Wrap Text
Unaudited Group Results and Dividend Declaration for the six months ended 31 March 2015
Tiger Brands Limited
Registration number: 1944/017881/06
Incorporated in the Republic of South Africa
Share code: TBS
ISIN: ZAE000071080
Unaudited Group Results and Dividend Declaration for the six months ended 31 March 2015
Key financial indicators
- Turnover up 7% to R15,9 billion
- Operating income before abnormal items down 5% to R1,6 billion
- Headline earnings per share from continuing operations of 853 cents in line with last year
- Earnings per share from continuing operations up 121% to 832 cents
- Dividend per share up 3% to 339 cents
COMMENTARY
OVERVIEW
The group’s results for the half year ended 31 March 2015 are characterised by a solid performance in the domestic
business, which was largely offset by foreign exchange losses arising from the devaluation of the Nigerian Naira and a weak
performance by the Kenyan business, Haco Tiger Brands (“Haco”).
Domestic turnover growth of 8% was driven by volume growth of 2% and pricing inflation of 6%. Through effective
management of price, volume and margin, operating profit from the domestic businesses grew by 9%, notwithstanding the
heightened level of market competition and significantly higher levels of marketing investment. There was a modest improvement
in the domestic operating margin, demonstrating the resilience and power of the group’s brands in challenging times.
Market shares overall appreciated over the six-month period.
The short-term macro-economic environment in Nigeria deteriorated significantly during the period under review
following the sharp drop in crude oil prices. This resulted in volatility in the country’s financial markets and a 25%
devaluation of the Naira against the US Dollar. This has significantly affected the performance of the group’s Nigerian
businesses, in particular Dangote Flour Mills (“DFM”), which carries short-term US Dollar borrowings to fund its imported wheat
purchases. The devaluation resulted in significant foreign exchange losses recognised on the translation of its foreign
denominated borrowings into Naira. The underlying trading performance of the DFM businesses continues to reflect an
encouraging positive trend, with good volume growth of 16% resulting in a 38% reduction in trading losses to R110 million,
excluding the foreign exchange losses attributable to the currency devaluation.
The performance of the group’s Kenyan business was particularly disappointing. Haco’s results were negatively affected
by the effects of pre-invoicing and the manipulation of profits in the previous financial year. Appropriate
corrective action has been implemented.
Total group turnover increased by 7% to R15,9 billion, whilst operating income before IFRS 2 share option charges
declined by 3% to R1,7 billion. This was after accounting for a R134 million foreign exchange loss in DFM relating to the
Naira devaluation and the effects of the prior year anomalies at Haco which resulted in a R108 million decline in its
operating results.
Excluding the Naira devaluation and the year-on-year decline in Haco’s results, the group’s operating profit before
IFRS 2 charges increased by 12%, reflecting a solid underlying performance.
Attributable profit after tax from continuing operations increased by 122% to R1,3 billion following the R849 million prior
year impairment of goodwill and intangible assets relating to the group’s investment in DFM. Income from associates
declined by 11% to R238 million, with the associate companies other than Chilean-based Empresas Carozzi, reporting a weaker
trading performance.
The effective tax rate before abnormal items was higher than the prior year due to investment allowances received on
qualifying capital projects in the prior year. Earnings per share from continuing operations for the current period
increased by 121% to 832 cents whilst headline earnings per share from continuing operations of 853 cents was in line with
the comparative figure last year.
KEY AREAS OF FOCUS
The group’s key strategic thrusts are focused on long-term profitable growth and the sustainability of its market
leading brands through increased brand support and product innovation. Steady progress has been recorded, with the group
achieving 2% volume growth overall during the period and the domestic business reflecting an improvement in market shares
in most categories. Total marketing investment increased by 20%, primarily in support of the group’s core brands, further
strengthening their positioning and market shares over the period.
The focus on operational efficiencies and cost management is central to the group’s strategy of continually seeking to
enhance the competitiveness of its products. Cost savings have been delivered throughout the group’s supply chain as
well as through the consolidation of various support functions, which has been enabled by the group-wide roll-out of a
centralised ERP platform. The final stages of this ERP roll-out should be completed within the next 12 months. Importantly,
a new wave of cost reduction initiatives is being targeted to improve profitability, given the ongoing cost pressures
faced by the group due to continuing Rand weakness and rising soft commodity prices. This is over and above the initial
annualised target of R500 million in cost savings, which will now be fully realised by the 2016 financial year following
the completion of the identified initiatives.
The group continues to pursue growth opportunities through expansion into new and existing categories and geographies, both in
South Africa and the balance of the continent. During the period, the Exports and International businesses, other than Haco,
achieved strong volume and top-line growth. Whilst both highly competitive and challenging, the Nigerian market remains
an attractive source of growth, which offers long-term opportunity given the size and demographic profile of its
population. The group remains firmly focussed on driving operational improvements in its Nigerian businesses in the medium
to long term, whilst minimising the downside risks as far as possible. In the short term, it is expected that trading will
continue to be challenging. However, we will continue to focus on the execution of our plans to gain maximum benefit
from DFM’s existing product portfolio and facilities as well as to shift its product mix to higher value categories.
Given its current losses and highly geared balance sheet, DFM will require further financial support from its
shareholders in order to further stabilise the business during this difficult phase and enable the delivery of its
long-term growth plans.
The group has continued to execute its plans to strengthen and rebuild the Home and Personal Care businesses, which
have underperformed internal growth targets over the last few years. The category portfolio includes a number of core
brands that have heritage positioning and significant brand equity and a number of smaller brands which are largely
positioned in the economy segment and contribute to the overall profitability of the business. In repositioning the business
to focus on its core brands, including investing more aggressively in marketing support and innovation, the group is better
placed to compete more effectively in these categories. Consequently, during the period, the group has increased its
marketing investment in the Home and Personal Care categories by 38% and 85% respectively in support of its core brands
and new market launches, resulting in a volume uplift of 13% and 4% respectively during the period. Operating profit for
the period in these categories increased by 15% and 16% respectively. The business continues to invest in its people and
supply chain capabilities and is exploring a number of partnership options to improve its technological capabilities in
core areas.
OPERATING PERFORMANCE
Grains division
The Grains division achieved a 5% growth in turnover, with total volumes increasing by 2%. Overall pricing inflation
of 3% was impacted by price deflation in the Maize category due to lower raw maize costs. Very strong volume growth was
achieved in the Maize, Pasta and Rice categories; however, due to aggressive pricing and the introduction of additional
manufacturing capacity in the Bread market, the group’s bread volumes declined by 3%. A deliberate and measured response,
focussed on the functional attributes of the Albany brand and supported by tactical pricing initiatives, has
started to yield positive results, with the operating margin for Bread in line with the prior period.
Operating profit for the Grains division as a whole increased by 7% to R890 million. This was achieved on the back of
a 23% increase in marketing investment, with the Maize, Pasta and Rice categories recording double digit growth in
operating income. During the period, the Jungle Ultra brand was launched, aimed at the fast growing energy segment of the
breakfast market.
Consumer Brands - Food
The Groceries business continued to show good progress following a pricing correction in the current period, which
resulted in a 12% increase in turnover. Overall volumes for the period held up well and were in line with the corresponding
period, whilst the Condiments, Ingredients and Spreads categories showed good volume growth. Volumes in the Fruit and
Vegetables category were hampered by increased price inflation, whilst Chutney volumes were negatively affected by a
global shortage of dried peaches. Operating profit for the Groceries business in total increased by 39% to R210 million,
with the overall operating margin improving by 180 basis points to 9,2%. The commissioning of the new Mayonnaise plant in
Boksburg, Johannesburg is scheduled for completion in June 2015.
The heightened focus within the Groceries business on continuous manufacturing improvements is expected to drive
further operational efficiencies and cost savings.
Sales volumes for the Snacks, Treats and Beverages categories were marginally down, with total turnover improving by
7%. Significant raw material cost pressures in the Snacks and Treats categories, as well as increased depreciation following
the commissioning of the new Gums and Jellies plant in September 2014, negatively affected gross margins. Overall, the
division achieved a marginal uplift in operating income to R262 million.
The Value Added Meat Products division performed well, reflecting top-line growth of 14% and a 12% increase in
operating income to R70 million, driven by high levels of product innovation.
Home, Personal Care and Baby (HPCB)
Solid top-line growth was achieved in the Home Care division, with volume growth of 13% driven by both market growth
and share gains in the Pest and Air Care categories. Volumes in the Personal Care Division grew by 4%. Operating income
for the Home and Personal Care divisions increased by 15% in aggregate to R123 million, notwithstanding a 57% increase in
marketing investment. Work on the factory reconfiguration at Isando has commenced and is scheduled for
completion by March 2016. This will drive greater manufacturing efficiencies and enable the in-house manufacturing of
certain core products that have previously been manufactured by third parties. With the increased investment in people,
marketing and R&D resources, the base business is being repositioned for continued and sustained growth.
Sales volumes in the Baby Care division grew by 6%. Higher than expected raw material cost increases, as well as
increased marketing investment and promotional activity, led to an 8% decline in operating profit.
Exports and International division
Total turnover for the Exports and International division was in line with the corresponding period at R2,2 billion,
whilst operating profit declined by 30% to R234 million, primarily as a result of the year-on-year decline in
profitability at Haco.
Davita, TBI Exports and Chococam all recorded solid top-line growth over the period, underpinned by strong volumes.
Demand for Davita’s Benny powdered seasoning product outstripped manufacturing capacity, with margins negatively impacted
by outsourced production during the period. New internal production capacity is scheduled to come on stream in June 2015.
The Ethiopian business, East African Tiger Brands Industries, reflected solid top-line growth of 14%, but its overall
results were negatively impacted by the write down of slow moving stock during the period.
The performance of Langeberg and Ashton Foods was negatively affected by a slower start to the fruit season, which
should improve in the second half. The business has recently successfully commissioned a dried fruit processing facility
which will supply dried peaches for the production of Mrs Ball’s chutney.
Nigeria division
DFM achieved turnover growth of 12% (18% in local currency), with good volume growth recorded in the Flour and Pasta
categories due to competitive pricing and enhanced product quality. Pricing competition intensified during the period,
with market participants seeking to recover lost market shares; however, gross margins improved as a result of the higher
volumes, procurement savings and efficiency gains achieved during the period. Product mix optimisation, human capital
resourcing and improvements in route to market capability are key areas of focus to drive profitability and growth. DFM’s
operating loss before the effects of the currency devaluation improved by 38% (32% in local currency) to R110 million. A
pre-tax foreign exchange loss of R134 million was incurred on the revaluation of external foreign-denominated
short-term debt following the devaluation of the Naira.
Deli Foods’ sales volumes for the period were negatively affected by the loss of a key production line, which will be
replaced in the fourth quarter. The 25% decline in turnover resulted in a R16 million negative swing in the trading
results of the business for the half year.
CASH FLOW AND CAPITAL EXPENDITURE
Cash generated from operations declined by 18% to R1,4 billion, largely as a result of seasonality of sales and
procurement positions held at the half year. This is expected to normalise during the second half. Capital expenditure of
R363 million was incurred during the period under review.
OCEANA GROUP LIMITED
Oceana yesterday announced a proposed acquisition of Daybrook Fisheries that is located in Louisiana in the United
States. The Oceana SENS announcement of 19 May 2015 in respect of this proposed acquisition and the detailed terms outlined
therein relating to the acquisition refer. Reference is also made to the SENS announcement issued yesterday by Tiger
Brands in which the company confirmed that it was supportive of the proposed transaction and had provided irrevocable
letters of support in terms of which Tiger Brands will vote in favour of the transaction at any Oceana shareholder meeting
and also will participate in the rights offer that is being proposed by Oceana to part-fund the transaction. Tiger Brands'
pro-rata participation in the rights issue is expected to cost approximately R525 million.
INTERIM DIVIDEND
The company has declared an interim dividend of 339 cents per share for the half year ended 31 March 2015, which
represents an increase of 3% compared to the 2014 interim dividend of 329 cents per share. Shareholders are referred to
the dividend announcement below for further details.
OUTLOOK
The trading conditions across most of the regions in which the group operates are challenging. However, the group is
confident that it has the right strategies in place and the depth of management to execute effectively against its plans.
In this regard, the group has significantly strengthened its management team, including seasoned and experienced FMCG
executives, both in South Africa and the balance of the continent, to hone its customer engagement, supply chain and
route to market capability. The group will continue to focus on delivering against its key strategic objectives, improving
the equity of its brands in the core South African markets and positioning the international businesses for growth.
Whilst the relentless focus on cost savings and efficiencies will remain, further investment will continue to be made on
innovation, customer engagement and brand development.
Market conditions in the South African businesses are likely to persist, with rising soft commodity prices and the
weak Rand adding to inflationary pressures in a tough competitive environment.
In the short term, market conditions in Nigeria will remain challenging, with the full inflationary impact of the
year-to-date devaluation of the Naira only likely to be felt by consumers later in the year. In addition, the
potential for further foreign exchange losses could have a material adverse effect on the results of the Nigerian businesses
in the second half. The group is pursuing a number of opportunities which could enhance the future performance
of DFM, impacting positively on the outlook for the business. The group has considered all of these factors
in performing a fair value assessment of the underlying assets of DFM as at 31 March 2015. It was concluded that there was
no need to take any impairment at the half year, but that this would be re-assessed at the year end when it is anticipated
that there would be sufficient clarity on the outcome of these opportunities as well as greater market stability following the
inauguration of the new Nigerian government later this month.
By order of the board
AC Parker PB Matlare
Chairman Chief Executive Officer
Sandton
19 May 2015
DECLARATION OF interim DIVIDEND No. 141
The board has approved and declared an interim dividend of 339 cents per ordinary share (gross) in respect of the six
months ended 31 March 2015.
The dividend will be subject to the Dividends Tax that was introduced with effect from 1 April 2012. In accordance
with paragraphs 11.17 (a) (i) to (x) and 11.17 (c) of the JSE Listings Requirements the following additional information is
disclosed:
- The dividend has been declared out of income reserves;
- The local Dividends Tax rate is 15% (fifteen per centum);
- The gross local dividend amount is 339 cents per ordinary share for shareholders exempt from the Dividends Tax;
- The net local dividend amount is 288,15 cents per ordinary share for shareholders liable to pay the Dividends Tax;
- Tiger Brands has 192 069 868 ordinary shares in issue (which includes 10 326 758 treasury shares); and
- Tiger Brands Limited’s income tax reference number is 9325/110/71/7.
Shareholders are advised of the following dates in respect of the interim dividend:
Last day to trade cum Friday, 19 June 2015
the interim dividend
Shares commence trading ex the interim dividend Monday, 22 June 2015
Record date to determine those shareholders entitled Friday, 26 June 2015
to the interim dividend
Payment in respect of the interim dividend Monday, 29 June 2015
Share certificates may not be dematerialised or re-materialised between Monday, 22 June 2015 and Friday, 26 June 2015,
both days inclusive.
By order of the board
T Naidoo
Secretary
Sandton
19 May 2015
Interim condensed consolidated income statement
R’million Notes Unaudited % Unaudited Audited
six months change six months year ended
ended ended 30 September
31 March 31 March 2014
2015 2014
Turnover 15 907,6 7 14 926,9 30 072,0
Cost of sales (10 961,3) (6) (10 319,3) (20 540,2)
Gross profit 4 946,3 7 4 607,6 9 531,8
Sales and distribution expenses (1 849,9) (6) (1 753,1) (3 495,1)
Marketing expenses (453,5) (20) (377,7) (755,6)
Other operating expenses (1 010,6) (33) (762,5) (1 725,1)
Operating income before abnormal items 2 1 632,3 (5) 1 714,3 3 556,0
Abnormal items 3 (41,4) 95 (835,7) (1 055,5)
Operating income after abnormal items 1 590,9 81 878,6 2 500,5
Net finance costs (189,7) 8 (206,3) (402,7)
Investment income 0,4 (67) 1,2 1,5
Income from associated companies 237,5 (11) 265,9 596,9
Profit before taxation 1 639,1 74 939,4 2 696,2
Taxation (449,6) (9) (412,4) (832,4)
Profit for the period from continuing operations 1 189,5 126 527,0 1 863,8
Profit for the period from discontinued operation 6 - - 41,0 41,0
Profit for the period 1 189,5 109 568,0 1 904,8
Attributable to:
Owners of the parent 1 339,4 112 631,9 2 020,2
- Continuing operations 1 339,4 122 602,0 1 990,3
- Discontinued operation - - 29,9 29,9
Non-controlling interest (149,9) 135 (63,9) (115,4)
- Continuing operations (149,9) 100 (75,0) (126,5)
- Discontinued operation - - 11,1 11,1
1 189,5 109 568,0 1 904,8
Basic earnings per share (cents) 832,2 111 395,0 1 261,6
- Continuing operations 832,2 121 376,3 1 242,9
- Discontinued operation - - 18,7 18,7
Diluted basic earnings per share (cents) 816,6 111 386,7 1 230,7
- Continuing operations 816,6 122 368,4 1 212,5
- Discontinued operation - - 18,3 18,2
Headline earnings per share (cents) 852,9 (2) 866,8 1 815,7
- Continuing operations 852,9 - 855,5 1 804,4
- Discontinued operation - - 11,3 11,3
Diluted headline earnings per share (cents) 837,0 (1) 848,7 1 771,2
- Continuing operations 837,0 - 837,6 1 760,2
- Discontinued operation - - 11,1 11,0
Interim condensed consolidated statement of comprehensive income
R’million Unaudited Unaudited Audited
six months six months year ended
ended ended 30 September
31 March 31 March 2014
2015 2014
Profit for the period 1 189,5 568,0 1 904,8
Other comprehensive income (175,8) (26,2) (28,5)
Net gain/(loss) on hedge of net investment in
foreign operation^ 13,4 (9,9) (3,2)
Foreign currency translation adjustments^ (161,9) 35,7 114,1
Net loss on cash flow hedges^ (1,7) (4,2) (5,1)
Net loss on available-for-sale financial assets^ (25,6) (53,0) (117,4)
Actuarial loss released on defined benefit pension
fund in terms of IAS 19R - - (40,8)
Tax effect - 5,2 23,9
Total comprehensive income for the period 1 013,7 541,8 1 876,3
Attributable to:
Owners of the parent 1 180,9 574,9 1 944,7
Non-controlling interest (167,2) (33,1) (68,4)
1 013,7 541,8 1 876,3
^Items that may be subsequently reclassified to profit or loss. During the current period, R44,3 million was reclassified
to profit or loss on the available-for-sale financial asset derecognised in terms of the Black Managers Participation Right
Scheme.
Interim condensed consolidated segmental information
R’million Unaudited % Unaudited Audited
six months change six months year ended
ended ended 30 September
31 March 31 March 2014
2015 2014
Turnover
Domestic Operations 12 114,6 8 11 204,9 22 373,2
Grains 5 611,6 5 5 338,7 10 948,6
Milling and Baking 3 942,9 2 3 862,3 8 043,0
Other Grains 1 668,7 13 1 476,4 2 905,6
Consumer Brands 6 503,0 11 5 866,2 11 424,6
Groceries 2 288,9 12 2 039,5 3 968,7
Snacks & Treats 1 113,4 9 1 024,2 2 054,5
Beverages 648,4 5 618,3 1 107,9
Value Added Meat Products 1 071,6 14 942,6 1 896,2
Out of Home 218,9 6 206,7 437,1
Home, Personal Care and Baby (HPCB) 1 161,8 12 1 034,9 1 960,2
Personal Care 299,6 15 261,0 564,2
Babycare 406,7 8 378,0 747,2
Homecare (including Stationery) 455,5 15 395,9 648,8
Exports and International 2 254,5 - 2 258,3 4 578,7
Exports 1 038,3 16 897,6 1 846,5
International operations 670,7 (10) 744,0 1 462,7
Langeberg & Ashton Foods 636,3 (6) 679,9 1 440,1
Intergroup sales (90,8) (44) (63,2) (170,6)
Nigeria 1 538,5 5 1 463,7 3 120,1
TOTAL TURNOVER 15 907,6 7 14 926,9 30 072,0
Operating income before abnormal items
Domestic Operations 1 697,2 9 1 557,2 3 252,2
Grains 889,6 7 832,1 1 918,9
Milling and Baking 735,8 7 689,0 1 596,5
Other Grains 153,8 7 143,1 322,4
Consumer Brands 815,6 10 739,3 1 375,8
Groceries 210,0 39 151,2 320,4
Snacks & Treats 166,8 (5) 175,2 309,4
Beverages 95,5 14 84,0 126,6
Value Added Meat Products 69,6 12 62,3 130,8
Out of Home 42,8 2 42,0 90,1
Home, Personal Care and Baby (HPCB) 230,9 3 224,6 398,5
Personal Care 75,2 16 65,1 112,8
Babycare 102,0 (8) 110,5 210,2
Homecare (including Stationery) 53,7 10 49,0 75,5
Other (8,0) 44 (14,2) (42,5)
Exports and International 233,8 (30) 335,0 691,1
Exports 217,3 10 198,4 423,6
International operations (20,6) (119) 105,7 207,1
Langeberg & Ashton Foods 37,1 20 30,9 60,4
Nigeria (262,9) (45) (181,0) (281,9)
IFRS 2 charges (35,8) 3,1 (105,4)
TOTAL OPERATING INCOME BEFORE ABNORMAL ITEMS 1 632,3 (5) 1 714,3 3 556,0
Interim condensed consolidated statement of financial position
R’million Unaudited Unaudited Audited
as at as at as at
31 March 31 March 30 September
2015 2014 2014
ASSETS
Non-current assets 13 874,2 13 852,4 14 123,7
Property, plant and equipment 5 679,7 5 736,6 5 867,6
Goodwill 2 383,5 2 440,6 2 411,2
Intangible assets 2 059,8 2 151,7 2 115,5
Investments 3 447,7 3 322,3 3 422,5
Deferred taxation asset 303,5 201,2 306,9
Current assets 11 053,6 10 070,7 10 728,3
Inventories 5 308,1 4 882,8 4 700,6
Trade and other receivables 5 192,1 4 502,9 4 867,4
Cash and cash equivalents 553,4 685,0 1 160,3
TOTAL ASSETS 24 927,8 23 923,1 24 852,0
EQUITY AND LIABILITIES
Total equity 14 145,3 13 128,7 13 947,2
Issued capital and reserves 13 578,9 12 302,9 13 177,4
Non-controlling interests 566,4 825,8 769,8
Non-current liabilities 1 313,3 2 048,6 1 532,9
Deferred taxation liability 308,6 409,4 279,1
Provision for post-retirement medical aid 637,0 590,4 626,4
Long-term borrowings 367,7 1 048,8 627,4
Current liabilities 9 469,2 8 745,8 9 371,9
Trade and other payables 4 633,6 4 145,7 4 441,6
Provisions 565,9 586,9 664,6
Taxation 112,0 47,2 243,6
Short-term borrowings 4 157,7 3 966,0 4 022,1
TOTAL EQUITY AND LIABILITIES 24 927,8 23 923,1 24 852,0
Net debt 3 972,0 4 329,8 3 489,2
Interim condensed consolidated statement of changes in equity
R’million Share capital Non- Accumulated Shares held by
and premium distributable profits subsidiary and
reserves empowerment
entities
Balance at 1 October 2013 117,3 1 989,8 12 990,2 (2 674,0)
Profit for the period - - 631,9 -
Other comprehensive income - (57,0) - -
117,3 1 932,8 13 622,1 (2 674,0)
Issue of share capital and premium 16,9 - - -
Disposal of Agrosacks - - - -
Acquisition of non-controlling interest - DFM - (49,7) - -
Distribution to Oceana Empowerment Trust Beneficiaries - (143,4) - -
Transfers between reserves - 147,1 (147,1) -
Share-based payment - - - -
Dividends on ordinary shares (net of dividend on treasury shares) - - (907,8) -
Sale of shares - - - 1,3
Balance at 31 March 2014 134,2 1 886,8 12 567,2 (2 672,7)
Profit for the period - - 1 388,3 -
Other comprehensive income - 11,1 (29,6) -
134,2 1 897,9 13 925,9 (2 672,7)
Issue of share capital and premium 5,2 - - -
Subsidiary legal reserve transfer - 25,8 (25,8) -
Transfers between reserves - 162,6 (162,6) -
Share-based payment - - - -
Dividends on ordinary shares (net of dividend on treasury shares) - - (538,7) -
Sale of shares - - - 0,8
Balance at 30 September 2014 139,4 2 086,3 13 198,8 (2 671,9)
Profit for the period - - 1 339,4 -
Other comprehensive income - (158,5) - -
139,4 1 927,8 14 538,2 (2 671,9)
Issue of share capital and premium 9,1 - - -
Transfers between reserves - 86,9 (86,9) -
Share-based payment - - - -
Dividends on ordinary shares (net of dividend on treasury shares) - - (1 010,5) -
Sale of empowerment shares^ - - - 182,8
Balance at 31 March 2015 148,5 2 014,7 13 440,8 (2 489,1)
^ Relates to the exercising of options vested post the December 2014 lock-in period in terms of the Black Managers
Participation Right Scheme (BMT).
Interim condensed consolidated statement of changes in equity (continued)
R’million Share-based Total attributable Non controlling Total
payment reserve to owners of interests equity
the parent
Balance at 1 October 2013 363,8 12 787,1 1 028,4 13 815,5
Profit for the period - 631,9 (63,9) 568,0
Other comprehensive income - (57,0) 30,8 (26,2)
363,8 13 362,0 995,3 14 357,3
Issue of share capital and premium - 16,9 - 16,9
Disposal of Agrosacks - - (145,1) (145,1)
Acquisition of non-controlling interest - DFM - (49,7) (24,4) (74,1)
Distribution to Oceana Empowerment Trust Beneficiaries - (143,4) - (143,4)
Transfers between reserves - - - -
Share-based payment 23,6 23,6 - 23,6
Dividends on ordinary shares (net of dividend on treasury shares) - (907,8) - (907,8)
Sale of shares - 1,3 - 1,3
Balance at 31 March 2014 387,4 12 302,9 825,8 13 128,7
Profit for the period - 1 388,3 (51,5) 1 336,8
Other comprehensive income - (18,5) 16,2 (2,3)
387,4 13 672,7 790,5 14 463,2
Issue of share capital and premium - 5,2 - 5,2
Subsidiary legal reserve transfer - - - -
Transfers between reserves - - - -
Share-based payment 37,4 37,4 - 37,4
Dividends on ordinary shares (net of dividend on treasury shares) - (538,7) (20,7) (559,4)
Sale of shares - 0,8 - 0,8
Balance at 30 September 2014 424,8 13 177,4 769,8 13 947,2
Profit for the period - 1 339,4 (149,9) 1 189,5
Other comprehensive income - (158,5) (17,3) (175,8)
424,8 14 358,3 602,6 14 960,9
Issue of share capital and premium - 9,1 - 9,1
Transfers between reserves - - - -
Share-based payment 39,2 39,2 - 39,2
Dividends on ordinary shares (net of dividend on treasury shares) - (1 010,5) - (1 010,5)
Sale of empowerment shares^ - 182,8 (36,2) 146,6
Balance at 31 March 2015 464,0 13 578,9 566,4 14 145,3
^ Relates to the exercising of options vested post the December 2014 lock-in period in terms of the Black Managers
Participation Right Scheme (BMT).
Interim condensed consolidated statement of cash flows
R’million Unaudited Unaudited Audited
six months six months year ended
ended ended 30 September
31 March 31 March 2014
2015 2014
Cash operating profit 2 158,8 2 149,8 4 541,2
Working capital changes (744,7) (427,4) (348,0)
Cash generated from operations 1 414,1 1 722,4 4 193,2
Finance cost net of dividends received (38,7) (91,3) (119,0)
Taxation paid (605,7) (487,7) (967,3)
Cash available from operations 769,7 1 143,4 3 106,9
Dividends paid (1 046,7) (907,8) (1 467,2)
Net cash (outflow)/inflow from operating activities (277,0) 235,6 1 639,7
Purchase of property, plant and equipment (363,3) (481,8) (982,9)
Black Managers Trust (BMT) shares exercised 215,3 - -
Proceeds from disposal of property, plant, equipment and intangible assets 7,0 33,7 26,0
Disposal of businesses - 496,4 496,4
Other 1,8 26,5 45,7
Net cash (outflow)/inflow from investing activities (139,2) 74,8 (414,8)
Proceeds from issue of share capital 9,1 18,4 22,1
Long and short-term borrowings repaid (560,1) (530,3) (1 056,5)
Acquisition of 2,31% non-controlling interest - DFM - (74,1) (74,1)
Net cash outflow from financing activities (551,0) (586,0) (1 108,5)
Net (decrease)/increase in cash and cash equivalents (967,2) (275,6) 116,4
Effect of exchange rate changes (28,3) 21,3 51,6
Cash and cash equivalents at the beginning of the period (1 925,9) (2 093,9) (2 093,9)
Cash and cash equivalents at the end of the period (2 921,4) (2 348,2) (1 925,9)
Cash resources 553,4 685,0 1 160,3
Short-term borrowings regarded as cash and cash equivalents (3 474,8) (3 033,2) (3 086,2)
(2 921,4) (2 348,2) (1 925,9)
Other salient features
R’million Unaudited Unaudited Audited
six months six months year ended
ended ended 30 September
31 March 31 March 2014
2015 2014
Capital commitments 479,6 442,8 978,0
- contracted 122,7 197,2 244,5
- approved 356,9 245,6 733,5
Capital commitments will be funded from normal operating cash
flows and the utilisation of existing borrowing facilities.
Capital expenditure 363,3 481,8 982,9
- replacement 307,0 265,7 555,2
- expansion 56,3 216,1 427,7
Contingent liabilities
- guarantees and contingent liabilities 74,3 131,1 70,8
Notes
1. Basis of preparation and changes to the group’s accounting policies
The preparation of these results has been supervised by O Ighodaro, Chief Financial Officer of Tiger Brands Limited.
The condensed group interim consolidated financial statements for the six months ended 31 March 2015 have been prepared
in accordance with IAS 34: Interim Financial Reporting as issued by the IASB, the South African Companies Act No 71
of 2008 and the Listing Requirements of the JSE Limited.
The accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with
those applied in preparation of the group’s annual consolidated financial statements for the year ended 30 September 2014.
The majority of the group’s financial instruments measured at fair value in terms of IFRS 13 are noted as level 1 hierarchy,
which are valued based on quoted market prices.
R’million Unaudited Unaudited Audited
six months six months year ended
ended ended 30 September
31 March 31 March 2014
2015 2014
2. Operating income before abnormal items
Depreciation (included in cost of sales and other operating expenses) (336,0) (332,8) (679,1)
Amortisation (11,8) (23,6) (38,1)
IFRS 2 (included in other operating expenses)
- Equity settled (39,2) (23,5) (61,0)
- Cash settled 3,4 26,6 (44,4)
3. Abnormal items
Impairment of intangible assets (29,6) (848,7) (916,4)
Impairment of property, plant and equipment (11,8) - (145,3)
Acquisition costs - (12,3) (12,3)
Profit on disposal of property, plant, equipment and intangible assets - 14,8 14,8
Insurance claim income - 28,7 43,2
Other - (18,2) (39,5)
(41,4) (835,7) (1 055,5)
4. Impairment
Goodwill and indefinite-life intangible assets are tested for impairment annually (as at 30 September) and when circumstances
indicate the carrying value may be impaired. The Group’s impairment tests are based on the value-in-use calculations. The
key assumptions used to determine the recoverable amount for the different cash-generating units were disclosed in the
annual consolidated financial statements for the year ended 30 September 2014. A specific impairment of R29,6 million was
recognised at 31 March 2015 relating to an indefinite-life intangible asset within the HPCB business.
R’million Unaudited Unaudited Audited
six months six months year ended
ended ended 30 September
31 March 31 March 2014
2015 2014
5. Reconciliation between profit for the period and headline earnings
Continuing operations
Profit for the period attributable to owners of the parent 1 339,4 602,0 1 990,3
Profit on disposal of property, plant, equipment and intangible assets (1,5) (14,2) (11,1)
Impairment of intangible assets 29,6 801,7 869,4
Impairment of property, plant and equipment 8,3 - 78,2
Write-off of other related assets - - 1,5
Insurance claim income - (20,7) (31,1)
Headline earnings adjustment - Associates
- Profit on disposal of property, plant, equipment and intangible assets (3,0) (0,1) (7,9)
1 372,8 1 368,7 2 889,3
Tax effect of headline earnings adjustments 2,9 16,9 (52,9)
Attributable to non-controlling interest - 20,9 (46,8)
Discontinued operation
Profit for the period attributable to owners of the parent - 29,9 29,9
Profit on remeasurement to fair value on transfer of net assets to held-for-sale - (11,8) (11,8)
- 18,1 18,1
Attributable to non-controlling interest - 6,8 6,8
6. Analysis of profit from discontinued operation
Turnover - 186,9 186,9
Expenses - (156,1) (156,1)
Operating income before abnormal items - 30,8 30,8
Profit on remeasurement to fair value on transfer of net assets to held-for-sale - 18,6 18,6
Operating income after abnormal items - 49,4 49,4
Finance costs - (5,0) (5,0)
Profit before taxation - 44,4 44,4
Taxation - (3,4) (3,4)
Profit for the period from discontinued operation - 41,0 41,0
Attributable to non-controlling interest - (11,1) (11,1)
Attributable to owners of parent - 29,9 29,9
Cash flows from discontinued operation
Net cash outflows from operating activities - (23,9) (23,9)
Net cash inflows from investing activities - 97,0 97,0
Net cash outflows from financing activities - (72,2) (72,2)
Net cash inflows - 0,9 0,9
Corporate information
Independent non-executive directors
A C Parker (Chairman), B L Sibiya (Deputy Chairman),S L Botha, R M W Dunne, K D K Mokhele, M P Nyama, R D Nisbet,
M Makanjee, M J Bowman, M O Ajukwu (appointed 31 March 2015)
Executive directors
P B Matlare (Chief Executive Officer), C F H Vaux, O Ighodaro (Chief Financial Officer)
Company Secretary
T Naidoo
Investor Relations
Nikki Catrakilis-Wagner (011) 840 4841
Physical address
Tiger Brands Limited, 3010 William Nicol Drive, Bryanston
Postal address
PO Box 78056, Sandton, 2146, South Africa
Telephone (011) 840 4000
Facsimile (011) 514 0477
Sponsor
JP Morgan Equities South Africa (Pty) Limited
1 Fricker Road, Corner Hurlingham Road, Illovo, 2196
Share registrars
Computershare Investor Services (Pty) Limited, 70 Marshall Street, Johannesburg, 2001 PO Box 61051, Marshalltown 2107,
South Africa.
Telephone (011) 370 5000
Website: www.tigerbrands.com
Release date: 20 May 2015
Date: 20/05/2015 07:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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