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ITR
ITR
ITR - Intertrading Limited - Audited results for the year ended 29 February 2008
INTERTRADING LIMITED
Registration number 1987/004777/06
("Intertrading", "the group" or "the company")
Share code: ITR
ISIN code: ZAE000015566
COMMENTARY
Intertrading is a South African company which specializes in the procurement and
marketing of niche products from the fresh produce industry to global markets.
Allied to this, Intertrading also provides air freight forwarding and logistical
service to the agricultural sector.
The closure of the citrus and grape activities and the sale of the macadamia nut
interests at the beginning of the current financial year, culminated in
Intertrading streamlining itself principally into a specialized air freight
business consisting of two operations; namely Agrilink and Skyservices. This was
part of the strategy to trim the business model into a sector of the
agricultural industry which does not carry the same risk profile as the
procurement and export of bulk fruit products such as citrus and deciduous
fruit. These risks are particularly evident where Intertrading has no direct
access to product and has had to rely on financial inducements to farmers to
secure supply lines. In line with this realignment Agrilink has been
divisionalised into Intertrading Fruit. The structure of the company has
therefore changed to meet more accurately the skills and resources needed to
optimally conduct the business.
The appointment of Bernd Julicher as Managing Director of Agrilink will further
enhance the integration of the two operations, as well as exploiting the
specialized management skills required.
Results for both the Agrilink division and Skyservices for the period under
review reflect the benefits which have accrued as a result of these changes.
Both businesses have made satisfactory profits and have performed well in
comparison to the previous years. Trading conditions for both have improved
substantially due to the softening of the Rand against both the Euro and Pound
Sterling; the two currencies most frequently used in their sphere of operations.
This has allowed more competitive pricing in the markets, even through increased
energy and fuel costs have put pressure on margins. Consequently Agrilink and
Sky recorded operating profits for the year of R2,663 (2007 R0,537) million and
R2,673 (2007: R1,237 loss) million respectively.
The Agrilink division has taken over the management of and increased the focus
on the export of subtropical fruit, with particular emphasis on avocado`s which
remains an important product in this category. In support of this, a joint
venture agreement is to be concluded with a farming operation which forms part
of the Government`s Land Restitution Programme. This will ensure a secure source
of supply and also underpin specific marketing programmes.
Skyservices has closed its branch in Durban and restructured the Cape Town
operation to enable it to focus on the increased volumes of flowers and fish
exported from this region. The Johannesburg branch has had significant growth
with turnover in the year to February 2008 of R157,249 million a 32% increase
over 2007.
It is also pleasing to report that certain of the provisions raised against
debts at the previous year end have been reversed due to the payment received
from debtors considered doubtful at the end of the previous financial year.
The group results take into account the profit on disposal of the macadamia nuts
businesses of R3,054 million which has been shown as an exceptional item.
Accordingly group pretax profit for the year is R5,226 million compared to a
loss in the prior year of R34,105 million which did include impairment of
goodwill amounting to R26,299 million.
The successful conclusion of the sale of the macadamia nut business, the partial
recoupment of outstanding debts and reversal of provisions, referred to above
has also had a positive impact in contributing towards a much stronger balance
sheet.
The group is now in a position to start actively searching for growth, either by
acquisition or by merging with complementary enterprises. This will provide the
critical mass to sustain the current listing and also take the business forward.
During the course of the next year the primary focus of the board will be to
achieve this objective and negotiations in this respect have already been
initiated.
Although the board maintains its philosophy of prudence, under the circumstances
and taking into consideration the past sacrifices of shareholders a dividend of
R0,04 (four cents per share) is proposed.
By order of the board
G G Burelli B Julicher Woodmead
(Chairman)
21 May 2007
CONSOLIDATED INCOME STATEMENT
Audited Audited
Year ended Year ended
29 February 28 February
2008 2007
R`000 R`000
Revenue 187 659 293 478
Cost of sales (165 620) (250 637)
Gross profit 22 039 42 841
Selling marketing and administration (21 265) (42 414)
costs
Operating profit before exceptional 774 427
items
Exceptional Items
Profit on disposal of the nuts 3 054 -
businesses - Note 1
Retrenchment costs - (518)
Bad debt provision 1 365 (3 798)
Software write off - (1 365)
Impairment of goodwill - (26 299)
Operating income/(loss) before 5 193 (31 553)
interest
Interest received 1 410 4 410
Interest paid (1 377) (6 962)
Net income/(loss) before taxation 5 226 (34 105)
Taxation (546) (3 419)
Net income/(loss) attributable to 4 680 (37 524)
shareholders
STATEMENT OF CHANGES IN EQUITY
26 608 64 132
Equity at beginning of period
Net income/(loss) for the period 4 680 (37 524)
attributable to shareholders
Equity at end of period 31 288 26 608
CASH FLOW STATEMENT
2 541 10 670
Cash generated by operations
Interest received 1 410 5 118
Interest paid (1 377) (7 670)
Taxation refunded 445 819
Cash generated by operating 3 019 8 937
activities
Cash inflow from disposal of 21 803 -
businesses - Note 1
Additions to property, plant and
equipment
and intangible assets (564) (3 495)
Net cash flow from other investing 141 493
activities
Net cash (outflow)/inflow from (1 233) 1 070
financing activities
Net movement in cash 23 166 7 005
Net cash resources at beginning of the (1 335) (8 340)
year
Net cash resources at end of the year 21 831 (1 335)
Note 1
Disposal of
nuts
businesses
Property, plant and equipment 8 822
Intangible assets 1 360
Trade and other receivables 13 758
Loans 2 505
Taxation receivable 68
Cash and cash equivalents (5 316)
Trade and other payables (4 874)
Other current liabilities (98)
Interest bearing debt (2 066)
Deferred tax (757)
Net assets disposed of 13 402
Profit on disposal 3 054
Proceeds on disposal 16 456
Net cash disposed of (5 316)
Net debt disposed of 10 663
Cash inflow on disposals 21 803
CONSOLIDATED BALANCE SHEET
Audited Audited
Year ended Year ended
29 February 28 February
2008 2007
R`000 R`000
ASSETS
Non-current assets
- Property, plant and equipment 3 632 12 755
- Intangible assets 4 681 6 442
- Deferred taxation 82 770
- Investments - 10
- Loan to related party - 2 505
Current assets 51 630 55 668
60 025 78 150
EQUITY AND LIABILITIES
Share capital and premium 47 452 47 452
Non-distributable reserves - 503
Distributable reserves (16 164) (21 347)
Shareholders` interest 31 288 26 608
Interest bearing debt 69 1 881
Deferred taxation 25 1 124
Current liabilities 28 643 48 537
60 025 78 150
SUPPLEMENTARY INFORMATION
Number of ordinary shares (`000) 50 000 50 000
Weighted average number of shares in 50 000 50 000
issue (`000)
Reconciliation of headline loss per
share
Headline earnings/(loss) 1 626 (11 225)
Add: Impairment of goodwill - (26 299)
Add: Profit on sale of nuts businesses 3 054 -
Basic earnings/(loss) 4 680 (37 524)
Headline earnings/(loss) per share 3,3 (22,5)
Basic earnings/(loss) per share 9,4 (75,0)
Net asset value per share - excluding
intangible
assets (cents) 53,2 40,3
Net asset value per share - including
intangible
assets (cents) 62,6 53,2
Segmental Analysis
Segmental revenue
Fresh produce exports 54 327 207 984
Freight forwarding 157 250 118 792
Other - 6 245
Less: Internal revenue (23 918) (39 543)
187 659 293 478
SEGMENTAL RESULTS
Fresh produce exports 1 071 (7 603)
Freight forwarding 2 674 (1 238)
Other* 1 448 (22 712)
Operating income/(loss) before 5 193 (31 553)
interest
*Mainly profit on sale of the macadamia nuts businesses.
BASIS OF PREPARATION
The annual financial statements have been prepared in accordance with
International Financial Reporting Standards, the requirements of IAS 34 and in
compliance with the JSE listing requirements and the Companies Act of South
Africa, 1973.
The accounting policies applied in the preparation of the results for the year
ended 29 February 2008 are consistent with those adopted in the previous
financial year.
AUDITOR`S REPORT
The summarised financial statements have been audited by our auditors PKF (Jhb)
Incorporated whose unqualified audit report is available for inspection at the
company`s registered office.
ANNUAL REPORT
The annual report will be posted before the end of May 2008.
Directors
Non-executive:
G G Burelli (Chairman) (Alt J Azoulay), C P Jousse,
G F M van Rooyen,
A Deiner
Executive: B Julicher, C J Hull (Group Financial Director)
Registered office:
Block 3, Harrowdene Office Park,Westen Servies Road, Woodmead, 2148 PO Box 100,
Woodland, 2080.
Transfer secretaries:
Computershare Investor Services (Pty) Limited Sponsor
Sasfin Capital
(A division of Sasfin Bank Limited)
21 May 2008
Johannesburg
Date: 21/05/2008 15:49:05 Produced by the JSE SENS Department.
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