| Thu 29 Apr 2004, 17:23 | | Audited Group results for the year ended 29 |
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Sovereign Food Investments Limited - Audited Group results for the year ended 29
February 2004
SOVEREIGN FOOD INVESTMENTS LIMITED
Incorporated in the Republic of South Africa
Registration number 1995/003990/06
Share code: SOV ISIN number: ZAE000009221
Audited Group results for the year ended 29 February 2004
INCOME STATEMENT
2004 2003
R"000 R"000
Revenue 331 138 286 216
Operating income 22 893 21 113
Depreciation 5 761 5 235
Net interest paid 8 652 5 606
Profit before taxation 8 480 10 272
Taxation 1 218 (71)
Profit after taxation 7 262 10 343
Dividends paid - 4 316
Retained earnings for the year 7 262 6 027
Retained earnings at beginning of year 45 187 39 160
As previously stated 45 463 45 231
Restatement (276) (6 071)
Retained earnings at end of year 52 449 45 187
Weighted average number of shares
in issue (000"s) 29 103 28 986
Earnings per share (cents) 25,0 35,7
Headline earnings per share (cents) 26,3 33,3
Capital distribution per share (cents) 10,0 -
Reconciliation between earnings
and headline earnings
Profit after taxation 7 262 10 343
Reconciling items:
Disposal of fixed assets (63) (819)
Taxation effect 441 133
Headline profit after taxation 7 640 9 657
BALANCE SHEET
Assets
Non-current assets
Property, plant and equipment 115 261 101 349
Investments 6 346 4 426
Current assets 100 178 101 335
Cash and investments 31 120 22 554
Inventory 43 235 51 849
Trade and other receivables 25 823 26 932
Total assets 221 785 207 110
Equity and liabilities
Capital and reserves
Share capital and premium 45 444 45 444
Accumulated profits 52 449 45 187
Shareholders" interest 97 893 90 631
Liabilities
Long-term loans 77 742 65 208
Long-term portion 63 759 54 384
Short-term portion 13 983 10 824
Deferred taxation 11 330 10 112
Trade and other payables 34 820 41 159
Total equity and liabilities 221 785 207 110
CASH FLOW STATEMENT
Cash generated from operations before
working capital changes 22 830 20 294
Changes in working capital 5 279 (13 504)
Cash generated from operating activities 28 109 6 790
Interest paid (8 652) (5 606)
STC paid - (539)
Dividends paid - (4 316)
Net cash flow from operating activities 19 457 (3 671)
Net cash flows from investing activities (6 072) (1 410)
Net cash flows from financing activities (2 899) (11 779)
Net increase/(decrease) in cash, cash
equivalents and investments 10 486 (16 860)
STATEMENT OF CHANGES IN EQUITY
Prior Net profit
2003 period for the 2004
R"000 adjustment year R"000
Share capital 291 291
Share premium 45 153 45 153
Retained earnings 45 463 (276) 7 262 52 449
Total 90 907 (276) 7 262 97 893
COMMENTS
PERIOD UNDER REVIEW
The Group has presented results for the period under review that are similar to
those of the previous period. For the past three years the focus has been on the
restructuring of the Group and we believe that the foundation for the
restructured Group has now been firmly established.
This process started with the restructuring of the agricultural divisions of the
Group. Large improvements have been made here and this is the foundation for the
strategy realignment as detailed below.
In October 2003, the Group undertook a detailed review of the production and
marketing aspects of the company and this process led the Group to make some
significant changes to these aspects.
Since the mid 1990s the Group has had a deliberate strategy to service the non-
commodity poultry market as protection against the cyclicality of pricing in the
commodity market. This necessitated a Group that focused on value added poultry
and sales to niche retail outlets.
However, as the Group expanded, the growth in volumes for such products did not
keep up with the total output for the Group. The result of this was that the
Group paid an ever larger straddling penalty as an increasing portion of its
output was going into the commodity markets whilst its cost base and operations
were geared to non-commodity products.
The Group took the decision in November 2003 to focus on the commodity market
and as an entrepreneurial business we believe that we are well placed to succeed
with this strategy.
This new strategy was phased in from November 2003 and was close to full
implementation by March 2004. The full impact of the new strategy will be seen
in the interim period to August 2004.
The Group ended the year with strong cash balances after generating 97 cents per
share from operations for the period under review and this has enabled the Group
to declare a capital distribution of 10 cents per share to shareholders.
Capital Distribution
It is proposed that the Board of Directors declare a capital distribution out of
share premium of 10,0 cents per ordinary share.
This declaration will be subject to the passing (and where applicable the
registration) of the special and ordinary resolutions at the Annual General
Meeting to be held on Thursday, 10 June 2004.
If the resolutions are passed and registered, where applicable, and the proposal
is then accepted, the capital distribution will be payable to shareholders
recorded in the register of the Company as at Friday, 25 June 2004.
In compliance with the requirements of STRATE the following dates are
applicable:
Last date to trade "CUM" the capital
distribution ("LDT") Friday, 18 June 2004
Trading commences "EX" the capital distribution Monday, 21 June 2004
Record date Friday, 25 June 2004
Date of payment Monday, 28 June 2004
Share certificates may not be dematerialised or rematerialised between Monday,
21 June 2004 and Friday, 25 June 2004, both dates inclusive.
ACCOUNTING POLICIES
The accounting policy in respect of the valuation of livestock and agricultural
produce has been changed to comply with AC137. The annual financial statements
have been prepared in accordance with South African Statements of Generally
Accepted Accounting Practice and, apart from this change, are consistent with
the accounting policies used in the previous year. These results have been
reviewed by the independent auditors, KPMG Inc. Their unmodified review report
dated 30 April 2004 is available for inspection at the registered offices of the
company.
By order of the Board
RB Spanjaard MJB Davis
Executive Chairman Managing Director
30 April 2004
Sovereign Food Investments Limited
Registration number 1995/003990/06
E-mail: info@sovfoods.co.za
Website: www.sovfoods.co.za
Transfer secretaries
Computershare Services Limited
PO Box 61051
Marshalltown 2107
Gauteng
Directorate
RB Spanjaard (Executive Chairman), MJB Davis (Managing Director), BR Cape,
C Coombes, BA Spanjaard, AH Vardy
Date: 29/04/2004 05:08:15 PM Produced by the JSE SENS Department
