SEA HARVEST GROUP LIMITED - Sea Harvest Group Results for the period ended 30 June 2019

Sea Harvest Group Results for the period ended 30 June 2019

Sea Harvest Group Limited
(Incorporated in the Republic of South Africa)
Registration number:  2008/001066/06
JSE code:  SHG ISIN:  ZAE00240198
"Sea Harvest" or "the Company" or "the Group"


SEA HARVEST GROUP RESULTS
FOR THE PERIOD ENDED 30 JUNE 2019


1. Key performance indicators 
                                                                                                   Period Ended       Period ended
                                                                                     Change        30 June 2019       30 June 2018
   Revenue (R'000)                                                                      86%           1 870 122          1 004 288
   Gross profit (R'000)                                                                 66%             611 487            367 646
   Gross profit margin (%)                                                                                  33%                37%
   Operating profit (R'000)                                                             70%             281 341            165 027
   Operating profit margin                                                                                15.0%              16.4%
   Profit for the period (R'000)                                                        44%             160 664            111 222
   Basic earnings per share (cents)                                                     28%                61.1               47.7
   Headline Earnings (R'000)                                                            52%             169 356            111 325
   Basic headline earnings per share (cents)                                            32%                61.1               46.4
   Weighted Average Number of Shares (WANOS) ('000)                                                     277 023            240 018
   Net asset value per share (cents)                                                    31%               776.4              592.9

2. SHORT-FORM ANNOUNCEMENT
   This short-form announcement is the responsibility of the directors of the Company. It contains only a summary of the information 
   in the full announcement ("Full Announcement") and does not contain full or complete details. The Full Announcement can be found
   at: https://senspdf.jse.co.za/documents/2019/jse/isse/shge/SHGHY19.pdf

   The Sea Harvest Group has delivered a pleasing set of results with headline earnings for the period ended 30 June 2019 increasing 
   52% to R169 million (2018: R111 million). Headline earnings per share increased 32% to 61.1 cents per share (2018: 46.4 cents per share) and 
   earnings per share increased 28% to 61.1 cents per share (2018: 47.7 cents per share), after a 15% increase in the weighted average number 
   of shares in issue during the period.

   Group revenue for the period increased 86% to R1.87 billion (2018: R1.0 billion), benefiting from the acquisition of Viking Fishing, 
   Viking Aquaculture and Ladismith Cheese.
   
   Gross profit for the period increased 66% to R611 million (2018: R368 million) and the gross profit margin contracted to 32.6% 
   (2018: 36.6%) as a result of the inclusion of Ladismith Cheese. The gross profit margin of the South African Fishing operation 
   expanded marginally to 36.3% (2018: 36.1%). 

   The Group delivered operating profit before net finance costs and taxation of R281 million for the period, 69% higher than last year 
   (2018: R166 million), with an operating profit margin of 15.0%.
   
   Profit after tax increased 44% to R161 million (2018: R111 million), benefiting from the 69% increase in operating profit before 
   net finance costs and taxation, offset by higher net finance costs as a result of increased borrowings to fund expansion.

   The Group generated R385 million (2018: R125 million) of net cash from its operations, utilised R693 million (2018: R130 million) 
   in investing activities and utilised a net R274 million (2018: R18 million) in financing activities during the period, ending the 
   period with R111 million (2018: R321 million) of cash on hand.

   In accordance with the Group's dividend policy, no interim dividend is declared or proposed for the six months ended 30 June 2019.

   Sea Harvest Group is c. 83% black-owned and is proud to have retained a Level 1 B-BBEE contributor status, with an improved score of 
   104.44 (previously 100.37). Driving transformation within Sea Harvest, and the fishing industry more broadly, is central to Sea Harvest's 
   existence. The Group invests significant resources in skills development, employment equity, supplier and enterprise development 
   initiatives, as well as initiatives focused on job creation, the youth and rural development.

   Sea Harvest has continued to deliver on its investment strategy of growing earnings through a combination of organic and acquisitive 
   measures, including:

   -  On 2 January 2019, Sea Harvest concluded the acquisition of 100% of the issued share capital of Ladismith Cheese, further diversifying 
      the Group's earnings.
   -  On 8 May 2019, Sea Harvest concluded the acquisition of the remaining 43.7% interest in Sea Harvest Australia (formerly Mareterram) 
      not already owned by the Group, strengthening Sea Harvest's presence in Australia and providing a beachhead for growth in the region.
   -  The integration of Viking Fishing into the Group is well progressed, with the alignment of Viking's ERP and inventory management 
      systems on track for implementation in the third quarter of 2019.
   -  Good progress has been made in addressing the teething issues experienced with the Marel fresh fish processing installation in Saldanha Bay. 
   -  The construction of a third powder plant at Ladismith Cheese has commenced, with the plant expected to be operational during the 
      first half of 2020.
   -  Work has commenced on the expansion of the Diamond Coast Aquaculture abalone facility in the Northern Cape and approval has been received
      for the completion of wind turbines at the Buffeljags abalone farm.
   -  Water usage leases for sea trout farming in Saldanha Bay have been awarded, supporting growth of the operation to commercial scale.

   The interim results have not been reviewed and reported on by the Group's external auditors.

   Copies of the Full Announcement is also available for viewing on the Company's website at https://www.seaharvest.co.za  or may be 
   requested in person, at the Company's registered office or the office of the sponsor/designated advisor, at no charge, during office hours.

   Any investment decisions by investors and/or shareholders should be based on consideration of the Full Announcement, as a whole.


   Date: 2 September 2019

   Sponsor
   Standard Bank



Date: 02/09/2019 10:19:00
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