COUNTRY BIRD HOLDINGS LIMITED

Expanding into Africa
AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2013

down 11%

up 125% co...
Upcoming SlideShare
Loading in …5
×

Country Bird Holdings Limited FY 2013 results

529 views
423 views

Published on

Country Bird Holdings Limited FY 2013 results

Published in: Investor Relations
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
529
On SlideShare
0
From Embeds
0
Number of Embeds
32
Actions
Shares
0
Downloads
0
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Country Bird Holdings Limited FY 2013 results

  1. 1. COUNTRY BIRD HOLDINGS LIMITED Expanding into Africa AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2013 down 11% up 125% contributing 49% of group operating profit Commentary on results Profile Country Bird Holdings Limited (CBH) is a focused African poultry group comprising: – integrated poultry and stock feed operations in South Africa trading as Supreme Poultry and Nutri Feeds; – poultry breeding, broiler and stock feed operations in the southern African region trading as Ross Africa and Master Farmer; and – South African retail and distribution operations trading as Long Iron Meats, Supreme Distributors and Ama Chick Chick. CBH currently operates in Botswana, the DRC, Malawi, Mozambique, Namibia, South Africa, Zambia and Zimbabwe. Financial review Group revenue for the year increased to R3,2 billion (2012: R3,1 billion) and operating profit of R132,6 million was 11% lower than the R149,5 million achieved for the prior year; this sustained level of profitability was primarily as a result of excellent performances by the other African poultry and feed businesses, and the South African feed operation despite losses being incurred in the South African poultry division. Operating profit of R64,6 million in the other African businesses is an increase of 125% over last year’s figure of R28,8 million and represents 49% of the group’s operating profit for the year. Expeditious procurement and hedging of raw materials, as well as tight operational controls resulted in the South African feed operation reporting an operating profit of R98,1 million, 62% higher than the previous year’s comparative of R60,6 million. With finance costs only reducing marginally by 1% to R60,2 million PBIT of R73,3 million was 18% lower than last year’s figure of R88,7 million. The attributable tax rate of 21%, being positively affected by the lower tax rates applicable in the other African operations resulted in a 5% reduction in profit after tax to R58,1 million (2012: R61,1 million). Operational review Group The group recorded a credible set of results, despite the considerable problems facing the poultry industry in South Africa. The performance from the operations outside of South Africa has been the best since the formation of the group. The rewards for early recognition and subsequent investment in selected countries in the SADC region are becoming apparent and these operations together with other selected regional opportunities will continue to be a key component of the group’s strategy going forward. As a result of difficult trading conditions in South Africa and substantial increases in raw material prices, the working capital requirements and consequent interest charges were high. Despite this the group was able to show an overall positive increase in cash and cash equivalents for the year of R38,7 million (2012: decrease of R35,1 million). Audited condensed consolidated statement of comprehensive income 30 June 2013 Audited R’000 Revenue % change 5 3 094 519 132 597 921 (60 204) (11) 95 (1) 149 469 472 (61 075) Profit before income tax Income tax expense 73 314 (15 179) (18) (45) 88 866 (27 803) Profit for the year Other comprehensive income: Currency translation differences 58 135 (5) 61 063 24 602 144 10 064 Total comprehensive income for the year 82 737 16 71 127 Profit attributable to: Owners of the parent Non-controlling interest 51 396 6 739 (14) 540 60 010 1 053 58 135 (5) 61 063 75 998 6 739 8 540 70 074 1 053 82 737 16 71 127 25,63 25,63 (17) (17) 30,79 30,79 Additional information to condensed consolidated financial statements Ordinary shares – issued net of treasury shares – weighted average number of ordinary shares – diluted number of ordinary shares Headline earnings per ordinary share (cents): – basic – diluted Dividend/capital distribution per share – interim (cents) Capital distribution per share – final (cents) Net asset value per share Tangible asset value per share Gearing ratio (net of cash and cash equivalents) 198 372 313 194 931 980 194 931 980 202 443 918 200 524 282 200 524 282 – – 314,67 261,43 1,80 2 2 (100) (100) 11 14 4 5,98 2,33 282,75 229,83 1,72 As at 30 June 2013 Audited R’000 % change As at 30 June 2012 Audited R’000 623 940 12 559 295 Property, plant and equipment 499 542 12 445 235 Intangible assets 106 757 3 103 160 931 43 653 ASSETS Financial assets and other investments Deferred income tax assets 16 710 63 10 247 1 331 595 22 1 092 350 Inventories 367 986 31 280 373 Biological assets 214 585 25 Final capital distribution or dividend Given the uncertainties surrounding the South African poultry industry with regard to the implementation and timing of an appropriate tariff structure, and the inevitable difficult trading conditions that will prevail until such time as relief is forthcoming, it is considered prudent that no final capital distribution or dividend be declared. By order of the board MP Stander Chief executive officer 27 August 2013 Trade and other receivables 553 045 15 Notes to the condensed consolidated financial statements 9 082 127 492 3 012 083 (2 928 646) Cash generated from operations Interest paid Income tax paid Cash flows from investing activities Net cash used in investing activities 205 507 (60 204) (17 811) 83 437 (61 075) (13 280) (76 844) (82 154) 4 667 – – (278) 921 (47 684) 2 960 5 047 11 493 – 472 (11 938) (16 518) – (6) 107 776 (114 991) (4 717) 8 100 – 318 496 (309 840) (33 274) 3. Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Exchange gains on cash and bank overdrafts 38 710 (15 591) (2 274) (35 148) 16 299 3 258 4. Cash and cash equivalents at end of year 20 845 (15 591) 5. Net cash used in financing activities Proceeds from the issuance of ordinary shares Share issue and listing expenses Proceeds from borrowings Repayments of borrowings Capital repayments to shareholders 30 June 2013 Audited R’000 1 783 588 2 007 573 (506 098) 287 138 (5 026) 860 709 1 579 294 (1 118 254) 507 945 (108 276) 592 279 593 385 (4 804) 6 678 (2 981) Poultry – South Africa Intersegment revenue – Other Africa Intersegment revenue Animal Nutrition – South Africa Intersegment revenue – Other Africa Intersegment revenue Retail and Distribution – South Africa Intersegment revenue – Other Africa Intersegment revenue OPERATING PROFIT 30 June 2012 Audited R’000 2 039 310 2 408 513 (554 224) 205 772 (20 751) 848 621 1 551 178 (1 021 924) 394 440 (75 073) 206 588 206 725 (137) – – 30 June 2013 Audited R’000 9 208 (24 666) – 33 874 – 133 582 98 116 – 35 466 – (10 193) (5 500) – (4 693) – 30 June 2012 Audited R’000 77 608 56 562 – 21 046 – 68 267 60 561 – 7 706 – 3 594 3 594 – – – ASSETS 30 June 2013 Audited R’000 1 283 738 884 884 – 398 854 – 497 854 409 503 – 88 351 – 173 943 150 805 – 23 138 – 30 June 2012 Audited R’000 1 135 183 885 369 – 249 814 – 455 834 374 045 – 81 789 – 60 628 60 628 – – – 3 236 576 3 094 519 132 597 149 469 1 955 535 1 651 645 Revenues of approximately R366,4 million (2012: R241,5 million) are derived from a single external customer. These revenues are attributable to the South African Poultry segment. Audited condensed consolidated statement of changes in equity Common control deficit R’000 Total attributable to owners of the parent R’000 Noncontrolling interest R’000 (58) 7 999 118 469 191 601 27 151 164 1 955 535 18 1 651 645 630 994 14 551 178 Ordinary shares 2 024 2 1 984 Share premium 761 103 2 745 508 Other reserves 36 880 20 30 834 Retained earnings 622 955 9 571 559 Common control deficit (832 110) 0 (832 110) Equity attributable to the owners of the parent 590 852 14 517 775 40 142 20 33 403 Non-controlling interest arising on business combination – – – – – – 7 447 7 447 283 280 (17) 340 566 Total transactions with owners 96 (26 659) 12 741 13 834 – 12 7 447 7 459 240 091 Balance at 30 June 2012 1 984 745 508 Balance at 1 July 2012 1 984 745 508 Non-controlling interest Non-current liabilities Borrowings Share Share Other Retained capital premium reserves earnings R’000 R’000 R’000 R’000 1 888 772 167 Balance at 1 July 2011 Total comprehensive income 8 029 497 715 (832 110) 447 689 Total equity R’000 24 903 472 592 – – 10 064 60 010 – 70 074 1 053 71 127 Proceeds from shares issued 96 6 616 8 019 – – 14 731 – 14 731 Shares to be issued related to business combination – – 18 556 – – 18 556 – 18 556 Employee share scheme transferred to retained earnings – – (13 834) 13 834 – – – – Capital distribution to shareholders – (33 275) – – – (33 275) – (33 275) Transactions with owners 179 499 (25) 1 752 (21) 2 223 102 029 4 98 252 Total comprehensive income 1 041 261 37 759 901 744 360 43 520 038 4 403 93 2 284 292 448 24 235 070 50 (98) 2 509 Total liabilities 1 324 541 20 1 100 467 Total transactions with owners Total equity and liabilities 1 955 535 18 1 651 645 Balance at 30 June 2013 30 834 571 559 (832 110) 517 775 33 403 551 178 30 834 571 559 (832 110) 517 775 33 403 551 178 Transactions with owners Employee share scheme liability Deferred income tax liabilities Current liabilities Trade and other payables Current income tax liabilities Borrowings Provision for other liabilities and charges – 11 171 (4 644) 9 075 51 396 60 010 (243) – (239) (11 171) Adjusted headline earnings 51 153 48 600 Capital expenditure and depreciation Capital expenditure Depreciation Amortisation of intangible assets 82 154 48 440 553 47 684 42 698 553 Capital and other commitments Inventories contracted for 135 729 108 975 Cash and cash equivalents Bank balances, deposits and cash Short-term borrowings 191 603 (170 758) 151 164 (166 755) 20 845 (15 591) 7. Reclassification of comparative figures In the prior period condensed consolidated financial information announcement, intersegment revenue in the segment report was only shown for the poultry segment, the animal nutrition segment and the beef segment. In order to more fairly present the intersegment revenue between both the primary and geographical segments, the intersegment revenue is disclosed separately for each of Poultry South Africa, Poultry Other Africa, Animal Nutrition South Africa, Animal Nutrition Other Africa and Retail and Distribution South Africa. This has resulted in the restatement of the prior year figures. 2. – – 24 602 51 396 – 75 998 6 739 82 737 Proceeds from shares issued 40 20 312 – – – 20 352 – 20 352 Shares to be issued related to business combination – – (18 556) – – (18 556) – (18 556) Capital distribution to shareholders – (4 717) – – – (4 717) – (4 717) 40 15 595 (18 556) – – (2 921) – (2 921) 2 024 761 103 36 880 622 955 (832 110) 590 852 www.cbh.co.za Operating profit The following amounts have been accounted for in the operating profit: Gain on bargain purchase of Silver Blade Abattoir Proprietary Limited Fair value gains/(losses) on financial assets at fair value through profit or loss Reconciliation to headline earnings Profit attributable to owners of the parent Adjusted for: (Profit)/loss on disposal of property, plant and equipment Gain on bargain purchase of Silver Blade Abattoir Proprietary Limited Furthermore, the Beef segment has now been renamed Retail and Distribution. This segment will now include all the retail and distribution operations of the group. 30 June 2012 Audited R’000 Condensed segment report as previously disclosed Poultry 2 039 310 – South Africa – Other Africa Intersegment revenue 1 861 270 189 760 (11 720) Animal Nutrition – South Africa – Other Africa Intersegment revenue 848 621 1 378 566 394 440 (924 385) 40 142 630 994 206 588 – South Africa Intersegment revenue 3 355 LIABILITIES 30 June 2012 Audited R’000 Beef 1 023 Total equity 30 June 2013 Audited R’000 6. Audited condensed segment report Derivative financial instruments EQUITY These audited condensed consolidated financial statements were approved by the board of directors on 26 August 2013. Cash flows from financing activities Current income tax receivable Total assets Basis of preparation The audited condensed consolidated financial information announcement for the year ended 30 June 2013 was prepared in accordance with International Financial Reporting Standards (IFRS), International Standard 34, the Listing Requirements of the JSE Limited and the South African Companies Act of 2008. The condensed consolidated financial statements were supervised by MJC Antunes (CA (SA)). The accounting policies are consistent with those of the previous financial year and comply with IFRS. These financial statements do not include all the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements as at and for the year ended 30 June 2013. These results have been audited by PricewaterhouseCoopers Inc, Chartered Accountants (SA), Registered Auditors. Their unqualified audit opinion is available for inspection at the company’s registered office. (27 712) Purchases of property, plant and equipment Proceeds from sale of property, plant and equipment Acquisition of subsidiaries, net of cash acquired Realisation of financial assets and investments Purchases of financial assets and investments Interest received 481 015 Cash and cash equivalents 1. 3 164 542 (2 959 035) 171 330 Current assets We continue to liaise closely with all relevant departments in Government to seek a mutually acceptable resolution to the problems facing the industry with regard to unequal treatment and dumping in respect of imported bone in cuts. It is an industry in crisis and until such time as we get greater understanding and action from all concerned parties, the industry will remain depressed and under threat. In South Africa we will concentrate our efforts on providing efficient and sustainable milling operations while aggressively targeting poultry market segments which we can serve to best advantage and thereby minimise the effect of imports competing on an uneven playing field. In Zambia, we will commission a new state of the art hatchery during the first half of the new year, providing an additional 40% capacity. The local market is robust, in line with the economy, and we plan to increase our market share. Breeder expansion will need to accompany this first phase but will take place at a later date. The feed mill has sufficient capacity to take up local growth and we should benefit in this regard. We also believe there is potential for growth in the regional parent market as neighbouring economies produce growth which we are well placed to take advantage of. In Botswana, the economy remains strong and we are well positioned to take advantage of any natural growth as well as to become more competitive in existing markets. We will relook at entering the ruminant market in order to take advantage of excess capacities in the milling sector. With regard to the International Finance Corporation (IFC) US$ 25 million convertible instrument transaction, all necessary regulatory requirements have been met and the funds have been disbursed subsequent to year end. We look forward to growing in Africa with the IFC as our partners, and see this as a critical pillar to the success of our group strategy going forward. Forecast financial information included in the commentary on results has not been reviewed or audited by the group’s auditors, in accordance with Section 8.40(a) of the JSE Listings Requirements. Cash receipts from customers Cash paid to suppliers and employees 24,93 24,93 Audited condensed consolidated statement of financial position Non-current assets Prospects 30 June 2012 Audited R’000 30 June 2013 Audited R’000 REVENUE 25,51 25,51 Retail and distribution This new division was formed by combining Supreme Distributors, Long Iron Meats and Ama Chick Chick factory retail outlets. The operation will focus on optimising distribution and logistics for the group. The difficult trading conditions previously referred to resulted in the segment realising an operating loss of R10,2 million compared with an operating profit of R3,6 million in the prior year. Poultry South Africa The industry remains under severe pressure and has now officially been designated as a distressed industry. The combination of static volumes with no significant increase in selling prices were insufficient to avoid further margin erosion with the sector recording an operating loss for the year of R24,7 million compared to an operating profit of R56,6 million in the prior year. The industry continues to suffer from record levels of imports coupled with high raw material input prices and we, both as a company and an industry, continue to engage with the relative government ministries in order to find common ground for relief. In an effort to minimise the impact of these hurdles we have continued to make inroads with our market diversification policy. We have recorded growth with the existing Quick Service Restaurant business whilst making further inroads into growth prospects with sustainable new customers. Poultry Other Africa Significant volume increases were recorded in our dressed operations in Botswana, from a relatively low base, and we achieved a 20% increase in day-old chick volumes, mainly due to the Francistown hatchery coming on stream for a full year. Prices in the poultry industry in general have not kept pace with input costs resulting in margin reduction but we are well placed with a strong customer base and quality product to take advantage of an upturn when it comes. The Zambian poultry industry has remained resilient throughout the year and we were able to increase volumes in both the day-old chick and parent market. This, together with good parent flock utilisation, has enabled Zambia to achieve excellent operating profits. Overall, operating profit of R33,9 million for this segment was an improvement of 61% over last year’s figure of R21 million. Animal Nutrition South Africa Nutri Feeds recorded an operating profit for the year under review of R98,1 million against last year’s figure of R60,6 million. Efforts were concentrated on cost control and improved efficiencies. These, together with sound procurement practices enabled our milling operation to remain profitable in a difficult operating environment. Good maize and soya positions, coupled with the advantage of strategically well situated mills, resulted in favourable landed raw material positions and improved margins. Animal Nutrition Other Africa Operating profit for the year was R35,5 million compared with R7,7 million for the comparative year, an excellent result. In Botswana management focus was on rationalisation of product lines, efficiency improvement and streamlined procurement policies. These efforts, together with solid foreign exchange management, ensured significant margin improvement despite a 5% drop in volumes. In Zambia, we achieved volume growth of 12% while maintaining margin through the ability to pass on large raw material input increases. Growth was achieved by establishing exports into neighbouring countries while maintaining market share in the local economy. Focus remains centred around continual efficiency improvements, cost control and full utilisation of group resources for quality enhancement and raw material procurement. Cash flows from operating activities Net cash generated from operating activities Positive cash generation down 17% R38,7 million Audited condensed consolidated statement of cash flows 3 236 576 Earnings per share (cents): – basic – diluted EPS up 2% 30 June 2012 Audited R’000 Operating profit Finance income Finance costs Total comprehensive income attributable to: Owners of the parent Non-controlling interest HEPS Other Africa operating profit 206 725 (137) Disclosure as per condensed segment report for the year ended 30 June 2012: Poultry 2 039 310 – South Africa Intersegment revenue – Other Africa Intersegment revenue 2 408 513 (554 224) 205 772 (20 751) Animal Nutrition 848 621 – South Africa Intersegment revenue – Other Africa Intersegment revenue 1 551 178 (1 021 924) 394 440 (75 073) Retail and distribution 206 588 – South Africa Intersegment revenue 206 725 (137) Country Bird Holdings Limited (Incorporated in the Republic of South Africa) Registration number: 2005/008505/06 ISIN: ZAE000094835 JSE Share code: CBH (“CBH” or “the group”) Directors of CBH Limited: BH Kent (Chairman)#, R Gibbison#, GP Heath, IWM Isdale#, KW James, MP Stander, CD Stein# #Independent non-executive Registered office: 8 Melville Road, Illovo, Johannesburg, 2196 (PO Box 412523, Craighall, 2024) Attorneys: Fluxmans Inc, 11 Biermann Avenue, Rosebank, Johannesburg, 2196 (Private Bag X41, Saxonwold, 2132) Investment Bank and Sponsor: Investec Bank Limited, (Registration number 1969/004763/06) 2nd Floor, 100 Grayston Drive, Sandton, 2196 (PO Box 785700, Sandton, 2146) Company secretary: MJC Antunes, 48 President Steyn Street, Westdene, Bloemfontein, 9301 (PO Box 6851, Bloemfontein, 9300) Auditors: PricewaterhouseCoopers Inc. 61 Second Avenue, Westdene, Bloemfontein, 9301 (PO Box 818, Bloemfontein, 9300) Transfer secretaries: Computershare Investor Services (Proprietary) Limited, (Registration number 2004/003647/07) Ground Floor, 70 Marshall Street Johannesburg, 2001 (PO Box 61051 Marshalltown, 2107) BASTION GRAPHICS Group operating profit

×