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SOVEREIGN FOOD INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1995/003990/06)
(Share code: SOV ISIN number: ZAE000009221)
("Sovereign" or "the Group")
Unaudited Group results for the six months
ended 31 August 2002
INCOME STATEMENT
Unaudited Audited
Six months Year ended
ended 31 August 28 February
2002 2001 2002
R`000 R`000 R`000
Revenue 129 581 96 280 214 461
Operating income 7 966 9 394 22 324
Depreciation 2 342 2 108 4 032
Net interest paid 2 236 2 635 3 425
Net operating income 3 388 4 651 14 867
Taxation 540 - 1 434
Income after taxation 2 848 4 651 13 433
Shares in issue (000`s) 28 775 28 775 28 775
Earnings per share (cents) 9,9 16,2 46,7
Headline earnings per share (cents) 9,9 16,2 49,3
Dividends per share (cents) - - 15,0
Reconciliation between earnings
and headline earnings
Profit after taxation 2 848 4 651 13 433
Reconciling items:
Disposal of fixed assets - - (228)
Restructuring costs - - 371
Taxation effect - - 607
Headline profit after taxation 2 848 4 651 14 183
BALANCE SHEET
Assets
Non-current assets
Property, plant and equipment 94 201 90 999 94 048
Current assets 93 137 57 622 99 949
Cash and investments 33 511 16 897 43 840
Inventory 39 225 25 457 41 299
Trade and other receivables 20 401 15 268 14 810
Total assets 187 338 148 621 193 997
Equity and liabilities
Capital and reserves
Share capital and premium 45 215 45 215 45 215
Distributable reserves 43 763 36 449 45 231
Shareholders` interest 88 978 81 664 90 446
Interest bearing debt 55 036 35 905 58 698
Long-term portion 45 347 29 910 49 297
Short-term portion 9 689 5 995 9 401
Deferred taxation 10 722 9 288 10 722
Trade and other payables 32 602 21 764 34 131
Total equity and liabilities 187 338 148 621 193 997
CASH FLOW STATEMENT
Cash generated from operations
before working capital changes 7 966 9 382 22 551
Changes in working capital (4 528) (1 576) (3 401)
Cash generated from
operating activities 3 438 7 806 19 150
Interest paid (2 236) (2 635) (3 425)
STC paid (540) - -
Dividends paid (4 316) - -
Net cash flow from
operating activities (3 654) 5 171 15 725
Net cash flows from
investing activities 981 (2 668) (711)
Net cash flows from
financing activities (7 656) (1 712) 12 720
Net change in cash and
cash equivalents (10 329) 791 27 734
STATEMENT OF CHANGES IN EQUITY
Change in
retained
28 February earnings for Dividend 31 August
2002 the period paid 2002
R`000 R`000 R`000 R`000
Share capital 288 - - 288
Share premium 44 927 - - 44 927
Retained earnings 45 231 2 848 (4 316) 43 763
Total 90 446 2 848 (4 316) 88 978
Change in
retained
28 February earnings for Dividend 31 August
2001 the period paid 2001
R`000 R`000 R`000 R`000
Share capital 288 - - 288
Share premium 44 927 - - 44 927
Retained earnings 31 798 4 651 - 36 449
Total 77 013 4 651 - 81 664
COMMENTS
PERIOD UNDER REVIEW
The period under review was a difficult one for the poultry industry as a whole
as well as for the Group. The depreciation of the Rand late last year lead to
large increases in the cost of feed raw materials and other currency-linked
input costs. At the same time, although turnover increased 35%, the major part
of this was due to improved poultry volumes and an increase in non-poultry
turnover. This led to a decrease in earnings per share to 9,9 cents per share
from 16,2 cents per share for the same period last year. Taxation is comprised
entirely of secondary taxation on companies.
With the restructuring of the agricultural division now largely complete,
operating efficiencies continue to improve with technical results in the broiler
division improving significantly by the period end. Non-broiler subsidiaries`
contribution to income increased slightly and there was a significant increase
in animal feed sales over the same period last year with no reduction in margin.
Although the Group experienced lower margins, there was no appreciable increase
in net working capital per R1 000 of turnover. Finance costs decreased by 15%
over the same period last year and the Group has 45% of its long-term debt at
fixed interest rates. The payment of the dividend declared last year and debt
repayments accounted for most of the decrease in cash and cash equivalents.
PROSPECTS
It is the norm for the Group to make the bulk of its operating profits in the
second half of the financial year. Based on current trading results,
expectations are that the results for the full year will exceed the results for
the previous year.
DIVIDEND
In accordance with the Group policy of only declaring one dividend per annum, no
interim dividend has been declared.
DIRECTORATE
Michael Charlewood resigned as a director effective 14 October 2002.
ACCOUNTING POLICIES
The interim financial statements have been prepared in accordance with South
African Statements of Generally Accepted Accounting Practice and are consistent
with the accounting policies used in the previous period.
By order of the Board
RB Spanjaard MJ Davis
Executive Chairman Managing Director
1 November 2002
Sovereign Food Investments Limited Transfer secretaries
Registration number 1995/003990/06 Computershare Investor
e-mail: info@sovfoods.co.za Services Limited
website: www.sovfoods.co.za PO Box 61051
Marshalltown 2107
Directorate
RB Spanjaard (Executive Chairman), MJ Davis (Managing Director),
B Cape*, CG Charlewood*, C Coombes, BA Spanjaard*, AH Vardy*
(*Non-executive)
Date: 31/10/2002 05:25:00 PM Produced by the JSE SENS Department
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