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Oceana Group Limited - Interim Report And Dividend Declaration For The Six
Months Ended 31 March 2004
Oceana Group Limited
Incorporated in the Republic of South Africa
(Registration Number 1939/001730/06)
JSE Share Code: OCE
ISIN Number: ZAE000025284
NSX Share Code: OCG
INTERIM REPORT AND DIVIDEND DECLARATION FOR THE SIX MONTHS ENDED 31 MARCH 2004
The unaudited results of the group for the six months ended 31 March 2004 are
set out herein.
This report has been prepared in compliance with South African Statements of
Generally Accepted Accounting Practice applicable to Interim Financial Reporting
and in accordance with the principles applied in the most recently published
annual financial statements, except as disclosed in Note 2.
Directors :
D M J Ncube (Chairman), R A Williams (Vice Chairman), A B Marshall* (Chief
Executive Officer), D F Behrens, M A Brey, B P Connellan, N Dennis,
R G Nicol*, S Pather, R V Smither. (*Executive)
Company Secretary: J D Cole
GROUP INCOME STATEMENT Unaudited Audited
Six months ended Year ended
31 March 30 Sept
Note 2004 2003 2003
Restated Change Restated
R"000 R"000 % R"000
Revenue 1,190,926 1,318,469 (10) 2,582,626
Operating profit before
abnormal items 111,219 128,151 (13) 267,072
Abnormal items 1 633 17 (180)
Operating profit 111,852 128,168 266,892
Dividends received 2,976 3,726 7,861
Net interest received 9,708 11,226 20,940
Profit before taxation 124,536 143,120 (13) 295,693
Taxation 42,113 52,104 (19) 101,393
Profit after taxation 82,423 91,016 194,300
Attributable to outside
shareholders in subsidiaries 1,266 3,478 5,579
Attributable to own
shareholders 81,157 87,538 (7) 188,721
Number of shares in
issue (000"s) 109,549 107,788 108,281
Weighted average number of shares
on which earnings per share and
headline earnings per share are
based (000"s) 109,390 107,730 107,906
Adjusted weighted average
number of shares on which diluted
earnings per share and diluted
headline earnings per share are
based (000"s) 111,969 111,287 111,073
Earnings per share (cents)
Basic 74.2 81.3 (9) 174.9
Diluted 72.5 78.7 (8) 169.9
Headline earnings per share (cents)
Basic 72.2 85.3 (15) 181.0
Diluted 70.6 82.6 (15) 175.9
Dividends per share (cents) 17.5 17.5 0 76.5
DETERMINATION OF HEADLINE EARNINGS
Attributable to own shareholders 81,157 87,538 188,721
Adjusted for:
Impairment loss on property
plant and equipment 160 4,443 6,885
Impairment loss on fishing
rights 0 0 2,243
Loss on change of interest in
joint ventures 0 0 197
Net surplus on disposal of
property, plant and equipment (2,288) (83) (2,687)
Headline earnings for ______ ______ _______
the period 79,029 91,898 (14) 195,359
DIVIDEND DECLARATION
Notice is hereby given that an interim dividend No. 121 of 17.5 cents per share,
in respect of the year ending 30 September 2004 was declared on Friday 7 May
2004. Relevant dates are as follows:
Last day to trade cum divided - Friday 25 June 2004.
Commence trading ex dividend - Monday 28 June 2004
Record date - Friday 2 July 2004.
Dividend payable - Monday 5 July 2004.
Share certificates may not be dematerialised or re-materialised between
Monday 28 June 2004 and Friday 2 July 2004, both dates inclusive.
By order of the board
J D Cole Secretary
7 May 2004
Registered Office: 16th Floor, Metropolitan Centre, 7 Coen Steytler Avenue,
Cape Town 8001
Transfer Secretaries: Computershare Limited
70 Marshall Street, Johannesburg, 2001
(P.O. Box 61051, Marshalltown, 2107
Sponsor: Standard Bank
STATEMENT OF CHANGES IN EQUITY
Share Non TOTAL
Capital Distribut- Distribut- R"000
& able able
Premium Reserves Reserves
Note R"000 R"000 R"000
Period 1 October 2003 to
31 March 2004
Balance at the beginning
of the period 32,894 22,497 713,472 768,863
Shares issued 6,899 0 0 6,899
(Increase)/decrease in 0 0 (41)
treasury shares held by (41)
Share Trust
Movement on foreign
currency translation 0 (1,359) 0 (1,359)
reserve
Net profit for the period 0 0 81,157 81,157
Profit on sale of 0 86
treasury shares 0 86
Dividends 0 0 (64,576) (64,576)
Balance at the end of the 39,752 21,138 730,139 791,029
period
Period 1 October 2002 to
31 March 2003 (Restated)
Balance at the beginning 40,044 597,298
of the period as 30,599 667,941
previously reported
Change in accounting 0 1,471 909
policy for Share Trust 2 (562)
Restated balance 30,037 40,044 598,769 668,850
Shares issued 968 0 0 968
(Increase)/decrease in 30 0 0 30
treasury shares held by
Share Trust
Movement on foreign (16,298) (16,298)
currency translation 0 0
reserve
Foreign currency hedging
reserve 0 (2,100) 0 (2,100)
Net profit for the period 0 0 87,538 87,538
Profit on sale of 0 0 205 205
treasury shares
Dividends 0 0 (55,448) (55,448)
Balance at the end of the 31,035 21,646 631,064 683,745
period
Period 1 October 2002 to
30 September 2003
(Restated)
Balance at the beginning 597,298
of the year as previously 30,599 40,044 667,941
reported
Change in accounting
policy for Share Trust 2 (562) 0 1,471 909
Restated balance 30,037 40,044 598,769 668,850
Shares issued 2,811 0 0 2,811
(Increase)/decrease in 46 0 0 46
treasury shares held by
Share Trust
Movement on foreign (17,547)
currency translation 0 0 (17,547)
reserve
Net profit for the year 0 0 188,721 188,721
Profit on sale of 0 0 343 343
treasury shares
Dividends 0 0 (74,361) (74,361)
Balance at the end of the 32,894 22,497 713,472 768,863
year
GROUP BALANCE SHEET
Unaudited Audited
31 March 30 Sept
2004 2003 2003
Restated Restated
Note R"000 R"000 R"000
Assets
Non current assets 462,233 384,190 394,145
Property, plant and equipment 309,550 263,806 280,189
Goodwill 5 19,279 0 0
Fishing Rights, trademarks 5 38,191 23,837 20,706
Deferred taxation 17,414 17,972 20,115
Investments and loans 77,799 78,575 73,135
Current assets 856,070 875,237 889,970
Inventories 280,368 175,076 193,091
Accounts receivable 466,409 521,295 452,751
Cash and cash equivalents 109,293 178,866 244,128
_______ _______ _______
Total assets 1,318,303 1,259,427 1,284,115
Equity and liabilities
Capital and reserves 791,029 683,745 768,863
Share capital and premium 39,752 31,035 32,894
Non-distributable reserves 21,138 21,646 22,497
Distributable reserves 730,139 631,064 713,472
Interest of outside
shareholders 13,104 12,385 14,211
Non-current liabilities
Deferred taxation 12,708 7,552 12,921
Current liabilities 501,462 555,745 488,120
Bank overdraft 44,137 58,372 39,088
Accounts payable and provisions 457,325 497,373 449,032
_______ _______ _______
Total equity and liabilities 1,318,303 1,259,427 1,284,115
Net asset value per ordinary
share (cents) 722 634 710
Total liabilities excluding
deferred taxation: Total shareholders
funds (%) 62 80 62
GROUP CASH FLOW STATEMENT
Unaudited Audited
Six months ended Year ended
31 March 30 Sept
2004 2003 2003
Restated Restated
R"000 R"000 R"000
Cash flows from operating activities
Operating profit 111,219 128,151 267,072
Adjustment for non cash items 25,676 27,256 56,092
_______ ________ _______
Cash operating profit before working
capital changes 136,895 155,407 323,164
Working capital changes (34,654) (79,433) (84,502)
_______ ________ _______
Cash generated from operations 102,241 75,974 238,662
Interest and dividends received 14,574 15,323 35,782
Interest paid (1,890) (4,096) (6,981)
Taxation paid (65,332) (56,997) (100,270)
Dividends paid (67,224) (59,405) (78,529)
________ ________ ________
Net cash(outflow)/inflow from
operating activities (17,631) (29,201) 88,664
Cash outflow from investing
activities (130,806) (93,826) (129,982)
_______ ________ ________
Net cash outflow
before financing activities (148,437) (123,087) (41,318)
Net cash flows from financing
activities 6,943 1,203 3,199
_______ ________ ________
Net decrease in cash and
cash equivalents (141,494) (121,824) (38,119)
Reduction in cash resulting from
disposal of joint ventures 0 0 (2)
Cash resulting from acquisition
of business 2,662 0 0
Cash and cash equivalents at the
beginning of the period 205,040 250,003 250,003
Effect of exchange rate changes (1,052) (7,685) (6,842)
_______ _______ ________
Cash and cash equivalents at the
end of the period 65,156 120,494 205,040
SEGMENT REPORT
Unaudited Audited
31 March 30 Sept
2004 2003 2003
Restated Restated
R"000 R"000 R"000
Revenue
Inshore Fishing 616,205 599,313 1,262,497
Midwater and Deepsea Fishing 519,187 663,671 1,190,706
Commercial Cold Storage and Logistics 55,534 55,485 129,423
_______ ________ ________
Total 1,190,926 1,318,469 2,582,626
Operating profit before abnormal items
Inshore Fishing 55,496 72,582 145,359
Midwater and Deepsea Fishing 43,786 39,257 80,070
Commercial Cold Storage and Logistics 11,937 16,312 41,643
_______ ________ ________
Total 111,219 128,151 267,072
Total assets
Inshore Fishing 611,494 497,572 519,062
Midwater and Deepsea Fishing 345,108 329,269 295,074
Commercial Cold Storage and Logistics 157,195 157,173 132,601
Financing 187,092 257,441 317,263
1,300,889 1,241,455 1,264,000
Deferred taxation 17,414 17,972 20,115
Total 1,318,303 1,259,427 1,284,115
Total liabilities
Inshore Fishing 299,257 272,467 293,694
Midwater and Deepsea Fishing 84,773 127,983 71,820
Commercial Cold Storage and Logistics 73,295 96,923 83,518
Financing 44,137 58,372 39,088
501,462 555,745 488,120
Deferred taxation 12,708 7,552 12,921
Total 514,170 563,297 501,041
NOTES
Unaudited Audited
31 March 30 Sept
2004 2003 2003
Restated Restated
R"000 R"000 R"000
1. Abnormal items
Net surplus on disposal of property,
plant and equipment 633 17 17
Loss on change of interest
in joint ventures 0 0 (197)
Abnormal profit before taxation 633 17 (180)
Taxation 0 4 0
Abnormal profit attributable to
own shareholders 633 13 (180)
2. Change in accounting policy
The Group has changed its policy
regarding accounting for the Oceana
Group Share Trust, which has now
been consolidated. Prior period
financial statements have been
restated accordingly. The main
effects of the change are set
out below:
Dividends received as previously reported 9,646
Adjustments to include Share Trust (1,785)
As restated 7,861
Profit attributable to own shareholders
as previously reported 190,506
Adjustments to include Share Trust (1,785)
As restated 188,721
Prior period share capital and premium,
number of shares in issue, investments and
loans and accounts payable have been re-
stated to take into account the treasury
shares held by the Share Trust and to
eliminate inter group balances
3. Dividends
Dividend declared after reporting
date 19,171 18,913 64,576
4. Supplementary information
Cost of sales 786,857 882,186 1,752,280
Depreciation 26,670 21,299 44,558
Amortisation of goodwill and other
intangibles 617 1,135 2,247
Impairment loss on plant and equipment 229 4,443 7,860
Impairment loss on fishing rights 0 0 2,243
Operating lease charges 4,800 4,416 11,780
Foreign exchange (profit)/loss (392) 8,799 11,473
Capital expenditure 58,362 91,955 136,313
Expansion 39,202 50,870 94,000
Replacement 19,160 41,085 42,313
Capital commitments 52,764 65,840 130,279
Contracted 24,516 35,937 10,295
Approved 28,248 29,903 119,984
Contingent liabilities 1,489 1,600 1,489
5. Acquisition of Glenryck (UK) Limited
On 31 March 2004 the Group acquired
100% of the share capital of Glenryck
(UK) Limited. The acquisition cost
was allocated as follows:
Shareholder"s loan 6,074
Net asset value 32,181
Trademark revaluation 15,643
Goodwill 19,279
73,177
COMMENTS
Financial Results
Headline earnings per share for the six months ended 31 March 2004 decreased by
15% compared to those of the first half of the previous year. Group turnover
declined by 10% and operating profit by 13%.
An interim dividend of 17.5 cents per share has been declared which is
the same as that of the previous year.
Review of operations
Canned fish sales volumes on the domestic market were 3% lower than the previous
year due mainly to a lack of supply. Pilchard landings to the cannery were
higher than for the same period last year, however, production yields were
poorer due to fish size and the distance from the fishing grounds, resulting in
lower production volumes. The pilchard biomass in SA waters remains healthy and
the 2004 Total Allowable Catch (TAC) of 250 000 tons (2003: 285 000 tons) is
likely to be increased.
Pilchard fishing in Namibia commenced in April against the provisional 20 000
ton TAC (2003: 20 000 ton). Due to the low TAC the industry is landing their
catch at the Etosha cannery.
Fish meal sales volumes were well above the previous year and prices were lower.
Export realisations from lobster were lower due to both weaker dollar selling
prices and the stronger rand. Lobster catches have been good and increased
quantities have been exported in live form.
Midwater pelagic fishing operations were disrupted following breakdowns on two
vessels. Turnover declined partly due to lower trading volumes from the North
Atlantic region and partly due to the effect of the strong rand.
Hake catches in South Africa were affected by inconsistent catching and a large
proportion of small size fish yielding lower returns. Realisations were also
affected by the stronger rand. Namibian hake operations continued to experience
low catch rates.
Squid operations performed well with record catches for the second successive
year. Tuna trading showed improved results as did the import trading business.
Cold storage occupancy levels and volumes handled in and out were ahead of last
year, due mainly to increased import activity. However, clearing and forwarding,
ships agency and bunkers performed well below the previous year.
The acquisition of Glenryck (UK) Ltd was effective from 31 March 2004. Glenryck
is the dominant canned pilchard brand in the United Kingdom and the acquisition
provides an additional outlet for product from the Group"s Namibian and South
African canneries. The Group results reflect the effect of the acquisition on
the balance sheet, however, trading results will be consolidated only from 1
April 2004. The cost of the acquisition which amounted to R73 million was funded
from cash reserves. In the short term the effect of the acquisition on the
earnings and net asset value of the Group will not be significant.
Prospects
The pelagic TACs (pilchard and anchovy) in SA are expected to be increased and
depending on fishing conditions this should translate into higher canned fish
and fishmeal production. Promotional activity and product availability should
benefit Lucky Star sales volumes.
Export earnings from hake and midwater pelagic are expected to remain depressed,
while lobster should benefit from increased sales volumes and prices in the
second half of the year.
The newly commissioned fruit handling facility at Maydon Wharf is well
positioned to benefit from the forthcoming fruit export season.
Although earnings for the second half are expected to exceed those of the first
half, for the full year the Group does not expect to achieve the same headline
earnings per share as the prior year.
On behalf of the board.
DMJ Ncube AB Marshall
Chairman Chief Executive Officer
Date: 07/05/2004 02:18:48 PM Produced by the JSE SENS Department
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