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PREMIER FISHING AND BRANDS LIMITED - Unaudited condensed consolidated interim results for the six months ended 28 February 2019 and dividend declaration

Release Date: 09/04/2019 16:30
Code(s): PFB     PDF:  
 
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Unaudited condensed consolidated interim results for the six months ended 28 February 2019 and dividend declaration

PREMIER FISHING AND BRANDS LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1998/018598/06
Share code: PFB and ISIN: ZAE000247516
(“PFB” or “the Company”or “the Group” or "Premier”)

UNAUDITED CONDENSED CONSOLIDATED INTERIM RESULTS FOR THE SIX MONTHS ENDED 28 FEBRUARY 2019 AND DIVIDEND DECLARATION

Group Profile

Premier Fishing and Brands Limited through its subsidiaries operates a vertically integrated fishing business which specialises in the
harvesting, processing and marketing of fish and fish-related products. The Group holds medium to long-term fishing rights in squid,
lobster, small pelagics, hake deep-sea trawl, hake longline ,horse mackerel, swordfish and tuna. The Group also owns an abalone farm
and invests in organic fertilisers through the “Seagro” range of products.

Highlights compared to the prior period:

- Revenue increased by 55% to R287 million from R185 million.
- Gross profit increased by 72% to R130 million from R76 million.
- Operating profit increased by 200% to R60 million from R20 million.
- Profit before tax increased by 78% to R73 million from R41 million.
- Cash generated from operations for the period amounted to R55 million.
- A maiden interim gross dividend of 12 cents per share has been declared after the reporting period, but before the financial
  statements were authorized for issue.

The Group delivered a strong performance for the period under review, with revenue increasing by 55% and operating profit increasing by
200% compared to the previous period.

Group headline earnings increased by 22% to R35 million from R29 million Headline earnings per share (“HEPS”) increased to 13.49 cents per
share from 11.10 cents per share and earnings per share (“EPS”) increased to 13.44 cents per share from 11.10 cents per share.

Cash generated from operations for the period amounted to R55 million, compared to cash used in operations of R22 million in the prior
period.

The acquisition of Talhado Fishing Enterprises Propriety Limited(“Talhado”) into the Group is now fully accounted for and the benefits of
the acquisition has contributed positively to our results under review.

The increase in operating profit is mainly attributable to the strong performance of the squid division.

Our abalone division continued to deliver results in line with management’s expectations, whilst we continue to focus on our expansion
plans with increased performance expected to be achieved once the expansion of the abalone farm is completed.

During the current interim reporting period, the carrying value of property, plant and equipment increased from R310 million to R368 million,
the majority of which is attributed to the abalone farm expansion.

Condensed Consolidated Statement of Profit or loss and Other Comprehensive Income
for the six months ended 28 February 2019

                                                                                                  Unaudited        Unaudited          Audited
                                                                                                      Group            Group            Group
                                                                                                28 February      28 February        31 August
                                                                                                       2019             2018             2018
                                                                                                   6 months         6 months        12 months
                                                                                                      R’000            R’000            R’000
Revenue                                                                                             286 920          184 580          490 870
Cost of sales                                                                                     (156 793)        (108 763)        (280 651)
Gross profit                                                                                        130 127           75 817          210 219
Other operating income                                                                                7 388              672           19 523
Other operating expenses                                                                           (76 703)         (56 220)        (138 161)
Operating profit                                                                                     60 812           20 269           91 581
Investment revenue                                                                                   14 685           22 325           40 975
Finance costs                                                                                       (2 013)          (1 343)          (3 543)
Profit before taxation                                                                               73 484           41 251          129 013
Taxation                                                                                           (18 775)         (12 401)         (33 672)
Profit after taxation for the period                                                                 54 709           28 850           95 341
Total comprehensive income for the period                                                            54 709           28 850           95 341

Profit after tax attributable to:
Shareholders of Premier                                                                              34 940            28 850          81 858
Non-controlling interests                                                                            19 769                -           13 483
Profit after taxation for the period                                                                 54 709            28 850          95 341

Basic and diluted earnings per share (cents)                                                          13.44             11.10           31.48
Headline and diluted headline earnings per share (cents)                                              13.49             11.10           31.60
Weighted average number of shares (OOOs)                                                            260 000           260 000         260 000


Condensed Consolidated Statement of Financial Position as at 28 February 2019
                                                                                                  Unaudited        Unaudited          Audited
                                                                                                      Group            Group            Group
                                                                                                28 February      28 February        31 August
                                                                                                       2019             2018             2018
                                                                                                   6 months         6 months        12 months
                                                                                                      R’000            R’000            R’000
Assets
Non-current assets                                                                                  568    374        290 033         509   625
Property, plant and equipment                                                                       367    718        173 969         310   242
Goodwill                                                                                             70    129         18 165          70   129
Intangible assets                                                                                    36    310             66          39   550
Loans to group companies                                                                             94    131         97 821          89   618
Deferred tax                                                                                                86             12                86

Current assets                                                                                      524 959           654 770         599 460
Inventories                                                                                          48 865            48 861          48 528
Other financial assets                                                                                4 685            10 665           3 424
Current tax receivable                                                                                  260               154             264
Trade and other receivables                                                                         128 612           104 825         128 643
Construction deposits                                                                                     -             8 951               -
Biological assets                                                                                    76 015            55 872          68 021
Cash and cash equivalents                                                                           266 522           425 442         350 580


Total assets                                                                                      1 093 333           944 803       1 109 085

Equity and liabilities
Equity
Stated capital                                                                                      507    517        507 517         507   517
Reserves                                                                                              8    014          8 014           8   014
Retained income                                                                                     268    364        245 416         298   424
Equity attributable to shareholders of Premier                                                      783    895        760 947         813   955
Non-controlling interests                                                                            43    032              -          48   481
Total equity                                                                                        826    927        760 947         862   436

Non-current liabilities                                                                             120 108            87 062         116 134
Other financial liabilities                                                                           4 550             6 564           4 663
Operating lease liability                                                                               313               788             333
Post-employment medical costs                                                                           854             1 111             984
Deferred tax                                                                                        114 391            78 599         110 154

Current liabilities                                                                                 146    298         96   794       130   515
Other financial liabilities                                                                          36    215          3   178         6   712
Current tax payable                                                                                  20    750         23   201        19   186
Trade and other payables                                                                             84    689         42   151        89   937
Provisions                                                                                            4    644          4   492        14   680
Bank overdraft                                                                                               -         23   772               -


Total liabilities                                                                                   266 406          183 856          246 649
Total equity and liabilities                                                                      1 093 333          944 803        1 109 085
Net asset value per share (cents)                                                                    318.05           292.67           331.71
Weighted average number of shares in issue                                                      260 000 000      260 000 000      260 000 000


Condensed Consolidated Statement of Changes in Shareholder’s Equity for the six months ended 28 February 2019

                                                                                                   Unaudited        Unaudited        Audited
                                                                                                       Group            Group          Group
                                                                                                 28 February      28 February      31 August
                                                                                                        2019             2018           2018
                                                                                                    6 months         6 months      12 months
                                                                                                       R'000            R'000          R'000
Balance at the beginning of the year                                                                        862 436              771 097    771 097
Non-controlling interests arising on acquisition of Talhado                                                       -                    -     50 662
Acquisition of additional shares from non-controlling interests
in subsidiaries of Talhado                                                                                        -                 -      (15 664)
Profit for the year attributable to shareholders of Premier                                                  34 940            28 850        81 858
Profit for the year attributable to non-controlling interests                                                19 769                 -        13 483
Dividends                                                                                                  (90 218)          (39 000)      (39 000)
Balance at the end of the year                                                                              826 927           760 947       862 436
Comprising of:
Stated capital                                                                                              507    517           507 517    507   517
Reserves                                                                                                      8    014             8 014      8   014
Retained income                                                                                             268    364           245 416    298   424
Non-controlling interests                                                                                    43    032                 -     48   481
Total equity                                                                                                826    927           760 947    862   436

Condensed Consolidated Statement of Cash Flows for the six months ended 28 February 2019

                                                                                                      Unaudited             Unaudited        Audited
                                                                                                          Group                 Group          Group
                                                                                                    28 February           28 February      31 August
                                                                                                           2019                  2018           2018
                                                                                                       6 months              6 months      12 months
                                                                                                          R’000                 R’000          R’000
Cash (used in)/generated from operations                                                                 54 621              (21 731)         91 187
Interest income                                                                                           9 010                15 537         29 448
Finance cost                                                                                            (2 013)               (1 343)        (3 543)
Tax paid                                                                                               (13 141)               (4 644)       (54 820)
Net cash flows from operating activities                                                                 48 477              (12 181)         62 272

Cash flows from investing activities
Purchases of property, plant and equipment to sustain operations                                       (22 077)              (26 488)       (28 837)
Purchases of property, plant and equipment to expand operations                                        (45 679)              (25 026)       (86 803)
Purchases of intangible assets                                                                             (16)                   (7)        (1 862)
Purchase of biological assets                                                                           (2 994)                     -          (520)
Business combinations                                                                                         -                     -       (61 239)
Acquisition of additional shares from non-controlling interests in
subsidiaries of Talhado                                                                                       -                             (15 664)
Loans advanced to group companies                                                                      (36 868)              (20    794)    (58 721)
Loans to group companies repaid                                                                          37 550               11    520       60 720
Financial assets advanced                                                                               (1 261)               (8    959)       (341)
Net cash flows from investing activities                                                               (71 345)              (69    754)   (193 267)



Cash flows from financing activities
Proceeds received from financial liabilities                                                             31 362                     -            942
Repayment of other financial liabilities                                                                (2 334)               (1 328)        (4 300)
Dividends paid                                                                                         (90 218)              (39 000)       (39 000)
Net cash flows from financial activities                                                               (61 190)              (40 328)       (42 358)

Total cash movement for the year                                                                       (84 058)             (122 263)      (173 353)
Cash at the beginning of the year                                                                       350 580               523 933        523 933
Total cash at the end of the year                                                                       266 522               401 670        350 580

1.STATEMENT OF COMPLIANCE AND BASIS OF PREPARATION

The unaudited condensed consolidated interim financial statements have been prepared and presented in accordance with International
Accounting Standard 34 (“IAS34”), the Listings Requirements of the JSE Limited (“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 unaudited condensed consolidated interim financial statements have been prepared on the going concern basis and historical cost
bases, except where otherwise indicated.

2.ACCOUNTING POLICIES

The accounting policies applied in the preparation of the condensed consolidated 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 2018, except for the adoption of accounting
policies described below.


3.ADOPTION OF NEW ACCOUNTING STANDARDS

During the reporting period the Group adopted the newly effective accounting standards, namely:

IFRS 9: Financial Instruments.

  -         IFRS 9 Financial Instruments (replacing IAS 39 Financial Instruments: Recognition and Measurement) is applicable to the Group
            for the 2019 annual reporting period, with the first application in the interim Group financial statements.

  -         The completed standard comprises guidance on the classification and measurement of financial assets and liabilities, and the
            introduction of the expected credit loss model (ECL) with respect to the measurement of impairment allowances for financial
            assets.

Effect of transition

  -        The Group has transitioned to IFRS 9 retrospectively, with any cumulative material impact being recognised in opening retained
           income as a result of the initial application of IFRS 9. Comparative information has therefore not been restated.

Classification
  -     IFRS 9 introduces a new approach to the classification of financial assets, which is driven by the business model in which the
        asset is held and their cash flow characteristics.

  -        There was no material impact on classification of financial assets nor financial liabilities.

Impairment

  -        The new standard introduces a single “expected credit loss” impairment model for the measurement of financial assets.

  -        The Group has assessed the impact of IFRS 9 including the application of the expected credit loss (ECL) model for the measurement
           of the impairment allowance of our trade and other receivables (through the application of the simplified approach)as well as
           loans to Group Companies.

Trade Receivables
   -   In terms of IAS 39, trade and other receivables were impaired when there was objective evidence of default.
       IFRS 9 dictates that the impairment is based on the lifetime expected credit losses on trade and other receivables.

      -    The Group has established a provision matrix that is based on historical credit loss experience, adjusted for forward looking
           factors specific to trade and other receivables including the economic environment.

Loan receivables
   -   The Group has adopted the general approach, which takes into account the three-stage approach, with respect to the recognition
       of credit losses being:

                                                   Stage 1                          Stage 2                         Stage 3
Description                            Credit risk has not                  Credit risk has                 Credit-impaired
                                   increased significantly      not increased significantly
                                 since initial recognition        since initial recognition

Recognition
of ECLs                                       12-month ECL                     Lifetime ECL                       Lifetime ECL

Recognition
of interest                             Effective interest            Effective interest on        Effective interest on
                                  on gross carrying amount            gross carrying amount          net carrying amount


      -   At each reporting date, the Group assess whether financial assets classified as amortised cost are credit impaired. Loans
          receivables are credit impaired when one or more events identified has a detrimental impact on the estimated future cash flows.

      -   The Group’s definition of credit impaired is aligned to its internal credit risk definition of default, namely a failure to make
          payment when due.

      -   As at the reporting date, credit risk has not increased significantly since initial recognition (“Stage 1), and therefore a 12
          month ECLs has been determined, which is not material.

Based on our assessment, the application of IFRS 9 had no material impact on the reported earnings or financial position for the interim
period under review.
IFRS 15: Revenue from contracts with customers.

   -   IFRS 15 replaces all existing revenue requirements in IFRS and applies to all revenue arising from contracts with customers, unless
       the contracts are in the scope of the standards on leases, insurance contracts and financial instruments.

   -   The core principle of the standard is that revenue recognised reflects the consideration to which the Company expects to be entitled
       in exchange for the transfer of promised goods or services to the customer. The standard incorporates a five-step analysis to
       determine the amount and timing of revenue recognition.


Effect of transition

   - The Group has transitioned to IFRS 15 by applying the standard retrospectively with the cumulative effect of initial application
     recognised as an adjustment to the opening balance of retained income in accordance with Para C7 of IFRS 15. Comparatives have
     therefore not been restated.

   - However, given the nature of revenue streams and contracts with customers, the adoption of the standard did not materially affect the
     manner of revenue recognition, and therefore no adjustment is required to opening retained income at the date of initial application.

   - IFRS 15 uses the terms ‘contract liability’ to describe what might more commonly be known as ‘accrued revenue’ and ‘deferred revenue’.
     The Group has adopted the terminology used in IFRS 15 to describe such balances.

   - No financial statement line item has been significantly affected in the current reporting period by the application of IFRS 15, as
     compared to IAS 18.


4. RESPONSIBILITY FOR THE UNAUDITED CONDENSED CONSOLIDATED INTERIM RESULTS

The condensed consolidated interim financial statements have been prepared by Brent Robertson CA(SA), Head of Finance under the supervision
of Imraan Moosa CA(SA), the Financial Director and were not reviewed nor audited by the Group's external auditors, BDO Cape Inc.


5. SEGMENTAL ANALYSIS
                                                 Segment Revenue                                            Segment Profit before tax
                                           Unaudited     Unaudited             Audited               Unaudited     Unaudited      Audited

                                         28 February     28 February         31 August             28 February    28 February        31 August
                                                2019             2018             2018                    2019           2018             2018
                                            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                                       58   663         89   170        202   318                15 728         18 173           53 941
Pelagics                                      18   512         20   101         62   904                 3 902          4 212           16 379
Hake                                          13   429         15   644         31   492                 5 021          5 046            8 893
Squid                                        171   661         30   627        128   169                59 593          8 338           58 018
Abalone                                       16   199         15   337         31   291                 4 748          4 615           12 175
Horse mackerel                                     231              569              879                   231            569              879
Cold storage                                   5   623          5   378         10   453                   448            387              359
Seagro                                         3   955          2   885          5   790                   918            712            1 193
Processing and marketing                       1   676          6   963         23   486                   306          1 045            5 503
                                             289   949        186   674        496   782                90 895         43 097          157 340
Less:
inter segmental sales                        (3 029)          (2 094)          (5 912)
Administration and support services                                -                                  (35 083)       (24 378)         (78 937)
Fair value gains                                                   -                                     5 000          1 550           13 178
Interest income                                                    -                                    14 685         22 325           40 975
Finance costs                                                      -                                   (2 013)        (1 343)          (3 543)
Total
                                             286 920           184 580          490 870                 73 484         41 251          129 013


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. This is the measure that is reported to the chief operating decision-maker for the
purposes of assessing the segment performance and resource allocation. The accounting policies of the reportable segments are the same
as the Group’s accounting policies.

Segmental assets
                                                                                                                      Unaudited          Unaudited      Audited
                                                                                                                    28 February        28 February    31 August
                                                                                                                           2019               2018         2018
                                                                                                                       6 months           6 months    12 months
                                                                                                                          R’000              R’000        R’000
Lobster                                                                                                                  69 119             85 245       77 566
Pelagics                                                                                                                 90 887            100 478      103 806
Hake                                                                                                                      6 290              5 214       11 457
Squid                                                                                                                   220 066             26 140      220 602
Abalone                                                                                                                 229 023            115 508      190 774
Cold storage                                                                                                              1 035                619          839
Seagro                                                                                                                    1 915              2 954        3 193
Processing and marketing                                                                                                 24 080             35 648       19 522
Administration and support services                                                                                     450 832            572 985      481 240
Total segment assets                                                                                                  1 093 247            944 791    1 108 999
Unallocated                                                                                                                  86                 12           86
Consolidated total assets                                                                                             1 093 333            944 803    1 109 085


Segmental liabilities
                                                                                                                      Unaudited          Unaudited      Audited
                                                                                                                    28 February        28 February    31 August
                                                                                                                           2019               2018         2018
                                                                                                                       6 months           6 months    12 months
                                                                                                                          R’000              R’000        R’000
Lobster                                                                                                                  18 317             15 340       15 877
Pelagics                                                                                                                  5 297              8 852       11 600
Hake                                                                                                                      4 698              3 698        5 347
Squid                                                                                                                    43 249              8 635       25 665
Abalone                                                                                                                   6 637              1 950       16 290
Processing and marketing                                                                                                 10 687              6 677       14 980
Administration and support services                                                                                      63 130             60 105       46 736
Total segment liabilities                                                                                               152 015            105 257      136 495
Unallocated                                                                                                             114 391             78 599      110 154
Consolidated total liabilities                                                                                          266 406            183 856      246 649

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:
                                                                          Depreciation and                              Additions to property, plant
                                                                            amortisation                                       and equipment
                                                               Unaudited          Unaudited             Audited        Unaudited     Unaudited       Audited
                                                             28 February        28 February           31 August      28 February   28 February    31 August
                                                                    2019               2018                2018             2019          2018          2018
                                                                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                                                            2 733              2 684               4 994            7 271        12 772        12 470
Pelagics                                                           2 953              3 739               5 648           11 339        12 414        14 234
Squid                                                              6 684                 390              5 237              504           389         1 292
Abalone                                                            1 630                 565              1 051           45 711        25 890        87 625
Cold storage                                                          38                  40                 40                -             -             -
Seagro                                                               146                 108                135                -             -             -
Processing and marketing                                               1                   -                  -                -             -            17
Administration and
support services                                                       162                   127            380              2 931               49         762
Total                                                               14 347                 7 653         17 485             67 756           51 514     116 400



Revenue per region
                                                               Unaudited          Unaudited             Audited
                                                             28 February        28 February           31 August
                                                                    2019               2018                2018
                                                                6 months           6 months           12 months
                                                                   R’000              R’000               R’000
United States of America                                          45 278             63 277             128 058
Far East                                                          26 788             41 546             154 998
Europe                                                           185 090             43 230             107 934
South Africa                                                      29 764             36 527              99 880
Total                                                            286 920            184 580             490 870
6. ACQUISITIONS OF PROPERTY, PLANT AND EQUIPMENT
During the current interim reporting period, the carrying value of property, plant and equipment increased from R310 million to R368 million,
the majority of which is attributed to the abalone farm expansion.


7. RECONCILIATION OF HEADLINE EARNINGS
                                                          Unaudited      Unaudited        Audited
                                                        28 February    28 February      31 August
                                                               2019           2018           2018
                                                           6 months       6 months      12 months
                                                              R’000          R’000          R’000
Earnings attributable to ordinary
equity holders of parent entity                               34 940        28 850         81 858
Adjusted for:
- Effect of (profit) loss on disposal
  of property, plant and equipment                               199             -            409
- Taxation effect                                               (56)             -          (115)
Headline earnings                                             35 083        28 850         82 152
Weighted average number of shares
on which earnings and headline earnings
per share is based                                      260 000 000    260 000 000    260 000 000
Headline earnings per share (cents)                           13.49          11.10          31.60


8. RELATED PARTY TRANSACTIONS
During the period under review, in the ordinary course of business, the Group entered into related party transactions, the substance of
which is disclosed in the Group's 2018 Annual Financial Statements.


9. SUBSEQUENT EVENTS
A maiden gross interim dividend of 12 cents per share has been declared after the reporting period but before the financial statements were
authorised for issue.

Furthermore, the directors are not aware of any other material facts or circumstances which occurred between the statement of financial
position date and the date of approval.

10. DIVIDENDS                                              R’000
Dividend declared after reporting date*                    31 200
Dividends per share (cents)                                    12
*These dividends were declared subsequent to the respective reporting period.

DECLARATION OF CASH DIVIDEND
Notice is hereby given that an interim gross dividend of 12 cents per share has been declared out of income reserves in respect of ordinary
shares of no par value for the six months ended 28 February 2019.

A dividend withholding tax of 20% or 2.4 cents per share will be applicable, resulting in a net dividend of 9.6 cents per share, unless the
shareholder is exempt from paying dividend withholding tax or is entitled to a reduced rate in terms of an applicable double-tax agreement.

The issued share capital at the declaration date is 260 000 000 ordinary shares.

The income tax number of the company is 924 603 6033.

Dates of importance:
- Last day to trade in order to participate in the dividend                           Monday, 29    April   2019
- Shares trade ex dividend                                                           Tuesday, 30    April   2019
- Record date                                                                            Friday,    3 May   2019
- Payment date                                                                           Monday,    6 May   2019

Share certificates may not be dematerialised or rematerialised between Tuesday, 30 April 2019, and Friday 3 May 2019, both days inclusive.

11. CHANGES TO THE BOARD OF DIRECTORS
As previously reported on the JSE Stock Exchange News Service, the following changes to the Board of Directors were effected:

- Reverend Dr Vukile Charles Mehana resigned as on independent non-executive director with effect from 14 March 2019. The Board expresses
  its appreciation and wishes Dr Vukile Charles Mehana the very best for his future endeavours.
- Mr Isaiah Tatenda Bundo has taken up an executive role within an associate of the Group, and hence has stepped down as Chief Financial
  Officer (“CFO”) with effect from 21 January 2019. The Board would like to thank Tatenda for his valuable contribution and wishes him
  well in his new role.
- Mr Imraan Yousuf Moosa has subsequently been appointed as CFO with effect from 21 January 2019.
- Ms Cherie Felicity Hendricks did not make herself available for re-election to the Board of directors at the Company’s annual general meeting.
  on 19 February 2019, and therefore resigned as a director of the Company with effect from 19 February 2019. The Board wishes Ms Hendricks all
  of the very best and success going forward.

12. APPROVAL OF INTERIM FINANCIAL STATEMENTS
The Condensed Consolidated Interim results were authorised for issue by the Company’s Board of Directors.

13. AUDIT OPINION
The Condensed Consolidated Interim results have not been reviewed nor audited by the Group’s auditors, BDO Cape Inc.


REVIEW OF OPERATIONS

Lobster

The 2018/19 total allowable catch (“TAC”) for South Coast Rock Lobster (“SCRL”) is 316 tons which resulted in a slight reduction from the prior
year’s TAC of 331 tons. The quota which is available to Premier is 129 tons (2018: 135 tons). The South Coast rock lobster specie remains a
stable fishery and well managed resource.

Our South Coast Rock Lobster brand is a top leading brand in the US market due to its high quality standards and is therefore we are able to
attract premium prices. The favourable size mix resulted in the Group achieving an increase of 4% in US dollar pricing for SCRL as compared
to the prior period. The Group experienced increased landings due to good catch rates for the lobster division.

The West Coast Rock Lobster (“WCRL”) sector remains a challenge for the industry and Premier Fishing currently contributes positively as
an industry player to ensure that the resource remains sustainable for the foreseeable future. The WCRL’s contribution to revenue and profits
of the Group is less than 10%.

Small Pelagics

The Group’s quota allocation for pilchards were not issued for the reporting period.

Industrial fish catch rates were the same as those experienced in the prior year.
The Group had less fishing days for the current period as compared to the prior period which resulted in lower volumes landed and lower
revenues and profit for the division in the current period. However, the Group expects the landings at year end to improve, which will
contribute positively to the divisional performance by year end.

The pilchard quota for the 2019 fishing season commenced in March 2019, and its performance will be reported on during the second half
of the year.

Squid

The squid division delivered strong returns for the period, even though catch rates were down compared to the same period in the prior
period. The Squid division with the acquisition of Talhado contributes significantly towards the revenue contribution. In the prior
period the contribution from the squid division was less than 20%.
The market for South African squid remains strong, with a steady increase in the average Euro selling price.
The good catch rates, steady increase in the average Euro selling price and consolidation of Talhado, contributed to the increase in
operating profits for the division.

Hake

The Group’s hake quota is caught, processed and marketed through a joint operation with Blue Continents Products. The division continues
to deliver good performance with the division experiencing favourable size mixes as part of its catches. Market prices remained
relatively stable resulting in the division maintaining its margins.

Abalone

The Group remained focused with the expansion of the abalone farm with a target holding capacity between 300 to 350 tons upon completion.
The division increased its spat (“Baby Abalone”) production from an average of 100 000 spat per month to an average of 200 000 spat per
month, when compared to the previous period. The hatchery continues to produce good quality spat which provides a good platform for our
planned expansion in production output.

Sales volumes for the period remained similar to that of the prior period, as the farm continues to strategically grow out abalone to a
larger size, in order to meet market demand, and thereby maximising the value received for our abalone.

Horse Mackerel

The Group was awarded a horse mackerel quota of 800 tons during the Fishing Rights Application Process 2015/2016. The Group’s horse
mackerel quota is caught, processed and marketed by Dessert Diamond Fishing (Pty) Ltd.

Seagro

Seagro is an organic fertiliser produced from fish oil which is a by-product of the fishmeal making process. The division performed in
line with management’s expectation, with sales volumes slightly increasing when compared to the prior period, with profitability
remaining relatively stable when compared to the prior period.
Future Prospects

The future outlook of the Group is a positive one, as the Group is well positioned to create and maintain shareholder value through
organic and acquisitive growth, thereby ensuring delivery on our stakeholder commitments.

Our main strategic focus area is the FRAP 2020 process, with the Group continuing to be well positioned for the   2020 Fishing Rights
Application Process (FRAP).

The abalone farm expansion continues to progress well and upon completion, production capacity will increase from 120 tons to between 300
and 350 tons per annum.

The Group continues to pursue strategic acquisitions within the fishing industry, in line with its growth strategy.

Reporting entity

Premier is a Company domiciled in South Africa. These condensed unaudited consolidated interim financial statements (“interim financial
statements”) for the six months ended 28 February 2019, comprises of the Company, its subsidiaries and interests in
joint ventures operations.

Appreciation

We wish to thank our employees, 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.


Salim Young                                                         Mr Mogamat Samir Saban
Independent Non-executive Deputy Chairman                           Chief Executive Officer

Cape Town
9 April 2019


DIRECTORATE AND STATUTORY INFORMATION

Directors
#*Salim Young (Independent Non-Executive Deputy Chairman); #*Khalid Abdulla; *Mogamat Samir Saban (Chief Executive Officer); *Imraan Yousuf
Moosa; *Rushaan Isaacs; #*Rosemary Phindile Mosia;#*Aziza Begum Amod; #*Clifford Leonard van der Venter; #* Advocate Ngoako Ramatlhodi,
#*Sebenzile Patrick Mngconkola

*Executive directors
#* Non-Executive directors


Company Secretary:      Mohamed Wazeer Moosa

Registered address:     No.3 South Arm Road, Victoria Basin, Victoria and Alfred Waterfront, Cape Town, Western Cape, 8002

Email:                  wazeerm@premfish.co.za

Transfer secretaries:   Link Market Services South Africa (Pty) Ltd,
                        Rennie House, 13th Floor, 19 Ameshoff Street, Braamfontein, 2001

Auditors:               BDO Cape Incorporated
                        6th Floor, 123 Hetzog Boulevard, Cape Town, 8001
                        (PO Box 2275, Cape Town, 8000)

Sponsor:                Vunani Capital

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