| Thu 11 Nov 2010, 16:12 | | OCE - Oceana Group Limited - Audited group results and dividend declaration for |
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OCE
OCE
OCE - Oceana Group Limited - Audited group results and dividend declaration for
the year ended 30 September 2010
Oceana Group Limited
Incorporated in the Republic of South Africa
(Registration Number 1939/001730/06)
JSE Share Code: OCE
ISIN Number: ZAE000025284
NSX Share Code: OCG
("Oceana" or "the company" or "the group")
Audited group results and dividend declaration for the year ended 30 September
2010
The results of the group for the year ended 30 September 2010 are set out
herein.
The condensed financial information has been prepared in accordance with the
framework concepts and the measurement and recognition requirements of
International Financial Reporting Standards (IFRS), the AC 500 standards as
issued by the Accounting Practices Board and the information as required by IAS
34 Interim Financial Reporting. The report has been prepared using accounting
policies that comply with IFRS which are consistent with those applied in the
financial statements for the year ended 30 September 2009.
During the year, the group adopted IAS 1 Presentation of Financial Statements
and IFRS 8 Operating Segments. The adoption of IAS1 only impacts presentation
aspects, therefore there is no impact on amounts reported. The adoption of IFRS
8 had no effect on the presentation of the current and prior year results.
The auditors, Deloitte & Touche, have issued their opinion on the group`s
financial statements for the year ended 30 September 2010. The audit was
conducted in accordance with International Standards on Auditing. They have
issued an unmodified audit opinion. These summarised provisional financial
statements have been derived from the group financial statements and are
consistent in all material respects, with the group financial statements. A copy
of their audit report is available for inspection at the company`s registered
office. Any reference to future financial performance included in this
announcement, has not been reviewed or reported on by the company`s auditors.
COMMENTS
Financial results
Headline earnings per share for the year ended 30 September 2010 rose by 13%
over the previous year. Earnings per share was affected by the impairment of
goodwill, disclosed in abnormal items, and was in line with the previous year.
Operating profit before abnormal items for the year ended 30 September 2010
increased by 18% compared with the previous year.
Investment income was lower than last year mainly as a consequence of lower cash
balances and lower interest rates.
A final dividend of 175 cents per share has been declared, which together with
the interim dividend of 33 cents, brings the total dividend for the year to 208
cents per share, an increase of 13% on the 2009 total dividend of 184 cents.
Review of operations
Inshore Fishing
The 2010 Total Allowable Catch (TAC) for pilchard in South Africa is 90 000 tons
(2009: 90 000 tons). Pilchard landings and processing yields at the St Helena
Bay cannery were in line with the previous financial year and the company`s
quota is expected to be landed in full by close of season. The Namibian pilchard
TAC is 25 000 tons (2009: 17 000 tons). Etosha landed its quota in full and also
canned a significant volume from frozen fish imported from Morocco.
Canned fish sales volumes increased on the domestic market as a result of the
greater availability of finished product from both local supply and imports.
Costs on imported product benefitted from the strong rand exchange rate.
Market conditions at Glenryck in the United Kingdom continued to be difficult.
The operation was restructured during the year and a number of product lines
discontinued. Core products will in future be supplied by Oceana Brands for sale
in the UK by a third party distributor under the Glenryck brand.
Overall, profitability from canned fish operations was well above that achieved
in the prior year.
The anchovy "A" season TAC for 2010 was 453 183 tons and "B" season 120 000 tons
(2009: "A" season 449 437 tons; "B" season 120 000 tons). By financial year end
the group had landed 52% of its anchovy quota (2009: 42%) and does not expect
significant further landings before the close of the season. Catches of redeye
herring were higher and overall the input into the fishmeal plants increased 17%
to 132 081 tons (2009: 112 834 tons). Selling prices in US dollar terms were
significantly better than the previous year and a large proportion of sales were
made to international markets, mainly in the Far East. Margins and profits were
higher than in the prior year.
The TAC for west coast lobster increased to 2 393 tons (2009: 2 340 tons). All
commercial rights holders were allocated the same quota as the prior year which
for Oceana was 348 tons. 343 tons was landed by the end of the season (2009: 348
tons). Catch rates were substantially better than last year which resulted in
lower catching costs per unit. Selling prices in foreign currency terms reached
record levels due to the worldwide shortage of lobster however this was
partially offset by the strong rand/dollar rate of exchange. Profits from
lobster increased due to higher prices and lower costs.
Squid turnover was higher than last year due to higher volumes. Squid catches
were higher than the previous year which had been affected by an industry-wide
strike by fishermen. The business returned to profitability.
Lower volumes of French fries coupled with high purchase prices of potatoes in
the first quarter resulted in a loss for this business.
Midwater and Deep-sea Fishing
The Namibian horse mackerel TAC is 247 803 tons (2009: 243 000 tons). Catch
rates in Namibia were very good due to extra catch capacity following upgrades
to two vessels in the prior year. In South Africa the Maximum Precautionary
Catch limit remained at 31 500 tons. Vessel operating costs in both Namibia and
South Africa were lower due to reduced fuel and maintenance costs. Selling
prices were generally higher in US dollar terms. Horse mackerel trading volumes
out of Mauritania and the South Pacific were significantly lower. Overall,
profit from horse mackerel was higher than last year.
Hake incurred a loss for the year as a result of low selling prices, the strong
rand exchange rate and costs associated with a breakdown on one of the vessels.
Cold Storage
Revenue increased due to higher frozen capacity, a higher overall occupancy rate
and an increase in the number of pallets handled. Fruit volumes however were
lower than last year which detracted from the excellent results from the frozen
stores. The expansion of the City Deep facility is scheduled for commissioning
in February 2011. Overall operating profit was higher than last year.
Prospects
Fishing conditions in the southern African region are expected to remain
relatively stable. Oceana`s South African, other African and Asian markets are
anticipated to show further growth while the company`s European markets are yet
to recover to levels experienced before the global economic crisis. The rand
exchange rate will continue to have a major bearing on financial performance.
MA Brey FP Kuttel
Chairman Chief executive officer
11 November 2010
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
Audited Audited
Year ended Year ended
30 Sept 30 Sept
2010 2009
Note R`000 Change % R`000
Revenue 3,423,219 4 3,301,288
Cost of sales 2,160,639 (3) 2,231,648
Gross profit 1,262,580 18 1,069,640
Sales and distribution 298,073 21 246,473
expenditure
Marketing expenditure 39,658 34 29,641
Overhead expenditure 426,780 13 377,760
Net foreign exchange loss 13,595 4,900
Operating profit before 484,474 18 410,866
abnormal items
Abnormal items 1 (19,697) 19,329
Operating profit 464,777 8 430,195
Dividends received and 13,532 (28) 18,731
accrued
Net interest received 721 (90) 7,230
Profit before taxation 479,030 5 456,156
Taxation 175,515 18 148,223
Profit after taxation 303,515 (1) 307,933
Other comprehensive income
Movement on foreign (3,541) (24,894)
currency translation
reserve
Movement on cash flow (75) (7,856)
hedging reserve
Other comprehensive (3,616) (32,750)
income, net of taxation
Total comprehensive income 299,899 9 275,183
for the year
Profit after taxation
attributable to:
Shareholders of Oceana 294,424 1 292,199
Group Limited
Non-controlling interests 9,091 (42) 15,734
303,515 (1) 307,933
Total comprehensive income
attributable to:
Shareholders of Oceana 290,808 12 259,449
Group Limited
Non-controlling interests 9,091 (42) 15,734
299,899 9 275,183
Weighted average number of 5 99,580 99,041
shares on which earnings
per share is based (000`s)
Adjusted weighted average 104,923 101,950
number of shares on which
diluted earnings per share
is based (000`s)
Earnings per share (cents)
Basic 295.7 0 295.0
Diluted 280.6 (2) 286.6
Dividends per share 208.0 13 184.0
(cents)
Headline earnings per
share (cents)
Basic 315.2 13 279.4
Diluted 299.2 10 271.5
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
Audited Audited
30 Sept 30 Sept
2010 2009
R`000 R`000
Assets
Non-current assets 541,146 534,276
Property, plant and equipment 364,538 352,170
Goodwill 18,774
Trademark 16,183 17,343
Deferred taxation 8,528 5,878
Investments and loans 151,897 140,111
Current assets 1,302,083 1,188,010
Inventories 574,838 589,814
Accounts receivable 545,515 408,793
Cash and cash equivalents 181,730 189,403
Total assets 1,843,229 1,722,286
Equity and liabilities
Equity 23,129 16,536
Share capital and premium
Foreign currency translation reserve (6,059) (2,518)
Capital redemption reserve 130 130
Cash flow hedging reserve (7,931) (7,856)
Share-based payment reserve 40,058 32,015
Distributable reserve 1,162,803 1,053,395
Interest of own shareholders 1,212,130 1,091,702
Non-controlling interests 34,340 33,994
Total equity 1,246,470 1,125,696
Non-current liabilities 89,841 76,291
Liability for share-based payments 42,941 26,462
Deferred taxation 46,900 49,829
Current liabilities 506,918 520,299
Accounts payable and provisions 470,304 499,866
Bank overdrafts 36,614 20,433
Total equity and liabilities 1,843,229 1,722,286
Number of shares in issue net of treasury 99,692 99,269
shares (000`s)
Net asset value per ordinary share (cents) 1,216 1,100
Total liabilities excluding deferred 44 49
taxation: Total equity (%)
Total borrowings: Total equity (%) 3 2
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
Audited Audited
30 Sept 30 Sept
2010 2009
R`000 R`000
Balance at the beginning of the year 1,125,696 999,558
Total comprehensive income for the year 299,899 275,183
Profit after taxation 303,515 307,933
Movement on foreign currency translation (3,541) (24,894)
reserve
Movement on cash flow hedging reserve (75) (7,856)
Shares issued 6,429 12,979
Movement in treasury shares held by 164 1,187
share trusts
Recognition of share-based payments 8,117 7,466
Profit on sale of treasury shares 5 307
Dividends declared (193,840) (170,984)
Balance at the end of the year 1,246,470 1,125,696
Comprising:
Share capital and premium 23,129 16,536
Foreign currency translation reserve (6,059) (2,518)
Capital redemption reserve 130 130
Cash flow hedging reserve (7,931) (7,856)
Share-based payment reserve 40,058 32,015
Distributable reserves 1,162,803 1,053,395
Non-controlling interests 34,340 33,994
Total 1,246,470 1,125,696
CONDENSED GROUP STATEMENT OF CASH FLOWS
Audited Audited
30 Sept 30 Sept
2010 2009
R`000 R`000
Cash flows from operating activities
Operating profit before abnormal items 484,474 410,866
Adjustment for non-cash and other items 101,092 89,659
Cash operating profit before working 585,566 500,525
capital changes
Working capital changes (168,970) (206 875)
Cash generated from operations 416,596 293 650
Interest and dividends received 6,639 16,509
Interest paid (5,497) (5,600)
Taxation paid (166,234) (138,822)
Dividends paid (193,840) (170,984)
Cash inflow /(outflow) from operating 57,664 (5,247)
activities
Cash outflow from investing activities (87,937) (62,429)
Capital expenditure (91,852) (91,138)
Proceeds on disposal of property, plant 2,590 10,275
and equipment
Net movement on loans and advances 1,534 14,221
Acquisition of investment (209)
Cash related abnormal items 4,213
Cash inflow from financing activities 6,753 15,670
Proceeds from issue of share capital 6,598 14,472
Short-term borrowings raised 155 1,198
Net decrease in cash and cash equivalents (23,520) (52,006)
Cash and cash equivalents at the 168,970 218,133
beginning
of the year
Effect of exchange rate changes (334) 2,843
Cash and cash equivalents at the end of 145,116 168,970
the year
CONDENSED GROUP OPERATING SEGMENTS REPORT
Audited Audited
30 Sept 30 Sept
2010 2009
R`000 R`000
Revenue
Inshore fishing 2,280,069 2,142,497
Midwater and deep-sea fishing 909,034 948,267
Commercial cold storage 234,116 210,524
Total 3,423,219 3,301,288
Operating profit before abnormal items
Inshore fishing 211,060 165,451
Midwater and deep-sea fishing 196,993 177,681
Commercial cold storage 76,421 67,734
Total 484,474 410,866
Total assets
Inshore fishing 1,020,241 926,830
Midwater and deep-sea fishing 268,830 286,029
Commercial cold storage 212,003 174,035
Financing 333,627 329,514
1,834,701 1,716,408
Deferred taxation 8,528 5,878
Total 1,843,229 1,722,286
Total liabilities
Inshore fishing 313,428 351,170
Midwater and deep-sea fishing 146,132 128,385
Commercial cold storage 51,194 44,437
Financing 39,105 22,769
549,859 546,761
Deferred taxation 46,900 49,829
Total 596,759 596,590
NOTES
Audited Audited
30 Sept 30 Sept
2010 2009
R`000 R`000
1. Abnormal items
Goodwill impairment (19,279)
Net surplus on disposal of property 14 8,474
Impairment charge on vessels and equipment (432) (713)
Reversal of provision for loans in 7,422
Namibian whitefish business
Profit on disposal of investment 1,413
Reversal of provision for irrecoverable 600
loans
Insurance proceeds 2,799
Utilisation of pension fund surplus (666)
Abnormal (loss) / profit before taxation (19,697) 19,329
Taxation (132) (2,312)
Abnormal (loss) / profit after taxation (19,829) 17,017
2. Determination of headline earnings
Profit after taxation attributable to own 294,424 292,199
shareholders:
Adjusted for:
Goodwill impairment 19,279
Net surplus on disposal of property, plant (497) (9,954)
and equipment
Impairment charge on vessels and equipment 432 713
Reversal of provision for loans in (7,422)
Namibian whitefish business
Profit on disposal of investment (1,413)
Total tax effect of adjustments 270 2,641
Headline earnings for the year 313,908 276,764
3. Dividends
Estimated dividend declared after 174,574 151,881
reporting date
Dividend on shares issued prior to last 33,140
day
to trade
Actual dividend declared after reporting 185,021
date
Audited Audited
30 Sept 30 Sept
2010 2009
R`000 R`000
4. Supplementary information
Depreciation 76,875 72,035
Operating lease charges 28,691 24,239
Capital expenditure 91,852 91,138
Expansion 30,233 19,618
Replacement 61,619 71,520
Budgeted capital commitments 169,540 105,264
Contracted 44,904 9,449
Not contracted 124,636 95,815
Number Number
of shares of shares
`000 `000
5. Elimination of treasury shares
Weighted average number of shares in issue 118,895 118,386
Less: treasury shares held by share trusts (14,221) (14,251)
Less: treasury shares held by subsidiary (5,094) (5,094)
company
Weighted average number of shares on which 99,580 99,041
earnings per share and headline earnings
per share are based
6. Contingent liability
The company received a summons from the Competition Commission in February
2010 pursuant to an investigation into the pelagic fishing industry which
has been ongoing since July 2008. Oceana`s attorneys have undertaken an
extensive investigation into the business conduct at Oceana Brands, the
subsidiary in which the group`s pelagic operations are held. The group
has been cooperating fully with the Commission. The outcome of the
investigation and summons is uncertain and therefore the financial effect
cannot be determined.
7.Events after the reporting date
No events occurred after the reporting date that may have an impact on the
group`s reported financial position at 30 September 2010.
Dividend declaration
Notice is hereby given that a final dividend number 134 of 175 cents per share,
in respect of the year ending 30 September 2010, was declared on Thursday 11
November 2010. Relevant dates are as follows:
Last day to trade cum dividend - Friday, 7 January 2011
Commence trading ex dividend - Monday, 10 January 2011
Record date - Friday, 14 January 2011
Dividend payable - Monday, 17 January 2011
Share certificates may not be dematerialised or re-materialised between Monday
10 January 2011 and Friday 14 January 2011, both dates inclusive.
By order of the board
M Allie
Company Secretary
11 November 2010
Directors: MA Brey (chairman), RA Williams (vice-chairman), FP Kuttel*
(chief executive officer), PG de Beyer, ABA Conrad*, M Fleming, PB Matlare, R
Nicol*,S Pather, NV Simamane, TJ Tapela (* executive)
Registered Office: 16th Floor Metropolitan Centre, 7 Coen Steytler Avenue, Cape
Town, 8001
Transfer Secretaries: Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Sponsor - South Africa: The Standard Bank of South Africa Limited
Sponsor - Namibia: Old Mutual Investment Services (Namibia) (Pty) Limited
Company Secretary: M Allie
Date: 11/11/2010 16:12:02 Produced by the JSE SENS Department.
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