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CKS
CKS
CKS - Crookes Brothers Limited - Unaudited Interim Results for the six months
ended 30 September 2010 and cash dividend declaration
CROOKES BROTHERS LIMITED
Registration No.
1913/000290/06
Share code : CKS ISIN No. ZAE000001434
("Crookes" "the company" or "the group")
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30
SEPTEMBER 2010 AND CASH DIVIDEND DECLARATION
CONDENSED CONSOLIDATED Unaudited Audited
STATEMENT
OF COMPREHENSIVE INCOME Six months ended Year ended
30 Sept 30 Sept 31 March
2010 2009 2010
(R000`s) (R000`s) (R000`s)
Continuing operations:
Revenue 190,421 169,570 305,883
Operating profit 17,430 20,730 36,402
Share of profit of associate - - 7
company
Investment income 1,198 857 502
Finance costs (3,825) (2,329) (5,828)
Capital items 92,972 13,198 13,188
Profit before tax 107,775 32,456 44,271
Income tax expense (6,528) (4,112) (7,214)
Profit for the period from 101,247 28,344 37,057
continuing operations
Discontinued operations:
(Loss)/ profit for the period - (3,944) (16,797)
from discontinued operations
Profit for the period 101,247 24,400 20,260
Other comprehensive income
Investment revaluation 13 65 305
Exchange differences on (3,609) - (867)
translating foreign operations
Other comprehensive income for (3,596) 65 (562)
the period, net of tax
Total comprehensive income for 97,651 24,465 19,698
the period
Profit attributable to :
Owners of the company 99,582 24,463 20,650
Non-controlling interests 1,665 (63) (390)
101,247 24,400 20,260
Total comprehensive income
attributable to :
Owners of the company 95,986 24,528 20,088
Non-controlling interests 1,665 (63) (390)
97,651 24,465 19,698
Earnings per share (cents) :
Basic 804.1 197.0 166.7
Diluted 803.2 196.8 166.6
Dividends/cash distributions
per share (cents) :
Dividends declared per share 45.0 45.0 70.0
- interim
- special 50.0 - -
HEADLINE EARNINGS Unaudited Audited
RECONCILIATION
Six months ended Year ended
30 Sept 30 Sept 31 March
2010 2009 2010
(R000`s) (R000`s) (R000`s)
Profit after taxation 99,582 24,463 20,650
Adjusted for:
Capital (profit) on disposal (92,972) (13,198) (13,188)
of land, buildings & biological
assets
(Profit)/loss on disposal of - (148) (2,150)
property, plant and equipment
Tax effect of the above 5,883 (2,602) (2,301)
Discontinued operations re- - - 10,693
measurement items
Discontinued operations re- - - (2,467)
measurement items tax effect
(Profit)/Loss on disposal of - - (117)
shares
Tax effect on disposal of - - 13
shares
Headline earnings 12,493 8,515 11,133
Headline earnings per share
(cents) :
Headline earnings 100.9 68.8 89.9
Headline earnings (diluted) 100.8 68.7 89.8
CONDENSED CONSOLIDATED Unaudited Audited
STATEMENT OF CHANGES IN EQUITY Six months ended Year ended
30 Sept 30 Sept 31 March
2010 2009 2010
(R000`s) (R000`s) (R000`s)
Balance at beginning of period 342,151 342,151 342,151
Share-based payment reserve - 50 100
movement
Total comprehensive income for 95,986 24,528 20,088
the period
Ordinary dividends paid (3,096) (8,422) (13,995)
Cash distribution paid - (6,193) (6,193)
Shareholders` equity at end of 435,041 352,114 342,151
period
Outside shareholders interest
in subsidiary
Balance at beginning of period (446) (56) (56)
Total comprehensive income for 1,665 (63) (390)
the period
1,219 (119) (446)
Total equity 436,260 351,995 341,705
- - -
CONDENSED CONSOLIDATED Unaudited Audited
STATEMENT OF FINANCIAL 30 Sept 30 Sept 31 March
POSITION
2010 2009 2010
(R000`s) (R000`s) (R000`s)
ASSETS
Non-current assets 282,125 226,167 250,879
Property, plant and equipment 164,799 136,694 159,790
Bearer biological assets 104,714 79,308 79,153
Unlisted investments 3,891 3,593 3,873
Investment in associate 8,063 5,805 8,063
companies
Unsecured loan - long term 658 767 -
Current assets 316,480 284,959 279,890
Inventories 12,370 17,397 21,105
Biological assets - crops and 89,464 99,741 120,345
livestock
Trade and other receivables 43,686 47,915 16,732
Taxation 4,054 - 1,495
Unlisted investments - 125,938 - -
preference shares
Cash and cash equivalents 30,968 3,102 3,338
Unsecured loan - short term - - 797
Assets classified as held-for- 10,000 116,804 116,078
sale
Total assets 598,605 511,126 530,769
EQUITY AND LIABILITIES
Total equity 436,260 351,995 341,705
Share capital and premium 3,208 3,208 3,208
Retained earnings 432,399 345,299 335,913
Investments revaluation 3,602 3,349 3,589
reserve
Foreign currency translation (4,476) - (867)
reserve
Share-based payment reserve 308 258 308
Shareholders` interest 435,041 352,114 342,151
Outside interests in 1,219 (119) (446)
subsidiary
Non-current liabilities 113,963 99,812 98,806
Deferred taxation 47,561 59,708 57,547
Long-term liabilities - 9,320 12,107 10,332
interest bearing
Long-term liabilities - 42,434 14,322 16,550
interest free
Post-employment obligations 14,648 13,675 14,377
Current liabilities 48,382 59,319 90,258
Trade and other payables 32,945 28,980 18,146
Taxation - 5,741 -
Current portion of long term 3,456 1,524 3,414
liabilities
Interest bearing debt - short 1,981 11,454 58,698
term
Other liabilities - 1,620 -
Liabilities associated with 10,000 10,000 10,000
assets classified as held for
sale
Total equity and liabilities 598,605 511,126 530,769
0 0 0
CONDENSED CONSOLIDATED Unaudited Audited
STATEMENT OF CASH FLOWS Six months ended Year ended
30 Sept 30 Sept 31 March
2010 2009 2010
(R000`s) (R000`s) (R000`s)
Operating profit 17,430 15,252 13,411
Non-cash items 25,824 18,629 8,659
Operating cash flows before 43,254 33,881 22,070
movement in working capital
Net inflow/(outflow) from (3,420) 26,040 18,231
changes in working capital
Finance costs (3,825) (2,329) (5,828)
Taxation paid (19,073) (4,549) (12,552)
Net cash flows from operating 16,936 53,043 21,921
activities
Net investing activities
Proceeds on sale of Komati 199,745 - -
property, plant and equipment
Investment in preference (125,956) - -
shares and other investments
Other net investment (1,611) (3,978) (16,462)
activities
Net cash outflow before 89,114 49,065 5,459
dividends and financing
activities
Dividends and cash (3,096) (14,615) (20,188)
distribution paid
Net cash inflow/(outflow) 86,018 34,450 (14,729)
before financing activities
Financing activities (58,388) (31,503) 17,912
Net (decrease)/increase in (58,388) (31,503) 17,912
borrowings
Net (decrease)/increase in 27,630 2,947 3,183
cash and cash equivalents
Cash and cash equivalents at 3,338 155 155
beginning of period
Cash and cash equivalents at 30,968 3,102 3,338
end of period
SUPPLEMENTARY INFORMATION Unaudited Audited
Six months ended Year ended
30 Sept 30 Sept 31 March
2010 2009 2010
(R000`s) (R000`s) (R000`s)
Depreciation 6,499 6,286 12,541
Capital expenditure
Incurred 13,982 17,852 55,521
Capital commitments
- Contracted 1,702 1,229 6,839
- Authorised but not 1,478 1,551 10,975
contracted
3,180 2,780 17,814
Contingent assets 24,500 - 16,100
Contingent liabilities 643 575 643
Net asset value per share 3,522 2,842 2,759
Ordinary number of shares in 2,385,000 12,385,000 12,385,000
issue
Weighted average number of 2,385,000 12,385,000 12,385,000
shares in issue
Fully diluted number of shares 12,398,591 12,396,014 12,398,591
GROUP SEGMENTAL ANALYSIS Unaudited Audited
Six months ended Year ended
30 Sept 30 Sept 31 March
2010 2009 2010
(R000`s) (R000`s) (R000`s)
Continuing operations
Revenue
Sugar cane 136,344 123,461 179,094
Bananas 25,786 21,920 54,430
Deciduous fruit 15,486 19,259 50,209
Grain and sheep 1,733 1,052 14,290
Crocodile farming/tourism 2,627 1,154 2,812
Cattle 4,575 1,186 1,473
Other operations 3,870 1,538 3,575
190,421 169,570 305,883
Operating profit
Sugar cane 37,341 39,086 54,435
Bananas (62) 2,234 9,522
Deciduous fruit (6,572) (9,319) (10,154)
Grain and sheep 1,543 2,406 4,358
Crocodile farming/tourism (3,397) (1,429) (1,170)
Cattle 88 67 (292)
Other operations/sundry income 3,014 815 5,028
Group administration (14,525) (13,130) (25,325)
17,430 20,730 36,402
ACCOUNTING POLICIES
The unaudited interim results of the group have been prepared in accordance with
IAS 34 - Interim Financial Reporting. The group`s accounting policies comply
with International Financial Reporting Standards ("IFRS"), AC 500 Standards as
issued by the Accounting Practices Board, the South African Companies Act, 1973
as amended and the Listings Requirements of the JSE Limited. The financial
information has been prepared on the historical cost basis except for the
revaluation of available-for-sale financial assets and the valuation of
biological assets and share-based payments at fair value. The principal
accounting policies are consistent with those of the previous year.
COMMENTS ON THE RESULTS
Earnings per share for the 6 months ended 30 September 2010 are 308% higher than
for the same period in the previous year largely due to the profit from the sale
of the group`s Komati Estate. Notwithstanding a flat operating profit from all
operations, headline earnings per share are 47% higher than for the same period
in the previous year, mainly due to adjustments to the deferred tax provision.
Operating profits for each segment were affected by:
* Sugar cane: The irrigated farms in Mpumalanga and Zambia performed well
but drought impacted production in the coastal region of KwaZulu-Natal. The
strong Rand reduced earnings in Swaziland and Zambia.
* Bananas: Lower prices on the local market and a repeat of winter cold
damage decreased operating profit.
* Deciduous: Prices in foreign currency are firmer than those of the previous
year but export revenues were affected by the strong Rand.
* Grain: Dry winter conditions reduced yields.
* Crocodiles: Prices for skins remained depressed due to poor market
conditions and a substantial supply overhang in Southern Africa. The
crocodile farming element of Crocworld will be closed down due to the weak
market. This is not expected to have a significant adverse impact on full
year results, and the site will remain operational as a tourist attraction.
CAPITAL TRANSACTION
The sale of the Komati Estate to the Department of Land Affairs was eventually
concluded during June 2010 with the receipt of capital proceeds, and the estate
is currently leased back by the group for a five year period, renewable for a
further five years, with results remaining consolidated. Legal action is being
pursued to recover interest which the directors believe is due in terms of the
sale agreement. This amount has not been taken into account in the earnings
figures reported in the interim results and is shown as a contingent asset. It
is planned to re-invest the proceeds of the Komati sale in replacement growth
assets.
PROSPECTS
The Board again cautions against using interim figures to project full year
results, due to the varying seasonality of the diverse crops in the group`s
portfolio.
Due to the volatility of exchange rates and prices for the group`s products, and
JSE rules, it is considered inappropriate to provide a forecast of expected
headline earnings for the year at this stage. Earnings for the full year will
benefit from the profit on the sale of the Komati Estate.
The cash received from the sale of the Komati Estate has been invested in
preference shares pending the identification of suitable investment
opportunities. Several options are currently being investigated and your
directors will act conservatively and with foresight in redeploying realised
capital to establish new growth projects for the group.
SPECIAL AND INTERIM DIVIDEND DECLARATION
The board is mindful of balancing growth prospects with generating a competitive
yield to shareholders, and considers its capital investment prospects together
with seeking to at least match the dividend yields and payout ratios of its peer
group of JSE-listed food and agricultural companies.
The board has declared an interim dividend of 45.0 cents (2009: 45.0 cents) per
share to reflect the sustainable earnings prospects for the group.
In addition, in recognition of the non-recurring gains realised by the group
from the Komati sale, the Board has declared a special dividend of 50 cents.
This special dividend will be paid from reserves and is subject to exchange
control approval. A finalisation announcement in this respect will be published
on or about 23 December 2010.
CHANGE OF COMPANY SECRETARY
Mr B Darbyshire-Roberts who was also Financial Director, resigned as Company
Secretary, with effect from 30 April 2010.
Highway Corporate Services (Pty) Limited were appointed as Company Secretaries
with effect from 1 May 2010 in his stead.
SPECIAL AND INTERIM CASH DIVIDEND
An interim dividend of 45,0 cents (2009: 45,0 cents) per share and a special
dividend of 50,0 cents (2009: nil) per share have been declared payable to
shareholders recorded in the books of the company at the close of business on
the record date, Friday, 7 January 2011.
The salient dates of the declaration and payment of these dividends are as
follows:
Last day to trade cum-dividend Friday,31 December 2010
Shares commence trading ex-dividend Monday, 3 January 2011
Record date Friday, 7 January 2011
Payment date Monday, 10 January 2011
Share certificates may not be dematerialised or re-materialised between Monday,
3 January 2011 and Friday, 7 January 2011, both days inclusive.
For and on behalf of the Board:
P Wayne G S Clarke
(Chairman) (Managing Director)
Renishaw
Registered office and postal Transfer secretaries
address
Renishaw, KwaZulu-Natal
P O Renishaw, KwaZulu-Natal, 4181
www.cbl.co.za
Computershare Investor Services (Pty) Ltd.
P O Box 61051, Marshalltown, 2107
G P Wayne * (Chairman), G S Clarke (Managing), P J Barker (Financial), P
Bhengu *, C J H Chance *, D J Crookes *, J A F Hewat *, P G Joubert *, M T
Rutherford * * Non-executive
director
Secretary:
Highway Corporate Services (Pty)
Limited
30 November 2010
Sponsor
Sasfin Capital
A division of Sasfin Bank Limited
Directors:
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Date: 30/11/2010 10:32:01 Produced by the JSE SENS Department.
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