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Intertrading - Unaudited Interim Results FOR The HALF year endeD 31 August 2005
Intertrading Limited
Registration number 1987/004777/06
("Intertrading" or "the company")
Share code: ITR ISIN code: ZAE000015566
UNAUDITED INTERIM RESULTS FOR the HALF year endeD 31 AUGUST 2005
"Intertrading is a global marketing company that specialises in fresh fruit,
vegetables and macadamia nuts from southern African producers."
CONSOLIDATED INCOME STATEMENT
Restated *Restated
Unaudited Unaudited Unaudited
half year half year year to
31 August 31 August 28 February
2005 2004 2005
R"000 R"000 R"000
Revenue 154 849 151 048 270 197
Continuing operations 154 717 149 713 266 698
Discontinuing operations 132 1 335 3 499
Operating profit before
interest and impairment
of goodwill 283 2 334 3 797
Continuing operations 227 2 082 3 061
Discontinuing operations 56 252 736
Interest received 1 448 915 1 741
Interest (paid) (2 053) (1 455) (2 814)
Impairment of goodwill - (1 105) (2 210)
Net (loss)/income before
taxation (322) 689 514
Taxation (407) (522) (952)
Continuing operations (407) (512) (942)
Discontinuing operations - (10) (10)
Net (loss)/income
attributable to shareholders (729) 167 (438)
Continuing operations (785) 269 (478)
Discontinuing operations 56 (102) 40
STATEMENT OF CHANGES IN EQUITY
2005 2004 2005
R"000 R"000 R"000
Equity at beginning of
the period 69 480 70 418 70 418
Net loss/income for
the period (729) 167 (438)
Dividend declared in respect
of prior year (500) (500) (500)
Equity at end of the period 68 251 70 085 69 480
CASH FLOW STATEMENT
2005 2004 2005
R"000 R"000 R"000
Cash generated/(utilised)
by operations (25 448) (17 636) 859
Net interest paid (605) (540) (1 073)
Taxation paid (829) (1 128) (2 238)
Dividend paid (500) (500) (500)
Cash utilised by operating
activities (27 382) (19 804) (2 952)
Net cash flow from investing
activities (3 098) (1 569) (2 476)
Net cash flow from financing
activities 1 476 159 (654)
Net movement in cash (29 004) (21 214) (6 082)
Net cash resources at
the beginning of the year 5 068 11 150 11 150
Net cash resources at end of
the period (23 936) (10 064) 5 068
*The audited results for the 12 months ended 28 February 2005 under SA GAAP have
been restated as unaudited due to the IFRS adjustment not having been audited by
the external auditors.
CONSOLIDATED BALANCE SHEET
Restated *Restated
Unaudited Unaudited Unaudited
half year half year year to
31 August 31 August 28 February
2005 2004 2005
R"000 R"000 R"000
ASSETS
Non-current assets
- Property, plant and
equipment 10 536 6 981 7 248
- Intangible assets 1 296 1 511 1 296
- Goodwill 31 478 32 583 31 478
- Deferred taxation 1 501 233 670
- Investments 60 2 183 1 221
Current assets 117 504 71 181 38 715
162 375 114 672 80 628
EQUITY AND LIABILITIES
Share capital 5 000 5 000 5 000
Share premium 42 452 42 452 42 452
Distributable reserves 20 799 22 633 22 028
Shareholders" interest 68 251 70 085 69 480
Long-term liabilities 2 505 867 1 029
Deferred taxation 612 - 711
Current liabilities 91 007 43 720 9 408
162 375 114 672 80 628
Discontinuing grain trading
operation
Total assets 2 857 3 517 2 787
Total liabilities 3 499 4 357 3 485
FINANCIAL HIGHLIGHTS
2005 2004 2005
R"000 R"000 R"000
Continuing operations
Headline (loss)/earnings
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 (loss)/earnings
per share (cents) (1,5) 2,5 3,5
Continuing operations (1,5) 2,7 3,4
Discontinuing operations - (0,2) 0,1
Less: Impairment of goodwill - (2,2) (4,4)
(Loss)/earnings per share
(cents) (1,5) 0,3 (0,9)
Net asset value per share -
excluding goodwill (cents) 73,50 75,00 76,00
SEGMENTAL ANALYSIS
2005 2004 2005
R"000 R"000 R"000
Segmental revenue
Seafreight 113 492 113 866 195 265
Airfreight 50 660 47 594 99 820
Other 2 267 2 801 1 795
Discontinued operations 132 1 335 3 499
Less internal revenue (11 702) (14 548) (30 182)
154 849 151 048 270 197
Segmental results
Seafreight (932) 790 1 798
Airfreight (83) 758 1 626
Other 1 242 534 (363)
Discontinued operations 56 252 736
Operating profit before
interest and goodwill 283 2 334 3 797
Reconciliation between IFRS and SA GAAP
The following reconciliations provide a quantification of the effect after
taxation, of the transition to IFRS:
Reconciliation of equity (R"000)
28 February 31 August 1 March
2005 2004 2004
As reported under SA GAAP 69 305 69 979 70 427
Adjustment for:
Depreciation 214 135 -
Operating leases (39) (29) (9)
As reported under IFRS 69 480 70 085 70 418
Reconciliation of continuing operations net profit (R"000)
12 months 6 months
28 February 31 August
2005 2004
As reported under SA GAAP (662) 154
Adjustment for:
Depreciation 214 135
Operating leases (30) (20)
As reported under IFRS (478) 269
Basis of presentation and Accounting Policies
The results for the six months to August 2005 and comparative information, have
been prepared in terms of International Financial Reporting Standards (IFRS)
which will be applicable at 28 February 2006. The results also comply with IAS
34 (Interim Financial Reporting) and relevant sections of the South African
Company"s Act 1973 as amended.
Intertrading group"s transition date is 1 March 2004. The financial statements
for the year ending 28 February 2006 will be the group"s first consolidated IFRS
- compliant financial statements. The disclosures required by IFRS 1 (First-time
Adoption of International Financial Reporting Standards) concerning the
transition from South African Generally Accepted Accounting Standards (SA GAAP)
to IFRS and the required changes in accounting policies are presented under the
heading - "Reconciliation between IFRS and SA GAAP".
At transition date IFRS 1 allows a number of exemptions to the retrospective
application principle on adoption of IFRS. The group has taken advantage of the
following optional exemption from full retrospective application:
- The group has made an election not to restate acquisitions prior to the date
of transition to IFRS. Goodwill is included on the basis of its deemed cost,
which represents the written down amount recorded under SA GAAP.
The following significant new accounting policies were applied for IFRS
reporting:
- Goodwill which was previously amortised is tested annually for impairment and
is carried at cost which is adjusted for any impairment.
- Where parts of an item of property, plant and equipment have different useful
lives, they are accounted for as separate items of property, plant and
equipment. Residual values and useful lives are reassessed annually.
- Operating leases for the group are now reported on a straight-line basis to
comply with South African Institute of Chartered Accountants (Circular number 7-
2005).
Commentary on results six months to August
Review
Poor trading conditions have again impacted adversely on the performance of the
group. Turnover for the six months to August 2005 was in line with that of the
previous year but well behind budget. Gross profit for the period showed an
improvement compared to the corresponding period of the previous year. Operating
expenses however, were also above budget and prior year resulting in a loss for
the period under review.
SEAFREIGHT
Cape operations
A slow start to the year due to depressed production arising from the drought
resulted in a loss for the half year to date.
Citrus and Subtropical
Subtropical fruit volumes and profitability were substantially up on previous
year. Sales of our other subtropical fruit lines are progressing well. The
Citrus season started well, however, prices in certain markets serviced by South
African suppliers slumped and the groups realisations were disappointing. Rand
realisations as a result of this and the strong rand forced us to curtail our
volumes and adversely profits. Despite the poor citrus season this division made
a profit for the six months albeit at lower levels than for the corresponding
period of the previous year.
Macadamia nuts
The volume of "nut in shell" delivered to the cracking plants in the six months
showed an improvement on previous year. Grower payments were consequently up for
the period. Prices achieved were higher and average gross profit per kilogram
was significantly up on the previous year. Lack of rains adversely impacted
"crack out" and as a consequence kernel available for sale was below that for
the same period of last year. Operating costs were above those for the first six
months of the previous year. Profits from this business consequently were below
those of the corresponding period in the previous year.
AIRFREIGHT
Agrilink
Volumes of avocado were well down on budget and previous year mainly as a result
of a greater volume being diverted to sea freight. Volume of exotic fruit,
particularly in pineapples was also lower than plan and previous year as a
result of poor quality and lower market demand. Against this, volumes of mini
vegetables were satisfactory. Margins were overall better than anticipated and
the operation was able to report a profit for the period under review.
Skyservices
The ban on ostrich meat exports continued in the period under review. During the
period this division has taken over the operations of JJ"s Airfreight in Cape
Town which business concentrates on freight forwarding of fish, flowers and
vegetables. Fish exports for the period under review were below expectations.
The lack of earnings from the low volumes of fish and ostrich meat resulted in
Sky Services reporting a loss for the period under review.
Discontinued Operations
Final winding down of the defunct grain trading business is in hand and actions
are being taken to recover amounts owing. These are adequately provided for.
DIRECTORATE
Chris Hull was appointed as Group Finance Director on 30 June 2005. Chris brings
with him a wealth of business experience from his career as a senior executive
at Anglo American. At the board meeting held on August, Katope International,
nominated three members, Jacques Azoulay, Kevin Kay and Hendrik Weirich to the
board. They were formally appointed on 12 September 2005 on which date Warwick
Marshall previously alternate to C. Jousse, was also appointed a full director.
We look forward to their contribution. Chris Jousse has been appointed acting
Chairman in place of Theo Swart who tendered his resignation from the board in
August for personal health reasons. We thank him for his significant
contribution to the Group during a difficult period.
OPPORTUNITIES
The company is exploring various opportunities to improve economies of scale.
DIVIDENDS
As is customary, no interim dividend has been declared or proposed in respect of
the six months period ending 31 August 2005.
By order of the board
C Jousse
(Acting chairman)
G F M van Rooyen
(Managing director)
Woodmead
9 November 2005
Registered office
Block 3
Harrowdene Office Park
Western Service Road
Woodmead, 2148
(PO Box 100, Woodlands, 2080)
Transfer secretaries
Computershare Investor Services 2004
(Pty) Limited
70 Marshall Street
Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Directors
Non-executive: C Jousse (Acting chairman), R Wells, C van der Merwe, W Marshall,
J Azoulay, H Weirich, K Kay
Executive: G F M van Rooyen (Managing director), A J de Kovel*, B Julicher, F
Pohl
*Netherlands
Date: 09/11/2005 04:24:17 PM Produced by the JSE SENS Department
