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SOV
SOV
SOV - Sovereign - Trading Update
SOVEREIGN FOOD INVESTMENTS LIMITED
Incorporated in the Republic of South Africa
Registration Number 1995/003990/06
JSE Code: SOV & ISIN : ZAE000009221
("Sovereign" or "the company")
TRADING UPDATE
In terms of the Listings Requirements of the JSE Limited, shareholders are
advised that Sovereign expects that the earnings per share and headline earnings
per share for the year ending 29 February 2008 will be between 35% and 45% lower
than those for the year ended 28 February 2007.
This will be primarily as a result of:
Delays in slaughtering birds during December 2007 and January 2008 as a result
of the installation of new production equipment in the abattoir and which
resulted in lower volumes in December 2007 and higher costs in January and
February 2008.
Lower than forecast sales volumes and worse than forecast production
efficiencies during the period October 2007 to February 2008 due to delays in
implementing new broiler production facilities as a result of delays in
obtaining positive Environmental Impact Assessments.
Higher than forecast maize and soya prices in the period September 2007 to
February 2008.
Lower than forecast selling prices during the period December 2007 to February
2008 due to significant import volumes over this period.
The installation of the new production equipment in the abattoir will be
completed by March 2008 and will result in the abattoir being able to process
three times its current capacity.
The Group is currently waiting for positive Environmental Impact Assessments for
56 000 m2 of new broiler and breeder production facilities and is nearing
completion on Environmental Impact Assessments for a further 200 000 m2 of
broiler and breeder production facilities.
The Group therefore remains ready to take advantage of the significant
investment in infrastructure that has taken place since March 2007.
The Group therefore expects volumes to be significantly higher in the 12 months
to 28 February 2009 compared to the 12 months to 29 February 2008.
Due to the expected good maize harvest, the Group also expects maize prices to
be lower in the 12 months to 28 February 2009 compared to the 12 months to 29
February 2008.
The financial information for the period ending 29 February 2008 has not been
reviewed or reported on by the Company`s auditors. It is anticipated that the
results for the period ending 29 February 2008 will be published on or about 29
April 2008.
Port Elizabeth
8 February 2008
SPONSOR
Barnard Jacobs Mellet Corporate Finance (Pty) Limited
Date: 08/02/2008 11:21:54 Produced by the JSE SENS Department.
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