| Thu 22 Jul 2010, 16:19 | | AVI - Avi Limited - Voluntary Trading Update and Statement for the year ended 30 |
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AVI
AVI
AVI - Avi Limited - Voluntary Trading Update and Statement for the year ended 30
June 2010
AVI Limited
(Registration number 1944/017201/06)
Share code: AVI
ISIN: ZAE000049433
("AVI" or "the Group")
VOLUNTARY TRADING UPDATE AND STATEMENT FOR THE YEAR ENDED 30 JUNE 2010
The following update is based on the latest available trading information for
the year ended June 2010 and covers performance for the Group`s continuing
operations.
Segmental revenue for continuing operations for the year ended 30 June 2010
Revenue 2010 2009 Change
Rm Rm %
Entyce beverages* 2,218 2,099 5.7
Snackworks* 2,081 2,037 2.2
Chilled & frozen convenience 1,743 1,916 -9.0
brands**
Fashion brands - personal care 803 730 10.0
Fashion brands - footwear & 782 670 16.7
apparel
Corporate 7 10
GROUP 7,634 7,462 2.3
* = includes Out Of Home (Ciro
and Sir Juice)
** = excludes Alpesca
Group revenue for the year to June 2010 was 2,3% higher than last year with
growth in most business units offset by a significant decline in I&J`s revenue
due to a combination of lower export selling prices, a stronger Rand and lower
volumes following the reduction in the hake total allowable catch. Demand for
the Group`s other food and beverage brands was satisfactory in the context of
constrained consumer spending and they all achieved revenue growth as a result
of either higher volumes or the annualising impact of price increases taken in
the prior year. AVI`s personal care and footwear brands performed strongly,
benefitting from price increases implemented in the second half of the last
financial year as well as solid volume growth.
All business units, aside from I&J, delivered robust improvements in operating
profit. This strong performance has more than off-set the significant decline in
I&J`s operating profit and both consolidated gross profit and consolidated
operating profit are higher than last year. The anticipated improvement in
Snackwork`s profit margins in the second half of the year, due to lower
commodity costs and progress with factory efficiencies, has been particularly
pleasing.
The consolidated gross margin percentage for the year has recovered to levels
similar to the 2008 financial year following the significant pressure endured
during a period of high commodity costs and constrained demand in our food and
beverage categories. The fashion brand business units also contributed to the
improvement with both Indigo and Spitz achieving higher gross margins through
the year. Selling and administration costs have been well controlled and despite
the poor performance of I&J the consolidated operating profit margin percentage
is slightly higher than last year.
The Australian Simplot Joint Venture has continued to deliver improved profits
as noted in our interim results, and full year profit is well above last year.
Lower average debt levels during the period, combined with lower interest rates,
have resulted in a material decrease in net finance charges compared to the same
period in the prior year.
CAPITAL ITEMS
Capital items in the year ended June 2010 are not material and relate to losses
on disposal of assets in the normal course of business. In the prior year there
was a net capital gain of R17,1 million before tax which included profits on the
sale of an I&J property and a non-core subsidiary offset by impairment of
intangible assets. This difference results in a smaller increase in attributable
earnings than headline earnings.
EXPECTED RESULTS FOR CONTINUING OPERATIONS
The following statement is made in accordance with Section 3.4 (b) of the
Listings Requirements of the JSE Limited:
- Consolidated headline earnings per share for the continuing operations of
the Group for the year ended 30 June 2010 are expected to increase by
between 11% and 16% over the comparable period in the prior year;
- Consolidated earnings per share for the continuing operations of the Group
for the year ended 30 June 2010, including net capital gains and losses on
the disposal of assets, are expected to reflect an increase of between 6%
and 11% over the comparable period in the prior year.
DISCONTINUED OPERATIONS - ALPESCA
The Board remains committed to disinvesting from the Argentinean hake and shrimp
operations conducted by Alpesca, a wholly owned subsidiary of I&J. A material
impairment provision will be raised in the final results from discontinued
operations for the year ended June 2010 to recognise the possibility that the
sale process may result in a consideration below the carrying value of the
operating assets. There has been a higher level of interest by prospective
buyers in the second half of the year and we are optimistic that a disposal will
be completed during the next year.
Alpesca`s operating results during the year have been compromised by lower
export prices, the weak Euro and material labour disruptions. Consequently this
operation is expected to report an operating loss compared to the small profit
in the prior year.
It is expected that AVI will release its final results for the year ended June
2010 on 6 September 2010.
The information above has not been reviewed and reported on by the Group`s
auditors.
Illovo
22 July 2010
Sponsor
Standard Bank
Enquiries:
Simon Crutchley Tel: +(27) 11 502 1300
Chief executive officer
Owen Cressey Tel: +(27) 11 502 1300
Chief financial officer
Date: 22/07/2010 16:19:03 Produced by the JSE SENS Department.
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