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ITR
ITR
Intertrading - Reviewed final results for the year ended 28 February 2006
INTERTRADING LIMITED
Registration number 1987/004777/06
("Intertrading" or "the company")
Share code: ITR & ISIN code: ZAE000015566
Reviewed final results for the year ended 28 February 2006
Consolidated Income Statement
Year ended Year ended
28 February 28 February
2006 2005
R"000 R"000
Revenue 298 101 270 197
Operating (loss)/profit before
interest (7 364) 4 313
Interest received 486 1 741
Interest paid (1 436) (2 814)
Impairment (2005 amortisation)
of goodwill - (2 210)
Net (loss)/income before taxation (8 314) 1 030
Taxation 1 395 (924)
Net (loss)/income after taxation (6 919) 106
Prior year adjustment - 1 509
Net (loss)/income attributable
to shareholders (6 919) 1 615
Statement of changes in equity
Year ended Year ended
28 February 28 February
2006 2005
R"000 R"000
Equity at beginning of period 71 551 71 936
Net (loss)/profit for the period (6 919) 106
Dividend (500) (500)
Fair value adjustment - 9
Equity at end of period 64 132 71 551
Cash flow statement
Year ended Year ended
28 February 28 February
2006 2005
R"000 R"000
Cash (utilised)/generated by
operations (5 280) 859
Net interest paid (950) (1 073)
Taxation paid (1 614) (2 238)
Dividend paid (500) (500)
Cash utilised by operating
activities (8 344) (2 952)
Net cash outflow from investing
activities (4 384) (2 476)
Net cash outflow from financing
activities (680) (654)
Net movement in cash (13 408) (6 082)
Net cash resources at beginning
of the year 5,068 11 150
Net cash resources at end of
the period (8 340) 5 068
Consolidated Balance Sheet
Year ended Year ended
28 February 28 February
2006 2005
R"000 R"000
ASSETS
Non current assets
- Property, plant, equipment
and trademarks 15 711 12 012
- Goodwill 30 947 30 947
- Deferred taxation 3 293 693
- Investments 66 1 221
Current assets 60 850 38 715
110 867 83 588
EQUITY AND LIABILITIES
Share capital and premium 47 452 47 452
Non-distributable reserves 9 9
Distributable reserves 16 671 24 090
Shareholders interest 64 132 71 551
Long-term liabilities 1 478 1 029
Deferred taxation 552 1 628
Current liabilities 44 705 9 380
110 867 83 588
FINANCIAL HIGHLIGHTS
Year ended Year ended
28 February 28 February
2006 2005
R"000 R"000
Number of ordinary shares ("000) 50 000 50 000
Weighted average number of shares
in issue ("000) 50 000 50 000
Headline (loss)/earnings per
share (cents) (13,8) 4,6
Less: Impairment (2005 amortised)
of goodwill 0,0 (4,4)
(Loss)/earnings per share (cents) (13,8) 0,2
Net asset value per share -
excluding goodwill (cents) 66,4 81,2
DISCONTINUED GRAIN TRADING OPERATIONS
28 February 28 February
2006 2005
R"000 R"000
Total assets 2 459 2 787
Total liabilities 3 882 3 485
RECONCILIATION BETWEEN IFRS AND SA GAAP
Reconciliation of equity
28 February 28 February
2005 2004
R"000 R"000
As reported under SA GAAP 69 305 70 427
Adjustment for:
Fair value adjustment 9 0
Depreciation 2 315 1 527
Operating leases (78) (18)
As reported under IFRS 71 551 71 936
Reconciliation of net profit
28 February 28 February
2006 2005
R"000 R"000
As reported under SA GAAP (7 749) (622)
After tax adjustment for:
Depreciation 955 788
Operating leases (125) (60)
As reported under IFRS (6 919) 106
SEGMENTAL ANALYSIS
28 February 28 February
2006 2005
R"000 R"000
Segmental revenue
Seafreight 189 168 195 265
Airfreight 133 012 99 820
Other 4 307 5 294
Less internal revenue (28 386) (30 182)
298 101 270 197
Segmental results
Seafreight (3 627) 2 325
Airfreight 1 563 1 819
Other (5 300) 169
Operating profit before interest
and goodwill (7 364) 4 313
The financial information contained in this announcement has been reviewed by
the group"s auditors PKF (Jhb) Inc.
A copy of their unqualified review report is available for inspection at
Intertrading"s registered office.
BASIS OF PRESENTATION AND ACCOUNTING
POLICIES
The results for the year to 28 February 2006 and comparative information, have
been prepared in terms of International Financial Reporting Standards (IFRS).
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).
PROFILE
Intertrading specialises in the procurement of fresh fruit, vegetables and
macadamia nuts from Southern African producers. The Group markets these products
internationally via sea and airfreight. Intertrading also provides services to
agriculture including marketing, technical advice, freight forwarding and
logistical services.
OPERATIONAL REVIEW
The unusually hostile trading environment in global markets mentioned in the
Interim report prevailed for the balance of the financial year. Although the
firm rand had an adverse effect in depressed and oversupplied fruit markets,
incorrect assessments made in some areas of the trading operations contributed
to the poor results.
SEAFREIGHT SECTOR
Citrus and sub tropicals were the hardest hit and significant losses were
recorded in this sector. Deciduous fruit exports however weathered the storm
better and made a meagre contribution.
Macadamia nuts was the star performer in the previous financial year but was
disappointing in 2006 largely though poor management of costs and the
significant carryover of stock.
AIRFREIGHT SECTOR
Agrilink had a reasonable year and Sky Services, following the resumption of
ostrich meat exports to Europe, put in a solid performance.
Financial
The trading losses were exacerbated by the impact of accounting for unrealised
foreign exchange losses on financial instruments amounting to R1,8 million at
the year-end. Subsequent to the year-end these instruments were retired at a net
realised loss of R446 000.
DIRECTORATE
Kevin Kay resigned on 16th March 2006 as a nominee director representing Katope
International and Nino Burrelli was appointed in his place. We thank Kevin for
his contribution to the board.
Prospects
The fundamentals of the business are sound. Remedial action has been taken where
necessary to correct the "slippage" in management systems so vital in a dynamic
trading business. In the citrus division our directors have decided to reduce
exposure to certain business practices which while common in the industry do not
fit the realigned risk profile of the group. Group skills have been bolstered in
the citrus and macadamia nut divisions by the addition of two senior external
appointments to the management team. The recent decline in the value of the Rand
against the "first world" currencies is a positive sign and brings some relief
to an embattled sector.
DIVIDENDS
Owing to the poor performance of the Group, our directors do not consider it
prudent to recommend a dividend in respect of the financial years ended 28th
February.
By order of the board
C Jousse
(Acting chairman)
G F M van Rooyen
(Managing director)
Woodmead
8 June 2006
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, N Burelli,
Executive: G F M van Rooyen (Managing director), C J Hull, B Julicher, F Pohl, A
J de Kovel*, R Hurly (alt) *Netherlands
www.intertrading.co.za
Date: 07/06/2006 04:43:25 PM Produced by the JSE SENS Department
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