| Fri 9 Nov 2007, 15:59 | | OCE / OCG - Oceana Group - Reviewed Group Results |
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OCE
OCE
OCE / OCG - Oceana Group - Reviewed Group Results And Dividend Declaration For
The Year Ended 30 September 2007 And Further Cautionary Announcement
OCEANA GROUP LIMITED
JSE Share Code: OCE
NSX Share Code: OCG
ISIN Number: ZAE000025284
Incorporated in the Republic of South Africa
(Registration Number 1939/001730/06)
REVIEWED GROUP RESULTS AND DIVIDEND DECLARATION FOR THE YEAR ENDED
30 SEPTEMBER 2007 AND FURTHER CAUTIONARY ANNOUNCEMENT
The results of the group for the year ended 30 September 2007 are set out
herein.
This report has been prepared in compliance with International Financial
Reporting Standards (IFRS) applicable to Interim Financial Reporting (IAS 34)
and in accordance with the principles applied in the most recently published
Annual Financial Statements.
The financial information has been reviewed by our auditors, Deloitte & Touche,
whose unmodified review opinion is available for inspection at the registered
office of the company.
Oceana Group Limited
Registered Office: 16th Floor Metropolitan Centre, 7 Coen Steytler Avenue,
Cape Town, 8001
Transfer Secretaries: Computershare Investor Services 2004 (Pty) Limited, 70
Marshall Street, Johannesburg, 2001 (PO Box 61051,
Marshalltown, 2107)
Sponsors:
South Africa: The Standard Bank of South Africa Limited
Namibia: Old Mutual Investment Services (Namibia) (Pty) Limited
Directors: MA Brey (Chairman), RA Williams (Vice Chairman),
AB Marshall* (Chief Executive Officer), ABA Conrad*, N Dennis, NP Doyle,
Z Fuphe, RG Nicol*, S Pather, F Robertson (*Executive)
Company Secretary: JD Cole
CONDENSED GROUP INCOME STATEMENT
2007 2006
Reviewed Audited Change
Note R`000 R`000 %
Revenue 2,608,894 2,544,558 3
Operating profit before abnormal items 236,723 183,325 29
Abnormal items 1 2,549 (5,882)
Operating profit 239,272 177,443 35
Dividends received 15,922 6,151
Net interest received 11,181 23,340
Profit before taxation 266,375 206,934 29
Taxation 85,869 70,088 23
Profit after taxation 180,506 136,846 32
Attributable to:
Shareholders of Oceana Group Limited 168,805 129,791 30
Outside shareholders in subsidiaries 11,701 7,055 66
180,506 136,846 32
Weighted average number of shares on
which earnings per share are based (000`s) 2 100,866 113,099
Adjusted weighted average number of shares
on which diluted earnings per share
are based (000`s) 101,017 113,426
Earnings per share (cents)
Basic 167.4 114.8 46
Diluted 167.1 114.4 46
Dividends per share (cents) 106.0 74.0 43
Headline earnings per share (cents)
Basic 162.4 112.8 44
Diluted 162.2 112.5 44
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
2007 2006
Reviewed Audited
R`000 R`000
Balance at the beginning of the year 818,830 916,344
Shares issued 16,087 9,377
Increase in treasury shares
held by subsidiary and share trusts (36,805) (177,763)
Movement on foreign currency
translation reserve 2,332 19,140
Recognition of share-based payments 5,634 2,613
Profit after taxation 180,506 136,846
(Loss) profit on sale of treasury shares (46) 205
Dividends declared (81,016) (87,932)
Balance at the end of the year 905,522 818,830
Comprising:
Share capital and premium 4,267 101
Foreign currency translation reserve 25,350 23,018
Share-based payment reserve 16,818 11,232
Capital redemption reserve 130 90
Distributable reserves 824,938 760,569
Outside shareholders interest 34,019 23,820
Total 905,522 818,830
CONDENSED GROUP BALANCE SHEET
2007 2006
Reviewed Audited
R`000 R`000
Assets
Non-current assets 460,724 511,305
Property, plant and equipment 273,413 316,457
Goodwill 22,830 21,911
Fishing rights and trademarks 32,682 40,109
Deferred taxation 10,438 12,850
Investments and loans 121,361 119,978
Current assets 1,041,655 826,327
Inventories 312,470 219,224
Accounts receivable 412,073 403,486
Non-current assets held for sale 602 4,950
Cash and cash equivalents 316,510 198,667
Total assets 1,502,379 1,337,632
Equity and liabilities
Capital and reserves
Share capital and premium 4,267 101
Foreign currency translation reserve 25,350 23,018
Share-based payment reserve 16,818 11,232
Capital redemption reserve 130 90
Distributable reserves 824,938 760,569
Interest of own shareholders 871,503 795,010
Interest of outside shareholders 34,019 23,820
Total equity 905,522 818,830
Non-current liabilities 39,584 30,961
Liability for share-based payments 6,999 1,087
Deferred taxation 32,585 29,874
Current liabilities 557,273 487,841
Accounts payable and provisions 459,132 415,895
Bank overdrafts 98,141 71,946
Total equity and liabilities 1,502,379 1,337,632
Number of shares in issue net of treasury
shares (000`s) 100,278 101,493
Net asset value per ordinary share (cents) 869 783
Total liabilities excluding deferred
taxation total equity (%) 62 60
Total borrowings:
interest of own shareholders (%) 11 9
CONDENSED GROUP CASH FLOW STATEMENT
2007 2006
Reviewed Audited
R`000 R`000
Cash flows from operating activities
Operating profit before abnormal items 236,723 183,325
Adjustment for non-cash items 78,423 60,777
Cash operating profit before working
capital changes 315,146 244,102
Working capital changes (44,475) 50,606
Cash generated from operations 270,671 294,708
Interest and dividends received 24,472 34,650
Interest paid (8,675) (5,159)
Taxation paid (74,378) (46,960)
Dividends paid (83,128) (86,034)
Net cash flows from operating activities 128,962 191,205
Cash outflow from investing activities (700) (167,811)
Capital expenditure (28,041) (94,276)
Proceeds on disposal of property, plant
and equipment 1,854 1,639
Net movement on loans and advances 14,291 12,789
Disposal of businesses 7,830 -
Disposal of fishing rights 3,366 -
Investment in preference shares - (88,000)
Other - 37
Net cash flows applied to financing
activities (33,286) (174,894)
Proceeds from issue of share capital 16,087 9,377
Proceeds on sale of treasury shares 264
Acquisition of treasury shares by subsidiary
and share trusts (36,805) (177,822)
Short-term borrowings repaid (12,568) (6,713)
Net increase (decrease) in cash and cash
equivalents 94,976 (151,500)
Cash and cash equivalents at the beginning
of the year 126,721 283,195
Effect of exchange rate changes (3,328) (4,974)
Cash and cash equivalents at the end of the year 218,369 126,721
CONDENSED GROUP SEGMENTAL REPORT
2007 2006
Reviewed Audited
R`000 R`000
Revenue
Inshore fishing 1,409,041 1,318,949
Midwater and deep-sea fishing 1,023,667 1,071,362
Commercial cold storage 176,186 154,247
Total 2,608,894 2,544,558
Operating profit before abnormal items
Inshore fishing 105,862 77,939
Midwater and deep-sea fishing 73,587 46,705
Commercial cold storage 57,274 58,681
Total 236,723 183,325
Total assets
Inshore fishing 604,834 563,887
Midwater and deep-sea fishing 280,829 264,306
Commercial cold storage 168,407 177,944
Financing 437,871 318,645
1,491,941 1,324,782
Deferred taxation 10,438 12,850
Total 1,502,379 1,337,632
Total liabilities
Inshore fishing 293,596 278,909
Midwater and deep-sea fishing 135,320 90,756
Commercial cold storage 35,979 41,693
Financing 99,377 77,570
564,272 488,928
Deferred taxation 32,585 29,874
Total 596,857 518,802
NOTES
2007 2006
Reviewed Audited
R`000 R`000
1. Abnormal items
Net(loss)surplus on disposal of property,
plant and equipment (64) 450
Profit on change of interest in
subsidiaries/joint ventures 7,920 283
Foreign exchange profit on reduction of
investment in subsidiary 1,652 -
Reversal of prior year`s loan provision
in Namibian whitefish business 5,547 -
Provision in respect of utilisation of
pension fund surplus (1,514) (6,842)
Impairment loss on vessels and equipment (1,839) -
Impairment loss on Australian lobster
fishing rights (6,223) -
Impairment of non-current asset held for sale (1,750) -
Provision for irrecoverable loans (1,180) -
Profit on disposal of fishing rights in Namibia - 227
Abnormal profit (loss) before taxation 2,549 (5,882)
Taxation 928 1,954
Abnormal profit (loss) after taxation 3,477 (3,928)
Number Number
of shares of shares
`000 `000
2. Elimination of treasury shares
Weighted average number of shares in issue 116,796 113,325
Less: treasury shares held by share trusts (14,388) (226)
Less: treasury shares held by subsidiary company (1,542)
Weighted average number of shares on which
earnings per share and headline earnings
per share are based 100,866 113,099
3. Determination of Headline Earnings R`000 R`000
Profit after taxation attributable to
own shareholders 168,805 129,791
Adjusted for:
Net surplus on disposal of property, plant
and equipment (349) (596)
Profit on change of interest in subsidiaries/
joint ventures (7,852) (283)
Foreign exchange profit on reduction of
investment in subsidiary (1,172) -
Reversal of prior year`s loan provision
in Namibian whitefish business (5,547) -
Impairment loss on vessels and equipment 2,548 -
Impairment loss on Australian lobster
fishing rights 6,223 -
Provision for irrecoverable loans 1,180 -
Insurance proceeds for damaged vessel - (1,104)
Profit on disposal of fishing rights in Namibia - (227)
Headline earnings for the year 163,836 127,581
4. Dividends
Estimated dividend declared after reporting date 87,242 59,881
Dividend on shares issued prior to last day to
trade 537
Actual dividend declared after reporting date 60,418
5. Supplementary information
R`000 R`000
Cost of sales 1,773,442 1,805,035
Depreciation 67,399 57,316
Operating lease charges 18,208 17,470
Net foreign exchange profits (5,308) (9,838)
Capital expenditure 28,041 94,276
Expansion 492 62,456
Replacement 27,549 31,820
Capital commitments 85,474 63,144
Contracted 8,436 2,124
Approved 77,038 61,020
COMMENTS
Financial Results
Earnings per share for the year ended 30 September 2007 increased by 46%
compared to those of the previous year following improved results in horse
mackerel, fishmeal and lobster. Headline earnings per share were 44% above last
year.
Group turnover increased by 3% whilst operating profit before abnormal items
increased by 29%. Investment income was lower due to lower average net cash
balances following the group`s contribution of R126.7m to the funding of its
black economic empowerment transaction during September 2006.
A final dividend of 87.0 cents per share has been declared, which together with
the interim dividend of 19.0 cents, brings the total dividend for the year to
106.0 cents per share (2006: 74.0 cents).
Review of operations
Inshore Fishing
The total allowable catch (TAC) for pilchard in 2007 is 162,436 tons (2006:
204,000 tons). For the financial year pilchard landings directed into canned
fish production were lower than last year. Fishing costs were lower as a
consequence of a larger proportion of fish being caught on the west coast
compared to the previous season when fish was only available on the south and
east coasts. Production yields were initially very poor but improved later in
the season due to better quality fish. The quantity of canned pilchard produced
at the St Helena Bay factory was marginally lower than last financial year. The
Namibian pilchard TAC was set at 15,000 tons (2006 TAC was 25,000 tons although
no landings were made) and landings of 8,261 tons were made to the Etosha
cannery in Walvis Bay by financial year end.
The supply of canned fish from other local producers was lower than the previous
year and despite increased imports there was insufficient supply of product to
satisfy demand on the domestic market. Sales volumes were below those of the
previous year and turnover declined.
Glenryck Foods, the group`s canned fish business in the UK, also experienced
supply constraints in the procurement of canned pilchard. This together with
higher overhead costs resulted in lower sterling profits. Canned tuna sales
volumes and margins were maintained.
Overall, profitability from canned fish was well below that of the previous
year.
The 2007 "A" season anchovy TAC was increased to 386,942 tons and the "B"
season, which has strict by-catch limitations, is 150,000 tons. Oceana`s
landings of anchovy and red eye herring at 97,884 tons were well above the
previous year (65,404 tons). Net realisations from fishmeal improved due to the
impact of higher international prices and a significantly greater proportion
being exported at better prices than achieved on the local market. Profits from
fishmeal improved substantially.
The 2006/07 west coast lobster TAC was 2,556 tons plus the carry over of 857
tons of uncaught quota from the previous season. Oceana`s quotas amounted to 551
tons which were landed in full by the close of season (2006 catch: 366 tons).
Production costs per unit were lower mainly as a result of increased volumes and
rationalisation of production facilities and vessels. Export prices were higher
which, with the weaker rand exchange rate, resulted in increased profitability.
Squid catches were below those of last year. Higher export prices and improved
vessel performances resulted in increased profits.
French fries performed well driven by strong volume growth, particularly in the
quick service restaurant market, resulting in improved profits.
Midwater and Deep-sea Fishing
The horse mackerel TAC in Namibia for 2007 was reduced to 300,000 tons (2006:
360,000 tons) and volumes available to Oceana were accordingly lower. Catches by
Oceana`s own vessels, however, were higher and improved vessel efficiencies
impacted favourably on fishing costs. In South Africa the TAC was unchanged at
31,500 tons. Oceana`s vessel experienced good catch rates and incurred lower
costs per ton of fish caught due to fuel efficiencies and the effect of
increased catch volumes.
Turnover declined by 3% due to lower volumes sourced from external fleets and
lower Namibian quotas. Prices in African markets were at good levels throughout
the year and combined with the weaker rand exchange rate resulted in overall
profitability from horse mackerel operations being significantly higher than the
previous year.
Hake results were negatively affected by reduced quotas and a shortage of quota
on joint venture vessels. Although fishing conditions and prices improved,
earnings were lower than last year.
Cold Storage
Additional capacity at Bayhead and Epping stores came on stream late in the 2006
financial year. Average activity levels were higher than those of the previous
year on a comparative basis, however, increased domestic consumer demand
resulted in shorter dwell times and reduced storage revenue. Overhead costs,
including depreciation, increased due to the expansions and property rental and
rates increases. Citrus volumes handled through the Maydon Wharf steri-fruit
facility were higher than the previous year but at lower margins. Overall cold
storage profits were marginally lower than in the previous year.
Prospects
With its strong balance sheet and "AA" Empowerdex BEE rating, Oceana is well
placed to participate in the expected industry consolidation.
The recent strengthening of the rand exchange rate and pressure on certain fish
resources are expected to limit earnings growth in the year ahead.
Specific Share Repurchase
Shareholders are referred to a separate announcement today regarding a proposed
specific share repurchase by the Company.
Further Cautionary Announcement
We refer to the cautionary announcements dated 28 June 2007, 17 August 2007 and
28 September 2007 and advise shareholders to continue to exercise caution when
dealing in the Company`s securities until a further announcement is made.
On behalf of the board.
MA Brey AB Marshall
Chairman Chief Executive Officer
9 November 2007
DIVIDEND DECLARATION
Notice is hereby given that a final dividend No. 128 of 87.0 cents per share, in
respect of the year ended 30 September 2007, was declared on Friday 9 November
2007. Relevant dates are as follows:
Last day to trade cum dividend - Friday 4 January 2008
Commence trading ex dividend - Monday 7 January 2008
Record date - Friday 11 January 2008
Dividend payable - Monday 14 January 2008
Share certificates may not be dematerialised or re-materialised between
Monday 7 January 2008 and Friday 11 January 2008, both dates inclusive.
By order of the board
JD Cole Secretary
9 November 2007
JSE Share Code: OCE
ISIN Number: ZAE000025284
Date: 09/11/2007 15:08:48 Produced by the JSE SENS Department.
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