| Mon 17 Nov 2003, 10:27 | | ASTRAL FOODS LTD - AUDITED RESULTS FOR THE YEAR EN |
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ASTRAL FOODS LTD - AUDITED RESULTS FOR THE YEAR ENDED 3O SEPTEMBER 2003
ASTRAL FOODS LTD
(Incorporated in the Republic of South Africa)
(Registration number 1978/003194/06)
Share code ARL ISIN ZAE000029757
("the group")
* Operating profit increase 49%
* Headline earnings per share increase 49%
* Net cash flow R180 million
* Net cash R59 million
* Dividend cover reduced
* Final dividend increase 80%
AUDITED RESULTS FOR THE YEAR ENDED 3O SEPTEMBER 2003
Consolidated Income Statements
Audited Audited
Year ended Year ended
30 Sept 2003 30 Sept2002 change
R"000 R"000 %
Revenue 3 947 030 3 692 129 7
Operating profit (note 3) 327 517 219 647 49
Net finance costs (15 218) (22 157)
Income from associate - 4 823
Profit before tax 312 299 202 313 54
Taxation (102 076) (62 061)
Profit after tax 210 223 140 252 50
Minority interests (1 708) (1 721)
Net profit for year 208 515 138 531 51
Number of shares in issue
(net of share buy-back) 42 260 903 42 866 780
Weighted average number of
ordinary shares in issue during
the year (net of share buy-back)
for purpose of calculating:
- basic earnings per share 42 742 565 42 916 475
- diluted earnings per share 46 063 665 46 268 075
Basic earnings per share (cents)
Earnings per share 487,7 322,8 51
Headline earnings per share 487,2 326,3 49
Diluted earnings per share (cents)
Earnings per share 457,0 307,7 49
Headline earnings per share 456,1 310,9 47
Dividends per share (cents) 168 108 55
Net asset value per share(Rand) 14,18 10,79 31
Headline earnings(R"000) (note 4) 208 257 140 032 49
Consolidated Balance Sheets
ASSETS
Non-current assets 504 753 490 180
Property, plant and equipment 475 996 468 995
Goodwill 18 374 17 026
Investments and loans 7 526 4 159
Deferred tax 2 857 -
Current assets 814 181 898 601
Inventories 274 426 358 089
Receivables and pre-payments 471 675 512 038
Cash and cash equivalents 68 080 28 474
Total assets 1 318 934 1 388 781
EQUITY AND LIABILITIES
Capital and reserves 599 395 462 417
Issued capital 261 455 265 206
Reserves 337 940 197 211
Minority interests 8 831 4 195
Non-current liabilities 129 357 140 557
Long-term liabilities 2 742 14 856
Deferred tax 74 916 80 012
Post-retirement medical aid obligations 51 699 45 689
Current liabilities 581 351 781 612
Trade and other payables 524 909 624 542
Provision for tax 49 659 40 624
Short-term borrowings 6 297 116 446
Shareholders" dividend 486 -
Total equity and liabilities 1 318 934 1 388 781
Consolidated Cash Flow Statements
Cash operating profit 412 607 287 415
Working capital changes 12 571 8 713
Capital investment to maintain
operations (32 998) (52 649)
Cash generated from operations 392 180 243 479
Finance costs (15 218) (22 157)
Tax paid (90 415) (50 910)
Dividends paid (50 644) (43 376)
Cash inflow from operating
activities 235 903 127 036
Net cash outflow to investing activities (55 814) (98 653)
Net cash inflow for the year 180 089 28 383
Net cash outflow to financing
activities (133 687) (14 710)
Net increase in cash and cash
equivalents 46 402 13 673
Effects of exchange rate changes (6 796) 105
Cash and cash equivalent balances
at beginning of year 28 474 14 696
Cash and cash equivalent balances
at end of year 68 080 28 474
Statements of Changes in Equity
Balance beginning of year 462 417 366 020
Profit for the year 208 515 138 531
Movement in currency translation
difference during the year (7 562) 2 051
Dividend paid (51 130) (43 353)
Decrease in share capital as result of
of shares buy-back (12 005) -
Disposal of subsidiary (840) -
Net decrease in share capital as result
of odd-lot offer - (832)
Balance at end of year 599 395 462 417
Segmental Reporting
Revenue Rm Rm
Animal Feed 2 681,0 2 688,6
Poultry 2 167,9 1 721,4
Inter Group (901,9) (717,9)
3 947,0 3 692,1
Operating profit
Animal feed 153,4 129,5
Poultry 174,1 90,1
327,5 219,6
Notes
1. Audit review
PricewaterhouseCoopers Inc. has audited the comprehensive financial
statements from which the summarised results were derived as well as the
summarised announcement of annual results contained herein. The unqualified
audit reports on the comprehensive financial statements and the summarised
financial results are available for inspection at the group"s registered office.
2. Accounting policies
The financial statements of the group are prepared in accordance with and
comply with the Statements of Generally Accepted Accounting Practice of South
Africa.
The financial statements are prepared under the historical cost convention as
modified by the restatement of certain financial instruments to fair value. The
accounting policies of the Group are consistent in all material respects with
those applied in the previous financial year.
3. Operating profit
R"000 R"000
The following items have been accounted
for in the operating profit:
Amortisation of goodwill 2 000 1 200
Auditors" remuneration 1 986 1 966
Depreciation on property, plant
and equipment 66 744 57 283
Directors" remuneration 6 969 5 889
Foreign exchange (losses)/gains (3 358) 1 147
Profit on sale of interest in business unit 2 726 -
4. Reconciliation to headline earnings
Net profit for the year 208 515 138 531
Profit on sale of interests in a subsidiary (2 726) -
Profit on sale of property, plant
and equipment (1 580) (2 092)
Amortisation of goodwill 2 000 1 200
Write-off of loans 2 048 2 393
Headline earnings for the year 208 257 140 032
5. Commitments
Capital expenditure commitments 39 111 7 204
Operating lease commitments 142 469 140 524
Financial Overview
Headline earnings for the second half of the year of R106 million
(2002: R64 million) exceeded the corresponding period by 66% against an
improvement of 34% for the first half. These results exceeded the board"s
expectations as the result of:
* a more balanced situation between supply and demand for broilers;
* further improvement in production and processing efficiencies;and
* the continuing strengthening of the rand, with resultant lower raw
material prices.
Turnover for the year increased by 7% to R3 947 million
(2002: R3 692 million) whilst operating profit increased by 49% to
R328 million (2002: R220 million). Net operating margins improved from
5,9% to 8,3%.
Net financing costs reduced from R22 million to R15 million following a net cash
inflow of R180 million (2002: R28 million), mainly as a result of increased
profits.
The tax rate of 32,7% was up on the previous year"s 30,7% due to the utilisation
of STC credits during 2002.
For the year under review, the group reports a headline earnings increase of
49%, from R140 million (2002) to R208 million (2003).
The balance sheet structure was strengthened with net asset value per share
increasing to R14,18 (2002: R10,79). The group"s debt has been repaid with net
cash balances at R59 million (2002: net borrowing R103 million) reflected at
year-end. In terms of a share buy back programme
605 877 shares of Astral Foods Limited were acquired at a total cost of
R12 million.
Operational Overview
Animal Feed division
Meadow Feeds was well positioned to take advantage of the volatile market
during the past year. Divisional turnover was static at R2,5 billion mainly as a
result of lower raw material costs. Net operation margins improved from 4,8% to
5,7%. Operating profit for the year amounted to R153 million (2002: R131
million) and contributed 46% (2002: 60%) of group profits.
The group benefited from a good procurement strategy optimising benefits from
the sharp reduction in the prices of raw materials and in particular yellow
maize. Cheaper maize imports as well as cost and efficiency improvements further
contributed to this performance.
Construction of the new facility at Port Elizabeth is progressing and it is
expected to be operational in January 2004.
The acquisition of the Bulkop feed mill and internal broiler expansion will
secure increased volumes. New products and markets are continuously being
developed to ensure growth.
Poultry division
The Poultry division experienced a satisfactory trading year. Revenue increased
from R1,7 billion to R2,2 billion in 2003. Broiler volumes increased by 11%
compared to 2002. Main reasons for the increase were:
* a full-year effect of 134 000 broilers per week from Paarl Poultry
following the long-term rental agreement effective from June 2002;
* good production and processing efficiencies.
Average broiler realisations increased by 8% on 2002.
Strong demand for poultry meat as well as the closure of Agrichicks during 2002
gave rise to a more balanced supply and demand situation. The sharp reduction in
the cost of feed and increased consumer spending caused poultry margins to
improve. A relatively disease-free year was experienced.
The strengthening of the rand has created a favourable climate for imports.
Large quantities of imported poultry entered the South African market. The South
African poultry industry has made application to the International Trade
Administration Commission of South Africa (ITAC) to increase the current tariff
that was approved in 1997 in line with the subsequent weakening of the exchange
rate. A decision on this application is expected shortly.
Prospects
It is not expected that the decrease in raw material prices will continue, as
international commodity prices have already started to firm. The rand is
expected to remain stable, especially against the US dollar.
Overall, in spite of lower interest rates and higher disposable income, it is
not expected that the current margins will be maintained. Earnings for the year
is nevertheless not expected to be lower than the past year.
Declaration of ordinary Dividend no 6
Notice is hereby given that a final dividend of 110 cents per ordinary share
has been declared in respect of the financial year ended 30 September 2003.
Last date to trade cum-dividend Friday, 9 January 2004
Shares commence trading ex-dividend Monday, 12 January 2004
Record date Friday, 16 January 2004
Payment of dividend Monday, 19 January 2004
Share certificates may not be dematerialised or rematerialised between Monday,
12 January 2004 and Friday, 16 January 2004, both days inclusive.
On behalf of the board
J L van den Berg N C Wentzel
Chairman Chief Executive Officer
Pretoria
14 November 2003
Registered office
Block E
Castle Walk Office Park
Erasmuskloof, Pretoria.
Postnet 329
Private Bag X10
Elarduspark, 0048
Telephone: 012-347-5077
Website address: www@astralfoods.com
Directors
J L van den Berg (Chairman), *N C Wentzel (Chief Executive Officer),
#T Pritchard (Financial Director) *M A Kingston, J J Geldenhuys,
E M Groeneweg, C G van Veyeren (*Executive director)
(#Company secretary)
Transfer secretaries
Computershare Limited
Investor Services Division
PO Box 1053
Johannesburg, 2001
Telephone: 011-370-5000
Sponsor
HSBC Investment Services (Africa) (Pty) Limited
HSBC Place
6 - 9 Riviera Road
Houghton, 2198
