| Wed 3 Nov 2004, 8:45 | | Results For The Half Year Ended 31 August 04 |
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Intertrading Limited - Unaudited Interim Results For The Half Year Ended 31
August 2004
INTERTRADING LIMITED
Registration number 1987/004777/06
Share code: ITR ISIN code: ZAE000015566
(`Intertrading` or `the company`)
UNAUDITED INTERIM RESULTS FOR THE HALF YEAR ENDED 31 AUGUST 2004
Nature of business
Intertrading is one of Southern Africa`s fresh fruit and macadamia nut
exporters. The group incorporates freight forwarding, air and sea freight
solutions for our growers, shipping their product to targeted international
destinations.
Operational review - continued operations
Turnover for the six months to end August 2004 in respect of continuing
operations fell by 28% compared with the same period last year.
The sharp decline in turnover was mainly due to the delayed start to the season
from the core citrus and macadamia nut divisions. The turnover in the freight
forwarding business was down in sympathy with the rest of the group, from which
it derives a significant amount of business. A contributing factor to the
decline in turnover was the strength of the Rand which reduced the Rand
realisations.
In the period under review the group increased its stake to 50% in its nut
processing plant in Nelspruit. The plants operations have now been consolidated
for the first time. This has resulted in an increase of R550 000 in operating
profits compared to last year.
Despite the strengthening of the Rand deciduous and citrus margins have been
fair. Certain grapefruit varieties under-performed in Europe due to lower
demand. Margins on exotic produce have also been similarly affected.
The Intertrading business model is extremely volume sensitive and it is
important to retain skills and maintain levels of service even though volumes
decline so that the Group is able to take advantage of the inevitable upturn in
business. This has had the impact of maintaining costs in an environment where
business activities have declined. This together with the lower Rand
realisations has had a negative effect on operating profits.
Headline earnings per share of 2,5 cents for the half year ended 31 August 2004
are significantly below the 6 cents reported for the corresponding half of the
previous year. This decline reflects reductions in turnover and margins together
with the cost of retaining the skills base referred to above.
Cash flow in the period has been significantly adversely affected by the delay
in the season referred to above. This has been exacerbated by the increase in
approximately 50% in Macadamia nut deliveries.
Operational review - discontinued operations
Closure costs from the discontinued Grain trading division were controlled to
R102 000 for the period and the final parcel of grain at the date of this review
has now been disposed of. No further losses are anticipated in respect of the
final disposal of these operations.
Corporate affairs
In line with our commitment to good corporate governance, the group has an Audit
and Remuneration committee, both chaired by non-executive directors. Warwick
Marshall was appointed as an alternate director to Chris Jousse on 3 August
2004. The Board has no new information to report regarding the Conafex Holding`s
call option that expires 30 November 2004, to acquire an additional 15,6%
interest in the company.
Prospects
As a result of the late start to the season referred to above it is expected
that significant sales will be generated and brought to account in the second
half of the current financial year. Accordingly it is expected that the second
half of the year will show an improvement over the first half. As long as the
Rand remains in its current strong cycle, margins will be impaired and the
financial results of the group subdued.
Accounting Policies
The results for the half year have been prepared in accordance with South
African statements of Generally Accepted Accounting Practice and are consistent
with the accounting policies adopted by the group as applied at 29 February
2004.
Dividends
In accordance with the company`s policy, no dividend has been declared in
respect of the half year.
By order of the board
T Swart G F M van Rooyen
Chairman Managing Director
Woodmead 3 November 2004
Registered office Transfer secretaries
Block 3 Computershare Investor Services 2004
Harrowdene Office Park (Pty) Limited
Western Service Road 70 Marshall Street
Woodmead, 2148 Johannesburg, 2001
(PO Box 100 (PO Box 61051
Woodlands, 2080) Marshalltown, 2107)
Directors
Non-executive:T J Swart, C Jousse, W. Marshall (Alt.), R Wells**
Executive: G F M van Rooyen, A J de Kovel*, B Julicher, C van der Merwe,
T Woods *Netherlands **U.K.
CONSOLIDATED Unaudited Unaudited Audited
INCOME STATEMENT half year half year year ended
31 Aug 31 Aug 29 Feb
2004 2003 2004
R`000 R`000 R`000
Revenue 151 048 237 372 363 024
- Continuing operations 149 713 206 697 333 110
- Discontinuing operations 1 335 30 675 29 914
Operating profit/(loss)
before interest and
amortisation of goodwill 2 201 1 066 (74)
- Continuing operations 1 949 4 274 6 410
- Discontinuing operations 252 (3 208) (6 484)
Interest received 915 470 898
Interest (paid) (1 455) (1 225) (1 341)
Amortisation (1 105) (1 306) (2 182)
Net income/(loss)
before taxation 556 (995) (2 699)
Taxation (504) (280) (1 615)
- Continuing operations (494) (1 216) (1 615)
- Discontinuing operations (10) 936 -
Net income/(loss)
attributable to
shareholders 52 (1 275) (4 314)
- Continuing operations 154 1 719 3 401
- Discontinuing operations (102) (2 994) (7 715)
STATEMENT OF Unaudited Unaudited Audited
CHANGES IN EQUITY half year half year year ended
31 Aug 31 Aug 29 Feb
2004 2003 2004
R`000 R`000 R`000
Equity at beginning of
period 70 427 75 741 75 741
Net profit/(loss)
for the period 52 (1 275) (4 314)
Dividend declared in
respect of prior year (500) (1 000) (1 000)
Equity at end of period 69 979 73 466 70 427
FINANCIAL Unaudited Unaudited Audited
HIGHLIGHTS half year half year year ended
31 Aug 31 Aug 29 Feb
2004 2003 2004
R`000 R`000 R`000
Number of ordinary
shares (`000) 50 000 50 000 50 000
Weighted average number
of shares in issue (`000) 50 000 50 000 50 000
Headline earnings/(loss)
per share (cents) 2,3 - (4,2)
- Continuing operations 2,5 6,0 11,2
- Discontinuing operations (0,2) (6,0) (15,4)
Less amortisation of goodwill (2,2) (2,6) (4,4)
Earnings/(loss) per
share (cents) 0,1 (2,6) (8,6)
Net asset value per share
- excluding goodwill (cents) 74,8 78,5 74,6
CONSOLIDATED Unaudited Unaudited Audited
BALANCE SHEET half year half year year ended
31 Aug 31 Aug 29 Feb
2004 2003 2004
R`000 R`000 R`000
ASSETS
Non-current assets
- Property, plant, equipment
and trademarks 8 351 5 156 6 785
- Goodwill 32 583 34 217 33 126
- Deferred taxation 247 - 720
- Investments 2 183 5 447 1 613
Current assets 71 181 75 229 42 436
114 545 120 049 84 680
EQUITY AND LIABILITIES
Share capital and premium 47 452 47 452 47 452
Distributable reserves 22 527 26 014 22 975
Shareholders` interest 69 979 73 466 70 427
Long-term liabilities 867 301 1
Current liabilities 43 699 46 282 14 252
114 545 120 049 84 680
Discontinued grain trading
operations
Total assets 3 517 7 650 6 637
Total liabilities 4 357 3 666 7 375
CASH FLOW Unaudited Unaudited Audited
STATEMENT half year half year year ended
31 Aug 31 Aug 29 Feb
2004 2003 2004
R`000 R`000 R`000
Cash (utilised)/generated
by operations (17 636) 7 226 10 212
Net interest paid (540) (755) (443)
Taxation paid (1 128) (2 607) (6 771)
Dividend paid (500) (1 000) (1 000)
Cash (utilised)/generated by
operating activities (19 804) 2 864 1 998
Net cash flow from investing
activities ( 1 569) (3 637) (1 934)
Net cash flow from financing
activities 159 77 (233)
Net movement in cash (21 214) (696) (169)
Net cash resources at beginning
of the year 11 150 11 319 11 319
Net cash resources at end of
the period (10 064) 10 623 11 150
