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TBS
TIIH
TBS - Tiger Brands Limited - Group results and dividend declaration for the six
months ended 31 March 2009
Tiger Brands Limited
(Registration number 1944/017881/06)
(Incorporated in the Republic of South Africa)
Share code: TBS ISIN: ZAE000071080
("Tiger Brands" or the "Company")
Group results and dividend declaration for the six months ended
31 March 2009
Turnover from continuing operations +24%
Operating income before abnormal items from continuing operations
+29%
Headline earnings per share from continuing operations +8%
Domestic foods
Operating income before abnormal items +30%
Consumer healthcare
Operating income before abnormal items +3%
Exports and International
Operating income before abnormal items +70%
Fishing including Sea Harvest
Operating income before abnormal items +48%
Introduction
These abridged results have been prepared in accordance with International
Financial Reporting Standards, IAS 34 - Interim Financial Reporting - and the
Listing Requirements of the JSE Limited.
The unbundling and separate listing of the Company`s Healthcare interests in
August 2008, coupled with the planned disposal of the Company`s interest in Sea
Harvest this year, has given rise for the need to distinguish between earnings
from continuing operations, which exclude the Healthcare and Sea Harvest
results, and total Group earnings which include the Healthcare results for the
comparative period ended 31 March 2008, as well as the results of Sea Harvest in
both the comparative and current reporting periods.
In terms of International Financial Reporting Standards - IFRS 5, the prior
period results of the Healthcare operations for the six months ended 31 March
2008 and 11 months ended 29 August 2008, have been reflected as a discontinued
operation in the Group income statement. In addition, the current period and
prior period discontinued operations also include the profit attributable to the
Company`s interest in Sea Harvest.
Earnings from continuing operations
Tiger Brands achieved headline earnings per share (HEPS) from continuing
operations of 607,1 cents for the six months ended
31 March 2009, representing an 8% increase on that achieved in the six months
ended 31 March 2008. Earnings per share (EPS) from continuing operations
increased by 24% to 610,7 cents per share. The higher percentage improvement in
EPS compared to HEPS is primarily due to the inclusion in March 2008 of an
abnormal charge of R112,3 million, which related to the impairment of the
carrying value of the goodwill associated with the Beverages business.
Costs of R32,6 million were also incurred in the current period relating to the
unsuccessful attempt by Tiger Brands to acquire the entire issued share capital
of AVI Limited. Excluding these costs, HEPS and EPS from continuing operations
would have increased by 12% and 28% respectively.
Total Group earnings
Total Group headline earnings per share decreased by 17% to 627,3 cents compared
to the same period last year, whilst total Group earnings per share decreased by
9% to 631,2 cents. Total Group headline earnings of R984,0 million and Group
profit attributable to ordinary shareholders of R990,1 million for the six
months ended 31 March 2009, are not directly comparable with the 2008 results as
the prior year includes the results of the unbundled Healthcare interests.
The costs in respect of the approach to AVI Limited referred to above, adversely
affected the rate of decline in total Group HEPS and total Group EPS by
approximately 2,7% and 3,0% respectively.
Overview of results
With reference to the introductory section, the commentary below relates only to
the Company`s FMCG businesses, being its continuing operations.
The trading environment for the period under review was characterised by
significant raw material cost increases, high interest rates and a weakening
Rand exchange rate. As a result of these and other factors, consumers have
altered their buying patterns which have had a negative impact on volumes in
many categories in which the Company operates.
Notwithstanding the above, turnover from continuing operations for the six
months ended 31 March 2009 increased by 24% compared with the same period last
year. The turnover increase was particularly pronounced in the Grains division,
reflecting the substantial increases in raw material commodity costs which had
been partially absorbed in the comparative period.
The total operating margin from continuing operations of 14,4% (2008: 13,8%)
reflected a recovery from the previous period in which certain raw material cost
increases were partially absorbed by the Group. The Milling and Baking,
Groceries, Snacks & Treats, Beverages, Exports and Fishing businesses all
contributed to the operating margin improvement while Other Grains, Value Added
Meat Products, Out of Home and Consumer Healthcare continued to experience
pressure on margins. Overall the Group delivered a pleasing growth in operating
income of 29% (2008: 15%) allowing it to adequately cover the increased cost of
funding the higher working capital requirements.
Abnormal items reflected a net charge of R50,6 million compared to a net charge
of R111,0 million in 2008. The prior year primarily comprised the goodwill
impairment of R112,3 million relating to the Company`s Beverages business. The
current year composition of abnormal items largely reflects the cost of R32,6
million associated with the unsuccessful attempt to acquire AVI Limited, as well
as a provision for closure costs relating to the loss-making pre-prepared meals
business known as Hot Favourites.
Net financing costs from continuing operations of R163,9 million (2008: R35,4
million) rose sharply over the prior period, reflecting the increased level of
gearing of the FMCG business as a consequence of the unbundling of Adcock Ingram
on 29 August 2008, as well as the impact of the high working capital demands
over the six-month period.
Group net debt from continuing operations, excluding both Sea Harvest and
Oceana, rose from R1 601 million at 30 September 2008 to R2 104 million at 31
March 2009. Net interest cover from continuing operations remains at a sound
level of 9,9 times.
Earnings from associates for the half year reflect the improved contribution
from Chilean-based Empresas Carozzi. The improved contribution primarily
comprises a capital profit of R16,8 million arising on the part sale of a
subsidiary and the benefits of a stronger Chilean Peso.
The average tax rate, before abnormal items, increased to 32,6% (2008: 28,3%).
This was primarily due to a reduced STC charge in 2008 as a result of a portion
of the 2007 final dividend being distributed as a payment of capital out of
share premium in January 2008.
The increased share of income attributable to minorities is due to the improved
levels of profitability in the Deciduous Fruit business as well as the
minorities` share of current year income attributable to the two African
acquisitions, Haco and Chococam, which were concluded during the second half of
2008.
Review of operations
Strong performances compared to the first six months of the prior year were
experienced in most FMCG categories despite underlying consumer demand having
weakened. The prior year trend of increasing cost push inflation, which
accelerated in the second half of 2008 across all categories, continued into the
current reporting period.
DOMESTIC FOOD increased turnover and operating income by 23% and 30%
respectively.
The Grains segment recorded a strong improvement in operating income of 35%.
Maize benefited from consumers downtrading out of the rice category into more
affordable staple products, resulting in an increase in demand for the Ace
brand. Golden Cloud flour and Albany bread volumes declined relative to the
prior period. These brands had recorded significant volume growth in the prior
period as the Group`s flour prices had lagged the extraordinary high increases
in wheat costs in the first half of 2008. The Board recently approved a capital
project to increase the capacity of the Pietermaritzburg bakery at a total cost
of approximately R200 million. The new bakery, which incorporates state-of-the-
art technology, is expected to be commissioned in July 2010.
The price-sensitivity of lower LSM (Living Standards Measurement) consumers to
increases in sorghum prices continues to place pressure on the King Korn brand.
Other Grains reflected good growth in operating income mainly due to the
contribution from the Breakfast category comprising the Jungle Oats and Ace
Instant brands. As mentioned above, demand for rice declined due to consumers
switching to other carbohydrates as a result of extraordinary selling price
increases resulting from high global rice prices and a depreciating Rand.
The Groceries business achieved a 31% growth in operating income off a 25%
increase in turnover. Strong volume growth was recorded by the KOO and Fatti`s &
Moni`s brands while the All Gold and Black Cat brands reflected more modest
volume growth. Supply of All Gold tomato sauce was adversely affected by the
delayed commissioning of a new tomato sauce plant.
Snacks & Treats achieved a growth of 10% in operating income off a modest
turnover increase of 8%. Turnover was impacted by a decline in chocolate sales
in what is a discretionary consumer spend category. The performance of the
Beverages category reflected a marked improvement off a low base. Operating
income increased by R43,9 million to R66,4 million due to better supply chain
efficiencies, the discontinuation of unprofitable product lines and improved
summer weather conditions relative to the prior year.
Trading conditions have remained difficult in the Value Added Meat Products
category where volumes have declined as consumers trade down to more affordable
meat offerings. Reduced consumer spending in the Out of Home market negatively
impacted this business, particularly in the loss-making prepared meals segment
which the Company has planned to exit.
The performance of Consumer Healthcare was disappointing with operating income
reflecting an increase of only 3% on a 10% growth in turnover. Despite having to
absorb certain cost increases in raw materials, Personal Care achieved a 13%
improvement in operating income. This was achieved on a turnover increase of 18%
in a category where pressure on consumer discretionary spend is particularly
noticeable. Babycare and particularly Homecare results were disappointing.
Growth in Baby Nutrition slowed as the category began to feel the impact of the
tighter economic conditions, while growth in the Elizabeth Anne`s brand was
offset by increased costs in the Baby Medicinal product range. Homecare
performance was negatively impacted by a poor pest season resulting in a decline
in operating income of 11% off a 4% increase in turnover.
EXPORTS AND INTERNATIONAL achieved a significant improvement on the prior year,
with operating income increasing by R64,4 million to R155,9 million. Langeberg &
Ashton Foods (67% held), the Group`s Deciduous Fruit business, benefited from a
weaker Rand, while the Tiger Brands International division`s enhanced
distribution capability contributed to increased sales, particularly in Zambia,
Zimbabwe and Malawi. Also contributing to the improved performance were the
Company`s two recent acquisitions, Haco Industries (Kenya) Limited (51% held), a
leading branded personal care and consumer products company, and Chocolaterie
Confiserie Camerounaise (Chococam) (74,7% held), a branded confectionery
business based in the Cameroon. The two companies performed in line with
expectations for the period to 31 March 2009. These two acquisitions provide
strategic in-country presence in the East and Central African regions from which
Tiger Brands will continue to expand its horizons in efforts to grow a branded
business on the rest of the African continent.
Fishing
The Company`s fishing interests comprise Sea Harvest (74% held) and Oceana Group
Limited (45% held).
Despite lower catches in Sea Harvest, sales realisations and profitability
improved on the prior period driven by better product mix, a weaker Rand
exchange rate and lower fuel costs.
Proportionately consolidated Oceana, which is separately listed on the JSE
Limited, reported a 59% increase in headline earnings per share for the six
months ended 31 March 2009. Oceana`s results were separately published on 7 May
2009.
Other corporate activities
Disposal of Sea Harvest
On 29 October 2008, Tiger Brands shareholders were advised that a consortium led
by Brimstone Investment Corporation Limited, which includes key members of Sea
Harvest management, submitted an offer to purchase the entire shareholding of
Sea Harvest held by Tiger Brands. The offer was accepted by Tiger Brands and is
subject to certain conditions precedent, including the approval by Brimstone
shareholders, as set out in the announcement made by Tiger Brands on 13 May
2009. The purchase consideration for the transaction is R541 million, to be
settled in cash, which amount will escalate at a pre-determined rate from 1
October 2008 until payment is made upon fulfilment of all outstanding conditions
precedent. PriceWaterhouseCoopers has confirmed that the terms and conditions in
respect of the proposed transaction are fair as far as the ordinary shareholders
of Tiger Brands are concerned. Unconditional approval for the proposed
transaction was given by the Competition Tribunal on 25 March 2009.
It is anticipated that the remaining conditions precedent will be met by close
of business on 1 June 2009.
Oceana
As a result of the Company amending an agreement with Brimstone Investment
Corporation Limited, the Company will cease to proportionately consolidate
Oceana with effect from the end of March 2009. Accordingly, although Oceana`s
results for the six months ended 31 March 2009 have still been proportionately
consolidated in the Group`s income statement, the share of Oceana`s individual
assets and liabilities has been derecognised in the Group balance sheet as at 31
March 2009 and has been accounted for as an investment in an associate.
Empowerment
At the end of 2008, shareholders were advised of the commitment by the Company
to increase its empowerment shareholding by a further 10%. Good progress has
been made in this regard and it is anticipated that the proposed transaction
will, subject to shareholder approval, be implemented prior to the end of the
current financial year that ends on 30 September 2009. Shareholders will in due
course be provided with the full details of the transaction and its
implications.
Board of directors
The Company is pleased to announce the appointment of the Chief Financial
Officer, Mr Michael Fleming, as an executive director of the Company.
Interim dividend
The directors have declared an interim dividend of 245 cents per share, which is
in line with the 2008 interim dividend. The directors have decided to maintain
the interim dividend at last year`s level notwithstanding the fact that the 2008
dividend was based on the Group`s earnings including the unbundled Adcock
Ingram.
The interim dividend for 2009 also takes cognisance of the Company`s previously
stated intention to correct, over time, the historical imbalance between the
interim and final dividend relative to headline earnings per share.
Following the unbundling of Adcock Ingram and consistent with past practice, it
is intended that the Company will continue to maintain an annual dividend cover
ratio of 2 times.
Outlook
Although interest rates are expected to decline further, Tiger Brands is likely
to continue to experience difficult trading conditions for the remainder of the
year, caused by ongoing pressure on consumer spending. In addition, the recent
strengthening of the Rand will have an adverse impact on the Group`s export
earnings. Notwithstanding these factors, headline earnings per share is expected
to show modest growth in real terms for the full year. This forecast financial
information has not been reviewed and reported on by the Company`s auditors.
For and on behalf of the Board
Lex van Vught Peter Matlare
Chairman Chief Executive Officer 18 May 2009
Declaration of Ordinary Dividend No 129
Notice is hereby given that an interim dividend of 245 cents per ordinary share
has been declared in respect of the half-year ended 31 March 2009.
In compliance with the requirements of Strate, the electronic settlement and
custody system used by the JSE Limited, the company has determined the following
salient dates for the payment of the dividend:
Last day to trade cum-dividend Friday, 26 June 2009
Shares commence trading ex-dividend Monday, 29 June 2009
Record date Friday, 3 July 2009
Payment of dividend Monday, 6 July 2009
Shareholders will not be permitted to dematerialise/rematerialise their shares
between Monday, 29 June 2009 and Friday, 3 July 2009, both days inclusive.
By order of the Board
I W M Isdale Sandton
Secretary 18 May 2009
Directors
Non-executive directors: L C van Vught (Chairman),
B L Sibiya (Deputy Chairman), S L Botha, R M W Dunne (British),
U P T Johnson, K D K Mokhele, A C Parker, P M Roux
Executive directors: P B Matlare (Chief Executive Officer),
N G Brimacombe, M Fleming, B N Njobe, C F H Vaux
Company secretary: I W M Isdale
Registered office: 3010 William Nicol Drive, Bryanston, Sandton, 2021
Postal address: PO Box 78056, Sandton, 2146, South Africa
Share registrars: Computershare Investor Services (Pty) Limited 70 Marshall
Street, Johannesburg, 2001
Postal address: PO Box 61051, Marshalltown, 2107, South Africa Telephone: (011)
370 5000
Income statements
Unaudited Audited
Six months Year
ended ended
31 March 30 Sept
2009 Change 2008 2008
Notes Rm % Rm Rm
Continuing
operations
Revenue 1 11 276,3 24 9 073,2 19 169,7
Turnover 1 11 154,0 24 8 984,9 18 954,0
Operating income 2 1 601,8 29 1 238,9 2 522,6
before abnormal
items
Abnormal items 3 (50,6) 54 (111,0) 4,3
Operating income after 1 551,2 38 1 127,9 2 526,9
abnormal items
Interest paid (273,3) 136 (115,9) (289,7)
Interest received 109,4 36 80,5 206,6
Dividend income 12,9 65 7,8 9,1
Income from 4 57,8 61 35,9 72,0
associates
Profit before taxation 1 458,0 28 1 136,2 2 524,9
Taxation (470,3) 38 (341,4) (791,6)
Profit for the period 987,7 24 794,8 1 733,3
from continuing operations
Discontinued 5
operations
Profit after tax 43,1 43,1 101,0
for the period -
Sea Harvest
Profit after tax - (100) 281,7 510,6
for the period -
Healthcare business
PROFIT FOR THE PERIOD 1 030,8 (8) 1 119,6 2 344,9
Attributable to:
Ordinary shareholders 990,1 (9) 1 090,7 2 273,7
Minorities 40,7 41 28,9 71,2
1 030,8 (8) 1 119,6 2 344,9
Headline earnings per 627,3 (17) 756,6 1 524,1
ordinary share (cents)
Diluted headline earnings 624,5 (16) 739,5 1 517,0
per ordinary share (cents)
Basic earnings per 631,2 (9) 690,8 1 440,0
ordinary share (cents)
Diluted basic earnings per 628,4 (7) 675,2 1 433,3
ordinary share (cents)
Dividends per ordinary 245,0 245,0 786,0
share (cents)
Interim dividend declared 245,0 245,0 245,0
Final dividend declared - - 541,0
Headline earnings per 607,1 8 562,7 1 149,5
ordinary share (cents) for
continuing operations
Diluted headline earnings 604,5 10 550,0 1 144,1
per ordinary share (cents)
for continuing operations
Basic earnings per
ordinary share (cents)
for continuing operations 610,7 24 494,2 1 074,1
Diluted basic earnings per
ordinary share (cents)
for continuing operations 608,0 26 483,0 1 069,0
Headline earnings per 20,1 (90) 193,9 374,7
ordinary share (cents) for
discontinued operations
Diluted headline earnings 20,1 (89) 189,5 372,9
per ordinary share (cents)
for discontinued
operations
Basic earnings per
ordinary share
(cents)
for discontinued 20,5 (90) 196,7 366,0
operations
Diluted basic
earnings per
ordinary share
(cents) for 20,4 (89) 192,2 364,2
discontinued
operations
Balance sheets
Unaudited Audited
as at as at
31 March 30 Sept
2009 2008 2008
Rm Rm Rm
ASSETS
Non-current assets 5 482,0 4 551,7 5 651,0
Property, plant and equipment 2 045,4 2 023,0 2 369,2
Goodwill and other intangibles 1 652,5 1 655,5 1 713,9
Investments 1 710,8 757,3 1 478,7
Deferred taxation asset 73,3 115,9 89,2
Current assets 6 420,1 6 426,2 7 025,9
Inventories 3 455,9 2 906,7 3 364,7
Trade and other receivables 2 755,1 3 104,3 3 102,5
Taxation receivable 70,2 - -
Cash and cash equivalents 138,9 415,2 558,7
Assets classified as held for 898,6 1 879,3 -
sale
TOTAL ASSETS 12 800,7 12 857,2 12 676,9
EQUITY AND LIABILITIES
Capital and reserves 5 924,9 6 225,6 5 760,7
Ordinary share capital and 51,7 41,8 41,8
share premium
Non-distributable reserves 784,4 597,5 713,6
Accumulated profits 6 286,0 6 860,2 6 203,5
Tiger Brands Limited shares (817,7) (799,0) (817,7)
held by subsidiary
Tiger Brands Limited shares (502,2) (632,4) (502,2)
held by empowerment trusts
Share based payment reserve 122,7 157,5 121,7
Minority interest 457,9 224,8 458,3
TOTAL EQUITY 6 382,8 6 450,4 6 219,0
Non-current liabilities 1 068,7 778,2 1 141,9
Deferred taxation liability 227,3 227,6 316,5
Provision for post-retirement 316,8 331,4 327,9
medical aid
Long-term borrowings 524,6 219,2 497,5
Current liabilities 5 115,7 4 399,9 5 316,0
Trade and other payables 2 856,4 3 198,3 3 546,3
Provisions 459,2 371,7 299,8
Provision for Sea Harvest put 81,4 81,4 81,4
option
Taxation - 198,5 54,6
Short-term borrowings 1 718,7 550,0 1 333,9
Liabilities classified as held 233,5 1 228,7 -
for sale
TOTAL EQUITY AND LIABILITIES 12 800,7 12 857,2 12 676,9
Note: The assets and liabilities relating to Sea Harvest are classified in the
Group balance sheet as at 31 March 2009 under assets and liabilities held for
sale, whereas the assets and liabilities relating to the unbundled Healthcare
operations are likewise classified in the Group balance sheet as at 31 March
2008.
Segmental analysis
Unaudited
Six months ended
31 March
2009 2008 Change
Rm % Rm % %
Turnover
FMCG - CONTINUING 11 154,0 96 8 984,9 82 24
OPERATIONS
Domestic Food 8 480,5 73 6 917,6 63 23
Grains 4 681,8 40 3 587,1 33 31
Milling and baking 3 158,3 27 2 681,7 25 18
Other Grains 1 523,5 13 905,4 8 68
Groceries 1 419,1 13 1 135,0 11 25
Snacks and Treats 877,2 8 814,9 7 8
Beverages 623,1 5 576,3 5 8
Value Added Meat Products 740,6 6 659,0 6 12
Out of Home 138,7 1 145,3 1 (5)
Consumer Healthcare 1 030,9 9 934,8 9 10
Personal 344,8 3 292,0 3 18
Babycare 286,3 2 257,0 2 11
Homecare 399,8 4 385,8 4 4
Exports and International 969,2 9 618,9 6 57
Fishing 736,5 6 580,9 5 27
OTHER INTERGROUP SALES - (63,1) (1) (67,3) (6)
FMCG (1)
DISCONTINUED OPERATIONS 465,8 4 1 969,6 18 (76)
Sea Harvest 465,8 4 427,5 4 9
Healthcare - - 1 544,1 14 (100)
OTHER INTERGROUP SALES - - - (2,0) - (100)
Healthcare
TOTAL TURNOVER 11 619,8 100 10 954,5 100 6
Unaudited
Six months ended
31 March
2009 2008 Change
Rm % Rm % %
Operating income before
abnormal items
FMCG - CONTINUING 1 601,8 97 1 238,9 70 29
OPERATIONS
Domestic Food 1 131,0 69 867,6 49 30
Grains 600,9 37 444,9 25 35
Milling and baking 439,9 27 305,6 17 44
Other Grains 161,0 10 139,3 8 16
Groceries 250,3 15 191,7 11 31
Snacks and Treats 141,7 9 128,8 8 10
Beverages 66,4 4 22,5 1 195
Value Added Meat Products 55,7 3 61,5 3 (9)
Out of Home 16,0 1 18,2 1 (12)
Consumer Healthcare 259,9 16 252,6 14 3
Personal 104,5 6 92,7 5 13
Babycare 79,2 5 74,6 4 6
Homecare 76,2 5 85,3 5 (11)
Exports and International 155,9 9 91,5 5 70
Fishing 79,2 4 45,8 3 73
Other (24,2) (1) (18,6) (1) (30)
DISCONTINUED OPERATIONS 47,1 3 541,6 30 (91)
Sea Harvest 47,1 3 39,4 2 20
Healthcare - - 502,2 28 (100)
TOTAL OPERATING INCOME 1 648,9 100 1 780,5 (7)
BEFORE ABNORMAL ITEMS 100
Segmental analysis continued
Audited
Year ended
30 Sept
2008
Rm %
Turnover
FMCG - CONTINUING OPERATIONS 18 954,0 83
Domestic Food 14 446,8 63
Grains 7 959,7 35
Milling and baking 5 948,9 26
Other Grains 2 010,8 9
Groceries 2 223,0 10
Snacks and Treats 1 605,6 7
Beverages 1 015,6 4
Value Added Meat Products 1 340,5 6
Out of Home 302,4 1
Consumer Healthcare 1 765,8 8
Personal 630,5 3
Babycare 517,0 2
Homecare 618,3 3
Exports and International 1 519,3 7
Fishing 1 364,3 6
OTHER INTERGROUP SALES - FMCG (142,2) (1)
DISCONTINUED OPERATIONS 3 861,3 17
Sea Harvest 934,4 4
Healthcare 2 926,9 13
OTHER INTERGROUP SALES - Healthcare - -
TOTAL TURNOVER 22 815,3 100
Audited
Year ended
30 Sept
2008
Rm %
Operating income before abnormal items
FMCG - CONTINUING OPERATIONS 2 522,6 71
Domestic Food 1 740,6 50
Grains 1 004,6 29
Milling and baking 764,9 22
Other Grains 239,7 7
Groceries 372,6 11
Snacks and Treats 246,8 7
Beverages 11,1 -
Value Added Meat Products 70,0 2
Out of Home 35,5 1
Consumer Healthcare 450,0 12
Personal 185,2 5
Babycare 150,6 4
Homecare 114,2 3
Exports and International 219,8 6
Fishing 144,3 4
Other (32,1) (1)
DISCONTINUED OPERATIONS 1 004,8 29
Sea Harvest 105,3 3
Healthcare 899,5 26
TOTAL OPERATING INCOME BEFORE ABNORMAL 3 527,4 100
ITEMS
Other Group salient features
Unaudited Audited
Six months Year
ended ended
31 March 30 Sept
2009 2008 2008
Group Group Group
Net worth per ordinary share 3 773 3 942 3 673
(cents)
Net debt to equity (%) 33,0 5,5 20,5
Interest cover - net (times) 9,9 35,2 30,5
Current ratio (:1) 1,3 1,5 1,3
Capital expenditure (R million) 252,4 306,9 641,8
- replacement 129,6 128,1 298,8
- expansion 122,8 178,8 343,0
Capital commitments (R million) 497,3 691,8 435,3
- contracted 139,3 330,7 168,5
- approved 358,1 361,1 266,8
Capital commitments will be funded
from normal operating cash flows
and the utilisation of existing
borrowing facilities.
Contingent liabilities (R million)
Guarantees and contingent 31,3 41,0 31,3
liabilities
Inventories carried at net 95,3 40,5 68,9
realisable value
Carrying and fair value of 1 710,8 757,3 1 478,7
investments (R million)
Listed 604,3 23,9 738,0
Unlisted 146,7 266,0 268,1
Associates (carrying value) 959,8 467,4 472,6
Abridged cash flow statements
Unaudited Audited
Six months ended Year ended
31 March 30 Sept
2009 2009 2008 2008
Pro forma
Continuing
operations Group Group Group
Rm Rm Rm Rm
Cash operating profit 1 767,3 1 842,0 2 026,0 4 008,3
Working capital (541,0) (512,7) (553,4) (914,1)
changes
Cash generated from 1 226,3 1 329,3 1 472,6 3 094,2
operations
Net financing costs (163,9) (158,3) (78,6) (196,4)
Dividends received 12,9 18,1 15,5 55,2
Taxation paid (574,0) (599,6) (489,8) (1 059,1)
Dividends received
from discontinued
operation
- Sea Harvest 22,9 - - -
Payment of - - - (152,3)
Competition
Commission fine
Cash available from 524,2 589,5 919,7 1 741,6
operations
Dividends and capital (869,3) (877,2) (724,1) (1 121,2)
distributions paid
Net cash (345,1) (287,7) 195,6 620,4
(outflow)/inflow from
operating activities
Net cash outflow from (308,7) (343,3) (422,1) (2 240,9)
investing activities
Net cash inflow from 79,8 79,3 51,2 458,7
financing activities
Net decrease in cash (573,9)* (551,7) (175,3) (1 161,8)
and cash equivalents
Cash and cash (957,2) (725,4) 721,7 436,4
equivalents at the
beginning of the
period
Cash and cash (1 531,1) (1 277,1) 546,4 (725,4)
equivalents at the
end of the period
*Includes an increase of R385,9 million on short-term borrowings regarded as
cash and cash equivalents.
Statements of changes in equity
Non-
Share capital Distribut- Accu-
able mulated
and premium reserves profits
Rm Rm Rm
Balance at 30 September 2007 536,9 526,5 6 074,8
Net profit for the period 2 273,7
Fair value adjustments 164,4
recognised in equity
Foreign currency translation (18,7)
reserve movement
536,9 672,2 8 348,5
Issue of share capital and 46,2
premium
Capital distribution out of (499,8)
share premium
Distribution in specie in (41,5) (1 450,5)
respect of unbundling of
Adcock Ingram Holdings
Limited
Minority interest arising
from unbundling of Adcock
Ingram Holdings Limited
Movement in treasury shares
as a result of unbundling of
Adcock Ingram Holdings
Limited
Share buyback
Transfers between reserves 41,4 (41,4)
Other reserve movements
Dividends on ordinary shares (636,3)
Total dividends (694,5)
Less: Dividends on treasury 58,2
and empowerment shares
Arising on changes in and (16,8)
acquisition of subsidiaries
and joint ventures
Balance at 30 September 2008 41,8 713,6 6 203,5
Net profit for the period 990,1
Fair value adjustments (12,3)
recognised in equity
Foreign currency translation 25,3
reserve movement
41,8 726,6 7 193,6
Issue of share capital and 9,9
premium
Transfer between reserves 57,8 (57,8)
Other reserve movements
Reclassification from joint
venture to associate
Dividends on ordinary shares (849,8)
Total dividends (937,6)
Less: Dividends on treasury 87,8
and empowerment shares
Balance at 31 March 2009 51,7 784,4 6 286,0
Statements of changes in equity continued
Shares held Total
by sub-
sidiary Share Attribut-
and based able
empowerment payment to ordinary
trusts reserve shareholders
Rm Rm Rm
Balance at 30 September 2007 (1 473,1) 119,9 5 785,0
Net profit for the period 2 273,7
Fair value adjustments 164,4
recognised in equity
Foreign currency translation (18,7)
reserve movement
(1 473,1) 119,9 8 204,4
Issue of share capital and 46,2
premium
Capital distribution out of 42,0 (457,8)
share premium
Distribution in specie in (33,3) (1 525,3)
respect of unbundling of
Adcock Ingram Holdings
Limited
Minority interest arising -
from unbundling of Adcock
Ingram Holdings Limited
Movement in treasury shares 370,8 370,8
as a result of unbundling of
Adcock Ingram Holdings
Limited
Share buyback (259,6) (259,6)
Transfers between reserves -
Other reserve movements 35,1 35,1
Dividends on ordinary shares (636,3)
Total dividends (694,5)
Less: Dividends on treasury 58,2
and empowerment shares
Arising on changes in and (16,8)
acquisition of subsidiaries
and joint ventures
Balance at 30 September 2008 (1 319,9) 121,7 5 760,7
Net profit for the period 990,1
Fair value adjustments (12,3)
recognised in equity
Foreign currency translation 25,3
reserve movement
(1 319,9) 121,7 6 763,8
Issue of share capital and 9,9
premium
Transfer between reserves -
Other reserve movements 13,1 13,1
Reclassification from joint (12,1) (12,1)
venture to associate
Dividends on ordinary shares (849,8)
Total dividends (937,6)
Less: Dividends on treasury 87,8
and empowerment shares
Balance at 31 March 2009 (1 319,9) 122,7 5 924,9
Statements of changes in equity continued
Minorities Total
Rm Rm
Balance at 30 September 2007 213,6 5 998,6
Net profit for the period 71,2 2 344,9
Fair value adjustments recognised in 164,4
equity
Foreign currency translation reserve (18,7)
movement
284,8 8 489,2
Issue of share capital and premium 46,2
Capital distribution out of share premium (457,8)
Distribution in specie in respect of (25,8) (1 551,1)
unbundling of Adcock Ingram Holdings
Limited
Minority interest arising from unbundling 138,0 138,0
of Adcock Ingram Holdings Limited
Movement in treasury shares as a result of 370,8
unbundling of Adcock Ingram Holdings
Limited
Share buyback (259,6)
Transfers between reserves -
Other reserve movements 35,1
Dividends on ordinary shares (23,5) (659,8)
Total dividends (23,5) (718,0)
Less: Dividends on treasury and 58,2
empowerment shares
Arising on changes in and acquisition of 84,8 68,0
subsidiaries and joint ventures
Balance at 30 September 2008 458,3 6 219,0
Net profit for the period 40,7 1 030,8
Fair value adjustments recognised in (12,3)
equity
Foreign currency translation reserve 25,3
movement
499,0 7 262,8
Issue of share capital and premium 9,9
Transfer between reserves -
Other reserve movements 13,1
Reclassification from joint venture to (13,7) (25,8)
associate
Dividends on ordinary shares (27,4) (877,2)
Total dividends (27,4) (965,0)
Less: Dividends on treasury and - 87,8
empowerment shares
Balance at 31 March 2009 457,9 6 382,8
Notes
Unaudited Audited
Six months Year
ended ended
31 March 30 Sept
2009 2008 2008
Rm Rm Rm
1. Revenue - continuing
operations
Turnover 11 154,0 8 984,9 18 954,0
Interest received 109,4 80,5 206,6
Dividend income 12,9 7,8 9,1
11 276,3 9 073,2 19 169,7
2. Operating income -
continuing operations
Operating income before
abnormal items is reflected
after charging:
Cost of sales 7 459,1 5 946,6 12 574,6
Sales and distribution 1 323,0 1 184,1 2 471,7
expenses
Marketing expenses 263,3 221,4 472,7
Other operating expenses 506,8 393,9 912,4
Depreciation (included in 131,2 113,4 245,5
cost of sales and other
operating expenses)
3. Abnormal items - continuing
operations
Loss on sale of property, (10,2) (107,9) (129,5)
plant and equipment,
including impairment charges
on intangibles
Net (loss)/profit on sale of (0,5) - 10,6
interest in subsidiaries and
joint ventures
(Impairment)/reversal of
investments, including
(loss)/profit on sale (4,3) - 3,8
Costs relating to the (32,6) - -
unsuccessful attempt to
acquire AVI Limited
Release of provision for 0,8 - 2,1
Healthcare unbundling costs
Recognition/(utilisation) of 5,7 (3,0) 127,0
pension fund surpluses
Other (9,5) (0,1) (9,7)
Abnormal (loss)/profit (50,6) (111,0) 4,3
before taxation
Taxation 2,0 0,6 (39,7)
(48,6) (110,4) (35,4)
Minorities - - -
Abnormal loss attributable
to shareholders in
Tiger Brands Limited (48,6) (110,4) (35,4)
4. Income from associates -
continuing operations
Normal trading 41,0 35,9 72,0
Abnormal item - profit on 16,8 - -
partial sale of interest in
subsidiary
57,8 35,9 72,0
5. Discontinued operations
5.1 Sea Harvest
On 29 October 2008, Tiger Brands shareholders were advised
that a consortium led by Brimstone Investment Corporation
Limited, which included key members of Sea Harvest
management, submitted an offer to purchase the entire
shareholding of Sea Harvest held by Tiger Brands, being
78 753 841 ordinary shares, representing 73,16% of the total
number of Sea Harvest ordinary shares in issue. The offer has
been accepted by Tiger Brands and is subject to certain
conditions precedent as outlined in the joint announcement by
Tiger Brands and Brimstone. The purchase consideration for
the transaction is R541 million, to be settled in cash, which
will escalate at a predetermined rate from 1 October 2008
until payment is made upon fulfilment of all conditions
precedent. It is anticipated that all conditions precedent
will be fulfilled by 1 June 2009.
Unaudited Audited
Six months Year
ended ended
31 March 30 Sept
2009 2008 2008
Rm Rm Rm
Turnover 465,8 427,5 934,4
Operating income before 47,1 39,4 105,3
abnormal items
Abnormal items 1,0 8,0 8,9
Interest paid (0,4) (0,4) (1,0)
Interest received 6,0 5,4 11,5
Dividend received 5,2 4,9 10,3
Profit before tax from a 58,9 57,3 135,0
discontinued operation
Taxation (15,8) (14,2) (34,0)
Profit for the period from 43,1 43,1 101,0
a discontinued operation
The major classes of assets and liabilities of Sea Harvest
classified as held for sale as at 31 March 2009 are as
follows:
Unaudited Audited
as at as at
31 March 30 Sept
2009 2008 2008
Rm Rm Rm
Assets
Property, plant and 298,0 277,4 288,0
equipment
Goodwill and other 16,7 18,6 17,7
intangibles
Investments 26,1 22,6 22,0
Deferred taxation asset - 1,1 0,6
Cash and cash equivalents 254,0 188,3 231,9
Inventories 118,1 159,6 151,3
Trade and other receivables 185,7 180,2 200,3
Assets classified as held 898,6 847,8 911,8
for sale
Liabilities
Interest-bearing 4,9 5,1 4,7
liabilities (long- and
short-term borrowings)
Deferred taxation liability 57,2 59,3 57,8
Provision for post- 19,4 19,5 19,2
retirement medical aid
Trade and other payables 151,7 143,4 171,9
Taxation 0,3 10,6 10,0
Liabilities directly
associated with assets
classified as held for
sale 233,5 237,9 263,6
Net assets directly 665,1 609,9 648,2
associated with disposal
group
Major classes of assets and liabilities reflected above as at
31 March 2008 and 30 September 2008 are shown for comparative
purposes and are not classified in the respective Group
balance sheets as assets and liabilities held for sale.
The net cash flows generated/(incurred) by the Sea Harvest
business are as follows:
Unaudited Audited
Six months Year
ended ended
31 March 30 Sept
2009 2008 2008
Rm Rm Rm
Operating activities 57,3 (33,4) 47,1
Investing activities (34,6) (6,3) (43,0)
Financing activities (0,7) (0,4) (0,7)
Net cash inflow/(outflow) 22,0 (40,1) 3,4
for the period
5.2 Healthcare interests
On 25 August 2008 the unbundling of Adcock Ingram Holdings
Limited was completed.
The results of Adcock Ingram Holdings Limited for the six
months ended 31 March 2008 (September 2008: 11 months to 24
August 2008), which were included in the 2008 Group results,
are presented below:
Unaudited Audited
Six months Year
ended ended
31 March 30 Sept
2009 2008 2008
Rm Rm Rm
Turnover - 1 544,1 2 926,9
Operating income before - 502,2 899,5
abnormal items
Abnormal items - (53,5) (71,4)
Interest paid - (119,3) (171,5)
Interest received - 71,2 47,7
Dividend received - 2,7 5,2
Profit before tax from a - 403,3 709,5
discontinued operation
Taxation - (121,6) (198,9)
Profit for the period from - 281,7 510,6
a discontinued operation
The major classes of assets and liabilities of Adcock Ingram
Holdings Limited classified as held for sale as at 31 March
2008 were as follows:
Unaudited Audited
as at as at
31 March 30 Sept
2009 2008 2008
Rm Rm Rm
Assets
Property, plant and - 331,0 -
equipment
Goodwill and other - 223,5 -
intangibles
Investments - 30,3 -
Deferred taxation asset - 9,6 -
Cash and cash equivalents - 131,3 -
Inventories - 423,8 -
Trade and other receivables - 729,8 -
Assets classified as held - 1 879,3 -
for sale
Liabilities
Interest-bearing - 726,4 -
liabilities (long- and
short-term borrowings)
Deferred taxation liability - 24,3 -
Provision for post- - 13,3 -
retirement medical aid
Trade and other payables - 464,7 -
Liabilities directly - 1 228,7 -
associated with assets
classified as held for sale
Net assets directly - 650,6 -
associated with disposal
group
6. Changes in accounting policies
The accounting policies adopted and methods of computation
are consistent with those of the previous financial year.
7. Property, plant and equipment
The additions for the period amounted to R252,4 million
(2008: R306,9 million) and the net book value of disposals
totalled R2,2 million (2008: R6,1 million).
8. Impairment of intangibles
Included in abnormal items from continuing operations is an
amount of R4,0 million relating to the impairment of goodwill
and trademarks in respect of the Out Of Home business. The
impairment is attributable to the expected reduction in the
future profit stream of the business.
Included in the March 2008 and September 2008 abnormal items
from continuing operations, was the impairment of goodwill
relating to the Bromor Foods acquisition in August 2006. The
impairment amounted to R112,3 million and was largely
attributable to the expected reduction in the future profit
stream, as well as an increase in the discount rate applied
to the future cash flows of the business.
Unaudited Audited
Six months Year
ended ended
31 March 30 Sept
2009 2008 2008
Rm Rm Rm
9. Shares
Number of ordinary shares 173 243 172 423 173 043
in issue (000`s)
Includes 10 326 758 shares held as treasury stock (March
2008: 8 589 328) and 5 896 140 shares owned
by staff empowerment entities (March 2008: 5 896 183)
Weighted average number of 156 863 157 882 157 893
ordinary shares (net of
treasury and empowerment
shares) on which headline
earnings and basic earnings
per share are based (000`s)
Weighted average diluted 157 554 161 528 158 637
number of ordinary shares
(net of treasury and
empowerment shares) on
which diluted headline
earnings and basic earnings
per share are based (000`s)
10. Reconciliation between
profit for the period
and headline earnings
Profit attributable to 990,1 1 090,7 2 273,7
ordinary shareholders
Adjusted for:
Net profit on sale of - - (8,7)
interest in subsidiaries
and joint ventures
Loss on sale of property,
plant and equipment,
including impairment 7,4 103,8 141,7
charges on intangibles
Loss on sale of investments 4,3 - -
Associates (16,8) - 1,4
Profit on sale of property, - - (1,3)
plant and equipment
Profit on partial sale of (16,8) - -
interest in subsidiary
Impairment of property, - - 2,7
plant and equipment
Other (1,0) - (1,6)
Headline earnings for the 984,0 1 194,5 2 406,5
period
11. Reconciliation between
profit for the period and
headline earnings -
discontinued operations
Profit attributable to 32,2 310,5 577,8
ordinary shareholders
Adjusted for:
Profit on sale of property,
plant and equipment,
including impairment (0,6) (4,3) 17,2
charges on intangibles
Net profit on sale of - - (3,5)
interest in subsidiaries
Headline earnings for the 31,6 306,2 591,5
period
Date: 19/05/2009 07:05:02 Produced by the JSE SENS Department.
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