoes that restricted the potato chip performance. Selling and administrative cost increases
were well contained, contributing to the overall growth in operating profit.

I&J
Revenue increased by 14,2% from R1,00 billion to R1,14 billion while operating profit increased from R159,7 million to
R167,4 million. The operating profit margin decreased from 16,0% to 14,6%.

Revenue growth largely reflects the benefit of the weaker Rand on export sales, and selling price increases in both
the domestic and export markets. Sales volumes were 5,7% lower than last year, impacted by the illegal strike in August
2016 and lower catch rates.

Lower fuel costs and a sound processing performance added to the benefit of the weaker Rand, resulting in an increase
in operating profit, notwithstanding the illegal strike which reduced operating profit by approximately R25 million. 

Fishing catch rates for the semester were on average slightly lower than last year, although showing some improvement
in the second quarter. The proportion of small fish remained high, impacting processing yields.

Personal Care
Indigo’s revenue from owned brands grew by 10,2% with price increases and volume growth, although total revenue growth
was limited to 9,1% due to lower volumes of product manufactured for Coty. Export profits grew strongly supported by
successful product launches in several key markets. The gross profit margin decreased due to cost pressure stemming from
the weaker Rand, lower commissions from Coty and sales mix changes. Selling and administrative expenses were well
controlled and operating profit grew 13,0% from R124,0 million to R140,1 million. The operating profit margin increased 
from 21,8% to 22,6%.

Footwear and Apparel 
The Footwear and Apparel category increased revenue by 4,3% to R1,19 billion while operating profit increased by 
1,3% from R305,6 million to R309,6 million. The operating profit margin decreased from 26,9% to 26,1%.

The Spitz and Kurt Geiger brands grew revenue by 2,8% as a result of higher selling prices offset by lower footwear 
volumes. Core footwear brands performed well considering the constrained consumer environment, although some consumers 
found it difficult to absorb the higher prices necessary to address rising, Rand driven, input costs. The gross profit 
margin was in line with last year underwritten by prudent control of selling and administrative costs. Spitz recorded 
its best monthly sales in December supporting a reasonable semester in a tough environment. Operating profit increased 
from R288,6 million to R290,4 million while the operating profit margin for the semester declined from 30,6% to 29,9%

Green Cross revenue grew 11,1% to R193,8 million. Retail revenue increased by 17,3% due to price increases in response
to the weaker Rand and increased trading space, with one new store opened in addition to the eight new stores opened in
the 2016 financial year. Improved assortment and stock replenishment resulted in encouraging retail sales growth
notwithstanding the constrained environment. Wholesale revenue declined by 1,9%, reflecting continued volume pressure on 
this channel as consumers increasingly display a preference to buy higher priced footwear in branded stores. Gross profit
margin was maintained despite the weaker Rand, while selling and administrative costs increased in line with the increased
number of stores. Operating profit increased from R17,8 million to R18,7 million with encouraging overall progress in
the last three months of the semester.

OUTLOOK
The trading environment is likely to remain difficult in the second half, with increasing competition for consumers’
discretionary income. We anticipate that the ongoing negative impact of inflation on the price of many goods and services
and higher interest rates will continue to constrain household incomes. This and the absence of improving employment
data means we are not expecting an improved demand environment for the balance of the calendar year. In this environment,
we will continue to focus on reacting quickly to market changes as we pursue the most appropriate balance of price,
sales volumes and profit margins for each of our brands.

Our brands remain healthy and appealing to consumers and we will continue to invest in capabilities that underpin our
manufacturing capacity, product quality and service levels. Where appropriate organisational structures and fixed
overhead costs have been reviewed to improve operational effectiveness and reduce our cost base. Entyce, Snackworks and Indigo
have well established capabilities to defend market share and profit margins in tough times, and Spitz, Kurt Geiger and
Green Cross retail stores should benefit from refurbishments and space growth to help offset the pressure on demand
from recent selling price increases. AVI International, supported by our South African manufacturing capabilities,
continues to build our brands’ shares in export markets while sustaining strong profit margins.

I&J’s prospects remain materially dependant on exchange rates and the fishing performance in the second semester.
Taking account of currency hedges and assuming catch rates similar to the first semester, I&J should be able to achieve
growth on last year’s profit, notwithstanding the stronger Rand and impact of the illegal strike in the first half of the
year. 

The Board is confident that AVI remains well positioned to compete effectively; prudently manage fixed and variable
costs; and, recognising the challenging environment, be alert for appropriate acquisition opportunities both domestically
and regionally.

The above outlook statements have not been reviewed or reported on by AVI’s auditors.

              
Gavin Tipper            Simon Crutchley
Chairman                CEO

6 March 2017


CONDENSED CONSOLIDATED BALANCE SHEET
                      
                                                            Unaudited at       Audited    
                                                            31 December     at 30 June                      
                                                          2016        2015        2016    
                                                            Rm          Rm          Rm                      
Assets                                                                                    
Non-current assets                                                                        
Property, plant and equipment                          3 433,8     3 220,6     3 352,4    
Intangible assets and goodwill                         1 143,5     1 144,8     1 145,4    
Investments                                              394,4       439,7       414,5    
Deferred taxation                                         16,8        24,4        24,6    
                                                       4 988,5     4 829,5     4 936,9    
Current assets                                                                            
Inventories and biological assets                      1 828,5     1 611,9     1 889,6    
Trade and other receivables including derivatives      2 132,7     2 014,1     1 895,5    
Cash and cash equivalents                                412,8       577,9       309,1    
                                                       4 374,0     4 203,9     4 094,2    
Total assets                                           9 362,5     9 033,4     9 031,1    

Equity and liabilities                                                                    
Capital and reserves                                                                      
Total equity                                           4 785,8     4 329,0     4 489,5    

Non-current liabilities                                                                   
Operating lease straight-line liabilities                 15,0        11,3        10,6    
Employee benefits                                        353,2       395,8       342,9    
Deferred taxation                                        412,1       338,5       354,9    
                                                         780,3       745,6       708,4    
Current liabilities                                                                       
Current borrowings                                     1 902,0     2 127,4     1 737,7    
Trade and other payables including derivatives         1 829,1     1 769,7     2 081,7    
Current tax liabilities                                   65,3        61,7        13,8    
                                                       3 796,4     3 958,8     3 833,2    
Total equity and liabilities                           9 362,5     9 033,4     9 031,1    
                                                                                          
Net debt*                                              1 489,2     1 549,5     1 428,6    
* Comprises current borrowings less cash and cash equivalents.             
                                                                         
                                                                       
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                                                        
                                                              Unaudited                          Audited        
                                                          six months ended                    year ended
                                                              31 December                        30 June    
                                                          2016          2015          %             2016    
                                                            Rm            Rm      change              Rm       
Revenue                                                7 134,6       6 393,0          12        12 188,9    
Cost of sales                                         (4 011,0)     (3 500,2)         15        (6 842,3)    
Gross profit                                           3 123,6       2 892,8           8         5 346,6    
Selling and administrative expenses                   (1 715,9)     (1 590,7)          8        (3 192,0)    
Operating profit before capital items                  1 407,7       1 302,1           8         2 154,6    
Interest received                                          2,1           5,5         (62)            6,5    
Finance costs                                            (82,0)        (60,4)         36          (135,9)    
Share of equity-accounted earnings of                
joint ventures                                            42,2          16,1         162            58,1    
Capital items                                             11,9          (7,4)       (261)          (14,3)    
Profit before taxation                                 1 381,9       1 255,9          10         2 069,0    
Taxation                                                (393,9)       (357,8)         10          (587,8)    
Profit for the period                                    988,0         898,1          10         1 481,2    
Profit attributable to:                                                                                     
Owners of AVI                                            988,0         898,1          10         1 481,2    

Other comprehensive income, net of tax                   (29,6)         93,7                       114,3    
Items that are or may be subsequently                
reclassified to profit or loss                                        
Foreign currency translation differences                 (47,0)         95,5                        75,1    
Cash flow hedging reserve                                 24,2          (2,5)                       15,8    
Taxation on items that are or may be                 
subsequently reclassified to                         
profit or loss                                            (6,8)          0,7                        (4,4)    
Items that will never be reclassified to             
profit or loss                                                     
Actuarial loss recognised                                    -             -                        38,6    
Taxation on items that will never be                 
reclassified to profit or loss                               -             -                       (10,8)    
Total comprehensive income for the period                958,4         991,8          (3)        1 595,5    
Total comprehensive income attributable to:                                                                 
Owners of AVI                                            958,4         991,8          (3)        1 595,5    

Depreciation and amortisation of property,           
plant and equipment, fishing rights and              
trademarks included in operating profit                  195,7         168,3          16           350,2    
Earnings per share                                                                                          
Basic earnings per share (cents)#                        305,4         279,9           9           460,7    
Diluted basic earnings per share (cents)##               302,9         276,0          10           455,4    
Headline earnings per share (cents)#                     302,9         281,6           8           464,1    
Diluted headline earnings per share (cents)##            300,4         277,6           8           458,8    
#  Basic earnings and headline earnings per share are calculated on a weighted average of 323 496 762 
   (31 December 2015: 320 821 709 and 30 June 2016: 321 536 201) ordinary shares in issue.                                          
## Diluted basic earnings and diluted headline earnings per share are calculated on a weighted average of 
   326 188 161 (31 December 2015: 325 369 853 and 30 June 2016: 325 220 785) ordinary shares in issue.                     


CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                                                                                            
                                                              Unaudited                          Audited    
                                                          six months ended                    year ended    
                                                             31 December                         30 June    
                                                          2016          2015          %             2016    
                                                            Rm            Rm      change              Rm                 
Operating activities                                                                                        
Cash generated by operations before 
working capital changes                                1 669,3       1 497,2          11         2 761,8    
Increase in working capital                             (433,4)       (392,6)         10          (469,3)    
Cash generated by operations                           1 235,9       1 104,6          12         2 292,5    
Interest paid                                            (82,0)        (60,4)         36          (135,9)    
Taxation paid                                           (289,2)       (252,1)         15          (508,6)    
Net cash available from operating activities             864,7         792,1           9         1 648,0    
Investing activities                                                                                        
Interest received                                          2,0           5,5         (64)            6,5    
Property, plant and equipment acquired                  (284,0)       (559,8)        (49)         (881,8)    
Additions to intangible assets                               -             -                        (2,4)    
Proceeds from disposals of 
property, plant and equipment                              4,9           4,7           4            10,2    
Movement in joint ventures and other investments          36,8           7,2         411            53,3    
Net cash used in investing activities                   (240,3)       (542,4)        (56)         (814,2)    
Financing activities                                                                                        
Proceeds from shareholder funding                         35,2          31,5          12            56,3    
Short-term funding raised                                164,3         462,2         (64)           72,6    
Dividends paid                                          (716,0)       (642,9)         11        (1 126,9)    
Net cash used in financing activities                   (516,5)       (149,2)        246          (998,0)    
Increase/(decrease) in cash and cash equivalents         107,9         100,5           7          (164,2)    
Cash and cash equivalents at beginning of period         309,1         462,5         (33)          462,5    
                                                         417,0         563,0                       298,3    
Translation of cash equivalents of 
foreign subsidiaries                                      (4,2)         14,9        (128)           10,8    
Cash and cash equivalents at end of period               412,8         577,9                       309,1    


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                                                                                      
                                                              Share       
                                                        capital and    Treasury                Retained      Total    
                                                            premium      shares    Reserves    earnings     equity    
                                                                 Rm          Rm          Rm          Rm         Rm               
Six months ended 31 December 2016                                 
Balance at 1 July 2016                                        114,3      (435,9)      456,7     4 354,4    4 489,5             
Profit for the period                                             -           -           -       988,0      988,0 
Other comprehensive income                                                                                         
Foreign currency translation differences                          -           -       (47,0)          -      (47,0) 
Cash flow hedging reserve, net of tax                             -           -        17,4           -       17,4 
Total other comprehensive income                                  -           -       (29,6)          -      (29,6) 
Total comprehensive income for the period                         -           -       (29,6)      988,0      958,4 
Transactions with owners, recorded directly in equity                                                              
Share-based payments                                              -           -        12,1           -       12,1 
Deferred taxation on Group share scheme recharge                  -           -         6,6           -        6,6 
Dividends paid                                                    -           -           -      (716,0)    (716,0) 
Issue of ordinary shares to AVI Share Trusts                  166,0      (166,0)          -           -          - 
Own ordinary shares sold by AVI Share Trusts                      -        35,7           -        (0,5)      35,2 
Total contributions by and distributions to owners            166,0      (130,3)       18,7      (716,5)    (662,1) 
Balance at 31 December 2016                                   280,3      (566,2)      445,8     4 625,9    4 785,8 

Six months ended 31 December 2015                                                                                  
Balance at 1 July 2015                                         79,2      (453,7)      330,5     3 984,5    3 940,5 
Profit for the period                                             -           -           -       898,1      898,1 
Other comprehensive income                                                                                         
Foreign currency translation differences                          -           -        95,5           -       95,5 
Cash flow hedging reserve, net of tax                             -           -        (1,8)          -       (1,8) 
Total other comprehensive income                                  -           -        93,7           -       93,7 
Total comprehensive income for the period                         -           -        93,7       898,1      991,8 
Transactions with owners, recorded directly in equity                                                              
Share-based payments                                              -           -         7,3           -        7,3 
Deferred taxation on Group share scheme recharge                  -           -         0,9           -        0,9 
Dividends paid                                                    -           -           -      (642,9)    (642,9) 
Issue of ordinary shares to AVI Share Trusts                    7,9        (7,9)          -           -          - 
Own ordinary shares sold by AVI Share Trusts                      -        29,6           -         1,8       31,4 
Total contributions by and distributions to owners              7,9        21,7         8,2      (641,1)    (603,3) 
Balance at 31 December 2015                                    87,1      (432,0)      432,4     4 241,5    4 329,0 

Year ended 30 June 2016                                                                                            
Balance at 1 July 2015                                         79,2      (453,7)      330,5     3 984,5    3 940,5 
Profit for the year                                               -           -           -     1 481,2    1 481,2 
Other comprehensive income                                                                                         
Foreign currency translation differences                          -           -        75,1           -       75,1 
Actuarial gain recognised, net of tax                             -           -        27,8           -       27,8 
Cash flow hedging reserve, net of tax                             -           -        11,4           -       11,4 
Total other comprehensive income                                  -           -       114,3           -      114,3 
Total comprehensive income for the period                         -           -       114,3     1 481,2    1 595,5 
Transactions with owners, recorded directly in equity                                                              
Share-based payments                                              -           -        15,0           -       15,0 
Deferred taxation on Group share scheme recharge                  -           -         9,1           -        9,1 
Dividends paid                                                    -           -           -    (1 126,9)  (1 126,9) 
Issue of ordinary shares to AVI Share Trusts                   35,1       (35,1)          -           -          - 
Own ordinary shares sold by AVI Share Trusts                      -        52,9           -         3,4       56,3 
Transfer between reserves                                         -           -       (12,2)       12,2          - 
Total contributions by and distributions to owners             35,1        17,8        11,9    (1 111,3)  (1 046,5) 
Balance at 30 June 2016                                       114,3      (435,9)      456,7     4 354,4    4 489,5         
                                                                                                

SUPPLEMENTARY NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the six months ended 31 December 2016                                                        
AVI Limited ("AVI" or "the Company") is a South African registered company. These condensed consolidated interim 
financial statements comprise the Company and its subsidiaries (together referred to as "the consolidated") and the 
consolidated’s interest in joint ventures.
                                                                          
1. Statement of compliance                                           
   The condensed consolidated interim financial statements have been prepared in accordance with the recognition and 
   measurement criteria of International Financial Reporting Standards, the presentation and disclosure requirements 
   of IAS 34 - Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices 
   Committee, the Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, the 
   Listings Requirements of the JSE Limited (the "JSE") and the Companies Act of South Africa. These condensed 
   consolidated interim financial statements have not been reviewed or audited by the auditors.      

2. Basis of preparation                                                                 
   The condensed consolidated interim financial statements are prepared in millions of South African Rands ("Rm") 
   on the historical cost basis, except for derivative financial instruments, biological assets and liabilities for 
   cash-settled share-based payment arrangements, which are measured at fair value. 
   
   The accounting policies used in the preparation of these interim financial statements are in terms of International 
   Financial Reporting Standards and are consistent with those applied in preparing the interim financial statements 
   for the six months ended 31 December 2015 and the annual financial statements for the year ended 30 June 2016.
   
   The Group has adopted the following new accounting standards, including any consequential amendments to other 
   standards, in the preparation of these interim results, all of which became effective to the Group from 1 July 2016:      
   - Amendments to IAS 1 (Disclosure Initiative)                                                                               
   - Annual improvements to IFRSs: 2012 - 2014 (various standards)
   
   The new and revised standards described have been adopted in accordance with IAS 8 - Accounting Policies, Changes 
   in Accounting Estimates and Errors as well as the specific requirements of each individual standard.  
   
   Amendments to IAS 1 (Disclosure Initiative)                                                    
   The amendments were published by the IASB to provide clarification to IAS 1 - Presentation of Financial Statements. 
   These amendments aim to improve presentation and disclosures in financial reporting to address both the preparers 
   as well as the users concerns.
   
   The application of the guidance provided by the amendments to IAS 1 has not significantly changed the Group’s 
   approach regarding disclosure. 
   
   Annual improvements to IFRSs: 2012 - 2014 (various standards)                                                          
   The new cycles of improvements form part of the IASB’s annual improvements process to make non-urgent but 
   necessary amendments to IFRS. Amendments have been made to a total of four standards.
   
   The implementation of the improvements has not had a significant impact on the Group’s results.  
   
   The remaining standards, amendments and interpretations, which became effective in the interim period ended 
   31 December 2016 were assessed for applicability to the Group and management concluded that they were not 
   applicable to the business of the Group and consequently will have no impact.                    

3. Segmental results           
                                                                      Unaudited                    Audited    
                                                                   six months ended             year ended    
                                                                      31 December                  30 June    
                                                                   2016        2015         %         2016    
                                                                     Rm          Rm    change           Rm                 
   Segmental revenue                                                                                          
   Food & Beverage brands                                       5 326,2     4 683,1        14      9 236,9    
   Entyce Beverages                                             1 987,8     1 728,1        15      3 421,9    
   Snackworks                                                   2 195,1     1 954,2        12      3 643,2    
   I&J                                                          1 143,3     1 000,8        14      2 171,8    
   Fashion brands                                               1 808,4     1 707,2         6      2 950,7    
   Personal Care                                                  620,9       569,1         9      1 096,4    
   Footwear & Apparel                                           1 187,5     1 138,1         4      1 854,3    
   Corporate and consolidation                                        -         2,7      (100)         1,3    
   Group                                                        7 134,6     6 393,0        12     12 188,9    
   Segmental operating profit before capital items                
   Food & Beverage brands                                         968,8       879,4        10      1 601,8    
   Entyce Beverages                                               389,0       351,0        11        661,7    
   Snackworks                                                     412,4       368,7        12        609,1    
   I&J                                                            167,4       159,7         5        331,0    
   Fashion brands                                                 449,7       429,6         5        563,0    
   Personal Care                                                  140,1       124,0        13        218,0    
   Footwear & Apparel                                             309,6       305,6         1        345,0    
   Corporate and consolidation                                    (10,8)       (6,9)      (57)       (10,2)    
   Group                                                        1 407,7     1 302,1         8      2 154,6    
                                                      
4. Determination of headline earnings        
                                                                     Unaudited                   Audited
                                                                 six months ended             year ended      
                                                                    31 December                  30 June          
                                                                  2016        2015        %         2016    
                                                                    Rm          Rm     change         Rm        
                                                                                                            
   Profit for the year attributable to owners of AVI             988,0       898,1       10      1 481,2    
   Total capital items after taxation                              8,2       (5,3)     (255)      (11,0)    
   Net loss on disposal of property, plant and equipment         (3,2)       (7,4)      (57)      (11,3)    
   Joint venture capital profit                                   15,1           -      100            -    
   Taxation attributable to capital items                        (3,7)         2,1     (276)         3,3    
   Headline earnings                                             979,8       903,4        8      1 492,2    
   Headline earnings per ordinary share (cents)                  302,9       281,6        8        464,1    
   Diluted headline earnings per ordinary share (cents)          300,4       277,6        8        458,8    
                                                                                                                   
                                                                Number         Number         %         Number     
                                                             of shares      of shares    change      of shares     
   Weighted average number of ordinary shares              323 496 762    320 821 709         1    321 536 201    
   Weighted average diluted number of ordinary shares      326 188 161    325 369 853         0    325 220 785    
               
5. Commitments                                           
                                                                     Unaudited           Audited    
                                                                  six months ended    year ended    
                                                                     31 December         30 June    
                                                                  2016         2015         2016    
                                                                    Rm           Rm           Rm    
                                                                                                    
   Capital expenditure commitments for property,                                      
   plant and equipment                                           250,9        365,9        327.4    
   Contracted for                                                169,1        178,5        183.9    
   Authorised but not contracted for                              81,8        187,4        143.5    
   It is anticipated that this expenditure will be financed by cash resources, cash generated from activities 
   and existing borrowing facilities. Other contractual commitments have been entered into in the normal course 
   of business.
   
6. Fair value classification and measurement                                                                
   The Group measures derivative foreign exchange contracts, fuel swaps and biological assets at fair value. 
   
   The fair value of foreign exchange contracts and fuel swaps is determined based on inputs as described in 
   Level 2 of the fair value hierarchy being quotes from financial institutions. Similar contracts are traded 
   in an active market and the quotes reflect the actual transactions on similar instruments. The carrying 
   values of all other financial assets or liabilities approximate their fair values based on the nature or 
   maturity period of the financial instrument.     
   
   Biological assets comprise abalone which is farmed by I&J. These assets are disclosed as Level 3 financial 
   instruments with their fair value determined using a combination of the market comparison and cost technique 
   as prescribed by IAS 41. 
   
   There were no transfers between Levels 1, 2 or 3 of the fair value hierarchy during the six months ended 
   31 December 2016.
   
7. Post-reporting date events                                                                              
   No significant events that meet the requirements of IAS 10 have occurred since the reporting date.   
                                                                                                           
8. Dividend declaration                                                                                    
   Notice is hereby given that a gross interim ordinary dividend No 87 of 162 cents per share for the 
   six months ended 31 December 2016 has been declared payable to shareholders of ordinary shares. The dividend 
   has been declared out of income reserves and will be subject to dividend withholding tax at a rate of 20%. 
   Consequently a net interim dividend of 129,6 cents per share will be distributed to those shareholders 
   who are not exempt from paying dividend tax. In terms of dividend tax legislation, the dividend tax amount 
   due will be withheld and paid over to the South African Revenue Services by a nominee company, stockbroker 
   or Central Securities Depository Participant ("CSDP") (collectively "regulated intermediary") on behalf of 
   shareholders. However, all shareholders should declare their status to their regulated intermediary, as they 
   may qualify for a reduced dividend tax rate or exemption. AVI’s issued share capital at the declaration date 
   is 350 488 163 ordinary shares. AVI’s tax reference number is 9500/046/71/0. The salient dates relating to 
   the payment of the dividend are as follows:                                                            

   Last day to trade cum dividend on the JSE                                           Tuesday, 18 April 2017    
   First trading day ex dividend on the JSE                                          Wednesday, 19 April 2017    
   Record date                                                                          Friday, 21 April 2017    
   Payment date                                                                         Monday, 24 April 2017 
   
   In accordance with the requirements of Strate Limited, no share certificates may be dematerialised or 
   rematerialised between Wednesday, 19 April 2017 and Friday, 21 April 2017, both days inclusive.   
   
   Dividends in respect of certificated shareholders will be transferred electronically to shareholders’ bank 
   accounts on payment date. In the absence of specific mandates, dividend cheques will be posted to shareholders. 
   Shareholders who hold dematerialised shares will have their accounts at their CSDP or broker credited on 
   Monday, 24 April 2017.  
   
9. Preparation of financial statements                    
   These condensed consolidated interim financial statements have been prepared under the supervision of 
   Owen Cressey CA(SA), the AVI Group Chief Financial Officer.  


ADMINISTRATION AND PRINCIPAL SUBSIDIARIES

Administration 
Company registration
AVI Limited ("AVI")
Reg no: 1944/017201/06
Share code: AVI
ISIN: ZAE000049433

Company Secretary
Sureya Naidoo

Business address and registered office
2 Harries Road
Illovo
Johannesburg 2196
South Africa

Postal address
PO Box 1897
Saxonwold 2132
South Africa

Telephone: +27 (0)11 502 1300
Telefax: +27 (0)11 502 1301
E-mail: info@avi.co.za
Website: www.avi.co.za

Auditors
KPMG Inc.

Sponsor
The Standard Bank of South Africa Limited

Commercial bankers
Standard Bank
FirstRand Bank

Transfer secretaries
Computershare Investor Services Proprietary Limited
Business address
Rosebank Towers
15 Biermann Avenue
Rosebank
Johannesburg 2196

Postal address
PO Box 61051
Marshalltown 2107
South Africa
Telephone: +27 (0)11 370 5000
Telefax: +27 (0)11 370 5271

Principal subsidiaries
Food & Beverage Brands
National Brands Limited
Reg no: 1948/029389/06
(incorporating Entyce Beverages and Snackworks)

30 Sloane Street
Bryanston 2021

PO Box 5159
Rivonia 2128

Managing director
Gaynor Poretti (Entyce Beverages and Snackworks)
Telephone: +27 (0)11 707 7200
Telefax: +27 (0)11 707 7799

I&J
Irvin & Johnson Holding Company Proprietary Limited
Reg no: 2004/013127/07

1 Davidson Street
Woodstock
Cape Town 7925

PO Box 1628
Cape Town 8000

Managing director
Jonty Jankovich
Telephone: +27 (0)21 440 7800
Telefax: +27 (0)21 440 7270

Fashion Brands
Personal Care
Indigo Brands Proprietary Limited
Reg no: 2003/009934/07

16 - 20 Evans Avenue
Epping 1 7460

PO Box 3460
Cape Town 8000

Managing director
Robert Lunt
Telephone: +27 (0)21 507 8500
Telefax: +27 (0)21 507 8501

Footwear & Apparel
A&D Spitz Proprietary Limited
Reg no: 1999/025520/07

29 Eaton Avenue 
Bryanston 2021

PO Box 782916
Sandton 2145

Acting managing director
Simon Crutchley 
Telephone: +27 (0)11 707 7300
Telefax: +27 (0)11 707 7763

Green Cross Manufacturers Proprietary Limited 
Reg no: 1994/08549/07

26 - 30 Benbow Avenue
Epping Industria
7460

PO Box 396
Epping Industria 7475

Managing director
Tracey Chiappini-Young
Telephone: +27 (0)21 507 9700
Telefax: +27 (0)21 507 9707

DIRECTORS
Executive
Simon Crutchley (Chief Executive Officer)
Owen Cressey (Chief Financial Officer)
Michael Koursaris (Business Development Director)

Independent non-executive
Gavin Tipper1 (Chairman)
James Hersov2
Adriaan Nühn1, 4
Mike Bosman2
Andisiwe Kawa1
Abe Thebyane1
Neo Dongwana2, 3
Richard Inskip5

1 Member of the Remuneration, Nomination and Appointments Committee
2 Member of the Audit and Risk Committee
3 Member of the Social and Ethics Committee
4 Dutch
5 Resigned 23 November 2016

For more information, please visit our website: www.avi.co.za

6 March 2017
Date: 06/03/2017 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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