| Wed 24 Dec 2008, 8:00 | | AVI - AVI Limited - Trading Update and Statement for the Six Months Ending 31 |
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AVI
AVI
AVI - AVI Limited - Trading Update and Statement for the Six Months Ending 31
December 2008
AVI Limited
(Registration number 1944/017201/06)
Share code: AVI
ISIN: ZAE000049433
("AVI" or "the Group")
TRADING UPDATE AND STATEMENT FOR THE SIX MONTHS ENDING 31 DECEMBER 2008
The following update is based on the latest available trading information for
the five months ended November 2008 and covers performance for the Group`s
continuing operations.
Segmental revenue for continuing operations for the five months ended 30
November 2008
Revenue 2008 2007 Change
Rm Rm %
Entyce beverages 744 656 13.4
Snackworks 945 743 27.2
Chilled & frozen convenience brands* 784 666 17.7
Out of home 198 175 13.1
Fashion brands - personal care 322 287 12.2
Fashion brands - footwear & apparel 272 250 8.8
Corporate 4 (1)
GROUP 3,269 2,776 17.8
* = excludes Alpesca
Group revenue for the five month period to November 2008 was 17.8% higher
than in the comparable period of the prior year. Demand for the Group`s food,
beverage and personal care brands has remained sound in the context of
significant pressure on consumer disposable income. Demand for AVI`s premium
footwear brands was adversely impacted by reduced consumer spending and like-
for-like revenue, excluding stores not open for a full year, was 10% lower
than the same period in the previous year.
Gross margins to the end of November 2008 were generally lower as a result of
high commodity and fuel prices and a weaker rand that were not fully
recovered due to the phasing of selling price increases. Lower volume growth
than in the comparable period of the previous year resulted in less operating
leverage over the fixed cost base and some concomitant tightening of
operating profit margins. Notwithstanding these pressures and assuming that
December trading volumes are as planned, Group operating profit growth is
expected to be above 10% for the trading period ended December 2008.
As disclosed in the annual report for the year ended June 2008, the Group`s
planned increase in gearing, combined with higher interest rates, has
resulted in a material increase in net finance charges compared to the same
period in the prior year.
Efforts to disinvest from the Argentinean hake and shrimp operations
conducted by Alpesca s.a.("Alpesca"), a wholly owned subsidiary of Irvin and
Johnson Holding Company (Proprietary) Limited ("I & J") are continuing. The
Board remains committed to disinvesting from this asset, but recognises that
reduced access to funding for prospective purchasers caused by the global
liquidity crisis may extend the planned disposal process. The accounting
classification of Alpesca as a discontinued operation that was adopted for
the 2008 annual results will be reviewed in February 2009 based on the status
of the disposal process at that time. Alpesca recorded a profit for the five
months to November 2008, despite lower hake quota due to improved shrimp
prices and advantageous foreign exchange cover on export sales.
As a consequence of AVI`s share buy-back program in the previous financial
year, the weighted average number of shares in issue for the six months ended
31 December 2008 is expected to be approximately 4.2% lower than for the six
months ended 31 December 2007.
With reference to AVI`s response on 17 November 2008 to the announcement by
Tiger Brands Limited ("Tiger Brands") of a potential offer for AVI, the Board
would like to confirm that it has not received a formal offer from Tiger
Brands nor has Tiger Brands initiated any other form of discussion since 17
November 2008.
Assuming that Alpesca remains classified as a discontinued operation,
financial results for the six months to December 2008 are expected to fall
within the following ranges:
- Consolidated headline earnings per share for the continuing operations of
the Group for the six months ending 31 December 2008 are expected to increase
by between 5% and 15% over the comparable period in the prior year;
- Consolidated headline earnings per share for the Group`s total operations
(including Alpesca) for the six months ending 31 December 2008 are expected
to increase by between 5% and 15% over the comparable period in the prior
year; and
- Consolidated earnings per share for the continuing operations of the Group
for the six months ending 31 December 2008, including net capital gains on
the disposal of assets, are expected to reflect an improvement of between 5%
and 15% over the comparable period in the prior year.
It is expected that AVI will release its interim results for the six months
ending 31 December 2008 on 9 March 2009.
The information above has not been reviewed and reported on by the Group`s
auditors.
Illovo
24 December 2008
Sponsor
Standard Bank
Enquiries
Simon Crutchley Tel: +(27) 11 502 1300
Chief executive officer
Owen Cressey Tel: +(27) 11 502 1300
Chief financial officer0
Date: 24/12/2008 08:00:23 Produced by the JSE SENS Department.
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