| Thu 11 Feb 2010, 16:00 | | CBH - Country Bird Holdings - Interim results for the period ended 31 December |
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CBH
CBH
CBH - Country Bird Holdings - Interim results for the period ended 31 December
2009
Country Bird Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number: 2005/008505/06
ISIN: ZAE000094835
JSE Share code: CBH
("CBH" or "the Company")
COUNTRY BIRD HOLDINGS LIMITED
Interim results for the period ended 31 December 2009
Highlights
Revenue 14% UP
Adjusted earnings per share 32% UP
Headline earnings per share 3% UP
Capital distribution 6,41 cents per share
Condensed Consolidated Statement of Comprehensive Income
6 months 6 months
ended ended
31 December 31 December
2009 2008
Unaudited Unaudited
R`000 R`000
Revenue 1 257 590 1 105 797
Cost of sales (1 107 742) (977 488)
Gross profit 149 848 128 309
Distribution cost (6 741) (2 383)
Administrative expenses (65 355) (54 694)
Other income 4 646 25 341
Operating profit 82 398 96 573
Finance income 2 636 1 479
Finance costs (28 806) (25 094)
Share of loss of associates (166) (457)
Profit before income tax 56 062 72 501
Income tax expense (18 188) (17 676)
Profit for the period 37 874 54 825
Profit for the period attributable to:
Equity holders of the company 36 061 53 336
Minority interest 1 813 1 489
37 874 54 825
Earnings per share (cents)
- Basic 19,27 28,51
- Diluted 18,98 28,25
Profit for the period 37 874 54 825
Other comprehensive income for the
period, net of tax
- Movement in foreign currency translation reserve (638) (2 706)
Total comprehensive income for the period 37 236 52 119
Total comprehensive income for the period
attributable to:
Equity holders of the company 35 423 50 630
Minority interest 1 813 1 489
37 236 52 119
Additional information to Condensed
Consolidated Financial Statements
Profit for the period attributable to
equity holders of the company 36 061 53 336
Reversal of non-recurring items per note 2 9 926 (18 467)
Adjusted profit attributable to equity holders
of the company 45 987 34 869
Adjusted earnings per share (cents):
- basic 24,58 18,64
- diluted 24,20 18,47
Ordinary share
Issued net of treasury shares:
- Weighted average number of ordinary shares 187 099 313 187 099 313
- Diluted number of ordinary shares 190 027 110 188 810 839
Headline earnings per ordinary share (cents)
- basic 19,22 18,60
- diluted 18,92 18,43
Dividend / Capital distribution per share
- Interim (cents) 6,41 9,50
Dividend / Capital distribution per share
- Final (cents) - -
Net asset value per share (cents) 214,82 163,95
Tangible asset value per share (cents) 164,23 112,30
Gearing ratio 2,06 2,46
12 months
ended
30 June
2009
Change Audited
% R`000
Revenue 14 2 238 999
Cost of sales 13 (1 993 823)
Gross profit 17 245 176
Distribution cost 183 (11 925)
Administrative expenses 19 (119 484)
Other income (82) 72 851
Operating profit (15) 186 618
Finance income 78 3 252
Finance costs 15 (50 833)
Share of loss of associates (64) (785)
Profit before income tax (23) 138 252
Income tax expense 3 (12 673)
Profit for the period (31) 125 579
Profit for the period attributable to:
Equity holders of the company (32) 123 005
Minority interest 22 2 574
(31) 125 579
Earnings per share (cents)
- Basic (32) 65,74
- Diluted (33) 65,38
Profit for the period (31) 125 579
Other comprehensive income for the period, net of tax
- Movement in foreign currency
translation reserve (76) (13 181)
Total comprehensive income for the period (29) 112 398
Total comprehensive income for the period
attributable to:
Equity holders of the company (30) 109 824
Minority interest 22 2 574
(29) 112 398
Additional information to Condensed Consolidated
Financial Statements
Profit for the period attributable to
equity holders of the company (32) 123 005
Reversal of non-recurring items per note 2 (154) (34 097)
Adjusted profit attributable to equity holders
of the company 32 88 909
Adjusted earnings per share (cents):
- basic 32 47,52
- diluted 31 47,26
Ordinary share
Issued net of treasury shares:
- Weighted average number of ordinary shares 187 099 313
- Diluted number of ordinary shares 188 129 044
Headline earnings per ordinary share (cents)
- basic 3,3 57,05
- diluted 2,7 56,74
Dividend / Capital distribution per share
- Interim (cents) (33) 9,50
Dividend / Capital distribution per share
- Final (cents) 9,52
Net asset value per share (cents) 31 194,16
Tangible asset value per share (cents) 46 143,33
Gearing ratio (16) 2,50
Condensed Consolidated Cash Flow Statement
6 months ended 6 months ended 12 months ended
31 December 2009 31 December 2008 30 June 2009
Unaudited Unaudited Audited
R `000 R `000 R `000
Cash flows from
operating activities
Net cash generated from
operating activities 4 816 21 952 102 579
Cash receipts
from customers 1 306 327 1 135 849 2 158 192
Cash paid to suppliers
and employees (1 268 632) (1 055 756) (1 945 020)
Cash generated
from operations 37 695 80 093 213 172
Interest paid (28 806) (25 094) (50 834)
Income tax paid (4 073) (33 047) (59 759)
Cash flows from
investing activities
Net cash used in
investing activities (31 746) (140 586) (223 018)
Purchases of property,
plant and equipment (40 144) (27 186) (62 083)
Proceeds sale of property,
plant and equipment 69 542 2 589
Purchases of
intangible asset - - (439)
Purchases of subsidiaries
and joint venture,
net of cash acquired - (124 573) (138 324)
Realisation /
(Purchases) of
financial assets
and investments 5 961 (15 357) (45 635)
Investments in associates (268) (491) (7 379)
Proceeds on disposal of
joint venture - 25 000 25 000
Interest received 2 636 1 479 3 253
Cash flows from
financing activities
Net cash used in
financing activities (19 366) 115 216 57 754
Capital distribution
to shareholders (17 812) - -
Share issue and
listing expenses (29) - -
Proceeds from /
(repayments of) borrowings (1 525) 120 6 42 80 954
Dividends paid to
company`s shareholders - (5 426) (23 200)
Net decrease in cash
and cash equivalents (46 296) (3 418) (62 685)
Cash and cash
equivalents at
beginning of period (6 950) 63 775 63 775
Exchange gains on cash
and bank overdrafts 2 635 (2 862) (8 040)
Cash and cash equivalents
at end of period (50 611) 57 495 (6 950)
Condensed Segment Report
Revenue
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2009 2008 2009
Unaudited Unaudited Audited
R`000 R`000 R`000
Poultry 856 577 860 828 1 681 350
- South Africa 780 252 782 812 1 512 536
- Other Africa 76 325 78 016 168 814
Animal nutrition 631 461 369 250 1 031 283
- South Africa 512 446 276 871 840 528
- Other Africa 119 015 92 379 190 755
Beef 159 934 65 629 175 735
Inter-group revenue (390 382) (189 910) (649 369)
1 257 590 1 105 797 2 238 999
Operating profit
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2009 2008 2009
Unaudited Unaudited Unaudited
R`000 R`000 R`000
Poultry 68 313 66 200 164 067
- South Africa 67 552 51 402 155 012
- Other Africa 761 14 798 9 055
Animal nutrition 13 497 28 801 19 315
- South Africa 6 486 25 314 10 759
- Other Africa 7 011 3 487 8 556
Beef 588 1 572 3 236
Inter-group revenue - - -
82 398 96 573 186 618
Condensed Consolidated Statement of Changes in Equity
6 months ended 6 months ended 12 months ended
31 December 2009 31 December 2008 30 June 2009
Unaudited Unaudited Audited
R`000 R`000 R`000
Operating balance 363 264 258 872 258 872
Issue of treasury shares 14 970 - -
Share issue and
listing expenses (29) - -
Capitalisation of
loan accounts - - 11 350
Capital distribution
to shareholders (17 812) - -
Share incentive scheme 4 870 1 175 3 844
Currency translation
differences (638) (2 706) (13 181)
Repurchase of an
equity instrument (568) -
Profit for the period 36 061 53 336 123 005
Minorities share of
profits and reserves 1 813 1 489 2 574
Dividend paid - (5 426) (23 200)
At end of period 401 931 306 740 363 264
Condensed Consolidated Statement of Financial Position
As at As at As at
31 December 31 December 30 June
2009 2008 2009
Unaudited Unaudited Audited
R`000 R`000 R`000
ASSETS
Non-current assets 583 329 489 638 576 796
Property, plant and equipment 377 134 326 199 355 507
Intangible assets 94 665 96 628 95 095
Financial assets and other
investments 71 695 459 72 045
Investment in associates 8 893 8 104 8 459
Deferred income tax assets 30 942 58 248 45 690
Current assets 647 087 572 855 694 487
Inventories 126 307 118 564 125 526
Biological assets 137 533 143 604 139 567
Trade and other receivables 297 778 235 655 346 516
Current income tax receivable 9 035 - 8 850
Cash and cash equivalents 76 434 75 032 74 029
Total assets 1 230 416 1 062 493 1 271 283
EQUITY
Capital and reserves attributable
to equity holders of the company
Total equity 401 931 306 740 363 264
Ordinary shares 2 021 1 871 1 871
Share premium 822 700 825 721 825 721
Other reserves 18 685 22 828 15 021
Retained earnings 366 784 278 828 330 723
Common control deficit (832 110) (832 110) (832 110)
Attributable to equity holders
of the company 378 080 297 138 341 226
Minority interest in equity 23 851 9 602 22 038
LIABILITIES
Non-current liabilities 434 884 412 778 436 977
Borrowings 35 4303 324 616 355 306
Deferred income tax liabilities 80 581 88 162 81 671
Current liabilities 393 601 342 975 471 042
Trade and other payables 225 091 233 797 37 962
Current income tax liabilities 703 26 008 -
Borrowings 167 601 82 570 122057
Provisions for other liabilities
and charges 206 600 1 023
Total liabilities 828 485 755 753 908 019
Total equity and liabilities 1 230 416 1 062 493 1 271 283
Notes to the Condensed Consolidated Financial Statements
1. Basis of preparation
The unaudited condensed consolidated interim financial information announcement
for the half-year ended 31 December 2009 was prepared in accordance with IAS 34
Interim Financial Reporting and in compliance with the Listings Requirements of
the JSE Limited and the South African Companies Act (1973). The accounting
policies are consistent with those of the previous financial period and comply
with International Financial Reporting Standards ( IFRS), except for the impact
of the standards noted below that became effective on 1 January 2009 :
IAS 1 Presentation of Financial Statements (revised) and IFRS 8 Operating
Segments. The adoption of these standards has no effect on the results, nor
has it required any restatement of the results. 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 unaudited condensed consolidated interim financial statements were
approved by the Board of Directors on 9 February 2010.
The following new amendments to IFRS is relevant to the Group and are mandatory
for the first time for the financial year beginning 1 July 2009: IAS 1
(revised), Presentation of Financial Statements. The revised standard prohibits
the presentation of items of income and expense (that is `non-owner` changes in
equity) in the statement of changes in equity, requiring `non-owner changes in
equity to be presented separately from owner changes in equity. All `non-owner`
changes in equity are required to be shown in a performance statement. Entities
can choose whether to present one performance statement (the statement of
comprehensive income) or two statements (the income statement and statement of
comprehensive income). The Group has elected to present one performance
statement: a statement of comprehensive income. The interim financial
statements have been prepared under the revised disclosure requirements.
IFRS 8 Operating Segments. The revised standard requires segmental disclosure
based on information that management used to run the business. The adoption of
this standard has no effect on the results, nor has it required any restatement
of the results.
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2009 2008 2009
Unaudited Unaudited Audited
R`000 R`000 R`000
2. Operating profit
The following amounts have been
accounted for in the operating profit:
Profit on sale of investment - 18 467 18 467
Fair value gains / (losses)
on financial assets at fair
value through profit or loss (9 926) - 15 629
3. Reconciliation to headline earnings
Net profit attributable to
the company`s equity holders 36 061 53 336 123 005
Adjusted for:
Profit on disposal of property,
plant and equipment (56) (67) (375)
Profit on sale of investment (45) (18 467) (15 882)
Adjusted headline earnings 35 960 34 802 106 748
4. Capital expenditure and depreciation
Capital expenditure 40 144 27 186 62 083
Depreciation 16 278 13 506 24 856
Amortisation of intangible assets 277 - 369
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2009 2008 2009
Unaudited Unaudited Audited
R`000 R`000 R`000
5. Capital expenditure and commitments
Capital expenditure contracted for - 6 236 -
Inventories contracted for 47 029 88 952 75 691
47 029 95 188 75 691
6. Cash and cash equivalents
Bank balances, deposits and cash 76 434 75 032 74 029
Short-term borrowings (127 045) (17 537) (80 979)
(50 611) 57 495 (6 950)
7. BEE ownership transaction
On 1 July 2009, the group repurchased the 25% of the shares held in the
subsidiary company Supreme Poultry ( Pty) Ltd by Jacinda ( Pty) Ltd from Union
Square ( Pty) Ltd, for an amount of R567 155.
In 2007, a BEE ownership transaction to the value of R12 333 514 was recognised
as an expense in the income statement and a reserve within equity and thus
resulted in a decrease of 6.59 cents in earnings per share. However, in terms
of the accounting standard IFRS 2 Share- based Payment, the group cannot
recognise the balance of the reserve resulting from the repurchase of this
equity instrument transaction as a gain of R11 766 353 in the statement of
comprehensive income. This amount therefore remains as a reserve within equity.
8. Declaration of capital distribution
Notice is hereby given that a capital distribution out of share premium of 6.41
cents per ordinary respect of the six months ended 31 December 2009 has been
declared by the board. The total distribution for the period is three 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 Thursday, 22 April 2010
Ordinary shares trade ex dividend Friday, 23 April 2010
Record date Friday, 30 April 2010
Payment date Monday, 3 May 2010
Share certificates may not be dematerialised or rematerialised between Friday,
23 April 2010 and Friday, 30 April 2010 (both dates inclusive).
The board of directors were given the general authority to make payments to
shareholders out of the Company`s share premium account at the annual general
meeting held on 24 November 2009.
The illustrative financial effects of the distribution set out below have been
prepared to assist shareholders in assessing the impact of the distribution of
capital out of share premium on the Net Asset Value per share ("NAV") and
Tangible Net Asset Value per share ("TNAV").
Impact of the distribution Pro forma after
of 6,41 cents per share the distribution
R`000 R`000
Assets
Cash and cash equivalents (11 993) 64 441
Equity and liabilities
Equity attributable to ordinary shareholders (11 993) 366 087
NAV (cents per share) (6,41) 208,41
TNAV (cents per share) 9,74 173,97
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, broiler 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, and Zambia.
FINANCIAL REVIEW
Operating profit dipped by 15% to R82,4 million for the six months ended 31
December 2009 (2008 : R96,6 million). Revenue was up 14% to R1,26 billion for
the period (2008 : R1,11 billion), with gross profit increasing by 17% to R149,
8 million (2008 : R128,3 million) after accounting for a 13% increase in cost
of sales attributable to revenue growth.
Profit before income tax fell 23% to R56,1 million (2008 : R72,5 million) due
primarily to a 15% increase in finance costs and an 82% decrease in other
income. The Group`s gearing ratio improved slightly to 2,06 from 2,46 a year
ago due mainly to the R88 million increase in retained earnings.
OPERATIONAL REVIEW
Poultry - South Africa
The South African poultry division reported a 3,8% increase in volume s sold
for the period but this was more than set off against a drop in realisations of
4,0%. There was a 7,5% drop in the feed price and a 4,3% improvement in food
conversion ratios in the poultry division, so despite the 8,9% increase in
operating costs, margins improved to 8,7% (2008 : 6,6%). The result was an
operating profit of R67,5 million for the period, versus R51,4 million for the
comparable period in 2008. Industry figure s show that poultry imports bounced
back over the period increasing 35% over the same period last year, impacting
the realisations and stock levels.
Poultry - Other Africa
This comprises a grandparent breeding operation in Zambia and a parent breeding
operation and broiler operation in Botswana. Operating profit continued to
decline falling to R0,8 million (2008 : R14,8 million), whilst revenues also
decreased by 2%. Trading conditions were very challenging over the period but
some strategic acquisitions are under consideration and expectations are high
for these businesses.
Animal Nutrition - South Africa
Nutri Feeds reported an improvement of 17,6% in volumes sold for the period
under review. This is the first period wherein Nutri Feeds has been 100% owned
by the Group for the full period and the drop in operating profit reflects the
shift in accounting policies such that, in the period under review, only
operating profit on external sales are shown.
Animal Nutrition - Other Africa
Both mills in Zambia and Botswana are on target for penetration into their
markets, showing a combined revenue increase of 28,9% to R119,0 million (2008 :
R92,4 million) and an operating profit improvement to 5,9% (2008 : 3,8%).
Red Meat
The efficiency and rationalisation improvement programmes continue successfully
in a very difficult trading environment. New product launches and penetration
into new market outlets are the light on the horizon for this business which
has shown tremendous revenue growth. Sales are at R159,9 million (2008 : R65,6
million), but margins have shrunk to yield operating profit of R0,6 million
(2008 : R1,6 million).
PROSPECTS
For the second half of the 2010 financial year the poultry industry in South
Africa is likely to continue operating at current margins and , whilst the
maize price and internal efficiencies provide cost relief, realisations remain
under pressure from stock levels and imports.
In the South African feed business further scientific development of be spoke
feed rations has assisted Supreme Poultry and its contract growers to achieve
outstanding growing results. The feed operation is increasing its volumes and
provided feed margins can be maintained, the increase in capacity utilisation
should result in higher operating income.
The feed mills in Zambia and Botswana are benefitting from information exchange
with Nutri Feeds and market penetration, operational efficiency and margin
improvement are the focus going forward.
CAPITAL DISTRIBUTION
In line with the Group`s dividend policy of three time s cover, a capital
distribution out of share premium of 6,41 cents per share for the period has
been declared for payment on 3 May 2010. The reason for a capital distribution
as opposed to a dividend is to provide a more tax-efficient distribution.
DIRECTORS OF CBH
BH Kent (Chairman) #, CD Stein #, IWM Isdale #, R Gibbison #,
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 Ox ford 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
Computer share Investor Services
(Proprietary) Limited
(Registration number 2004/003647/07)
Ground Floor, 70 Marshall Street
Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Johannesburg
11 February 2010
Date: 11/02/2010 16:00:02 Produced by the JSE SENS Department.
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