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SOV
SOV
SOV - Sovereign Food Investments Limited - Trading statement
SOVEREIGN FOOD INVESTMENTS LIMITED
Incorporated in the Republic of South Africa
Registration Number 1995/003990/06
JSE Code: SOV ISIN Number: ZAE000009221
( "the Group")
TRADING STATEMENT
In accordance with paragraph 3.4(b) of the Listings Requirements of the JSE
Limited, shareholders are advised that headline earnings per share and earnings
per share for the year ended 28 February 2009 are expected to be lower than the
comparative figure for the year ended 29 February 2008 ("previous comparable
period").
Headline earnings per share for the previous comparable period was 155.0 cents
per share. It is expected that the headline loss per share for the period ended
28 February 2009 will be between 31.0 cents per share and 0 cents per share.
Earnings per share for the previous comparable period was 141.6 cents per share.
It is expected that the loss per share for the period ended 28 February 2009
will be between 28.3 cents per share and 0cents per share.
The Group had a strong recovery in the second half of the year as a result of
improved volume throughput and improved poultry prices. The results for the
year ended 28 February 2009 have been adversely affected by unfavourable trading
conditions during especially the first half of the financial year, during which
period a headline loss per share of 104.1 cents and a loss per share of 102.9
cents were realised. Shareholders are referred to the interim results
announcement published on 26 September 2008.
Pricing
After pricing in the first half of the year declined 2% from the previous
comparable period, pricing in the second half of the year recovered and
increased by 13% over the previous comparable period.
The Group has seen strong pricing in the market place as a result of consumer
demand for affordable protein and as a result of lower import volumes. The Group
expects this strong pricing trend to continue into the new financial year.
Volumes
Volume growth was exceptionally strong in the second half of the year with
volumes increasing by 60% over the previous comparable period. This volume
growth was as a result of the expansion that the Group has undertaken over the
previous two years.
Feed costs
Due to the Group`s policy of hedging it`s maize purchases, the Group was not
able to take advantage of the fall in maize spot prices during the second half
of the year. Feed costs to the Group were therefore 40% higher than for the
previous comparable period. This hedge expires at the end of March 2009.
Lower demand world-wide has led to a decline in maize prices and this, coupled
with the strong local harvest, should lead to considerably lower South African
maize prices for the new financial year. The weakening of the Rand over the past
8 months has caused strong inflationary pressure on the imported component of
inputs into the food supply chain.
Industry prospects
Due to the above mentioned factors, the South African poultry industry should
expect to see improved margins in the coming year.
The forecast financial information on which this trading statement is based has
not been reviewed and/or reported on by the Group`s auditors.
The results for the year ended 28 February 2009 are expected to be released on
or about 18 May 2009.
Port Elizabeth
25 March 2009
SPONSOR
BARNARD JACOBS MELLET CORPORATE FINANCE (PROPRIETARY) LIMITED
Date: 25/03/2009 12:08:03 Produced by the JSE SENS Department.
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