- Interim Financial Results - September 2010 -
Intrim Results
     
CONDENSED CONSOLIDATED STATEMENT                 Unaudited Audited
OF COMPREHENSIVE INCOME           Six months ended Year ended
30 Sept 30 Sept 31 March
(R000's)                                                                       2010 2009   2010
Continuing operations:
 Revenue       190 421       169 570       305 883
     
Operating profit          17 430         20 730         36 402
Share of profit of associate company                -                  -                   7
Investment income           1 198              857              502
Finance costs          (3 825)          (2 329)          (5 828)
Capital items         92 972         13 198        13 188
Profit before tax       107 775         32 456         44 271
Income tax expense        (6 528)        (4 112)        (7 214)
Profit for the period from continuing operations       101 247         28 344        37 057
 
Discontinued operations:
(Loss)/ profit for the year from discontinued operations                -          (3 944)     (16 797)
Profit for the year     101 247        24 400       20 260
 
Other comprehensive income
Investment revaluation               13               65              305
Exchange differences on translating foreign operations (3 609)                -           (867)
Other comprehensive income for the period, net of tax       (3 596) 65         (562)
  __________ ______ ________
Total comprehensive income for the period        97 651 24 465      19 698
 
Profit attributable to :
Owners of the company         99 582 24 463         20 650
Non-controlling interests           1 665 _______3)         (390)
      101 247 ___24 400       20 260
Total comprehensive income attributable to :
Owners of the company         95 986         24 528         20 088
Non-controlling interests           1 665              (63)             (390)
        97 651         24 465         19 698
Earnings per share (cents) :
Basic           804.1           197.0           166.7
Diluted           803.2           196.8           166.6
Dividends/cash distributions per share (cents) :
Dividends declared per share - interim             45.0             45.0               70.0
- special             50.0                -                    -  
     
HEADLINE EARNINGS RECONCILIATION Unaudited Audited
Six months ended Year ended
30 Sept 30 Sept 31 March
(R000's) 2010 2009   2010
Profit after taxation          99 582         24 463         20 650
Adjusted for:
Capital (profit) on disposal of land, buildings & biological assets        (92 972)        (13 198)        (13 188)
(Profit)/loss on disposal of property, plant and equipment                -               (148)          (2 150)
Tax effect of the above           5 883          (2 602)          (2 301)
Discontinued operations re-measurement items                -                  -           10 693
Discontinued operations re-measurement items tax effect                -                  -            (2 467)
(Profit)/Loss on disposal of shares                -                  -               (117)
Tax effect on disposal of shares                -                  -                 13
Headline earnings         12 493           8 515         11 133
 
Headline earnings per share (cents) :
Headline earnings           100.9             68.8             89.9
  Headline earnings (diluted)           100.8             68.7             89.8
         
CONDENSED CONSOLIDATED Unaudited Audited
STATEMENT OF CHANGES IN EQUITY Six months ended Year ended
30 Sept 30 Sept 31 March
(R000's) 2010 2009   2010
Balance at beginning of period       342 151       342 151       342 151
Share-based payment reserve movement                -                 50              100
Total comprehensive income for the period         95 986         24 528         20 088
Ordinary dividends paid          (3 096)          (8 422)        (13 995)
Cash distribution paid                -            (6 193)          (6 193)
Shareholders' equity at end of period       435 041       352 114       342 151
Outside shareholders interest in subsidiary
Balance at beginning of period             (446)              (56)              (56)
Total comprehensive income for the period           1 665              (63)             (390)
          1 219             (119)             (446)
Total equity       436 260       351 995       341 705
                 -                  -                    -  
     
CONDENSED CONSOLIDATED Unaudited Audited
STATEMENT OF FINANCIAL POSITION 30 Sept 30 Sept 31 March
(R000's) 2010 2009   2010
ASSETS
Non-current assets       282 125       226 167       250 879
Property, plant and equipment       164 799       136 694       159 790
Bearer biological assets       104 714         79 308         79 153
Unlisted investments           3 891           3 593           3 873
Investment in associate companies           8 063           5 805           8 063
Unsecured loan - long term              658              767                -  
Current assets       316 480       284 959       279 890
Inventories         12 370         17 397         21 105
Biological assets - crops and livestock         89 464         99 741       120 345
Trade and other receivables         43 686         47 915         16 732
Taxation           4 054                -             1 495
Unlisted investments - preference shares       125 938                -                  -  
Cash and cash equivalents         30 968           3 102           3 338
Unsecured loan - short term                -                  -                797
Assets classified as held-for-sale         10 000       116 804       116 078
Total assets       598 605       511 126       530 769
 
EQUITY AND LIABILITIES
Total equity       436 260       351 995       341 705
Share capital and premium           3 208           3 208           3 208
Retained earnings       432 399       345 299       335 913
Investments revaluation reserve           3 602           3 349           3 589
Foreign currency translation reserve          (4 476)                -               (867)
Share-based payment reserve              308              258              308
Shareholders' interest       435 041       352 114       342 151
Outside interests in subsidiary           1 219             (119)             (446)
Non-current liabilities       113 963         99 812         98 806
Deferred taxation         47 561         59 708         57 547
Long-term liabilities - interest bearing           9 320         12 107         10 332
Long-term liabilities - interest free         42 434         14 322         16 550
Post-employment obligations         14 648         13 675         14 377
Current liabilities         48 382         59 319         90 258
Trade and other payables         32 945         28 980         18 146
Taxation                -             5 741                -  
Current portion of long term liabilities           3 456           1 524           3 414
Interest bearing debt - short term           1 981         11 454         58 698
Other liabilities                -             1 620                -  
Liabilities associated with assets classified as held for sale         10 000         10 000         10 000
Total equity and liabilities       598 605       511 126       530 769
  0 0   0
     
CONDENSED CONSOLIDATED Unaudited Audited
STATEMENT OF CASH FLOWS Six months ended Year ended
30 Sept 30 Sept 31 March
(R000's) 2010 2009   2010
       
Operating profit         17 430         15 252         13 411
Non-cash items         25 824         18 629           8 659
Operating cash flows before movement in working capital         43 254         33 881         22 070
Net inflow/(outflow) from changes in working capital          (3 420)         26 040         18 231
Finance costs          (3 825)          (2 329)          (5 828)
Taxation paid        (19 073)          (4 549)        (12 552)
Net cash flows from operating activities         16 936         53 043         21 921
Net investing activities
Proceeds on sale of Komati property, plant and equipment       199 745                -                    -  
Investment in preference shares and other investments      (125 956)                -                    -  
Other net investment activities          (1 611)          (3 978)        (16 462)
Net cash outflow before dividends and financing activities         89 114         49 065           5 459
Dividends and cash distribution paid          (3 096)        (14 615)        (20 188)
Net cash inflow/(outflow) before financing activities         86 018         34 450        (14 729)
Financing activities        (58 388)        (31 503)         17 912
Net (decrease)/increase in borrowings        (58 388)        (31 503)         17 912
Net (decrease)/increase in cash and cash equivalents         27 630           2 947           3 183
Cash and cash equivalents at beginning of period           3 338              155              155
Cash and cash equivalents at end of period         30 968           3 102           3 338
         
SUPPLEMENTARY INFORMATION Unaudited Audited
Six months ended Year ended
30 Sept 30 Sept 31 March
(R000's) 2010 2009   2010
       
Depreciation           6 499           6 286         12 541
Capital expenditure
    Incurred           13 982         17 852         55 521
Capital commitments
   - Contracted           1 702           1 229           6 839
   - Authorised but not contracted           1 478           1 551         10 975
          3 180           2 780         17 814
Contingent assets         24 500                -           16 100
Contingent liabilities              643              575              643
Net asset value per share           3 522           2 842           2 759
Ordinary number of shares in issue    12 385 000   12 385 000   12 385 000
Weighted average number of shares in issue     12 385 000   12 385 000   12 385 000
Fully diluted number of shares     12 398 591   12 396 014   12 398 591
         
         
GROUP SEGMENTAL ANALYSIS Unaudited Audited
Six months ended Year ended
30 Sept 30 Sept 31 March
(R000's) 2010 2009   2010
Continuing operations
Revenue
Sugar cane       136 344       123 461       179 094
Bananas         25 786         21 920         54 430
Deciduous fruit         15 486         19 259         50 209
Grain and sheep           1 733           1 052         14 290
Crocodile farming/tourism           2 627           1 154           2 812
Cattle           4 575           1 186           1 473
Other operations           3 870           1 538           3 575
      190 421       169 570       305 883
Operating profit
Sugar cane         37 341         39 086         54 435
Bananas              (62)           2 234           9 522
Deciduous fruit          (6 572)          (9 319)        (10 154)
Grain and sheep           1 543           2 406           4 358
Crocodile farming/tourism          (3 397)          (1 429)          (1 170)
Cattle               88               67             (292)
Other operations/sundry income           3 014              815           5 028
Group administration        (14 525)        (13 130)        (25 325)
        17 430         20 730         36 402
     
Comments
 

ACCOUNTING POLICIES

The unaudited interim results of the group have been prepared in accordance with IAS 34 - Interim Financial Reporting. The group's accounting policies comply with International Financial Reporting Standards ("IFRS"), AC 500 Standards as issued by the Accounting Practices Board, the South African Companies Act, 1973 as amended and the Listings Requirements of the JSE Limited. The financial information has been prepared on the historical cost basis except for the revaluation of available-for-sale financial assets and the valuation of biological assets and share-based payments at fair value. The principal accounting policies are consistent with those of the previous year.

COMMENTS ON THE RESULTS                                                                     
Earnings per share for the 6 months ended 30 September 2010 are 308% higher than for the same period in the previous year largely due to the profit from the sale of the group’s Komati Estate.  Notwithstanding a flat operating profit from all operations, headline earnings per share are 47% higher than for the same period in the previous year, mainly due to adjustments to the deferred tax provision.

Operating profits for each segment were affected by:

  • Sugar cane:  The irrigated farms in Mpumalanga and Zambia performed well but drought impacted production in the coastal region of KwaZulu-Natal. The strong Rand reduced earnings in Swaziland and Zambia.
  • Bananas: Lower prices on the local market and a repeat of winter cold damage decreased operating profit.
  • Deciduous: Prices in foreign currency are firmer than those of the previous year but export revenues were affected by the strong Rand.
  • Grain: Dry winter conditions reduced yields.
  • Crocodiles: Prices for skins remained depressed due to poor market conditions and a substantial supply overhang in Southern Africa. The crocodile farming element of Crocworld will be closed down due to the weak market.  This is not expected to have a significant adverse impact on full year results, and the site will remain operational as a tourist attraction.

CAPITAL TRANSACTION

The sale of the Komati Estate to the Department of Land Affairs was eventually concluded during June 2010 with the receipt of capital proceeds, and the estate is currently leased back by the group for a five year period, renewable for a further five years, with results remaining consolidated.  Legal action is being pursued to recover interest which the directors believe is due in terms of the sale agreement.  This amount has not been taken into account in the earnings figures reported in the interim results and is shown as a contingent asset. It is planned to re-invest the proceeds of the Komati sale in replacement growth assets.

SPECIAL AND INTERIM DIVIDEND DECLARATION

The board is mindful of balancing growth prospects with generating a competitive yield to shareholders, and considers its capital investment prospects together with seeking to at least match the dividend yields and payout ratios of its peer group of JSE-listed food and agricultural companies.

The board has declared an interim dividend of 45.0 cents (2009: 45.0 cents) per share to reflect the sustainable earnings prospects for the group.

In addition, in recognition of the non-recurring gains realised by the group from the Komati sale, the Board has declared a special dividend of 50 cents. This special dividend will be paid from reserves and is subject to exchange control approval. A finalisation announcement in this respect will be published on or about 23 December 2010.

PROSPECTS

The Board again cautions against using interim figures to project full year results, due to the varying seasonality of the diverse crops in the group’s portfolio.

Due to the volatility of exchange rates and prices for the group’s products, and JSE rules, it is considered inappropriate to provide a forecast of expected headline earnings for the year at this stage. Earnings for the full year will benefit from the profit on the sale of the Komati Estate.

The cash received from the sale of the Komati Estate has been invested in preference shares pending the identification of suitable investment opportunities.  Several options are currently being investigated and your directors will act conservatively and with foresight in redeploying realised capital to establish new growth projects for the group.

SPECIAL AND INTERIM CASH DIVIDEND

An interim dividend of 45,0 cents (2009: 45,0 cents) per share and a special dividend of 50,0 cents (2009: nil) per share have been declared payable to shareholders recorded in the books of the company at the close of business on the record date, Friday, 7 January 2011.
The salient dates of the declaration and payment of these dividends are as follows:

Last day to trade cum-dividend

Friday

31 December 2010

Shares commence trading ex-dividend

Monday

 3 January 2011

Record date

Friday

 7 January 2011

Payment date

Monday

10 January 2011

Share certificates may not be dematerialised or re-materialised between Monday, 3 January 2011 and Friday, 7 January 2011, both days inclusive.

For and on behalf of the Board:

  G P Wayne
(Chairman)		 G S Clarke
(Managing Director)
  Renishaw 26 November 2010
     
  Registered office and postal address Transfer secretaries
  Renishaw, KwaZulu-Natal
P.O Reniwhaw, KwaZulu-Natal, 4181		 Computershare Investor Services (Pty) Ltd.
P O Box 61051, Marshalltown, 2107
     
  Sponsor Website
  Sasfin Capital
A division of Sasfin Bank limited		 www.cbl.co.za
     
  Directors:  
  G P Wayne * (Chairman), G S Clarke (Managing), P J Barker (Financial), P Bhengu *, C J H Chance *, D J Crookes *, J A F Hewat *, P G Joubert *, M T Rutherford *
* Non-executive director
     
  Secretary:  
  Highway Corporate Services (Pty) Limited  
     
   
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