| Fri 30 Apr 2004, 10:57 | | Reviewed preliminary group results for |
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Amalgamated Beverage Industries Limited - Reviewed preliminary group results for
the year ended 31 March 2004
Amalgamated Beverage Industries Limited
(Registration number 1970/006820/06)
ISIN number:ZAE000000048
Share code:ABI
Reviewed preliminary group results for the year ended 31 March 2004
Beverage volumes up 7.8% to 13 million hectolitres
Sales revenue grows by 12.9% to R5.6 billion
Trading profit increases by 20.4%, exceeding R1 billion
Adjusted headline earnings increase by 21.1% to R775 million
Dividends per share increase by 21.7% to 280 cents per share
Group income statements
Year ended Year ended
31 March 31 March
2004 2003 %
Rm Rm Change
(Reviewed) (Audited)
Revenue 5 666 5 016 13
Sales revenue 5 571 4 933 13
Cost of sales (3 339) (3 041)
Gross profit 2 232 1 892
Net operating costs (1 192) (1 028)
Trading profit before goodwill
amortisation 1 040 864 20
Goodwill amortisation (78) (78)
Operating profit 962 786
Income from an associate 48 47
Profit on ordinary activities
before interest and taxation 1 010 833 21
Net finance income 66 56
Profit on ordinary activities
before tax 1 076 889
Taxation (377) (242)
Current taxation (342) (276)
Deferred taxation 7 65
Secondary tax on companies (42) (31)
Profit on ordinary activities
after tax 699 647
Equity minority interests (11) (15)
Net profit for the year 688 632
Reconciliation of headline
earnings (Rm)
Net profit for the year 688 632 9
Loss/(profit) on disposal of fixed
assets after tax 9 (1)
Goodwill amortisation 78 78
Headline earnings 775 709 9
Deferred tax adjustment due to
assessed loss - (69)
Adjusted headline earnings 775 640 21
Earnings per share (cents)
Basic earnings 450 416 8
Headline earnings 507 466 9
Adjusted headline earnings 507 421 20
Dividends per share (cents) 280 230 22
Net asset value per share (cents) 2 359 2 154 10
Number of ordinary shares in
issue (million) 153 152
Weighted average number of ordinary
shares in issue (million) 153 152
Group balance sheets
31 March 31 March
2004 2003
Rm Rm
(Reviewed) (Audited)
ASSETS
Non-current assets 3 010 2 933
Property, plant and equipment 1 615 1 459
Investment properties 3 4
Goodwill 1 107 1 185
Investment in an associate 235 216
Deferred taxation asset 50 69
Current assets 1 580 1 370
Inventories 309 270
Trade and other receivables 309 298
Prepayments 160 29
Cash and cash equivalents 802 773
Total assets 4 590 4 303
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 1 614 1 599
Non-distributable reserves (5) 2
Accumulated profits 1 976 1 652
Ordinary shareholders" funds 3 585 3 253
Minority interest 24 21
Total shareholders" funds 3 609 3 274
Non-current liabilities 214 255
Long-term loans 6 11
Deferred taxation liability 107 130
Deferred income 74 89
Retirement benefit obligation 27 25
Current liabilities 767 774
Trade and other payables 707 688
Provisions 47 18
Current taxation 13 68
Total equity and liabilities 4 590 4 303
Future capital expenditure
Contracted 6 76
Authorised by the directors but not yet
contracted 437 401
Group cash flow statements
Year ended Year ended
31 March 31 March
2004 2003
Rm Rm
(Reviewed) (Audited)
Trading profit before goodwill
amortisation 1 040 864
Depreciation 217 180
Non-cash items 1 56
(Increase)/decrease in working capital (126) 37
Cash generated from operating activities 1 132 1 137
Dividend income 28 23
Normal tax paid (394) (266)
Secondary tax on companies paid (42) (31)
Net cash inflow from operating activities 724 863
Finance income received 73 53
Finance costs paid - (3)
Dividends paid (366) (277)
Net cash retained 431 636
Cash utilised in investment activities (409) (321)
Investment to maintain and upgrade
operations (209) (127)
Investment to expand operations (241) (227)
Proceeds on assets sold 41 33
Cash effects of financing activities 10 11
Long-term loans (repaid)/incurred (5) 11
Premium on issue of share capital used
for share options 15 -
Analysis of movement in cash and
cash equivalents
Balance at the beginning of the year (773) (450)
Currency translation reserve 3 3
Balance at the end of the year 802 773
Increase in cash and cash equivalents 32 326
Statements of changes in equity
Ordinary Ordinary Non-
share share distributable
capital premium reserves
Rm Rm Rm
Balance at
31 March 2002 1 1 598 5
Foreign currency translation
differences - - (3)
Net profit for the year - - -
Dividend - - -
Balance at
31 March 2003 1 1 598 2
Premium on issue of share capital used
for share options - 15 -
Foreign currency translation
differences - - (7)
Net profit for the year - - -
Dividend - - -
Balance at
31 March 2004 1 1613 (5)
Statements of changes in equity (continued)
Ordinary Total
Accumu- share- share-
lated holders" Minority holders"
profit funds interests funds
Rm Rm Rm Rm
Balance at
31 March 2002 1 297 2 901 10 2 911
Foreign currency
translation differences - (3) (3) (6)
Net profit for the year 632 632 15 647
Dividend (277) (277) (1) (278)
Balance at
31 March 2003 1 652 3 253 21 3 274
Premium on issue
of share capital used
for share options - 15 - 15
Foreign currency
translation differences - (7) (6) (13)
Net profit for the year 688 688 11 699
Dividend (364) (364) (2) (366)
Balance at
31 March 2004 1 976 3 585 24 3 609
Commentary
Overview: ABI has delivered a good set of results for the year ended March 2004
through strong volume growth, revenue management and ongoing productivity gains.
The sales volume growth of 7.8% for the year was a function of sustained
increases in consumer disposable income, favourable weather conditions in the
peak summer season, brand innovations and effective market execution. Mainstream
carbonated soft drink volumes increased by 6.8%, while other soft drinks grew by
31.0%. The latter now contribute 5.0% to the total volumes sold, up from 4.3% at
the end of the previous financial year.
Financial performance: Adjusted headline earnings increased by 21.1% compared to
the prior year. This increase is calculated after adjusting for the benefit of
the R69 million deferred tax adjustment arising from an assessed tax loss within
New Age Beverages, which was accounted for in the F03 results, and more
correctly reflects ABI"s underlying trading performance. Unadjusted headline
earnings increased by 9.3%.
The positive sales revenue growth of 12.9% was driven by the combined effect of
volume growth and selling price increases. This was partly offset by package mix
changes and growth in non-carbonated soft drink contributions.
Gross margins reflected an improvement from 38.4% to 40.1%, largely as a result
of moderated increases in raw material costs in the latter half of the year.
Results also benefited from sustained improvements in manufacturing and supply
chain efficiencies.
Trading profit grew by 20.4% over the prior year, strengthening ABI"s trading
margin to 18.7% from 17.5%, as further overhead productivity gains were realised
in areas of manufacturing and distribution. These sustainable productivity
improvements were temporarily moderated by the impact of a write-down of fixed
assets in the hands of customers following a detailed review of coolers and
discontinued returnable containers in the trade.
Working capital management excluding an increase in prepayments for the purchase
of glass and resin at attractive Rand rates, continued to show improvements.
ABI has more than R800 million cash on hand and in the financial year invested
R450 million in fixed assets to maintain and expand operations. The large
investment in returnable containers was made to ensure sufficient capacity to
meet peak and future market demands.
Sustainability: ABI continues to take a holistic approach to business
sustainability with appropriate investment in health and safety, the environment
and the communities within which the company operates. In this regard, good
progress was made in NOSA and ISO 14000 ratings during the year. Further
investments in sophisticated bottle inspection equipment resulted in improved
product quality results.
ABI"s staff Hiv/Aids programme, covering awareness, voluntary testing and
treatment at company cost progressed in the year. Reasonable progress has been
made in staff volunteering for testing - this is seen as the key first step in
the management and prevention of the disease within the group.
In the broader community, ABI continues to support initiatives that lessen the
effect of Hiv/Aids through partnerships with NOAH (Nurturing Orphans of Aids for
Humanity) and The Starfish Foundation. Two NOAH community `Arks" have been
built with ABI support.
ABI has participated in, and met the requirements for, the JSE Socially
Responsible Investment Index, which is to be launched shortly.
Outlook: Sales volumes are expected to continue the positive momentum in the new
financial year albeit at a lower rate than achieved in the year under review.
Alongside a constructive pricing outlook, major input costs are likely to remain
relatively stable for the year, subject to Rand volatility. Further
productivity improvements are planned in the optimisation of the distribution
grid. While the level of competition has increased over the past year, ABI
remains confident that through proactive brand and marketing initiatives the
company"s market position will be maintained. Management expects continued real
growth in earnings in the coming year but at a lower rate than that of the
current year.
ccounting policies: These results have been compiled in accordance with the
South African Statements of Generally Accepted Accounting Practice and the
listing requirements of the JSE Securities Exchange South Africa and Schedule 4
of the South African Companies Act. With the exceptions noted below, the
accounting policies and methods of computation used in the preparation of the
results are consistent in all material respects with those adopted in the annual
financial statements for the year ended 31 March 2003. The following exceptions
should be noted:
- Accounting statement AC133 dealing with the recognition and measurement of
financial instruments, has been applied in preparation of the results for the
year.
- The ABI Executive Share Incentive Scheme and ABI Share Purchase Scheme have
been consolidated in accordance with the requirements of the JSE Securities
Exchange South Africa.
The net effect of the above changes in accounting policy on retained income was
immaterial.
Ernst & Young, the company"s external auditors, have reviewed the financial
results. A copy of their unmodified report is available for inspection at the
company"s registered office.
Declaration of dividend number 57: Notice is hereby given that on 29 April 2004,
the board of directors declared a final dividend of 231 cents per share (2003:
189.6 cents) for the year ending 31 March 2004. This dividend will be paid out
of profit on ordinary activities after taxation, as determined by the directors,
to ordinary shareholders recorded as such in the register at the close of
business on the record date, Friday, 25 June 2004. The last date to trade to
participate in the dividend is Friday, 18 June 2004. Shares will commence
trading ex-dividend from Monday, 21 June 2004.
The important dates pertaining to this dividend are as follows:
Last day to trade "cum" dividend Friday, 18 June 2004
Shares trade "ex" dividend Monday, 21 June 2004
Record date Friday, 25 June 2004
Payment date Monday, 28 June 2004
Share certificates may not be dematerialised or rematerialised between Monday,
21 June 2004 and Friday, 25 June 2004, both days inclusive.
By order of the board
MJ Bowman V Pillay
Managing director Financial director 29 April 2004
Amalgamated Beverage Industries Limited (Registration number 1970/006820/06)
ISINnumber: ZAE000000048 Share code: ABI
Registered office: ABI House, 14 Pongola Crescent, Eastgate Extension 17,
Sandton 2199. PO Box 76202, Wendywood 2144, South Africa
Directorate and administration: Non-executive chairman EAG. Independent non-
executive directors MP Adonisi; PM Bester. Non-executive directors JA Mabuza;
MI Wyman (British). Executive directors MJ Bowman (managing director); EM
Borcherds; TK Gibbon; MJ Hoy; AP Lemmert; HBB Lloyd; V Pillay; TC Sanderson.
Company secretary S Pienaar
Transfer secretaries: Computershare Limited, 70 Marshall Street, Johannesburg
2001. PO Box 61051, Marshalltown 2107, South Africa
www.abi.co.za
Date: 30/04/2004 10:00:11 AM Produced by the JSE SENS Department
