Interim condensed consolidated income statementDownload
| R’million | Notes | Unaudited six months ended 31 March 2021 |
Restated unaudited six months ended 31 March 2020# |
Audited year ended 30 September 2020 |
|---|---|---|---|---|
| Continuing operations | ||||
| Revenue | 16 445,0 | 15 184,2 | 29 796,1 | |
| Cost of sales | (11 414,1) | (10 491,9) | (20 837,4) | |
| Gross profit | 5 030,9 | 4 692,3 | 8 958,7 | |
| Sales and distribution expenses | (2 033,5) | (2 007,4) | (3 899,2) | |
| Marketing expenses | (529,2) | (508,0) | (821,2) | |
| Other operating expenses | (910,7) | (865,2) | (1 518,5) | |
| Expected credit loss | 21,3 | 21,9 | (118,2) | |
| Operating income before impairments and abnormal items | 2 | 1 578,8 | 1 333,6 | 2 601,6 |
| Impairments | 3 | – | (557,2) | (602,9) |
| Abnormal items | 4 | 43,2 | (18,6) | (90,2) |
| Operating income after impairments and abnormal items | 1 622,0 | 757,8 | 1 908,5 | |
| Finance costs | (33,0) | (93,3) | (110,8) | |
| Finance income | 3,6 | 13,4 | 14,2 | |
| Foreign exchange (loss)/profit | (56,3) | 83,5 | 40,1 | |
| Income from investments | 12,7 | 11,7 | 15,4 | |
| Income from associated companies | 177,0 | 158,0 | 352,4 | |
| Profit before taxation | 1 726,0 | 931,1 | 2 219,8 | |
| Taxation | (461,3) | (366,7) | (726,7) | |
| Profit for the period from continuing operations | 1 264,7 | 564,4 | 1 493,1 | |
| Discontinued operations | ||||
| Profit/(loss) for the period from discontinued operations | 6 | 135,3 | (204,8) | (453,2) |
| Profit for the period | 1 400,0 | 359,6 | 1 039,9 | |
| Attributable to: | ||||
| Owners of the parent | 1 386,3 | 347,4 | 1 014,3 | |
| – Continuing operations | 1 251,0 | 552,2 | 1 467,5 | |
| – Discontinued operations | 135,3 | (204,8) | (453,2) | |
| Non-controlling interests | 13,7 | 12,2 | 25,6 | |
| – Continuing operations | 13,7 | 12,2 | 25,6 | |
| 1 400,0 | 359,6 | 1 039,9 | ||
| Basic earnings per ordinary share (cents) | 836,5 | 209,7 | 612,2 | |
| – Continuing operations | 754,9 | 333,3 | 885,7 | |
| – Discontinued operations | 81,6 | (123,6) | (273,5) | |
| Diluted basic earnings per ordinary share (cents) | 827,2 | 208,4 | 607,5 | |
| – Continuing operations | 746,5 | 331,3 | 879,0 | |
| – Discontinued operations | 80,7 | (122,9) | (271,5) | |
| Headline earnings per ordinary share (cents) | 741,2 | 489,1 | 940,3 | |
| – Continuing operations | 740,8 | 612,7 | 1 196,1 | |
| – Discontinued operations | 0,4 | (123,6) | (255,8) | |
| Diluted headline earnings per ordinary share (cents) | 733,1 | 486,1 | 933,2 | |
| – Continuing operations | 732,7 | 609,0 | 1 187,1 | |
| – Discontinued operations | 0,4 | (122,9) | (253,9) | |
| # | Restated as required by IFRS 5 in relation to the treatment of Value Added Meat Products (VAMP), a division of Tiger Consumer Brands Limited (Domestic operations – Consumer Brands) as a discontinued operation. Refer to note 6. |
Interim condensed consolidated statement
of
comprehensive incomeDownload
| R’million | Unaudited six months ended 31 March 2021 |
Unaudited six months ended 31 March 2020 |
Audited year ended 30 September 2020 |
|---|---|---|---|
| Profit for the period | 1 400,0 | 359,6 | 1 039,9 |
| Other comprehensive (loss)/income, net of tax | (319,5) | 74,5 | 111,1 |
| Net gain on hedge of net investment in foreign operation1 | 3,8 | 30,9 | 28,7 |
| Foreign currency translation (FCTR) adjustments1 | (236,1) | 64,2 | 56,3 |
| Share of associates’ other comprehensive (loss)/income and FCTR1 | (111,0) | 66,7 | 46,2 |
| Net gain/(loss) on cash flow hedges1 | 1,5 | (17,3) | (18,7) |
| Net gain/(loss) on FVOCI2 financial assets1 | 22,3 | (70,0) | (46,0) |
| Remeasurement raised in terms of IAS 19R | – | – | 58,6 |
| Tax effect | – | – | (14,0) |
| Total comprehensive income for the period, net of tax | 1 080,5 | 434,1 | 1 151,0 |
| Attributable to: | |||
| Owners of the parent | 1 075,9 | 401,0 | 1 104,8 |
| Non-controlling interests | 4,6 | 33,1 | 46,2 |
| 1 080,5 | 434,1 | 1 151,0 |
| 1 | Items that may be subsequently reclassified to profit or loss including the related tax effects, with the exception of R5,1 million loss (2020: R2,9 million loss) relating to the share of associates' other comprehensive income and fair value gains/(losses) on equity instruments measured at FVOCI. |
| 2 | FVOCI – fair value through other comprehensive income. |
Interim condensed consolidated statement
of financial positionDownload
| R’million | Notes | Unaudited six months ended 31 March 2021 |
Restated unaudited six months ended 31 March 2020~ |
Restated audited year ended 30 September 2020~ |
|---|---|---|---|---|
| Assets | ||||
| Non-current assets | 11 344,6 | 11 089,0 | 10 880,1 | |
| Property, plant and equipment | 5 317,6 | 5 230,2 | 5 059,4 | |
| Goodwill | 1 180,0 | 1 198,2 | 1 198,0 | |
| Intangible assets | 1 732,5 | 1 750,3 | 1 745,5 | |
| Investments | 3 064,2 | 2 807,4 | 2 854,8 | |
| Deferred taxation asset | 50,3 | 102,9 | 22,4 | |
| Current assets | 11 123,2 | 10 745,4 | 10 617,9 | |
| Inventories | 5 990,1 | 5 339,1 | 5 324,9 | |
| Trade and other receivables | 3 925,3 | 4 016,5 | 3 503,0 | |
| Cash and cash equivalents | 1 207,8 | 1 389,8 | 1 790,0 | |
| Assets classified as held-for-sale | 6 | 22,6 | 15,9 | 419,2 |
| Total assets | 22 490,4 | 21 850,3 | 21 917,2 | |
| Equity and liabilities | ||||
| Total equity | 15 703,4 | 15 080,8 | 15 787,4 | |
| Issued capital and reserves | 15 539,9 | 14 884,8 | 15 628,1 | |
| Non-controlling interests | 163,5 | 196,0 | 159,3 | |
| Non-current liabilities | 1 255,5 | 1 314,4 | 1 074,6 | |
| Deferred taxation liability | 371,5 | 477,0 | 359,5 | |
| Post-retirement medical aid obligation | 532,6 | 592,4 | 517,9 | |
| Long-term borrowings* | 351,4 | 245,0 | 197,2 | |
| Current liabilities | 5 528,6 | 5 428,8 | 4 751,3 | |
| Trade and other payables | 4 851,6 | 4 468,0 | 4 092,8 | |
| Employee-related accruals | 458,0 | 441,3 | 453,9 | |
| Taxation | 35,9 | 6,6 | 63,6 | |
| Short-term borrowings* | 183,1 | 512,9 | 141,0 | |
| Liabilities directly associated with assets classified as held-for-sale | 6 | 2,9 | 26,3 | 303,9 |
| Total equity and liabilities | 22 490,4 | 21 850,3 | 21 917,2 | |
| Net cash | (1 205,7) | (978,4) | (1 788,0) |
| * | Lease liabilities have been included in the long and short-term borrowings respectively. The lease liabilities have been excluded from the net cash/(debt) as these are non-cash in nature. |
| ~ | Restated as the group reclassified customer rebates as part of continuous improvements in terms of IFRS 15. Refer to note 7. |
Interim condensed consolidated statement
of cash flows
Download
| R’million | Unaudited six months ended 31 March 2021 |
Unaudited six months ended 31 March 2020 |
Audited year ended 30 September 2020 |
|---|---|---|---|
| Cash operating profit | 2 017,0 | 1 479,2 | 3 005,7 |
| Working capital changes | (334,7) | (12,5) | (52,5) |
| Cash generated from operations | 1 682,3 | 1 466,7 | 2 953,2 |
| Finance income and income from investments received | 16,3 | 11,7 | 27,4 |
| Finance costs paid | (33,5) | (57,1) | (116,0) |
| Dividends received from associate companies | – | – | 105,5 |
| Taxation paid | (469,5) | (415,9) | (620,3) |
| Cash available from operations | 1 195,6 | 1 005,4 | 2 349,8 |
| Dividends paid | (1 139,2) | (739,3) | (740,6) |
| Net cash inflow from operating activities | 56,4 | 266,1 | 1 609,2 |
| Purchase of property, plant and equipment | (381,0) | (478,7) | (937,1) |
| Cash on disposal of division (refer to note 6) | 153,0 | – | 100,0 |
| Proceeds on disposal of intangible assets | 56,0 | – | 0,3 |
| Proceeds from disposal of property, plant and equipment | 30,8 | 50,3 | 49,8 |
| Proceeds on sale of investment | 0,3 | – | – |
| Funds held in escrow | (122,7) | – | – |
| Proceeds on disposal of shares on held-for-sale investment | – | 10,1 | 9,9 |
| Loans advanced | – | – | (20,0) |
| Net cash outflow from investing activities | (263,6) | (418,3) | (797,1) |
| Net cash (outflow)/inflow before financing activities | (207,2) | (152,2) | 812,1 |
| Black Managers Trust (BMT) shares exercised | 1,1 | 1,8 | 3,9 |
| Shares exercised relating to equity-settled scheme | (17,9) | (6,1) | (9,1) |
| Repayment of lease liabilities | (98,7) | (96,5) | (136,6) |
| Short-term borrowings (repaid)/raised | (14,1) | 94,1 | (104,0) |
| Net cash outflow from financing activities | (129,6) | (6,7) | (245,8) |
| Net (decrease)/increase in cash and cash equivalents | (336,8) | (158,9) | 566,3 |
| Effect of exchange rate changes on cash and cash equivalents | (233,3) | 141,3 | 51,5 |
| Cash and cash equivalents at the beginning of the period | 1 779,5 | 1 161,7 | 1 161,7 |
| Cash and cash equivalents at the end of the period | 1 209,4 | 1 144,1 | 1 779,5 |
| Cash resources | 1 207,8 | 1 389,8 | 1 790,0 |
| Short-term borrowings regarded as cash and cash equivalents | (2,1) | (205,6) | (2,0) |
| Discontinued operations | 3,7 | (40,1) | (8,5) |
| 1 209,4 | 1 144,1 | 1 779,5 |
Other salient featuresDownload
| R’million | Unaudited six months ended 31 March 2021 |
Unaudited six months ended 31 March 2020 |
Audited year ended 30 September 2020 |
|---|---|---|---|
| Capital commitments | 1 325,2 | 1 163,1 | 1 532,0 |
| – Contracted | 567,4 | 583,5 | 162,7 |
| – Approved | 757,8 | 579,6 | 1 369,3 |
| Capital commitments will be funded from normal operating cash flows and the utilisation of existing borrowing facilities. | |||
| Capital expenditure | 381,0 | 478,7 | 937,1 |
| – Replacement | 295,9 | 392,8 | 658,8 |
| – Expansion | 85,1 | 85,9 | 278,3 |
| Replacement capital expenditure in line with approved capex plan. | |||
| Guarantees | |||
| – Guarantees (unutilised) | 20,1 | 20,2 | 20,1 |
Interim condensed consolidated statement
of changes in equityDownload
| R’million | Share capital and premium |
Non-distributable reserves |
Accumulated profits |
Shares held by subsidiary and empowerment entities |
| Balance at 1 October 2019 | 142,0 | 2 886,9 | 13 784,9 | (2 201,6) |
| Profit for the period | – | – | 347,4 | – |
| Other comprehensive income | – | 53,6 | – | – |
| Total comprehensive income | – | 53,6 | 347,4 | – |
| Transfers between reserves | – | 154,5 | (150,8) | – |
| Change in reserve due to adoption of IFRS 161 | – | – | (43,4) | – |
| Share-based payment2 | – | – | – | – |
| Dividends on ordinary shares (net of dividend on treasury shares) | – | – | (739,1) | – |
| Sale of empowerment shares3 | – | – | – | 1,1 |
| Balance at 31 March 2020 | 142,0 | 3 095,0 | 13 199,0 | (2 200,5) |
| Profit for the period | – | – | 666,9 | – |
| Other comprehensive (loss)/income | – | (5,3) | 42,2 | – |
| Total comprehensive (loss)/income | – | (5,3) | 709,1 | – |
| Transfers between reserves | – | 83,7 | (82,3) | – |
| Share-based payment2 | – | – | – | – |
| Dividends on ordinary shares (net of dividend on treasury shares) | – | – | (0,7) | – |
| Sale of empowerment shares3 | – | – | – | 0,7 |
| Balance at 30 September 2020 | 142,0 | 3 173,4 | 13 825,1 | (2 199,8) |
| Profit for the period | – | – | 1 386,3 | – |
| Other comprehensive loss4 | – | (310,4) | – | – |
| Total comprehensive (loss)/income | – | (310,4) | 1 386,3 | – |
| Transfers between reserves | – | 177,0 | (169,6) | – |
| Share-based payment2 | – | – | – | – |
| Dividends on ordinary shares (net of dividend on treasury shares) | – | – | (1 139,6) | – |
| Sale of empowerment shares3 | – | – | – | – |
| Balance at 31 March 2021 | 142,0 | 3 040,0 | 13 902,2 | (2 199,8) |
| 1 | Retained earnings adjustment resulting from the modified retrospective approach relating to IFRS 16. |
| 2 | Included in the movement of the share-based payment are options exercised amounting to R17,9 million (2020: R6,0 million). |
| 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). |
| 4 | Following the closure of Deli Foods Nigeria Limited (Deli Foods), the foreign currency translation reserve has been released to the income statement. This is in line with IAS 21, which requires the cumulative amount of the exchange differences recognised in other comprehensive income and accumulated in the separate component of equity, to be reclassified from equity to profit or loss (as a reclassification adjustment) when the gain or loss on disposal of the foreign operation is recognised. The gain recognised in the income statement amounted to R92,7 million. |
| R’million | Share-based payment reserve |
Total attributable to owners of the parent |
Non-controlling interests |
Total equity |
|---|---|---|---|---|
| Balance at 1 October 2019 | 632,2 | 15 244,4 | 163,1 | 15 407,5 |
| Profit for the period | – | 347,4 | 12,2 | 359,6 |
| Other comprehensive income | – | 53,6 | 20,9 | 74,5 |
| Total comprehensive income | – | 401,0 | 33,1 | 434,1 |
| Transfers between reserves | (3,7) | – | – | – |
| Change in reserve due to adoption of IFRS 161 | – | (43,4) | – | (43,4) |
| Share-based payment2 | 20,8 | 20,8 | – | 20,8 |
| Dividends on ordinary shares (net of dividend on treasury shares) | – | (739,1) | (0,2) | (739,3) |
| Sale of empowerment shares3 | – | 1,1 | – | 1,1 |
| Balance at 31 March 2020 | 649,3 | 14 884,8 | 196,0 | 15 080,8 |
| Profit for the period | – | 666,9 | 13,4 | 680,3 |
| Other comprehensive (loss)/income | – | 36,9 | (0,3) | 36,6 |
| Total comprehensive (loss)/income | – | 703,8 | 13,1 | 716,9 |
| Transfers between reserves | (1,4) | – | – | – |
| Share-based payment2 | 39,5 | 39,5 | – | 39,5 |
| Dividends on ordinary shares (net of dividend on treasury shares) | – | (0,7) | (49,8) | (50,5) |
| Sale of empowerment shares3 | – | 0,7 | – | 0,7 |
| Balance at 30 September 2020 | 687,4 | 15 628,1 | 159,3 | 15 787,4 |
| Profit for the period | – | 1 386,3 | 13,7 | 1 400,0 |
| Other comprehensive loss4 | – | (310,4) | (9,1) | (319,5) |
| Total comprehensive (loss)/income | – | 1 075,9 | 4,6 | 1 080,5 |
| Transfers between reserves | (7,4) | – | – | – |
| Share-based payment2 | (24,5) | (24,5) | – | (24,5) |
| Dividends on ordinary shares (net of dividend on treasury shares) | – | (1 139,6) | (0,4) | (1 140,0) |
| Sale of empowerment shares3 | – | – | – | – |
| Balance at 31 March 2021 | 655,5 | 15 539,9 | 163,5 | 15 703,4 |
| 1 | Retained earnings adjustment resulting from the modified retrospective approach relating to IFRS 16. |
| 2 | Included in the movement of the share-based payment are options exercised amounting to R17,9 million (2020: R6,0 million). |
| 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). |
| 4 | Following the closure of Deli Foods Nigeria Limited (Deli Foods), the foreign currency translation reserve has been released to the income statement. This is in line with IAS 21, which requires the cumulative amount of the exchange differences recognised in other comprehensive income and accumulated in the separate component of equity, to be reclassified from equity to profit or loss (as a reclassification adjustment) when the gain or loss on disposal of the foreign operation is recognised. The gain recognised in the income statement amounted to R92,7 million. |
Interim condensed consolidated
segmental informationDownload
| R’million | Unaudited six months ended 31 March 2021 |
Restated unaudited six months ended 31 March 2020# |
Audited year ended 30 September 2020 |
||
|---|---|---|---|---|---|
| Revenue | |||||
| Domestic operations | 14 607,0 | 13 632,9 | 26 428,7 | ||
| Grains | 7 463,5 | 6 776,6 | 13 920,4 | ||
| Milling and Baking1 | 5 051,4 | 4 783,2 | 9 955,2 | ||
| Other Grains2 | 2 412,1 | 1 993,4 | 3 965,2 | ||
| Consumer Brands | 6 041,8 | 5 820,0 | 10 667,9 | ||
| Groceries | 3 075,6 | 3 014,0 | 5 545,8 | ||
| Snacks & Treats | 1 218,5 | 1 105,3 | 2 140,9 | ||
| Beverages | 948,0 | 944,8 | 1 560,1 | ||
| Out of Home | 256,2 | 280,7 | 446,0 | ||
| Baby3 | 543,5 | 475,2 | 975,1 | ||
| Home and Personal Care (HPC) | 1 101,7 | 1 036,3 | 1 840,4 | ||
| Personal Care | 271,3 | 269,7 | 661,3 | ||
| Home Care | 830,4 | 766,6 | 1 179,1 | ||
| Exports and International | 1 838,0 | 1 551,3 | 3 367,4 | ||
| Exports | 930,2 | 733,1 | 1 539,7 | ||
| International operation | |||||
| – Central Africa (Chococam) | 531,5 | 468,3 | 942,3 | ||
| Deciduous Fruit (LAF) | 585,7 | 575,8 | 1 283,0 | ||
| Other intergroup sales | (209,4) | (225,9) | (397,6) | ||
| Continuing operations | 16 445,0 | 15 184,2 | 29 796,1 | ||
| Discontinued operation – West Africa (Deli Foods) | – | 9,8 | 9,8 | ||
| Discontinued operation – Value Added Meat Products | 92,4 | 524,7 | 1 178,4 | ||
| Total revenue | 16 537,4 | 15 718,7 | 30 984,3 | ||
| Operating income before impairments and abnormal items4 | |||||
| Domestic operations | 1 489,4 | 1 304,0 | 2 564,4 | ||
| Grains | 619,2 | 531,8 | 1 235,7 | ||
| Milling and Baking1 | 477,0 | 497,1 | 1 121,6 | ||
| Other Grains2 | 142,2 | 34,7 | 114,1 | ||
| Consumer Brands | 639,7 | 538,4 | 940,5 | ||
| Groceries | 221,9 | 169,8 | 353,7 | ||
| Snacks & Treats | 135,5 | 102,6 | 170,5 | ||
| Beverages | 175,0 | 167,1 | 238,4 | ||
| Out of Home | 51,4 | 52,8 | 67,0 | ||
| Baby3 | 55,9 | 46,1 | 110,9 | ||
| Home and Personal Care (HPC) | 251,5 | 237,0 | 399,5 | ||
| Personal Care | (9,4) | 10,5 | 78,8 | ||
| Home Care | 260,9 | 226,5 | 320,7 | ||
| Other5 | (21,0) | (3,2) | (11,3) | ||
| Exports and International | 85,1 | 53,9 | 103,3 | ||
| Exports | 51,2 | 3,6 | 32,8 | ||
| International operation | |||||
| – Central Africa (Chococam) | 85,5 | 71,0 | 148,7 | ||
| Deciduous Fruit (LAF) | (51,6) | (20,7) | (78,2) | ||
| Total operating income before IFRS 2 charges | 1 574,5 | 1 357,9 | 2 667,7 | ||
| IFRS 2 charges | 4,3 | (24,3) | (66,1) | ||
| Total operating income after IFRS 2 charges | 1 578,8 | 1 333,6 | 2 601,6 | ||
| Discontinued operation – West Africa (Deli Foods) | 0,7 | (7,6) | (13,5) | ||
| Discontinued operation – Value Added Meat Products | (7,8) | (255,7) | (489,6) | ||
| Total operating income | 1 571,7 | 1 070,3 | 2 098,5 |
| All segments operate on an arm’s length basis in relation to inter-segment pricing. | |
| # | Restated as required by IFRS 5 in relation to the treatment of Value Added Meat Products (VAMP), a division of
Tiger Consumer Brands Limited (Domestic operations – Consumer Brands) as a discontinued operation. Refer to note 6. |
| 1 | Comprises maize milling, wheat milling and baking, sorghum beverages and malt-based breakfast cereals. |
| 2 | Comprises rice, pasta and oat-based breakfast cereals. |
| 3 | In order to bring external segmental reporting in line with internal reporting, Baby Care has been reclassified into the Consumer Brands segment, from Home, Personal and Baby Care previously. This change does not have a financial impact on the group and better reflects how management reviews financial information in order to allocate resources and assess performance. Prior year segmental numbers have been restated to reflect this change. |
| 4 | Operating income is stated after amortisation of intangible assets. |
| 5 | Includes the corporate office and management expenses relating to international investments. |
Notes
1. Basis of preparation and changes to the group’s accounting policies
The preparation of these results has been supervised by Deepa Sita, Chief Financial Officer of Tiger Brands Limited.
The condensed consolidated interim results for the six months ended 31 March 2021 have been prepared in accordance with the International Financial Reporting Standard (IAS 34) Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council, the requirements of the South African Companies Act No 71 of 2008 and the Listings Requirements of the JSE Limited. These statements have not been audited or reviewed by the group's auditors.
The accounting policies adopted in the preparation of the condensed consolidated interim results are consistent with those applied in preparation of the group’s annual consolidated financial statements for the year ended 30 September 2020. 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.
2. Operating income before impairments and abnormal items
| R’million | Unaudited six months ended 31 March 2021 |
Restated unaudited six months ended 31 March 2020# |
Audited year ended 30 September 2020 |
|
|---|---|---|---|---|
| Depreciation (included in cost of sales and other operating expenses) | (418,5) | (351,9) | (741,2) | |
| Amortisation | (4,6) | (4,6) | (9,3) | |
| IFRS 2 (included in other operating expenses) | ||||
| – Equity settled | 6,5 | (26,8) | (69,4) | |
| – Cash settled | (2,2) | 2,5 | 3,3 |
| # | Restated as required by IFRS 5 in relation to the treatment of Value Added Meat Products (VAMP), a division of
Tiger Consumer Brands Limited (Domestic operations – Consumer Brands) as a discontinued operation. Refer to note 6. |
3. Impairment
Goodwill and indefinite useful life intangible assets are tested for impairment annually (as at 30 September) and when circumstances indicate that the carrying value may be impaired. The group’s impairment tests for goodwill and intangible assets with indefinite useful lives are based on the value-in-use calculations. The key assumptions used to determine the recoverable amount for the different cash-generating units disclosed in the consolidated financial statements for the year ended 30 September 2020 have been revised given the current market outlook.
The impact of Covid-19-related economic challenges as far as could be estimated, in the short and medium term, have been factored into the cash flow forecasts.
Based on management’s assessments, no impairments have been recorded at 31 March 2021.
| R’million | Unaudited six months ended 31 March 2021 |
Restated unaudited six months ended 31 March 2020# |
Audited year ended 30 September 2020 |
|
|---|---|---|---|---|
| Impairment of intangible assets | – | (286,0) | (286,0) | |
| Impairment of property, plant and equipment | – | (196,5) | (199,2) | |
| Impairment of associate investment | – | (74,7) | (117,7) | |
| – | (557,2) | (602,9) |
| # | Restated as required by IFRS 5 in relation to the treatment of Value Added Meat Products (VAMP), a division of
Tiger Consumer Brands Limited (Domestic operations – Consumer Brands) as a discontinued operation. Refer to note 6. |
4. Abnormal items
| R’million | Unaudited six months ended 31 March 2021 |
Restated unaudited six months ended 31 March 2020# |
Audited year ended 30 September 2020 |
|
|---|---|---|---|---|
| Profit/(loss) on disposal of intangible asset | 43,0 | (0,6) | (0,6) | |
| Restructuring and related costs | – | – | (68,2) | |
| Profit on disposal of property | 0,2 | 43,0 | 43,0 | |
| Early settlement of lease liability | – | 10,7 | 10,7 | |
| Loss on disposal of shares in held-for-sale investment | – | (0,3) | (0,1) | |
| Davita legal settlement | – | (71,4) | (66,6) | |
| Obsolete assets scrapped | – | – | (8,4) | |
| 43,2 | (18,6) | (90,2) |
| # | Restated as required by IFRS 5 in relation to the treatment of Value Added Meat Products (VAMP), a division of
Tiger Consumer Brands Limited (Domestic operations – Consumer Brands) as a discontinued operation. Refer to note 6. |
5. Reconciliation between profit for the period and headline earnings
| R’million | Unaudited six months ended 31 March 2021 |
Restated unaudited six months ended 31 March 2020# |
Audited year ended 30 September 2020 |
|
|---|---|---|---|---|
| Continuing operations | ||||
| Profit for the year attributable to owners of the parent | 1 251,0 | 552,2 | 1 467,5 | |
| (Profit)/loss on disposal of intangible asset | (33,3) | 0,6 | 0,6 | |
| Loss/(profit) on disposal of property, plant, equipment and vehicles | 10,2 | (39,2) | (32,4) | |
| Impairment of intangible assets | – | 286,0 | 286,0 | |
| Impairment of property, plant and equipment | – | 141,5 | 143,4 | |
| Impairment of associate investment | – | 74,7 | 117,7 | |
| Loss on disposal of shares in held-for-sale investment | – | 0,3 | 0,1 | |
| Headline earnings adjustment – associates | – | |||
| – Profit on disposal of property, plant and equipment | – | (1,0) | (1,1) | |
| Headline earnings for the period | 1 227,9 | 1 015,1 | 1 981,8 | |
| Tax effect of headline earnings | (9,7) | 47,8 | (51,2) | |
| Discontinued operations | ||||
| Profit/(loss) for the year attributable to owners of the parent | 135,3 | (204,8) | (453,2) | |
| Impairment of property, plant and equipment | – | – | 59,9 | |
| Profit on disposal of plant, equipment and vehicles | (25,9) | – | (30,6) | |
| Profit on disposal of intangible asset | (16,0) | – | – | |
| Release of foreign currency translation reserve on closure of foreign subsidiary | (92,7) | – | – | |
| Headline earnings for the period | 0,7 | (204,8) | (423,9) |
| # | Restated as required by IFRS 5 in relation to the treatment of Value Added Meat Products (VAMP), a division of
Tiger Consumer Brands Limited (Domestic operations – Consumer Brands) as a discontinued operation. Refer to note 6. |
6. Analysis of loss from discontinued operations
Loss for the period from discontinued operations (attributable to owners of the company)
The results of the held-for-sale VAMP business have been included in the profit for the year as set out below and comparatives restated accordingly. Deli Foods closure process has been concluded.
On 17 August 2020, the company announced that it has entered into two separate sale-of-business agreements (SBAs) for the disposal of its VAMP business as going concerns. The two SBAs comprised an agreement with Molare Proprietary Limited for a total cash contribution of R100 million paid on 30 September 2020. The second comprised an agreement with Silver Blade Abattoir Proprietary Limited for a cash contribution of R153 million paid on 2 November 2020. A profit of R42,5 million (pre-tax) had resulted from the conclusion of the first SBA and a profit of R20,5 million (pre-tax) had resulted from the conclusion of the second SBA.
| R’million | Unaudited six months ended 31 March 2021 |
Restated unaudited six months ended 31 March 2020# |
Audited year ended 30 September 2020 |
|
|---|---|---|---|---|
| Revenue | 92,4 | 534,5 | 1 188,2 | |
| Expenses | (99,5) | (797,8) | (1 691,3) | |
| Operating loss before impairments and abnormal items | (7,1) | (263,3) | (503,1) | |
| Impairments | – | – | (83,2) | |
| Abnormal items | 142,2 | (2,6) | (9,2) | |
| Operating income/(loss) after impairments and abnormal items | 135,1 | (265,9) | (595,5) | |
| Net finance costs | (0,5) | (11,8) | (13,5) | |
| Profit/(loss) before taxation | 134,6 | (277,7) | (609,0) | |
| Taxation | 0,7 | 72,9 | 155,8 | |
| Profit/(loss) for the period from discontinued operations | 135,3 | (204,8) | (453,2) | |
| Attributable to non-controlling interest | – | – | – | |
| Attributable to owners of parent | 135,3 | (204,8) | (453,2) | |
| Cash flows from discontinued operations | ||||
| Net cash outflows from operating activities | (87,7) | (212,5) | (150,0) | |
| Net cash inflows from investing activities | 110,8 | 325,8 | 296,4 | |
| Net cash outflows from financing activities | (11,0) | (109,7) | (110,7) | |
| Net cash inflows from financing activities | 12,1 | 3,6 | 35,7 | |
| Assets and liabilities held-for-sale | ||||
| Non-current assets | 22,6 | 15,9 | 182,1 | |
| Current assets | – | – | 237,1 | |
| Non-current liabilities | – | (17,3) | (27,5) | |
| Current liabilities | (2,9) | (9,0) | (276,4) | |
| Net asset value | 19,7 | (10,4) | 115,3 |
| # | Restated as required by IFRS 5 in relation to the treatment of Value Added Meat Products (VAMP), a division of
Tiger Consumer Brands Limited (Domestic operations – Consumer Brands) as a discontinued operation. |
7. Restatement of customer rebates
As part of the company’s continued IFRS 15 Revenue from Contracts with Customers’ compliance assessment it was noted that the company has historically incorrectly presented certain rebate payable balances to customers as part of the ‘Trade and other payables’ balance as opposed to offsetting these against the ‘Trade and other receivables’ line as required by the accounting standard. This error has been corrected in the current year with rebate liability balances of R509,1 million relating to March 2020 six months ended and R416,8 million relating to the 2020 financial year being reclassified from the ‘Trade and other payables’ line to the ‘Trade and other receivables’ line. This affects the statement of financial position:
| March 2020 | September 2020 | |||||
| R’million | Previously reported |
Effect of change |
Restated | Previously reported |
Effect of change |
Restated |
| Trade and other receivables | 4 525,6 | (509,1) | 4 016,5 | 3 919,8 | (416,8) | 3 503,0 |
| Trade and other payables | 4 977,1 | (509,1) | 4 468,0 | 4 509,6 | (416,8) | 4 092,8 |
8. National Foods Holdings Limited
As disclosed in the 30 September 2020 financial statements, the equity-accounted results of National Foods Holdings Limited (NFH), included in these results have been prepared in accordance with the provisions of IAS 29 Financial Reporting in Hyperinflationary Economies (IAS 29), with key accounting principles and judgements applied by the group.
The results and net asset value of NFH have been translated into the group’s presentation currency at the closing exchange rate, in accordance with hyperinflationary provisions of IAS 21 The Effects of Changes in Foreign Exchange Rates.
9. Subsequent events
Subsequent to 31 March 2021, a packaging failure was identified at one of our divisions, in respect of packaging material purchased after 31 March 2021. The contract with the relevant supplier allows provision for a claim to be made to recover the significant damages sustained. The matter is currently under investigation, with the net potential exposure still to be quantified. The affected stock of finished product is in storage and marked for destruction. Management does not anticipate any disruption in market supply.
There are no other material events that occurred during the period subsequent to 31 March 2021 and prior to these financial results being authorised for issue.