| Tue 25 Aug 2009, 10:30 | | CBH - Country Bird Holdings Limited - Audited results for the year ended 30 June |
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CBH
CBH
CBH - Country Bird Holdings Limited - Audited results for the year ended 30 June
2009
Country Bird Holdings Limited
(Incorporated in the Republic of South Africa)
(Reg. no 2005/008505/06)
Share Code: CBH
ISIN: ZAE000094835
Audited results for the year ended 30 June 2009
Highlights
* Revenue up 33%
* Operating profit up 354%
* Headline earnings up 543%
Audited Condensed Consolidated Income Statement
30 June 30 June
2009 2008
Audited % Audited
R`000 change R`000
Revenue 2 238 999 33 1 689 223
Cost of sales (1 993 823) 26 (1 587 839)
Gross profit 245 176 142 101 384
Distribution cost (11 925) 107 (5 752)
Administrative expenses (119 484) 53 (78 338)
Other income 72 851 206 23 819
Operating profit 186 618 354 41 113
Finance income 3 252 (6) 3 465
Finance costs (50 833) 86 (27 309)
Share of loss of associates (785) (20) (978)
Profit before income tax 138 252 749 16 291
Income tax expense (12 673) (315) 5 882
Profit for the year 125 579 466 22 173
Attributable to:
Equity holders of the Company 123 005 649 16 423
Minority interest 2 574 (55) 5 750
125 579 466 22 173
Earnings per ordinary share
(cents):
- basic 65,74 649 8,78
- diluted 65,38 650 8,72
Additional information to
Consolidated Financial
Statements
Weighted average number of 187 099 313 187 099 313
ordinary shares
Diluted number of ordinary 188 129 044 188 313 694
shares
Headline earnings per ordinary
share (cents):
- basic 57,05 543 8,87
- diluted 56,74 544 8,81
Dividend per share - interim 9,50 -
(cents)
Dividend per share - final 9,52 228 2,90
(cents)
Net asset value per share 194,16 40 138,36
Tangible asset value per share 143,33 10 130,07
Gearing ratio 2,50 (7) 2,69
Audited Condensed Consolidated Cash Flow Statement
30 June 2009 30 June
2008
Audited Audited
R`000 R`000
Cash generated from operating
activities
Net cash generated from/(required for) 102 579 (38 188)
operating activities
Cash receipts from customers 2 158 191 1 599 084
Cash paid to suppliers and employees (1 945 020) (1 607 135)
Net cash generated from operating 213 172 (8 051)
activities
Interest paid (50 833) (25 113)
Income tax paid (59 759) (5 024)
Cash flow from investing activities
Net cash used in investing activities (223 018) (48 820)
Purchases of property, plant and (62 083) (44 182)
equipment
Proceeds from sale of property, plant 2 589 963
and equipment
Purchases of intangible asset (439) -
Purchases of subsidiaries and joint (138 324) (11 067)
venture, net of cash acquired
Puchases of financial assets and (45 635) (1 493)
investments
Investment in associates (7 379) (4 006)
Proceeds on disposal of joint venture 25 000 7 500
or subsidiary
Interest received 3 253 3 465
Cash flow from financing activities
Net cash generated from financing 57 754 115 808
activities
Proceeds from borrowings 80 954 121 421
Dividends paid to Company`s (23 200) (5 613)
shareholders
Net increase/(decrease) in cash and (62 685) 28 800
cash equivalents
Cash and cash equivalents at beginning 63 775 33 670
of year
Exchange gains/(losses) on cash and (8 040) 1 305
bank overdrafts
Cash and cash equivalents at end of (6 950) 63 775
year
Audited Condensed Consolidated Balance Sheet
30 June 2009 30 June
2008
Audited Audited
R`000 R`000
ASSETS
Non-current assets 576 795 369 204
Property, plant and equipment 355 507 281 651
Intangible assets 95 094 15 522
Financial assets and other 72 045 1 691
investments
Investment in associates 8 459 14 146
Deferred income tax assets 45 690 56 194
Current assets 694 488 586 601
Inventories 125 526 109 628
Biological assets 139 567 134 969
Trade and other receivables 346 516 265 709
Current income tax receivable 8 850 -
Cash and cash equivalents 74 029 76 295
Total assets 1 271 283 955 805
EQUITY
Capital and reserves attributable to
equity holders of the Company
Total equity 363 264 258 875
Ordinary shares 1 871 1 871
Share premium 825 721 825 721
Other reserves 15 021 24 361
Retained earnings 330 723 230 918
Common control deficit (832 110) (832 110)
Attributable to equity holders of the 341 226 250 761
Company
Minority interest in equity 22 038 8 114
LIABILITIES
Non-current liabilities 436 977 276 961
Borrowings 355 306 190 604
Deferred income tax liabilities 81 671 86 357
Current liabilities 471 042 419 969
Trade and other payables 347 962 254 361
Current income tax liabilities - 37 127
Borrowings 122 057 127 615
Provisions for other liabilities and 1 023 866
charges
Total liabilities 908 019 696 930
Total equity and liabilities 1 271 283 955 805
Audited Condensed Segment Reporting
30 June 2009 30 June
2008
Audited Audited
R`000 R`000
REVENUE
Poultry 1 681 350 1 291 178
- South Africa 1 512 536 1 189 211
- Other Africa 168 814 101 967
Animal nutrition 1 031 283 473 513
- South Africa 840 528 412 183
- Other Africa 190 755 61 330
Beef 175 735 87 869
Intersegment revenues (649 369) (163 337)
2 238 999 1 689 223
OPERATING PROFIT
Poultry 164 067 23 486
- South Africa 155 012 995
- Other Africa 9 055 22 491
Animal nutrition 19 315 17 095
- South Africa 10 759 14 730
- Other Africa 8 556 2 365
Beef 3 236 532
186 618 41 113
Audited Condensed Consolidated Statement of Changes in Shareholders` Equity
Share Share Other
capital premium reserves
R`000 R`000 R`000
Balance at 1 July 2007 1 871 825 721 23 003
Disposal of subsidiary - - -
Currency translation - - (1 432)
differences
Profit for the year - - -
Employee share scheme - - 2 790
Dividend - - -
Balance at 30 June 2008 1 871 825 721 24 361
Balance at 1 July 2008 1 871 825 721 24 361
Capitalisation of loan - - -
accounts
Currency translation - - (13 181)
differences
Profit for the year - - -
Employee share scheme - - 3 841
Dividend - - -
Balance at 30 June 2009 1 871 825 721 15 021
Total
attributable
to equity
Common holders of
Retained control the parent
earnings deficit company
R`000 R`000 R`000
Balance at 1 July 2007 220 108 (838 605) 232 098
Disposal of subsidiary - 6 495 6 495
Currency translation - - (1 432)
differences
Profit for the year 16 423 - 16 423
Employee share scheme - - 2 790
Dividend (5 613) - (5 613)
Balance at 30 June 2008 230 918 (832 110) 250 761
Balance at 1 July 2008 230 918 (832 110) 250 761
Capitalisation of loan - - -
accounts
Currency translation - - (13 181)
differences
Profit for the year 123 005 - 123 005
Employee share scheme - - 3 841
Dividend (23 200) - (23 200)
Balance at 30 June 2009 330 723 (832 110) 341 226
Minority Total
interest equity
R`000 R`000
Balance at 1 July 2007 2 364 234 462
Disposal of subsidiary - 6 495
Currency translation - (1 432)
differences
Profit for the year 5 750 22 173
Employee share scheme - 2 790
Dividend - (5 613)
Balance at 30 June 2008 8 114 258 875
Balance at 1 July 2008 8 114 258 875
Capitalisation of loan 11 350 11 350
accounts
Currency translation - (13 181)
differences
Profit for the year 2 574 125 579
Employee share scheme - 3 841
Dividend - (23 200)
Balance at 30 June 2009 22 038 363 264
Notes to the Condensed Consolidated Financial Statements
1. Basis of preparation
The condensed consolidated financial information is based on the audited
financial statements of the Group for the year ended 30 June 2009, which have
been prepared in accordance with International Financial Reporting Standards
("IFRS"), International Accounting Standard 34, the Listings Requirements of the
JSE Limited and the South African Companies Act 61 of 1973 as amended, on a
consistent basis with that of the prior year. These financial statements do not
include all the information required for full annual financial statements and
should be read in conjunction with the consolidated financial statements as at
and for the year ended 30 June 2009. These results have been audited by
PricewaterhouseCoopers Inc, Chartered Accountants (SA), Registered Auditors.
Their unqualified audit opinion is available for inspection at the Company`s
registered office.
2. Accounting policies
The accounting policies applied in these condensed consolidated financial
statements comply with IFRS and International Auditing Standard 34 and are in
agreement with those applied in the preparation of the Group`s annual financial
statements for the year ended 30 June 2009 and are consistent with those applied
in previous years.
30 June 30 June
2009 2008
Audited Audited
R`000 R`000
3. Reconciliation to headline earnings
Net profit attributable to the Company`s 123 005 16 423
equity holders
Adjusted for:
Profit on disposal of property, plant and (375) (627)
equipment
(Profit)/loss on sale of investment (15 882) 791
Adjusted headline earnings 106 748 16 587
4. Capital expenditure and depreciation
Capital expenditure 62 083 44 182
Depreciation 24 856 19 092
Amortisation of intangible assets 369 24
5. Capital expenditure and commitments
Capital expenditure contracted for - 2 404
Inventories contracted for 75 691 79 576
75 691 81 980
6. Cash and cash equivalents
Cash and cash equivalents 74 030 76 295
Bank overdrafts (80 980) (12 520)
(6 950) 63 775
7. Business combinations
The Group made the following acquisitions during the year:
Nutri Feeds (Pty) Limited and Hollyberry Props 40 (Pty) Limited
On 24 October 2008, the Group acquired the remaining 50% of the share capital of
Nutri Feeds (Pty) Limited, which has stock feed business operations in South
Africa, and Hollyberry Props 40 (Pty) Limited, a rental company, for a cash
consideration of R123,2 million. The Group already owned 50% of the company and
acquired the remaining 50% of the company during the year. The acquired business
contributed revenues of R859,9 million and net profit of R23,7 million to the
Group for the period from 24 October 2008 to 30 June 2009. If the acquisition
had occurred on 1 July 2008, group revenue would have been R2 378,9 million, and
net profit would have been R137,5 million. The fair value of the net assets
acquired amounted to R62,6 million and resulted in the recognition of goodwill
of R60,6 million.
Oistens (Pty) Limited
On 1 July 2008, the Group acquired selected assets within a newly established
company, Oistins (Pty) Limited, which will operate as a poultry operation in
Botswana. The assets purchased include the property and all the land and
buildings erected on the property together with all fixed assets and other
assets installed therein as well as biological assets, inventories and certain
trade and other receivables and trade and other payables. The acquired business
contributed revenues of R26,1 million and net loss of R54 327 to the Group for
the period from 1 July 2008 to 30 June 2009. The purchase consideration was R9,5
million. The fair value of the net assets acquired amounted to R7 million and
resulted in the recognition of goodwill of R2,5 million.
Long Iron Meats (Pty) Limited
On 1 March 2009, the Group acquired the remaining 50% of the share capital of
Long Iron Meats (Pty) Limited, which operates as a beef abattoir in South
Africa, for a cash consideration of R1. The Group already owned 50% of the
company and acquired the remaining 50% of the company during the year. The
acquired business contributed revenues of R175,7 million and net profit of R250
561 to the Group for the period from 1 March 2008 to 30 June 2009. If the
acquisition had occurred on 1 July 2008, group revenue would have been R2 414,7
million, and net profit would have been R125,8 million. The fair value of the
net liabilities acquired amounted to R204 816 and resulted in the recognition of
goodwill of R5,8 million.
8. Disposal of investment in associate
On 28 November 2008, the Group sold its 18% shareholding in Elite Breeding Farms
and Kayfour Investments (Pty) Limited for the amount of R25 million, and
realised a profit of R18,5 million.
9. Declaration of dividend
Notice is hereby given that a dividend of 9,52 cents per ordinary share in
respect of the year ended 30 June 2009 has been declared by the board. The total
dividend for the period is 3 times covered by headline earnings per share.
The salient dates of the declaration and payment of this dividend is as follows:
Last date to trade ordinary shares cum dividend 20 November 2009
Ordinary shares trade ex dividend 23 November 2009
Record date 27 November 2009
Payment date 30 November 2009
Share certificates may not be dematerialised or rematerialised between Monday,
23 November 2009 and Friday, 27 November 2009 (both dates inclusive).
Commentary on results
PROFILE
Country Bird Holdings Limited (CBH) is an agricultural group comprising:
* integrated poultry and stock feed business operations in South Africa trading
as Supreme Poultry and Nutri Feeds;
* poultry breeding and stock feed operations in the southern African region
trading as Ross Africa and Master Farmer; and
* a South African red meat abattoir and trading operation trading as Long Iron
Meats.
CBH currently operates in South Africa, Botswana, Namibia and Zambia.
FINANCIAL REVIEW
Improved margins and increased sales resulted in operating profit of R186,618
million which is a 354% improvement on the figure for the corresponding period
of R41,113 million. Increased gearing from acquisitions and investments resulted
in finance costs increasing by 86%. However, overall, attributable profit of
R125,579 million was 466% higher than the figure of R22,173 million for the
previous year.
This translates into an increase in headline earnings per share (HEPS) of 543%
from 8,87 cents to 57,05 cents.
OPERATIONAL REVIEW
The South African poultry industry recovered somewhat in the year under review.
Margins improved but are still not quite at previous levels, whilst volumes
continued to grow. Acquisitions were made which strengthen the position of the
Group and management feels that this bodes well for the much anticipated
economic recovery.
Poultry
South Africa
The South African poultry operation produced an operating profit of R155,0
million (2008: R1 million), a significant improvement over the prior year.
Margins returned and there was a 4% increase in volumes. Of equal importance
from an operational perspective was the realisation of performance improvements
following the introduction of the Arbor Acres genetics. Marked improvements were
seen in food conversion ratios, mortalities and hatchability, with an
encouraging level of consistency even in the winter months. The productivity
improvement programme implemented in the last quarter of 2008 is showing
excellent results.
Africa
There were significant challenges in the Group`s African operations in the
second half of the financial year but management is confident that the measures
put in place will overcome these and improvements are anticipated.
Zambia
The economy in Zambia has suffered from copper price volatility and consequently
disposable income has been under pressure. The arrival of two competitors in the
day-old chick market eroded both market share and margin. These factors,
combined with an unusually high feed price, negatively impacted the performance
of the Zambian operation. However, the copper market seems to be recovering and
the Group has commenced feed milling operations which should bolster the results
in 2010.
Botswana
The final two breeding sites were established but the largest abattoir in
Botswana suffered a major fire which had a negative impact on broiler day-old
chick demand. The abattoir should be re-commissioned in 2010 but until then the
hatchery and breeding operation will be at reduced levels of operation.
Animal Nutrition
South Africa
The Nutri Feeds operation is now 100% managed and controlled by the CBH Group.
There were management changes at the mills and productivity improvement
programmes were implemented. This resulted in improved results from the quality
analysis, as well as improvements in productivity and marketing.
Africa
The feed mill was turned to profitability and operations have been satisfactory.
Synergies with the South African feed mills are being explored and operational
improvements are anticipated as the benefits of scale take effect.
Red Meat
The introduction of new, experienced management saw product innovations and
plant improvements that are particularly exciting in this small business. The
beef industry in general has been under tremendous pressure in this volatile
economic cycle but this operation weathered the storm.
PROSPECTS
Poultry margins have recovered, on-farm operational indicators are encouraging
and commodity prices have stabilised. The feed mill is now wholly-owned and
competent management is in place. The Directors are confident that the Group is
properly structured and staffed to benefit, grow and generate cash on a
sustainable basis from its platform in southern Africa.
DIVIDEND
In line with the Group`s dividend policy of three times cover, a dividend of
9,52 cents per share for the period has been declared for payment on 30 November
2009.
DIRECTORS OF CBH
BH Kent (Chairman)#, CD Stein#, JD Wright
KW James, GP Heath, RJ Taylor
#Independent non-executive
REGISTERED OFFICE
15 Coro Street, Bloemfontein, 9301
(PO Box 6851, Bloemfontein, 9300)
ATTORNEYS
Ramsay Webber Inc., 269 Oxford Road, Illovo, 2196
(PO Box 55232 Northlands, 2116)
INVESTMENT BANK and SPONSOR
Investec Bank Limited, (Registration number
1969/004763/06) 2nd Floor, 100 Grayston Drive, Sandton, 2196
(PO Box 785700, Sandton, 2146)
COMPANY SECRETARY
MJC Antunes, 15 Coro Street, Bloemfontein, 9301
(PO Box 6851, Bloemfontein, 9300)
AUDITORS
PricewaterhouseCoopers Inc.
61 Second Avenue, Westdene, Bloemfontein, 9301
(PO Box 818, Bloemfontein, 9300)
TRANSFER SECRETARIES
Computershare Investor Services
(Proprietary) Limited
(Registration number 2004/003647/07)
Ground Floor, 70 Marshall Street
Johannesburg, 2001
(PO Box 61051
Marshalltown, 2107)
25 August 2009
Date: 25/08/2009 10:30:01 Produced by the JSE SENS Department.
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