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PREMIER FISHING AND BRANDS LIMITED - Summarised Financial Results For The Year Ended 31 August 2017 And Maiden Cash Dividend Declaration

Release Date: 24/10/2017 10:00
Code(s): PFB     PDF:  
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Summarised Financial Results For The Year Ended 31 August 2017 And Maiden Cash Dividend Declaration

Premier Fishing and Brands Limited
(Previously Premier Food and Fishing Limited)
(Incorporated in the Republic of South Africa)
Registration number 1998/018598/06
Share code: PFB and ISIN: ZAE000247516
("Premier " or "the Company" or "the Group")

Summarised preliminary consolidated financial results for the year ended 31 August 2017

Highlights compared to the prior year:

    -    Successfully listed Premier during the year under review
    -    Capital raised on listing of R526.5 million
    -    Revenue increased to R411 million from R402 million
    -    Profit after tax increased by 31% from R52 million to R68 million.
    -    Achieved our expectation of R66m profit after tax per the pre listing statement.
    -    NAV increased by 143% to 3.83 cents
    -    Dividends of 15 cents per share declared to shareholders.

Premier was listed on the main board of the Johannesburg Stock Exchange ("JSE") on 2 March 2017. In preparation 
for the listing, on 1 February 2017, there was a subdivision of the authorised and issued shares of Premier in which 
one share was subdivided into 1 430 000 shares. The issued share capital of Premier increased from 100 ordinary shares 
to 143 000 000 shares on that date. Subsequent to the above mentioned capital raise the total issued shares increased 
to 260 000 000. The earnings per share and headline earnings per share have been calculated taking into account the 
subdivision of shares.

Summarised Audited Consolidated Statement of Comprehensive Income
For the year ended 31 August 2017
                                                                          Audited          Audited     Change
                                                                    year ended 31    year ended 31          %
                                                                      August 2017      August 2016
                                                                            R'000            R'000
Revenue                                                                   410 733          401 692          2
Cost of sales                                                           (230 586)       (239 098)         (4)
Gross profit                                                              180 147          162 594         10
Other operating income                                                      1 249            2 647       (53)
Other operating expenses                                                (116 245)        (100 085)         16
Operating profit                                                           65 151           65 156          -
Investment revenue                                                         33 015           11 349        191
Finance costs                                                             (3 323)          (2 986)         11

Profit before taxation                                                     94 843           73 519         29
Taxation                                                                 (26 743)         (21 411)         25
Profit for the year                                                        68 100           52 108         31
Total comprehensive income for the year                                    68 100           52 108         31
               
Profit after tax attributable to :               
Shareholders of Premier                                                    68 100           52 108         31
               
Basic and diluted earnings per share (cents)                                33,77            36.44        (7)
Basic and diluted headline earnings per share (cents)                       34,59            36.73        (6)
               
Weighted average number of shares                                         201 660          143 000


Summarised consolidated Statement of financial position
At 31 August 2017
                                                                               Audited as at    Audited as at
                                                                              31 August 2017   31 August 2016
                                                                                       R'000            R'000
                    
ASSETS                    
Non-Current Assets                                                                   230 157          221 262
Property, plant and equipment                                                        130 107          124 596
Goodwill                                                                              18 165           18 165
Intangible assets                                                                         62               41
Loans to group companies                                                              81 758           78 396
Deferred tax                                                                              65               64
Current Assets                                                                       730 806          163 553
Inventories                                                                           43 083           42 379
Other financial assets                                                                 1 707            1 065
Trade and other receivables                                                           89 620           48 270
Biological assets                                                                     54 323           48 169
Current tax receivable                                                                   154              154
Cash and cash equivalents                                                            541 919          23 516
Total Assets                                                                         960 963          384 815
                           
EQUITY AND LIABILITIES                           
Share capital                                                                        507 517                -
                           
Reserves                                                                               8 014            8 014
Retained income                                                                      255 566          217 466
Total equity                                                                         771 097          225 480
                    
Non-Current Liabilities                                                               82 310           85 871
Other financial liabilities                                                            7 651           10 764
Operating lease liability                                                              1 243            2 065
Post-employment medical costs                                                          1 075            1 153
Deferred tax                                                                          72 341           71 889
                    
Current Liabilities                                                                  107 556           73 464
Trade and other payables                                                              55 455           53 243
Loans from group companies                                                                 -            1 478
Other financial liabilities                                                            3 419            3 280
Current tax payable                                                                   21 752            8 119
Provisions                                                                             8 944            7 344
Bank overdraft                                                                        17 986                -
                     
Total Equity and Liabilities                                                         960 963          384 815
                     
Net asset value per share (cents)                                                     382,37           157,68
Net tangible asset value (cents)                                                      373,34           144,95
Total liabilities excluding deferred taxation: Total equity (%)                           15               39
Total borrowings: Total equity (%)                                                        25               71
                    
Summarised Consolidated Statement of Changes in Equity
For the year ended 31 August 2017
                                                                                     Audited          Audited
                                                                               year ended 31    year ended 31
                                                                                 August 2017      August 2016
             
                                                                                       R'000            R'000
Balance at the beginning of the year                                                 225 480          197 372
Profit for the year                                                                   68 100           52 108
Issue of shares                                                                      507 517                -
Dividends                                                                           (30 000)         (24 000)
Balance at the end of the year                                                       771 097          225 480
             
Comprising:             
Stated capital                                                                       507 517                -
Reserves                                                                               8 014            8 014
Retained income                                                                      255 566          217 466

Summarised consolidated Statement of cash flows
For the year ended 31 August 2017
                                                                                     Audited          Audited
                                                                               year ended 31    year ended 31
                                                                                 August 2017      August 2016
                                                                                       R'000            R'000
Cash flows from operations                                                             40 094           68 381
Interest income                                                                       17 446            1 357
Finance costs                                                                        (3 323)          (2 830)
Tax paid                                                                            (12 659)          (8 876)
Cashflow from operating activities                                                    41 558           58 032
                               
Cashflows used for investing activities                                             (45 692)         (39 951)
Purchase of property, plant and equipment to                               
sustain operations                                                                  (14 066)          (9 295)
Purchases of property, plant and equipment to                               
 expand operations                                                                   (7 995)                -
Purchase of other intangible assets                                                     (27)                -
Loans received from group companies                                                        -           10 000
Loans advanced to group companies                                                   (21 485)         (42 020)
Loans to group companies repaid                                                            -           10 000
Repayment of loans from group companies                                              (1 478)          (8 678)
Repayment of financial assets                                                              -               42
Advances to other financial assets                                                     (641)                -
                                
Cash flows from financing activities                                                 504 551            9 862
Proceeds on share issue                                                              526 500                -
Share issue costs                                                                   (18 983)                -
Proceeds from other financial liabilities                                                  -           12 548
Repayment of other financial liabilities                                             (2 966)          (2 686)
                                     
Net increase in cash and cash equivalents                                            500 417           27 943
Cash at the beginning of the year                                                     23 516          (4 427)
                                
Net cash and cash equivalents at end of the year                                     523 933           23 516
 
1. BASIS OF PREPARATION

The summarised preliminary consolidated financial statements were prepared in accordance with the JSE Limited Listings 
Requirements ("JSE") and the requirements of the Companies Act, 2008 (No. 71 of 2008), as amended, applicable to summarised 
financial statements. The JSE requires summary financial statements to be prepared in accordance with the framework concepts 
and the measurement and recognition requirements of International Financial Reporting Standards ("IFRS") as issued by the 
International Accounting Standards Board, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee 
and Financial Pronouncements as issued by the Financial Reporting Standards Council and to also, as a minimum, contain the 
information required by IAS 34 - Interim Financial Reporting. The accounting policies applied in the preparation of the summarised 
consolidated financial statements are in line with IFRS and are consistent with the accounting policies applied in the preparation 
of the previous consolidated annual financial statements.

The summarised preliminary consolidated financial statements were prepared under the supervision of the Group Chief Financial 
Officer, Isaiah Tatenda Bundo BCom , CA(SA).

This summarised report is extracted from the audited consolidated financial statements, but is not itself audited. The consolidated 
financial statements were audited by the Group's external auditors, Grant Thornton Cape Inc., who expressed an unmodified opinion 
thereon. The audited consolidated financial statements and the auditor's report thereon are available for inspection at the Company's 
registered office and on the Company's website: www.premierfishing.co.za. The auditor's report does not necessarily report on all of 
the information contained in this announcement. Shareholders are therefore advised that in order to obtain a full understanding of the 
nature of the auditor's engagement they should obtain a copy of the auditor's report together with the accompanying financial information 
from the Company's registered office. The directors take full responsibility for the preparation of the summarised consolidated financial 
statements which has been extracted without adjustment from the underlying audited consolidated financial statements.

Any reference to future financial performance included in this announcement has not been reviewed or reported by the Company's auditors. 
The audit was conducted in accordance with International Reporting Standards on Auditing.

2. SEGMENTAL RESULTS
Revenue                                                                                        Audited          Audited
                                                                                           Year end 31      Year end 31
                                                                                           August 2017   31 August 2016
                                                                                                 R'000            R'000
Lobster                                                                                        190 589          190 110
Pelagics                                                                                        80 778           93 670
Hake                                                                                            31 210           31 110
                                                            
Squid                                                                                           34 428           23 541
Abalone                                                                                         36 186           39 697
Cold storage                                                                                     9 555            8 720
Seagro                                                                                           5 174            2 717
Processing and marketing                                                                        26 909           15 959
                                                                                               414 829          405 524
Less inter segmental sales                                                                     (4 096)          (3 832)
Total                                                                                          410 733          401 692
                                                        
Segmental profit                                                        
Lobster                                                                                         52 106           46 446
Pelagics                                                                                        23 636           33 406
Hake                                                                                            12 013            9 794
Squid                                                                                           10 916            4 360
Abalone                                                                                         13 241           13 015
Cold storage                                                                                       332              303
Seagro                                                                                           1 013              701
Processing and marketing                                                                         6 996            3 860
                                                                                               120 253          111 885
Administration and support services                                                           (61 255)         (48 864)
Fair value gains                                                                                 6 153            2 007
Interest income                                                                                 33 015           11 477
Finance costs                                                                                  (3 323)          (2 986)
Total                                                                                           94 843           73 519
                                                               
Total Assets                                                               
Lobster                                                                                         75 140           69 106
Pelagics                                                                                        94 743           82 448
Hake                                                                                            15 935           11 624
Squid                                                                                           10 701            6 047
Abalone                                                                                         84 216           78 113
Cold store                                                                                         628            1 038
Seagro                                                                                           6 181            2 312
Processing and marketing                                                                        35 358           20 726
Administration and support services                                                            637 996          113 337
                                                                                               960 898          384 751
Unallocated                                                                                         65               64
Consolidated total assets                                                                      960 963          384 815
                                                               
Total Liabilities                                                        
Lobster                                                                                         12 820            6 421
Pelagics                                                                                        11 258            7 625
Hake                                                                                             4 757            3 711
Squid                                                                                            7 124              371
Abalone                                                                                          6 478            3 440
Processing and marketing                                                                        14 158            9 969
Administration and support services                                                             60 929           55 908
                                                                                               117 524           87 445
Unallocated                                                                                     72 341           71 890
Consolidated total liabilities                                                                 189 865          159 335
                  
Revenue per region
United States of America                                                                       118 801          105 476
Far East                                                                                       110 029          111 248
Europe                                                                                          60 232           53 587
South Africa                                                                                   121 671          131 381
Total                                                                                          410 733          401 692
                 
3. OPERATING ITEMS
Operating profit for the year is stated after accounting for the following:
Interest income from group companies                                                            12 285            9 992
Management fee expense                                                                          12 480           10 524
Loss on disposal of property, plant and equipment                                                2 295              569
Loan written off                                                                                   397                -
Loss on exchange differences                                                                     2 979              521
Amortisation of intangible assets                                                                    5              201
Depreciation on property, plant and equipment                                                   14 258           13 407
Fair value gain on biological assets                                                           (6 153)          (2 007)

4. HEADLINE EARNINGS
Earnings attributable to owners of Premier                                                      68 100           52 108
Adjusted for:                                             
Effect of loss on disposal of property, plant and                                             
equipment gross of tax                                                                           2 295              569
Taxation effect                                                                                  (643)            (159)
Headline earnings                                                                               69 752           52 518
                                             
5. MAIDEN DIVIDENDS BY PREMIER                                           
Estimated dividend declared after reporting date (R'000)                                        39 000                -
Dividends per share (cents)                                                                         15                -
                                           
COMMENTS

FINANCIAL RESULTS

On 2 March 2017, Premier listed on the main board of the Johannesburg Stock Exchange ("JSE"). 117 000 000 new shares were 
issued on listing date, raising R526 million in cash.

The Group delivered a satisfactory maiden set of results for the year ended 31 August 2017 with profit after tax increasing 
by 31% from the prior year. The major reasons for the positive results achieved were as a result of excellent performance 
across most of the Group's operating divisions. The pelagic division had lower than expected catches of pilchards industry wide,
compared to the prior period.

The Group's revenue increased to R411 million from R402 million in the prior year. During the year under review, the number of 
shares in issue increased by 117 000 000 shares and due to this issue of new shares, the earnings per share and headline earnings 
per share decreased by 7% and 6% respectively.

The stronger Rand had an impact on revenue but with cost controls and operational efficiencies offset some of the negative impact 
on the business.

REVIEW OF OPERATIONS

Lobster

The Total Allowable Catch ("TAC") for the lobster season under review remained similar to that of the prior period. Good catches were 
obtained for the period under review compared to the prior year which resulted in lower production costs and efficiencies, which resulted
in higher margins, which offset the stronger Rand. The west coast rock lobster quota available to Premier was 183 tons for the current season 
compared to 180 tons for the prior season.

Operating profit in this division increased compared to the prior year as a result of good catch rates compared to the prior year. This 
resulted in better margin extraction.

West Coast Rock Lobster

West Coast Rock Lobster Fishing rights are currently provisionally announced with a final announcement to be made shortly by the Department 
of Agriculture, Forestry and Fisheries. See prospects below.

Pelagic

Revenue and operating profit in this division was lower than the prior year as a result of lower than expected pilchard catch rates experienced 
industry wide. However, the industrial fish landings compared to prior year was in line with management's expectation that contributed positively 
to the performance of this division.

Squid

The squid division had an excellent year compared to the prior period as a result of higher landings and greater sales volumes sold. The good 
catch rates in this division resulted in lower production cost and efficiencies which resulted in higher margins compared to the prior year. 
Excellent selling prices were achieved during financial year which contributed positively to this division's performance.

Revenue and operating profit increased significantly compared to prior period due to the excellent catch rates and greater sales volume compared 
to the prior year.

Hake

The hake division is a joint venture between the Oceana Group Limited and Premier. This division continues to deliver good performance year-on-year.

Abalone

The abalone division delivered positive results for the year under review. Sales volume for the year were lower than the prior year as the Group 
strategically decided to grow out the larger sizes for customers for the new financial year. The stock value increased by 13% from the prior year 
and this volume will be realised in the new financial year. It is the Company's intention to increase the stock growth and holding value in line 
with the abalone expansion plans.

The expansion plans are on target and the Group is set to have a fully grown farm by 2019/2020 to meet the strong international demand for its 
product and brand. The closing stock value as forecasted in our Pre-Listing Statement indicated that the Group will have 119 tons stock on the 
farm. Actual abalone stock on the farm closed at 126 tons exceeding forecast by 7 tons.

The live pack facility was completed and is fully operational for the period under review as per the Pre-Listing Statement. Phase 1 and 2 of the 
solar project has been completed and is fully functional and financial benefits are being realised.

POST BALANCE EVENT

Shareholders are hereby advised that the Company through its subsidiary Premier Fishing SA Proprietary Limited entered into a binding Heads of 
Agreement with Talhado Fishing Enterprises Proprietary Limited ("Talhado") to acquire a 50.01% stake in their business. The effective date of 
the transaction is 30 November 2017 subject to conditions precedent in the heads of agreement. Talhado is the largest squid player in the South 
African market and the acquisition fits in line with the Group's growth strategy to expand organically or through acquisitions. This acquisition 
will also increase the diversification to our product basket. A SENS announcement in relation to the transaction was released on 18 October 2017. 
As detailed in the SENS, the Talhado transaction is undertaken at a 4 to 6 times historic profit after tax multiple which is earnings enhancing 
to shareholders of Premier.


FINANCIAL POSITION AND CASHFLOW

Total cash generated from operations before working capital requirements for the year under review was R77 million. There was an increase in 
investment in working capital during the year of R28 million compared to the current year. The increase is mainly due to advances made to buy 
wild abalone, contracted third party fish as well as contracted lobster quota holders for the 2018 season.

At year end the cash balance was R524 million.

MAIDEN CASH DIVIDEND DECLARATION

The Board of directors are pleased to announce that it has approved and declared a gross final maiden dividend of 15 cents per share for the year 
ended 31 August 2017 from income reserves. The final dividend amount, net of South African dividend tax of 20% which equates to 3 cents per share 
is therefore a net dividend of 12 cents per share for those shareholders that are not exempt from dividend tax.

The number of ordinary shares in issue at the declaration date is 260 000 000 and the income tax number of the Company is 9246036033.

The salient dates of the maiden dividend distribution are as follows:

Gross dividend (cents per share)                                                                                                         15.00
Dividend net of dividend withholding tax (cents per share)                                                                               12.00
Last day to trade cum dividend                                                                                        Tuesday, 30 January 2018
Trading ex-dividend commences                                                                                       Wednesday, 31 January 2018
Record date                                                                                                            Friday, 2 February 2018
Date of payment                                                                                                        Monday, 5 February 2018

Share certificates may not be dematerialised between Wednesday, 31 January 2017 and Friday, 2 February 2018, both days inclusive.

PROSPECTS

The successful listing of Premier during the year under review and the capital raised placed the Group in a strong financial position in order to 
pursue its organic and acquisitive growth strategies.

The Group continues to focus on the expansion of the abalone farm which is scheduled to be completed by 2019/2020 with production capacity to 
increase in excess of 300 tons of cultivated abalone.

The Group will continue to aggressively pursue acquisitions in the fishing industry to improve our synergy and diversification growth strategy.

The west coast rock lobster 2016 FRAP has been provisionally announced and Premier's allocation increased from 5.8% to 7.8% of the TAC. The Group 
expects the Department of Agriculture, Forestry and Fisheries to announce the final list shortly.


DIRECTORATE AND STATUTORY INFORMATION

Directors:                    Reverend Dr Vukile Mehana (chairman) #*, Khalid Abdulla (deputy chairman)#*, Mogamat Samir Saban 
                              (chief executive officer) *, Isaiah Tatenda Bundo *, Rushaan Isaacs*, Salim Young #*,Cherie Felicity Hendricks#*, 
                              Aziza Amod#*, Takudzwa Hove#*, Rosemary Mosia #*, Clifford van der Venter #*, Arthur Johnson #*, Lavendra Naidoo #* 
                              and Fredelaine Brand #*
* Executive directors
#* Non-executive directors

Registered office:            Quay 7, East Pier, V & A Waterfront, Cape Town, 8001

Auditor:                      Grant Thornton Cape Inc.

Company Secretary:            Nobulungisa Mbaliseli
                              Quay 7, East Pier, V & A Waterfront, Cape Town, 8001
                              nobulungisa@aeei.co.za

Sponsor:                      PSG Capital Proprietary Limited

Transfer secretaries:         Link Market Services South Africa (Pty) Ltd
                              Rennie House, 13th Floor, 19 Ameshoff Street, Braamfontein, Johannesburg 2000
                              Postal address: PO Box 4844, Johannesburg, 2000
                              Telephone: +27 11 713 0800
                              Telefax: +27 86 674 4381
                              Website: www.linkmarketservices.co.za
Cape Town
24 October 2017



Date: 24/10/2017 10:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

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