| Fri 12 Oct 2001, 0:00 | | Sovereign Food Investments Limited - Unaudited Gro |
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SOVEREIGN FOOD INVESTMENTS LIMITED
Registration number 1995/003990/06
Share Code: SOV ISIN number: ZAE000009221
Unaudited Group Results for the six months ended
31 August 2001
- Earnings per share up 61%
INCOME STATEMENT
Unaudited Audited
Six months Year ended
ended 31 August 28 February
2001 2000 2001
R'000 R'000 R'000
Revenue 96 280 90 046 191 735
Operating income 9 394 7 374 21 477
Depreciation 2 108 1 928 3 949
Net interest paid 2 635 2 552 4 975
Net operating income 4 651 2 894 12 553
Taxation - - 1 319
Income for the period 4 651 2 894 11 234
Shares in issue (000's) 28 775 28 775 28 775
Earnings per share (cents) 16,2 10,1 39,0
BALANCE SHEET
Assets
Non-current assets
Property, plant and equipment 90 999 84 708 86 236
Net current assets 35 858 28 047 33 092
Cash 16 897 6 144 16 106
Other 18 961 21 903 16 986
Total assets 126 857 112 755 119 328
Equity and liabilities
Capital and reserves
Share capital and premium 45 215 45 215 45 215
Distributable reserves 36 449 23 458 31 798
Shareholders' interest 81 664 68 673 77 013
Interest bearing debt 35 905 36 113 33 027
Long-term portion 29 910 30 384 27 845
Payable within one year 5 995 5 729 5 182
Deferred taxation 9 288 7 969 9 288
Total equity and liabilities 126 857 112 755 119 328
COMMENT
PERIOD UNDER REVIEW
The Group presented a solid performance for the period under review with an
increase in earnings of 61% to R4,7 million compared to earnings in the same
period last year of R2,9 million. This was achieved through a 7% increase in
turnover that was offset by an increase in feed costs leaving operating
margins higher at 9,8% compared to 8,2% for the same period last year.
Non-broiler subsidiaries contribution to earnings was consistent with that
of the previous year. Continued management focus on reducing operational
costs resulted in operational costs per unit decreasing over the same period
last year.
The Group has strengthened its technological and logistical ties with major
national customers and is focusing on further enhancing its business
relationship with these customers.
The balance sheet remains strong with net debt at R19,0 million and the debt
to equity ratio decreasing from 44% at August 2000 to 23% at August 2001.
Working capital per R1 000 of turnover decreased by 19% from August 2000. As
noted in our last annual report, the Group began restructuring the broiler
division in February 2001 and has incurred capital expenditure of R6,8
million to this end.
EXPORTS
Management continues to focus on the export of value added products and
exports will have a significant contribution towards revenue and earnings in
future. The export order book has experienced strong growth and management
is currently investigating the export of value added products into the
European Union, the USA and the Far East.
PROSPECTS
Prices are expected to remain at their current levels as national stocks
remain low, the illegal dumping of portions is controlled and the Rand
continues to weaken against the US dollar. Although the cost of raw
materials is expected to remain high for the next six months, the Group has
secured a significant part of its purchases for the next six months at
advantageous prices. The broiler restructuring, which is part of an ongoing
process, has yielded improved operating efficiencies and this improvement is
expected to continue.
The Group earns a larger portion of its earnings from the second half of the
financial year and management is therefore confident of a continued increase
in earnings for the six months to February 2002 and thereafter.
DIVIDENDS
In accordance with the Group policy of only declaring one dividend per
annum, no interim dividend has been declared.
By order of the Board
CG Charlewood RB Spanjaard
Non-executive Chairman Chief Executive Officer
12 October 2001
Sovereign Food Investments Limited Transfer secretaries
Registration number 1995/003990/06 Computershare Services
Limited
e-mail: info@sovfoods.co.za PO Box 61051
website: www.sovfoods.co.za Marshalltown 2107, Gauteng
Directorate
CG Charlewood* (Chairman), RB Spanjaard (Chief Executive Officer), MGM
Charlewood, B Cape*, C Coombes, MAB Davis,
BA Spanjaard*, AH Vardy*
*Non-executive
