| Mon 9 Mar 2009, 7:30 | | AVI - AVI Limited - Interim Results for the Six Months Ended 31 December 2008 |
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AVI
AVI
AVI - AVI Limited - Interim Results for the Six Months Ended 31 December 2008
AVI Limited
Registration number: 1944/017201/06
Share code: AVI & ISIN: ZAE000049433
("AVI" or "the Group" or "the Company")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2008
HIGHLIGHTS
- Revenue from continuing operations up 18% to R4,0 billion
- Gross margin down from 42,5% to 40,3% due to input cost pressures
- Operating profit from continuing operations up 16% to R535 million
- Headline earnings per share from continuing operations up 12% to 103 cents*
- Cash from operations up 17% to R650 million
- Interim dividend up 9% to 36 cents per share
*?prior year headline earnings per share = 92 cents after restatement to exclude
Alpesca now disclosed as a discontinued operation.
GROUP OVERVIEW
Demand for AVI`s brands has remained strong in the six months to December 2008,
with sales volumes maintained or increased in most categories. This is
particularly pleasing given the increased pressure on consumers from high
interest rates, reduced access to credit and higher selling prices. Selling
price increases in our businesses were largely driven by higher commodity input
costs and a weaker Rand, and in most categories were insufficient to fully
recover the higher costs. Consequently, gross operating margins were generally
lower than in the same period in 2007. Selling and administration costs were
well controlled and increased by less than the inflation rate, offsetting some
of the impact of lower gross margins.The Board remains committed to disinvesting
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"), and efforts in this regard are continuing.
Alpesca is classified as a discontinued operation and presented accordingly in
these results.
CONTINUING OPERATIONS
Financial performance from our continuing operations was robust. Revenue rose by
18,0% from R3,4 billion to R4,0 billion. The consolidated gross profit margin
declined from 42,5% of revenue to 40,3% as a result of cost pressures which were
only partially offset by selling price increases. Selling and administration
costs were well contained and some volume leverage was achieved in categories
with higher growth. Operating profit rose by 15,8%, from R461,5 million to
R534,6 million and the operating profit margin decreased only slightly from
13,6% to 13,4%.
The Group`s planned increase in gearing, combined with higher interest rates,
has resulted in a material increase in net finance charges from R21,1 million to
R69,3 million.
The effective tax rate of 31,6% is lower than in the first half of the prior
year as a result of higher capital profits which are taxed at lower rates.
Headline earnings increased by 8,4% from R285,6 million to R309,6 million.
Headline earnings per share increased by 11,8% to 103,2 cents per share as the
weighted average number of shares in issue decreased by 4,2% following the share
buy-back which commenced after the annual general meeting in October 2007. No
shares were repurchased during the six months to December 2008.
The capital items of R54,1 million before tax largely comprise a R26,4 million
profit on the sale of an I&J property and a R23,6 million profit on the disposal
of a non-core subsidiary that packed private label teas and coffees.
Cash generated by operations before working capital changes increased by 17,2%
to R649,5 million. Net working capital at the end of December decreased from
18,8% of sales in 2007 to 16,9% of sales. The increase in working capital from
July to December 2008 was only R31,7 million with the normal seasonal increase
ameliorated by high stock levels at the end of June 2008. Other material cash
outflows during the period were dividends of R139,9 million, capital expenditure
of R165,7 million and taxation of R171,0 million. Net debt at the end of
December 2008 was R568,3 million compared to R635,5 million at the end of
December 2007.
Capital expenditure of R165,7 million included mainly replacement expenditure
and R34,5 million for an additional vessel for I&J`s wet fishing fleet.
SEGMENTAL REVIEW - CONTINUING OPERATIONS
Six months ended 31 December
Segmental revenue
2008 2007 Change
Rm Rm %
Food and beverage brands 3 219,5 2 688,9 19,7
Entyce 887,4 762,9 16,3
Snackworks 1 127,9 883,7 27,6
Chilled and frozen 969,6 840,7 15,3
convenience
brands
Out of home 234,6 201,6 16,4
Fashion brands 777,9 693,3 12,2
Personal care 377,8 325,3 16,1
Footwear and apparel 400,1 368,0 8,7
Corporate 5,4 10,7
Group 4 002,8 3 392,9 18,0
SEGMENTAL REVIEW - CONTINUING OPERATIONS (continued)
Six months ended 31 December
Segmental operating profit
2008 2007 Change
Rm Rm %
Food and beverage brands 413,7 336,4 23,0
Entyce 103,9 94,8 9,6
Snackworks 139,7 128,6 8,6
Chilled and frozen 140,5 86,0 63,4
convenience
brands
Out of home 29,6 27,0 9,6
Fashion brands 124,1 134,7 (7,9)
Personal care 42,1 35,8 17,6
Footwear and apparel 82,0 98,9 (17,1)
Corporate (3,2) (9,6)
Group 534,6 461,5 15,8
Entyce
An increase in revenue of 16,3% was achieved from volume growth in affordable
coffee and creamer supported by input cost driven price increases across all
categories. Market shares were maintained or increased in all categories,
despite strong competition.
Significantly higher black tea costs were not fully recovered by increased
selling prices resulting in lower profit margins in the tea category. Coffee
gained volume and market share with good performance from the key Frisco brand
which resulted in improved margins despite much higher purchase costs for
Robusta coffee beans. Creamer has been promoted strongly to combat increased
competition from cheaper formulations and this resulted in lower margins despite
an increase in volumes. A decision has been taken to reconfigure the retail
juice operations as a smaller regional business and once-off costs of R4,9
million relating to the closure of the Gauteng and KwaZulu-Natal operations were
incurred.
Operating profit increased by 9,6% from R94,8 million to R103,9 million with the
operating profit margin at 11,7% compared to 12,4% in the prior period.
Snackworks
Revenue increased by 27,6% largely due to the accumulated impact of price
increases taken over the last 18 months in response to the unprecedented rise in
soft commodity prices and a 10,9% increase in snack volumes due to strong
promotional activity. Biscuit volumes were maintained at the same level as in
the prior period.
Notwithstanding these increased selling prices, the higher input costs were not
fully recovered resulting in lower profit margins. Consumers have also migrated
to more affordable products within our brand portfolio putting further pressure
on margins.
Operating profit consequently increased by only 8,6% from R128,6 million to
R139,7 million with operating profit margin of 12,4% compared to 14,6% in the
first half of the previous financial year.
Chilled and Frozen Convenience Brands (I & J* and Denny)
Excluding Alpesca.
The combined revenue for this category increased by 15,3% and operating profit
increased by 63,4% from R86,0 million to R140,5 million with the operating
margin improving from 10,2% to 14,5%.
The main contributor was I&J`s South African operations which realised higher
export prices as well as increases in local prices for seafood products. These
factors, together with improved catch rates and good processing efficiencies
impacted very positively on its operating performance. However, hake volumes
were lower because of the reduced quota allocations and export prices came under
pressure towards the end of the period due to lower consumer demand in Europe.
Denny achieved slightly higher sales volumes and also increased prices in
response to the rising cost of imported raw materials with the weakening of the
Rand. Operating profit increased from R10,5 million to R14,0 million with the
improvement largely reflecting the impact of strikes in the prior period which
resulted in significant additional labour costs.
Out of Home (Ciro Beverage Solutions and Sir Juice)
Revenue increased by 16,4% due to an increase in juice volumes and selling price
increases in response to higher raw material costs. Core coffee volumes were
maintained with new corporate customers offsetting pressure on the restaurant
and coffee shop channel. Operating profit increased by only 9,6% from R27,0
million to R29,6 million as the higher proportion of relatively lower margin
juice combined with input cost pressures resulted in a decrease in operating
margin from 13,4% to 12,6%.
Fashion Brands (personal care, footwear and apparel)
Revenue rose by 12,2% with strong volume growth in personal care supported by
price increases - principally in the footwear and apparel business to partially
offset the impact of the weaker Rand. Operating profit decreased from R134,7
million to R124,1 million and operating margin decreased from 19,4% to 16,0%,
reflecting the decrease in profitability in the footwear and apparel business.
In the personal care category, Indigo Cosmetic`s revenue increased by 16,1%.
Deodorant spray volumes again grew materially and were well supported by good
performances in the fragrance and make-up product categories. Selling price
increases were below inflation which has helped volume growth but, together with
the impact of the weaker Rand on imported materials, has put pressure on gross
margins. Volume leverage offset the impact of the lower gross margin and the
operating profit margin improved slightly from 11,0% to 11,1%. Operating profit
increased 17,6% from R35,8 million to R42,1 million.
Revenue in the footwear and apparel category increased by 8,7%, largely due to
increased selling prices in Spitz following the substantial weakening of the
Rand over the prior period. Demand for core brands and product lines remained
sound, however trading densities were impacted by reduced consumer spending and
temporary supply chain delays arising from both delayed stock shipments and the
implementation of SAP during the period. Store openings over the last 18 months
resulted in average trading space increasing by 20% but trading density declined
by 12%. Six new stores were opened in the current period and one store was
closed. Over the last two years Spitz has invested in new and refurbished
stores as well as people and systems to underpin the long-term sustainability of
the expanded business. This has resulted in a higher fixed cost base which
contributed to a decrease in operating profit margin from 26,9% to 20,5% in the
current period. Operating profit declined from R98,9 million to R82,0 million.
DISCONTINUED OPERATION
Despite a lower hake quota, Alpesca showed an improvement in operating profit in
the current period, from an operating loss of R2,7 million to a profit of R20,8
million, as a result of improved shrimp prices and better Euro/US Dollar
exchange rates.Profit after tax of R2,5 million was R3,7 million higher than in
the prior period, with the improved operating profit was largely offset by a
higher taxation charge arising from the devaluation of tax assets in line with
the weakening of the Argentinean Peso.
DIVIDENDS
An interim dividend of 36 cents per share has been declared in line with AVI`s
interim dividend policy of a three times cover on diluted headline earnings per
share from continuing operations.
OUTLOOK
Household disposable income is likely to remain constrained by relatively high
interest rates and reduced access to credit. This coupled with general consumer
uncertainty as a result of the current global economic crises is likely to
dampen demand in the second half. Our ongoing commitment to ensure, through a
number of market initiatives, that our brands provide a sustained value
proposition to consumers should position us well to respond to this environment.
In addition, there is ongoing focus on improving overall cost efficiency through
cost savings and better yields which should increase our flexibility to respond
to consumer needs.
AVI is fortunate to have a portfolio of market-leading brands that has
demonstrated defensive attributes over many decades which together with planned
efficiency and product initiatives will allow us to effectively compete for
market share and sustain growth in these leaner times.
UNSOLICITED APPROACH FROM TIGER BRANDS LIMITED
During the period Tiger Brands Limited (Tiger) made an unsolicited approach to
acquire the entire issued share capital of AVI, the terms of which were
published by Tiger in an announcement on SENS on 17 November 2008. This
expression of interest was not converted into a formal offer but a revised
proposal was tabled to AVI`s board on 22 January 2009 following which the AVI
board placed the Company under cautionary on 26 January 2009. After a process of
engagement, Tiger unilaterally withdrew its expression of interest on 4 March
2009 following which AVI also withdrew its cautionary announcement.
CONDENSED GROUP BALANCE SHEETS
Unaudited as at 31 Audited
December as at 30
June
2008 2007 2008
Rm Rm Rm
ASSETS
Non-current assets
Property, plant and equipment 1 224,6 1 263,8 1 164,8
Intangible assets and goodwill 982,9 1 080,6 986,2
Joint ventures and other investments 283,9 255,6 312,8
Deferred tax asset 72,2 106,4 89,1
2 563,6 2 706,4 2 552,9
Current assets
Inventories and biological assets 994,0 763,7 873,0
Trade and other receivables including 1 244,0 1 194,1 1 178,7
derivatives
Cash and cash equivalents 496,5 428,2 174,9
Assets classified as held for sale* 507,3 3,9 493,0
3 241,8 2 389,9 2 719,6
Total assets 5 805,4 5 096,3 5 272,5
EQUITY AND LIABILITIES
Capital and reserves
Attributable to equity holders of AVI 2 796,8 2 421,5 2 518,8
Minority interests (23,3) (17,9) (17,5)
Total equity 2 773,5 2 403,6 2 501,3
Non-current liabilities
Financial liabilities, borrowings and 604,9 175,5 409,7
operatinglease straight-line liabilities
Employee benefits 301,9 312,8 293,5
Deferred taxation 179,2 160,5 154,0
1 086,0 648,8 857,2
Current liabilities
Current borrowings including derivatives 484,8 915,5 536,3
Trade and other payables 1 167,5 1 062,5 1 048,1
Corporate taxation 35,5 65,9 73,4
Liabilities classified as held for sale* 258,1 - 256,2
1 945,9 2 043,9 1 914,0
Total equity and liabilities 5 805,4 5 096,3 5 272,5
*Assets & liabilities held-for-sale comprise the Argentinean hake and
shrimp operations conducted by Alpesca, a wholly owned subsidiary of
I&J, and properties held for sale. (December 2007: remaining assets
of ancillary offshore subsidiaries of I&J; June 2008 : Argentinean
hake and shrimp operations conducted by Alpesca and properties held
for sale).
CONDENSED GROUP INCOME STATEMENTS
Unaudited Audited
Six months ended Year
31 December ended 30
June
2008 2007 Change 2008
Rm Rm % Rm
CONTINUING OPERATIONS
Revenue 4 002,8 3 392,8 18 6 660,6
Cost of sales 2 391,3 1 949,3 23 3 912,3
Gross profit 1 611,5 1 443,6 12 2 748,3
Selling and administrative 1 076,9 982,1 10 1 949,6
expenses
Operating profit before capital 534,6 461,5 16 798,7
items
Income from investments 11,8 8,6 37 22,5
Finance costs (81,1) (29,7) 173 (86,5)
Share of equity accounted 7,5 5,5 36 17,2
earnings of joint ventures
Capital items 54,1 21,6 13,7
Profit before taxation 526,9 467,5 13 765,6
Taxation 166,7 162,1 3 265,8
Profit from continuing 360,2 305,4 18 499,8
operations
DISCONTINUED OPERATIONS*
Revenue 275,7 219,7 25 445,5
Cost of sales 235,4 173,5 36 351,9
Gross profit 40,3 46,2 (13) 93,6
Selling and administrative 19,5 48,9 (60) 103,8
expenses
Operating (loss)/profit before 20,8 (2,7) 870 (10,2)
capital items
Finance costs (3,8) (4,6) (17) (10,0)
Capital items - - 0,2
Profit/(loss) before taxation 17,0 (7,3) 333 (20,0)
Taxation 14,5 (6,1) (338) (9,9)
Profit/(Loss) from discontinued 2,5 (1,2) 308 (10,1)
operations
Profit for the year 362,7 304,2 19 489,7
Attributable to:
Equity holders of AVI 361,9 303,4 19 488,3
Minority interests 0,8 0,8 - 1,4
362,7 304,2 19 489,7
* Discontinued operations comprise the Argentinean hake and shrimp
operations conducted by Alpesca, a wholly owned subsidiary of I&J, In
June 2008 the AVI Board resolved to disinvest from this operation.
Basic earnings per share from 120,8 98,1 23 162,9
continuing operations (cents)#
Diluted basic earnings per 119,3 97,2 23 161,4
share from continuing
operations (cents)##
Depreciation and amortisation of property, plant and equipment,
fishing rights and trademarks included in operating profit
Continuing operations 87,0 80,1 9 166,7
Discontinued operations 12,2 11,6 5 24,4
Headline earnings per share 103,2 92,3 12 159,0
from continuing operations
(cents)#
Diluted headline earnings per 102,0 91,5 11 157,6
share from
continuing operations (cents)##
# Basic earnings and headline earnings per share is calculated on a
weighted average of 297 599 002 (2007: 310 513 219 and 30 June 2008:
306 081 992) ordinary shares in issue.
## Diluted basic earnings and headline earnings per share is
calculated on a weighted average of 301 276 209 (2007: 313 206 531
and 30 June 2008: 308 840 457) ordinary shares in issue.
CONDENSED GROUP CASH FLOW STATEMENTS
Unaudited Audited
Six months ended Year
31 December ended 30
June
2008 2007 Change 2008
Rm Rm % Rm
CONTINUING OPERATIONS
OPERATING ACTIVITIES
Cash generated by operations 649,5 554,1 17 1,022,8
before working capital changes
Increase in working capital (31,7) (194,4) (84) (354,7)
Cash generated by operations 617,8 359,7 72 668,1
Interest paid (79,9) (29,8) 168 (91,0)
Taxation paid (171,0) (106,0) 61 (247,4)
Net cash available from 366,9 223,9 64 329,7
operating activities
INVESTING ACTIVITIES
Investment income 10,2 8,5 20 29,6
Property, plant and equipment (165,7) (115,8) 43 (271,6)
acquired
Proceeds from disposals of 67,4 30,5 121 32,3
property, plant and equipment
Proceeds on disposal of 35,2 15,1 133 15,1
businesses - Note 5
Acquisition of businesses - (35,7) (35,9)
Movement in investments and 4,8 (3,1) 255 (1,9)
joint ventures
Net cash used in investing (48,1) (100,6) (52) (232,4)
activities
FINANCING ACTIVITIES
Capital returned to - (435,1) (549,7)
shareholders
Net increase in shareholder 4,3 2,1 105 4,7
funding
Long-term borrowings - net 199,2 (4,9) 4 165 308,8
raised/(repaid)
(Decrease)/Increase in short- (74,8) 554,6 (113) 206,2
term funding
Dividends paid (139,9) (134,4) 4 (233,4)
(11,2) (17,7) (37) (263,4)
DISCONTINUED OPERATIONS*
Cash flows from operating 20,5 (6,2) 431 31,7
activities
Cash flows from investing (2,1) (2,9) (28) (11,0)
activities
Cash flows from financing (22,2) 10,0 (322) 2,1
activities
Cash flows from discontinued (3,8) 0,8 (575) 22,8
operations
Increase/(decrease) in cash and 303,8 106,4 186 (143,3)
cash equivalents
Cash and cash equivalents at 204,8 317,1 (35) 317,1
beginning of period
508,6 423,5 173,8
Translation of cash equivalents 16,1 4,7 243 31,0
of foreign subsidiaries at
beginning of year
Cash and cash equivalents at 524,7 428,2 204,8
end of period
Attributable to
Continuing operations 496,5 428,2 16 174,9
Discontinued operations 28,2 - 29,9
* Discontinued operations comprise the Argentinean hake and shrimp
operations conducted by Alpesca, a wholly owned subsidiary of I&J.
CONDENSED GROUP STATEMENTS OF CHANGES IN EQUITY
Share Treasury Reserves Retained
Capital shares Rm Earnings
And Rm Rm
Premium
Rm
Six months ended 31 December
2008
Balance at 1 July 2008 171,0 (719,8) 147,8 2 919,8
Recognised income and expense
Profit for the period 361,9
Foreign currency translation 34,5
differences
Cash flow hedging reserve 7,8
Transactions with shareholders
Share based payments 9,4
Dividends paid (139,9)
Disposal of a subsidiary
Own ordinary shares sold by AVI 4,3
Share Trusts (net)
Balance at 31 December 2008 171,0 (715,5) 199,5 3 141,8
Six months ended 31 December
2007
Balance at 1 July 2007 428,2 (435,7) 20,5 2 667,4
Recognised income and expense
Profit for the period 303,4
Foreign currency translation 0,4
differences
Cash flow hedging reserve (4,5)
Transactions with shareholders
Share based payments 7,7
Dividends paid (134,1)
Payment out of share premium (257,0) 26,4
Own ordinary shares (201,4) 0,2
sold/(purchased) by AVI Share
Trusts and subsidiaries (net)
Balance at 31 December 2007 171,2 (610,7) 24,1 2 836,9
Year ended 30 June 2008
Balance at 1 July 2007 428,2 (435,7) 20,5 2 667,4
Recognised income and expense
Profit for the year 488,3
Foreign currency translation 111,5
differences
Cash flow hedging reserve (0,4)
Transactions with shareholders
Share based payments 16,2
Dividends paid (232,9)
Payment out of share premium (257,0) 26,4
Own ordinary shares purchased (319,1)
by a subsidiary
Redemption of convertible (0,2)
redeemable preference shares
Own ordinary shares sold by AVI 8,6 (3,0)
Share Trusts (net)
Balance at 30 June 2008 171,0 (719,8) 147,8 2 919,8
CONDENSED GROUP STATEMENTS OF CHANGES IN EQUITY (continued)
Total Minority Total
Rm Interests Equity
Rm Rm
Six months ended 31 December
2008
Balance at 1 July 2008 2 518,8 (17,5) 2 501,3
Recognised income and expense
Profit for the period 361,9 0,8 362,7
Foreign currency translation 34,5 34,5
differences
Cash flow hedging reserve 7,8 7,8
Transactions with shareholders
Share based payments 9,4 9,4
Dividends paid (139,9) (139,9)
Disposal of a subsidiary - (6,6) (6,6)
Own ordinary shares sold by AVI 4,3 4,3
Share Trusts (net)
Balance at 31 December 2008 2 796,8 (23,3) 2 773,5
Six months ended 31 December
2007
Balance at 1 July 2007 2 680,4 (18,4) 2 662,0
Recognised income and expense
Profit for the period 303,4 0,8 304,2
Foreign currency translation 0,4 0,4
differences
Cash flow hedging reserve (4,5) (4,5)
Transactions with shareholders
Share based payments 7,7 7,7
Dividends paid (134,1) (0,3) (134,4)
Payment out of share premium (230,6) (230,6)
Own ordinary shares (201,2) (201,2)
sold/(purchased) by AVI Share
Trusts and subsidiaries (net)
Balance at 31 December 2007 2 421,5 (17,9) 2 403,6
Year ended 30 June 2008
Balance at 1 July 2007 2 680,4 (18,4) 2 662,0
Recognised income and expense
Profit for the year 488,3 1,4 489,7
Foreign currency translation 111,5 111,5
differences
Cash flow hedging reserve (0,4) (0,4)
Transactions with shareholders
Share based payments 16,2 16,2
Dividends paid (232,9) (0,5) (233,4)
Payment out of share premium (230,6) (230,6)
Own ordinary shares purchased (319,1) (319,1)
by a subsidiary
Redemption of convertible (0,2) (0,2)
redeemable preference shares
Own ordinary shares sold by AVI 5,6 5,6
Share Trusts (net)
Balance at 30 June 2008 2 518,8 (17,5) 2 501,3
SUPPLEMENTARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the six months ended 31 December 2008
AVI Limited (the "Company") is a South African registered company.
The condensed consolidated financial statements of the Company
comprise the Company and its subsidiaries (together referred to as
the "Group") and the Group`s interest in jointly controlled entities.
1. Statement of compliance The condensed consolidated interim
financial statements have been prepared in accordance with the
recognition and measurement criteria of IFRS, the presentation as
well as the disclosure requirements of IAS 34 - Interim Financial
Reporting and the Listing Requirements of the JSE Limited (the
"JSE"). These condensed interim financial statements has not been
reviewed or audited by the Group`s auditors.
2. Basis of preparation The financial statements are prepared in
millions of South African Rand ("Rm") on the historical cost
basis, except for derivative financial instruments and biological
assets which are recognised at fair value. The accounting
policies are those presented in the annual financial statements
for the year ended 30 June 2008 and have been applied
consistently to the periods presented in these condensed
consolidated interim financial statements and by all Group
entities.
3. Determination of headline earnings
Unaudited Audited
Six months ended Year Ended
31 December 30 June
2008 2007 Change 2008
Rm Rm % Rm
Profit for the year 361,9 303,4 19 488,3
attributable to equity
holders of AVI
Total capital items 52,3 17,8 12,0
included in earnings
Net surplus on disposal of 54,1 22,1 19,0
businesses, properties,
vessels and plant and
equipment
Impairment of plant, - (0,5) (5,1)
equipment and vessels
Taxation attributable to (1,8) (3,8) (1,9)
capital items
Headline earnings 309,6 285,6 8 476,3
Attributable to:
Continuing operations 307,1 286,7 7 486,7
Discontinued operations 2,5 (1,1) (10,4)
309,6 285,6 8 476,3
Headline earnings per 104,0 92,0 13 155,6
ordinary share (cents)
Continuing operations 103,2 92,3 12 159,0
(cents)
Discontinued operations 0,8 (0,3) (3,4)
(cents)
Diluted headline earnings 102,8 91,2 13 154,2
per ordinary
share (cents)
Continuing operations 102,0 91,5 11 157,6
(cents)
Discontinued operations 0,8 (0,3) (3,4)
(cents)
4. Segmental results
Six months Year ended
ended31 December 30 June
2008 2007 % 2008
Rm Rm change Rm
CONTINUING OPERATIONS
Segmental revenue
Beverage brands - Entyce 887,4 762,9 16 1 547,5
Snacking brands - 1 127,9 883,7 28 1 677,2
Snackworks
Chilled and frozen 969,6 840,7 15 1 775,4
convenience brands
Out of home 234,6 201,6 16 392,7
Personal care 377,8 325,3 16 623,5
Footwear and apparel 400,1 368,0 9 629,8
Corporate 5,4 10,7 14,5
GROUP 4 002,8 3 392,9 18 6 660,6
Segmental operating profit
before capital items
Beverage brands - Entyce 103,9 94,8 10 189,1
Snacking brands - 139,7 128,6 9 185,8
Snackworks
Chilled and frozen 140,5 86,0 63 194,9
convenience brands
Out of home 29,6 27,0 10 42,7
Personal care 42,1 35,8 18 73,4
Footwear and apparel 82,0 98,9 (17) 132,9
Corporate (3,2) (9,6) (20,1)
GROUP 534,6 461,5 16 798,7
5. Investment activity
There were no significant changes to investments in the year to
date.
Effective 12 December 2008, National Brands Limited disposed of a
non-core subsidiary that packed private label teas and coffees
for R35,2 million (net of cash disposed of).
6. Commitments
Six months Year ended
ended31 December 30 June
2008 2007 2008
Rm Rm Rm
Capital expenditure 104,0 101,7 127,7
commitments for property,
plant and equipment
Contracted for 56,8 75,0 79,3
Authorised but not 47,2 26,7 48,4
contracted for
It is anticipated that this expenditure will be financed by cash
resources, cash generated from activities and existing borrowing
facilities. Other contractual commitments have been entered into
in the normal course of business.
7. Contingent liabilities
The South African Revenue Service ("SARS") has issued revised
assessments on a foreign subsidiary for taxes plus penalties and
interest in respect of the tax years previously assessed, 1998
through 2003. The additional taxes assessed by SARS amount to
R49,4 million. The total amount in terms of the assessments,
including penalties and interest up to June 2008, is R271,0
million.
Were assessments to be issued for the 2004 to 2008 tax years on
the same basis applied in the assessments received, the total
amount of additional tax payable in respect of these years would
be R43,3 million, excluding penalties, with interest thereon
estimated at R12,9 million.
The matter is expected to proceed to court in the next six
months. However, the issues in dispute are of a complex nature
and it is anticipated that the matter could remain unresolved for
an extended period.
8. Directorate
Mrs NJM Canca resigned as a director of the company with effect
from 19 November 2008.
9. Post-balance sheet events
No significant events outside the ordinary course of business
have occurred since the balance sheet date.
10. Dividend declaration
Notice is hereby given that an interim ordinary dividend No 69 of
36 cents per share for the six months ended 31 December 2008 has
been declared payable to shareholders of ordinary shares. The
salient dates relating to the payment of the dividend are as
follows :
Last day to trade cum dividend on the JSE Friday, 27 March 2009
First trading day ex dividend on the JSE Monday, 30 March 2009
Record date Friday, 3 April 2009
Payment date Monday, 6 April 2009
In accordance with the requirements of Strate, no share
certificates may be dematerialised or rematerialised between
Monday, 30 March 2009 and Friday, 3 April 2009, both days
inclusive.
Dividends in respect of certificated shareholders will be
transferred electronically to shareholders` bank accounts on
payment date. In the absence of specific mandates, dividend
cheques will be posted to shareholders. Shareholders who hold
dematerialised shares will have their accounts at their Central
Securities Depository Participant ("CSDP") or broker credited on
Monday, 6 April 2009.
Angus Band Simon Crutchley
Chairman CEO
9 March 2009
Directors:
Executive : Simon Crutchley (Chief executive officer), Owen Cressey (Chief
financial officer), Robert Katzen (Business development director)
Non-executive: Angus Band (Chairman), Humphrey Buthelezi, Pat Goss, James
Hersov, Sean Jagoe, Nombulelo Moholi, Adriaan Nuhn*, Gavin Tipper *Dutch
Registered office: 2 Harries Road, Illovo, Johannesburg 2196, South Africa
Postal address: PO Box 1897, Saxonwold 2132, South Africa
Telephone: +27 11 502 1300, Telefax: +27 11 502 1301
e-mail: info@avi.co.za Website: www.avi.co.za
Sponsor : Standard Bank
Date: 09/03/2009 07:30:01 Produced by the JSE SENS Department.
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