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Astral - Audited results for the year ended 30 September 2005
ASTRAL FOODS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1978/003194/06)
Share code: ARL & ISIN: ZAE000029757
("the Group")
* Operating profit up 47% to R572 million
* Headline earnings per share up 45%
to 918 cents
* Annual dividend up 65% to 380 cents
* Cash generated up 100% to R829 million
AUDITED RESULTS
for the year ended 30 September 2005
Consolidated Income Statement
Audited Audited
Year ended Year ended
30 Sept 2005 30 Sept 2004 Change
R"000 R"000 %
Revenue 4 602 391 4 053 142 14
Operating profit (note 4) 572 000 388 979 47
Net interest (paid)/received (11 360) 1 339
Profit before tax 560 640 390 318 44
Tax (162 872) (126 070)
Net profit for year 397 768 264 248 51
Minority interests (2 865) (1 845)
Attributable profit to ordinary
shareholders 394 903 262 403 50
Earnings per share (cents) 952 630 51
Headline earnings per share (cents) 918 631 45
Diluted earnings per share (cents) 926 603 53
Diluted headline earnings
per share (cents) 893 605 48
Dividends per share (cents)
- declared out of the earnings
for year 380 230 65
Net asset value per share (Rand) 22.33 17.36 29
Shares in issue
- net of treasury shares (note 6) 40 569 574 41 654 032
Weighted average shares in issue
- net of treasury shares 41 482 050 41 640 015
Consolidated Balance Sheet
ASSETS
Non-current assets 889 032 823 653
Property, plant and equipment 744 905 678 736
Goodwill 123 548 117 033
Intangible assets 17 434 11 053
Loans 2 282 6 715
Deferred tax 863 10 116
Current assets 913 452 1 014 424
Inventories 155 109 199 592
Biological assets 195 398 202 778
Receivables and pre-payments 497 827 568 016
Cash and cash equivalents 65 118 44 038
Total assets 1 802 484 1 838 077
EQUITY AND LIABILITIES
Capital and reserves 915 371 764 828
Issued capital 253 765 258 590
Reserves 652 327 496 363
Ordinary shareholders" interest 906 092 754 953
Minority interests 9 279 9 875
Non-current liabilities 184 142 207 181
Long-term liabilities 1 759 2 748
Deferred tax 120 959 142 965
Post-retirement medical aid
obligations 61 424 61 468
Current liabilities 702 971 866 068
Trade and other payables 641 782 590 022
Provision for tax 58 965 77 232
Short-term borrowings 2 224 198 814
Total equity and liabilities 1 802 484 1 838 077
Net cash/(Interest bearing
borrowings) 61 135 (157 524)
Consolidated Cash Flow Statement
Cash operating profit 657 653 470 664
Working capital changes 170 948 (57 041)
Cash generated from operations 828 601 413 623
Net interest (paid)/received (11 360) 1 339
Tax paid (196 055) (105 137)
Dividends paid (115 470) (79 539)
Cash inflow from operating
activities 505 716 230 286
Net cash outflow to investing
activities (154 600) (406 817)
Net cash inflow for year 351 116 (176 531)
Net cash (outflow)/inflow from
financing activities (330 090) 155 362
Net increase/(decrease) in cash and
cash equivalents 21 026 (21 169)
Effects of exchange rate changes 54 (2 873)
Cash and cash equivalent balances
at beginning of year 44 038 68 080
Cash and cash equivalent balances
at end of year 65 118 44 038
Statement of Changes in Equity
Balance beginning of year 764 828 614 695
Profit for year 397 768 264 248
Movement in currency translation
difference during year 804 (3 348)
Dividends paid for year (115 563) (79 591)
Shares issued 8 209 4 923
Decrease in share capital as
result of
buy-in of shares (140 675) (36 099)
Balance end of year 915 371 764 828
Segmental Reporting
Rm Rm
Revenue
Animal Nutrition 2 516.3 2 703.2
Poultry 3 345.2 2 284.7
Inter-Group (1 259.1) (934.8)
4 602.4 4 053.1
Operating profit
Animal Nutrition 204.7 151.4
Poultry 367.3 237.6
572.0 389.0
Notes
1. Audit review
PricewaterhouseCoopers Inc. has audited the comprehensive financial statements
from which the summarised results were derived as well as the summarised
announcement of annual results contained herein. The unqualified audit reports
on the comprehensive financial statements and the summarised financial results
are available for inspection at the Group"s registered office.
2. Accounting policies
The financial statements of the Group are prepared in accordance with and
comply with 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 and biological
assets to fair value. The accounting policies of the Group are consistent in
all material respects with those applied in the previous financial year,
except for goodwill which is no longer amortised and is now reviewed annually
for impairment.
The effect of the accounting treatment of escalations in operating leases on a
straight-line basis over the lease periods was immaterial.
R"000 R"000
3. Commitments
Capital expenditure commitments 44 814 9 242
Operating lease commitments 128 374 125 747
4. Operating profit
The following items have been
accounted for in the operating profit:
Auditors" remuneration 2 637 2 406
Amortisation of goodwill - 3 405
Depreciation on property, plant
and equipment and intangible assets 102 145 71 247
Operating lease payments 30 599 23 499
Directors" remuneration 9 659 8 832
Profit on disposal of property 15 287 -
5. Reconciliation to headline earnings
Net profit for year 394 903 262 403
Loss related to sale of business unit 1 039 -
Profit on sale of property,
plant and equipment (15 020) (137)
Amortisation of goodwill - 3 405
Recovery of loans - (2 736)
Headline earnings for year 380 922 262 935
6. Share capital
In terms of a share buy-back programme 2 105 591 (2004: 1 238 871) shares were
acquired by a subsidiary of Astral Foods Limited at a total cost of R141
million (2004: R36 million). In terms of the Group"s share incentive scheme,
1 021 000 (2003: 632 000) options were exercised.
7. 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 year
ended 30 September 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 year ended 30 September 2005.
Stated in Restated in
accordance with accordance
SA GAAP with IFRS
Audited Unaudited
Year ended Year ended
30 Sept 2005 30 Sept 2005
Consolidated Income Statement R"000 R"000
Revenue 4 602 391 4 613 287
Operating profit 572 000 600 329
Net interest paid (11 360) (11 323)
Profit before tax 560 640 589 006
Taxation (162 872) (171 932)
Net profit for year 397 768 417 074
Minority interests (2 865) (5 318)
Attributable profit to
ordinary shareholders 394 903 411 756
Earnings per share (cents) 952 993
Headline earnings per share (cents) 918 959
Consolidated Balance Sheet
Assets
Non-current assets 889 032 981 976
Current assets 913 452 919 387
Total assets 1 802 484 1 901 363
Equity and Liabilities
Capital and reserves 915 371 983 045
Non-current liabilities 184 142 212 891
Current liabilities 702 971 705 427
Total equity and liabilities 1 802 484 1 901 363
Reconciliation of net profit for year
Net profit in accordance with SA GAAP 397 768
Reduced depreciation -after tax 19 306
Net profit in accordance with IFRS 417 074
Changes to the IFRS information presented above may be required due to
different interpretations of standards as practice develops.
Financial overview
Good operating performances from both poultry and animal nutrition resulted in
headline earnings per share improving by 45% on last year from 631 cents to
918 cents.
Revenue for the year increased by 14% to R4.6 billion (2004: R4.1 billion)
mainly as a result of the acquisition of the remaining 50% of Earlybird in
September 2004.
Operating profit for the period increased by 47% to R572 million (2004: R389
million). The current year"s figure includes R15 million profit on the sale of
poultry properties due to urban encroachment. Poultry continues to be the main
profit contributor with R367 million (64%) whilst Animal Nutrition contributed
R205 million (36%). Operating margin for the year at 12.4 % is well up from
last year"s 9.6%.
Net finance cost of R11.4 million compares with the previous year"s net income
of R1.3 million.
The effective tax rate of 29.1% is down on the prior year"s rate of 32.3%
following the reduction in the statutory rate of 1% as well as reversals of
prior year"s over provisions.
The balance sheet reflects an increase in net asset value per share of 29% to
R22.33 (2004: R17.36).
The strong cash generation continued with a net cash inflow of R351 million
(2004: outflow of R177 million following the Earlybird acquisition for R262
million). Despite a more aggressive share buy-back (note 6) the group ended
the year with surplus cash of R61 million compared to borrowings of R158
million at the end of 2004.
Return on equity improved to 48% (2004: 39%). Economic value added improved to
R278 million (2004: R134 million).
Dividends declared out of profits for the year increased by 65% from 230 cents
to 380 cents per share as a result of reducing the dividend cover to 2.4 times
compared with last year"s 2.7 times.
Operational overview
Animal Nutrition Division
Following on the high inventory carry over of 3.3 million tonnes of maize from
the 2004/2005 marketing season, the estimated crop for the past season of some
12 million tonnes will increase the carry-over stock to 8 months consumption.
Record global crops of grains for feed production exacerbate the oversupply
situation. Yellow maize prices as a result reduced substantially from R1 015
per ton in October 2004 to R560 per ton in February 2005 although the price
subsequently increased by R280 per ton due to weather concerns, speculation
about the crop size and the threat of a significant reduction in maize
hectares to be planted for the new season.
Revenue for the year reduced by 7% to R2.5 billion (2004: R2.7 billion) as a
result of 7% lower realisations following the lower raw material prices as
well as a 3% volume reduction. The volume reduction is a function of more home
mixing following the low maize prices as well as a lower off-take following
poultry and pig diseases.
Operating profits increased by 36% to R205 million (2004: R151 million) with
net margins improving to 8.1% (2004: 5.6%). Strict cost control and
operational efficiencies contributed to the improved results.
Poultry Division
As reported during the interim results, the benefit to the Poultry Division as
a result of reduced raw material prices was only felt during the second half
of 2005.
The market, influenced by record high levels of imports, restricted average
realisations to 1% above last year. Sales volumes increased by 45% mainly as a
result of the consolidation of the Earlybird operation for a full year, which
together with a 7% reduction in the average cost price of feed, resulted in a
54% increase in operating profit to R367 million (2004 : R238 million) and an
increase in operating margins to 11% (2004: 10,4%) Poultry supply and demand
remained in balance and at no stage did industry stock levels distort the
market. Application has been made by the South African Poultry Association for
the extension of anti-dumping duties on imported frozen chicken which expires
in December this year.
Prospects
Continued low maize prices, increased disposable income in the hands of
consumers and a continued balanced supply and demand for poultry should
positively influence the results for the year ahead.
Declaration of Ordinary Dividend No. 10
Notice is hereby given that dividend No.10 of 260 cents per ordinary share has
been declared in respect of the financial year ended 30 September 2005.
Salient dates 2006
Last date to trade cum-dividend Friday, 6 January
Shares commence trading ex-dividend Monday, 9 January
Record date Friday, 13 January
Payment of dividend Monday, 16 January
Share certificates may not be dematerialised or rematerialised between Monday,
9 January 2006 and Friday, 13 January 2006, both days inclusive.
On behalf of the board
J L van den Berg N C Wentzel
Chairman Chief Executive Officer
Pretoria
17 November 2005
Country Fair
Earlybird Farm
CAL Labs
ROSS
NuTec
Explicit Nutrition
Meadow
More than just feed
NVS
NATIONAL CHICKS
TIGER ANIMAL FEEDS
More than just feed
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,
*C E Schutte, *C A du Toit, J J Geldenhuys,
C G van Veyeren, M Macdonald, T C C Mampane
(*Executive director)
Company Secretary: M Eloff
Transfer secretaries
Computershare Investor Services 2004 (Pty) Ltd
PO Box 61051
Marshalltown, 2107
Telephone: 011-370-5000
Sponsor
JP Morgan Chase Bank NA
(Johannesburg Branch)
1 Fricker Road, Illovo
Johannesburg 2196
Private Bag X9936
Sandton, 2146
Telephone: (011) 507-0430
Date: 18/11/2005 07:00:41 AM Produced by the JSE SENS Department
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