| Tue 25 Aug 2009, 10:31 | | CBH - Country Bird Holdings - Recovery in margins and volumes lifts Country |
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CBH
CBH
CBH - Country Bird Holdings - Recovery in margins and volumes lifts Country
Birds` results
Country Bird Holdings Limited
(Incorporated in the Republic of South Africa)
(Reg. no 2005/008505/06)
Share Code: CBH ISIN: ZAE000094835
RECOVERY IN MARGINS AND VOLUMES LIFTS COUNTRY BIRDS` RESULTS
A recovery in margins and volumes lifted Country Bird Holdings Limited`s (CBH)
operating profit to R186,6 million for the year ended 30 June 2009, which is a
354% improvement on the R41,1 million reported for the previous financial year.
Despite higher financing costs, the results were positively impacted by the
introduction of Arbor Acres genetics which substantially improved operational
performance in the South African breeding operations.
Attributable profit increased by 466% to R125,6 million (2008: R22,17 million)
notwithstanding an increase in net financing costs of 86%.
Headline earnings per share increased by 543% to 57,05 cents from 8,87 cents the
previous year. 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.
CBH CFO Robbie Taylor says the improvement in the results is due to a general
recovery in the South African poultry market. "Margins have improved but are
still not quite at previous levels whilst volumes continue to grow.
Acquisitions have been made which strengthen the position of the group and this
bodes well for the much anticipated economic recovery," says Taylor.
CBH operates a poultry business in South Africa trading as Supreme Poultry, and
a stock feed business trading as Nutri Feeds. In addition to its poultry and red
meat business in South Africa, the group has poultry breeding and stock feed
operations in southern Africa trading as Ross Africa and Master Farmer. It
currently has operations in South Africa, Botswana, Namibia and Zambia.
The South African poultry operation produced an operating profit of R155
million, which is a marked improvement over the R1 million reported in the prior
financial year. Operating profit was boosted by a general recovery in margins,
while volumes increased by 4%. Wright says the results were significantly
impacted by performance improvements following the introduction of the Arbor
Acres genetics. "Marked improvements have been 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," he says.
CBH concluded the acquisition of 100% of the Nutri Feeds operation during the
year, and implemented management changes as well as productivity improvements.
It was a challenging second half of the financial year for the group`s African
poultry operations, but changes have been implemented which are expected to
yield positive results in the coming financial year. The Zambian business was
adversely affected by a weaker copper market and falling disposable income.
Copper prices have started to recover and this is expected to boost disposable
income in the coming year, while the commencement of feed milling operations
should translate into better results in 2010.
The Botswana business was negatively affected by a fire at the country`s largest
abattoir, which will be re-commissioned only in 2010. Unit then, the group`s
hatchery and breeding operations will be at reduced levels.
The Africa feed mill is now trading profitably, and synergies with the South
African feed mills are being explored. This is expected to yield operational
improvements as the benefits of scale take effect.
South Africa`s red meat industry has been under severe pressure due to the
economic downturn, but CBH`s red meat business weathered the storm, helped by
the appointment of new and experienced management and the introduction of
product innovations and plant improvements.
Looking forward, Taylor says the recovery in poultry margins, improvements in
operational performance and the stabilisation of commodity prices augurs well
for the year ahead. "We are confident that the group is properly structured and
staffed to benefit and grow on a sustainable basis from its platform in southern
Africa."
About Country Bird Holdings Limited (CBH)
CBH, which listed on the JSE in May 2007, is a holding company incorporating
integrated poultry, stock feed and beef businesses in South Africa, operating as
Supreme Poultry, Nutri Feeds and Long Iron Meats respectively, as well as
poultry breeding and broiler operations in the southern African region,
operating as Ross Africa. CBH is currently active in South Africa, Namibia,
Botswana and Zambia.
Issued for: Country Bird Holdings Limited (CBH)
Contact: Robbie Taylor, Group Financial Director:
011 778 0658 / 082 809 9506
Fax No: 086 660 0917
Email: Robbie@countrybird.co.za
Website: www.cbhltd.co.za
Issued by: Tish Stewart Corporate and Investor Communications
Contact: Tish Stewart: 082 4436399 / 011 442 5536
Fax No: 011 447 9317
Email: tishstewart@mweb.co.za
Date: 25 August 2009
Sponsor: Investec Bank Limited
Date: 25/08/2009 10:31:01 Produced by the JSE SENS Department.
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