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Astral Foods Limited - Unaudited Interim Results And Dividend Declaration For
The Year Ended 31 March 2005
ASTRAL FOODS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1978/003194/06)
Share code:ARL ISIN:ZAE000029757
(`the Group`)
- Headline earnings per share increase 33%
- Net cash inflow increase 37%
- Interim dividend increase 50%
UNAUDITED IMTERIM RESULTS AND DIVIDEND DECLARATION
for the six months ended 31 March 2005
Consolidated Income Statement
Unaudited Audited
Six months ended Year ended
31 March 31 March Change 30 Sept
2005 2004 2004
R`000 R`000 % R`000
Revenue 2 326 632 1 935 606 20 4 053 142
Operating profit(note 3) 246 121 189 901 30 388 979
Net interest
received/(paid) (7 972) 2 422 1 339
Profit before tax 238 149 192 323 24 390 318
Taxation (73 474) (64 127) (126 070)
Profit after tax 164 675 128 196 28 264 248
Minority interests (1 325) (926) (1 845)
Net profit for the
period 163 350 127 270 28 262 403
Earnings per share
(cents) 392,2 304,3 29 630,2
Headline earnings per
share (cents) 406,6 306,2 33 631,4
Diluted earnings per
share (cents) 374,3 288,4 30 603,3
Diluted headline earnings
per share (cents) 388,1 290,2 34 604,6
Dividend per share(cents)
-declared out of earnings
for the period 120 80 50 230
Net asset value per
share(Rand) 20,21 15,80 28 17,36
Shares in issue
- net of treasury
shares 41 516 365 41 341 422 41 654 032
Weighted average shares
in issue (net of
treasury shares)
- net of treasury
shares 41 653 141 41 828 216 41 640 015
Consolidated Balance Sheet
Assets
Unaudited Audited
Six months ended Year ended
31 March 31 March 30 Sept
2005 2004 2004
R`000 R`000 R`000
Non-current assets 799 459 521 572 823 653
Property, plant and equipment 677 855 496 648 689 789
Goodwill 114 819 17 204 117 033
Investments and loans 6 785 7 720 6 715
Deferred tax - - 10 116
Current assets 878 761 917 545 1 014 424
Inventories 172 823 213 727 199 592
Biological assets 204 196 115 715 202 778
Receivables and pre-payments 465 358 450 982 568 016
Cash and cash equivalents 36 384 137 121 44 038
Total assets 1 678 220 1 439 117 1 838 077
Equity and liabilities
Capital and reserves 850 448 662 691 764 828
Issued capital 258 004 255 764 258 590
Reserves 581 244 397 634 496 363
Ordinary shareholders`
interest 839 248 653 398 754 953
Minority interests 11 200 9 293 9 875
Non-current liabilities 202 875 135 827 207 181
Long-term liabilities 1 720 2 547 2 748
Deferred tax 139 658 78 432 142 965
Post-retirement medical
aid obligations 61 497 54 848 61 468
Current liabilities 624 897 640 599 866 068
Trade and other payables 549 113 596 614 590 022
Provision for tax 913 38 992 77 232
Short-term borrowings 74 871 4 993 198 814
Total equity and liabilities 1 678 220 1 439 117 1 838 077
Net debt/(surplus cash) 40 207 (129 581) 157 524
Consolidated Cash Flow Statement
Cash operating profit 302 510 230 579 470 664
Working capital changes 87 046 36 543 (57 041)
Cash generated from
operations 389 556 267 122 413 623
Interest received(paid) (7 972) 2 422 1 339
Tax paid (141 892) (68 365) (105 137)
Dividends paid (64 015) (45 871) (79 539)
Cash inflow from operating
activities 175 677 155 308 230 286
Net cash outflow to
investing activities (42 557) (57 816) (406 817)
Net cash inflow/(outflow) for
the period 133 120 97 492 (176 531)
Net cash outflow to financing
activities
Shares issued 1 324 - 4 923
Buy-back of shares (17 379) (25 470) (36 099)
(Decrease)/increase in
borrowings (124 971) (1 499) 186 538
Net (decrease)/ increase in
cash and cash equivalents (7 906) 70 523 (21 169)
Effects of exchange
rate changes 252 (1 482) (2 873)
Cash and cash equivalent
balances at beginning of year 44 038 68 080 68 080
Cash and cash equivalent
balances at end of period 36 384 137 121 44 038
Statement of Changes in Equity
Balance beginning of year 764 828 608 226 608 226
Change in accounting policy:
AC 137 - Agriculture
(biological assets) - - 6 469
Balance beginning of
year - restated 764 828 608 226 614 695
Profit for the period 164 675 128 196 264 248
Movement in currency
translation difference during
the period 917 (2 348) (3 348)
Dividends paid during
the period (63 917) (45 913) (79 591)
Decrease in equity as result
of buy-back of shares (17 379) (25 470) (36 099)
Shares issued 1 324 - 4 923
Balance at end of period 850 448 662 691 764 828
Segmental Reporting Change
Revenue Rm Rm % Rm
Animal Nutrition 1 331,3 1 269,3 5 2 703,2
Poultry 1 634,7 1 093,3 50 2 284,7
Inter group (639,4) (427,0) (934,8)
2 326,6 1 935,6 20 4 053,1
Operating profit
Animal Nutrition 100,8 69,1 46 151,4
Poultry 145,3 120,8 20 237,6
246,1 189,9 30 389,0
Notes
1. Accounting policies
The financial statements of the Group are prepared in accordance with and
comply with the South African Statements of Generally Accepted Accounting
Practice.
The financial statements are prepared under the historical cost convention,as
modified by the restatement of certain financial instruments. The accounting
policies of the Group are consistent in all material respects with those
applied in the previous financial year.
Unaudited Audited
Six months ended Year ended
31 March 2005 31 March 2004 30 Sept 2004
R`000 R`000 R`000
2. Capital commitments
Capital expenditure commitments 32 462 44 051 9 242
Earlybird acquisition - 250 000 -
3.Operating profit
The following items
have been accounted
for in the operating profit:
Biological assets
- fair value gain/(loss) (3) - 697
Amortisation of goodwill 6 234 1 170 3 405
Depreciation on property, plant
and equipment 50 447 36 881 71 247
4.Reconciliation to headline earnings
Net profit for the period 163 350 127 270 262 403
Profit on sale of property,
plant and equipment (235) (366) (137)
Amortisation of goodwill 6 234 1 170 3 405
Recovery of loans
previously written off - - (2 736)
Headline earnings for the period 169 349 128 074 262 935
5.Restatement of financial information under International Financial Reporting
Standards (`IFRS`)
The Group will report its financial information for the 2006 financial year in
accordance with IFRS.
The comparative financial information for 2006 (i.e. the results for the six
months ended 31 March 2005) will have to be restated in accordance with
IFRS,and these restated results are disclosed below for information purposes
only, in order to give an indication of the effect of IFRS on the results and
balance sheet for the six months ended 31 March 2005.
Stated in Restated in
accordance with accordance
SA GAAP with IFRS
Unaudited Unaudited
31 March 31 March
2005 2005
Consolidated Income Statement R`000 R`000
Revenue 2 326 6322 326 632
Operating profit 246 121 272 965
Net interest paid (7 972) (10 156)
Profit before tax 238 149 262 809
Taxation (73 474) (79 109)
Profit after tax 164 675 183 700
Minority interests (1 325) (2 079)
Net profit for the period 163 350 181 621
Earnings per share (cents) 392.2 436.0
Headline earnings per share (cents) 406.6 435.5
Consolidated Balance Sheet
Assets
Non-current assets 799 459 940 984
Current assets 878 761 883 489
Total assets 1 678 2201 824 473
Equity and liabilities
Capital and reserves 850 448 924 534
Non-current liabilities 202 875 264 759
Current liabilities 624 897 635 180
Total equity and liabilities 1 678 2201 824 473
Reconciliation of net profit for the period
Net profit in accordance with SA GAAP 163 350
Reduced depreciation - after tax 12 037
Goodwill amortisation added back 6 234
Net profit in accordance with IFRS 181 621
Financial overview
The Group reported a good performance with an increase in headline earnings
per share of 33% from 306,2 cents to 406,6 cents.
Revenue for the period increased by 20% to R2,3 billion (2004 : R1,9 billion)
mainly as the result of the acquisition of the remaining 50% of Earlybird in
September 2004. Sales volumes increased by 5,5%.
Operating profit for the period increased by 30% from R190 million to R246
million. Poultry is still the major contributor with R145 million (59%) whilst
Animal Nutrition contributed R101 million (41%). Operating margin for the
period at 10,6% is up from last year`s 9,8%.
Net finance cost of R8,0 million compares with the previous year`s income of
R2,4 million.
The tax rate of 30,9% (2004 : 33,3%) includes a write back of R4,5 million on
deferred taxation following the reduction of the statutory tax rate to 29%.
The balance sheet reflects an increase in net asset value per share of 28% to
R20,21 (2004 : R15,80).
The strong cash generation continued with net cash inflow for the period of
R133 million (2004 : R97 million) before allowing for the further share buy-
back of R17 million (2004 : R25 million). The resultant net borrowing
situation reduced from R157 million at year-end to R40 million.
Dividends paid for the period increased by 50% from 80 cents per share to 120
cents per share. This includes an element of adjustment of the disparity
between the interim and final dividend.
Operational overview
Animal Nutrition Division
The South African maize producers find themselves in a crisis situation.
Following on the high carry over of 3,3 million tonnes of maize from the
2004/2005 marketing season, the latest estimate for the current season crop is
11,6 million tonnes. We believe that this figure could be conservative. Record
global crops of grains for feed production have exacerbated the current
agricultural crisis. Safex prices of maize remained high during the period
under review but as the prospects of a huge crop became reality the maize
price dropped substantially.
The division was well positioned for the market collapse. Revenue for the six
months increased by 5% to R1,3 million mainly due to increased off-take by the
Group`s poultry operations. Operating profit increased by 46% to R100,8
million from last year`s R69,1 million. Operating margins improved from 5,4%
to 7,6% due to strict cost control and margin management.
Poultry Division
The benefit to the poultry division as the result of reduced raw material
prices will be felt during the second half of 2005.
The market, influenced by the increase of imports and the strong Rand,
restricted realisations to an average price increase of 1%. Feed cost,
however, increased by 6% resulting in operating margins decreasing from last
year`s high of 11,0% to 8,9%. Operating profits nevertheless increased from
R121 million to R145 million with the full inclusion of Earlybird. Poultry`s
operating profit was negatively affected by a R5,3 million goodwill
amortisation charge following the acquisition of Earlybird. Volumes increased
by 5% over the same period last year.
IFRS reporting
The Group will report its financial information for the 2006 financial year in
accordance with IFRS. Note 5 sets out the effect of IFRS on the results and
balance sheet for the six months ended 31 March 2005.
Prospects
Increased disposable income in the hands of consumers, lower raw material
prices and the expectation of balanced poultry demand and supply should impact
positively on results compared to the second half of last year.
Declaration of Ordinary Dividend No. 9
Notice is hereby given that dividend no.9 of 120 cents per ordinary share has
been declared in respect of the six months ended 31 March 2005.
Last date to trade cum-dividend Friday, 8 July 2005
Shares commence trading ex-dividend Monday, 11 July 2005
Record date Friday, 15 July 2005
Payment of dividend Monday, 18 July 2005
Share certificates may not be dematerialised or rematerialised between Monday,
11 July 2005 and Friday, 15 July 2005, both days inclusive.
On behalf of the board
J L van den Berg N C Wentzel
Chairman Chief Executive Officer
Pretoria
23 May 2005
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, M Macdonald, T C C Mampane
(*Executive director) (#Company secretary)
Transfer secretaries
Computershare Investor Services 2004 (Pty) Ltd
PO Box 61051
Marshalltown, 2107
Telephone: 011-370-5000
Sponsor
JPMorgan Chase Bank, N.A. (Johannesburg branch)
Private Bag X9936
Sandton, 2146
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