20
23
23
Tiger Brands unaudited group results and dividend declaration
for the six months ended 31 March 2023
FINANCIALS
| R'million | Notes | Unaudited six months ended 31 March 2023 |
Unaudited six months ended 31 March 2022 |
Audited year ended 30 September 2022 |
|
| Total revenue | 19 380,6 | 16 758,1 | 34 028,9 | ||
|---|---|---|---|---|---|
| Revenue | 19 380,6 | 16 758,1 | 34 030,6 | ||
| Impact of product recall | 2 | – | – | (1,7) | |
| Total cost of sales | (14 139,1) | (11 870,3) | (23 713,1) | ||
| Cost of sales | (14 139,1) | (11 870,3) | (23 708,2) | ||
| Impact of product recall | 2 | – | – | (4,9) | |
| Gross profit | 5 241,5 | 4 887,8 | 10 315,8 | ||
| Sales and distribution expenses | (2 426,6) | (2 164,1) | (4 350,3) | ||
| Marketing expenses | (540,7) | (507,0) | (906,9) | ||
| Other operating expenses | (958,8) | (886,2) | (1 834,2) | ||
| Sundry income | 2,3 | 32,2 | 171,7 | 218,8 | |
| Expected credit loss reversed/(raised) | 8,7 | (8,8) | (12,5) | ||
| Operating income before impairments and non-operational items | 4 | 1 356,3 | 1 493,4 | 3 430,7 | |
| Impairments and fair value losses | 5 | – | – | (15,9) | |
| Operating income after impairments | 1 356,3 | 1 493,4 | 3 414,8 | ||
| Non-operational items | 6 | 33,0 | 10,7 | 28,3 | |
| Profit including non-operational items | 1 389,3 | 1 504,1 | 3 443,1 | ||
| Finance costs | (115,0) | (44,2) | (89,1) | ||
| Finance income | 21,2 | 10,3 | 14,2 | ||
| Foreign exchange (loss)/profit | (14,8) | 5,1 | 45,7 | ||
| Investment income | 12,4 | 11,6 | 22,7 | ||
| Income from associated companies | 274,7 | 181,7 | 478,0 | ||
| Profit before taxation | 1 567,8 | 1 668,6 | 3 914,6 | ||
| Taxation | (379,0) | (439,3) | (1 019,5) | ||
| Profit for the year | 1 188,8 | 1 229,3 | 2 895,1 | ||
| Attributable to: | |||||
| Owners of the parent | 1 170,7 | 1 214,8 | 2 864,5 | ||
| Non-controlling interests | 18,1 | 14,5 | 30,6 | ||
| 1 188,8 | 1 229,3 | 2 895,1 | |||
| Weighted average number of shares in issue | 156 374 568 | 165 676 335 | 162 552 439 | ||
| Basic earnings per ordinary share (cents) | 748,7 | 733,2 | 1 762,2 | ||
| Diluted basic earnings per ordinary share (cents) | 735,3 | 722,9 | 1 737,7 | ||
| Headline earnings per ordinary share (cents) | 731,0 | 728,8 | 1 702,4 | ||
| Diluted headline earnings per ordinary share (cents) | 718,0 | 718,5 | 1 678,7 |
| R'million | Unaudited six months ended 31 March 2023 |
Unaudited six months ended 31 March 2022 |
Audited year ended 30 September 2022 |
| Profit for the period | 1 188,8 | 1 229,3 | 2 895,1 |
|---|---|---|---|
| Other comprehensive income/(loss), net of tax | 851,4 | (77,3) | (92,8) |
| Foreign currency translation reserve (FCTR) adjustments1 | 77,5 | (56,8) | 14,8 |
| Share of associates other comprehensive gain/(loss) and FCTR1 | 708,7 | (23,5) | (90,8) |
| Net gain/(loss) on cash flow hedges1 | 5,9 | 37,8 | (18,8) |
| Net gain/(loss) on FVOCI2 financial assets | 59,3 | (34,8) | (55,4) |
| Remeasurement raised in terms of IAS 19R | – | – | 63,0 |
| Tax effect | – | – | (5,6) |
| Total comprehensive income for the period, net of tax | 2 040,2 | 1 152,0 | 2 802,3 |
| Attributable to: | |||
| Owners of the parent | 2 005,3 | 1 146,5 | 2 774,0 |
| Non-controlling interests | 34,9 | 5,5 | 28,3 |
| 2 040,2 | 1 152,0 | 2 802,3 |
| 1 | Items that may be subsequently reclassified to profit or loss including the related tax effects, with the exception of R3,1 million loss (2022: R5,8 million loss) relating to the share of associates’ other comprehensive loss, and fair value losses on equity instruments measured at FVOCI. |
| 2 | FVOCI – fair value through other comprehensive income. |
| R'million | Notes | Unaudited six months ended 31 March 2023 |
Unaudited six months ended 31 March 2022 |
Audited year ended 30 September 2022 |
||||
| ASSETS | ||||||||
| Non-current assets | 12 650,1 | 11 382,0 | 11 616,3 | |||||
| Property, plant and equipment* | 5 720,1 | 5 498,0 | 5 695,4 | |||||
| Goodwill | 5 | 1 184,0 | 1 177,7 | 1 179,4 | ||||
| Intangible assets | 5 | 1 723,1 | 1 721,0 | 1 719,8 | ||||
| Investments | 3 980,1 | 2 954,5 | 2 987,4 | |||||
| Investments in associated companies | 3 377,2 | 2 341,3 | 2 421,2 | |||||
| Other investments | 552,1 | 568,9 | 515,8 | |||||
| Loans | 50,8 | 44,3 | 50,4 | |||||
| Deferred taxation asset | 42,8 | 30,8 | 34,3 | |||||
| Current assets | 13 250,4 | 10 760,5 | 12 402,5 | |||||
| Inventories | 7 614,9 | 6 529,0 | 7 331,0 | |||||
| Trade and other receivables | 4 977,6 | 3 613,3 | 3 955,6 | |||||
| Cash and cash equivalents | 657,9 | 618,2 | 1 115,9 | |||||
| TOTAL ASSETS | 25 900,5 | 22 142,5 | 24 018,8 | |||||
| EQUITY AND LIABILITIES | ||||||||
| Total equity | 16 635,3 | 15 326,6 | 15 692,8 | |||||
| Issued capital and reserves | 16 458,6 | 15 174,6 | 15 550,5 | |||||
| Non-controlling interests | 176,7 | 152,0 | 142,3 | |||||
| Non-current liabilities | 1 814,9 | 1 240,7 | 890,1 | |||||
| Deferred taxation liability | 246,4 | 181,6 | 240,7 | |||||
| Post-retirement medical aid obligation | 303,6 | 422,8 | 322,9 | |||||
| Long-term borrowings1** | 1 264,9 | 636,3 | 326,5 | |||||
| Current liabilities | 7 450,3 | 5 575,2 | 7 435,9 | |||||
| Trade and other payables | 5 530,4 | 4 870,9 | 5 677,7 | |||||
| Employee-related accruals | 352,8 | 415,5 | 464,4 | |||||
| Taxation | 46,2 | 110,8 | 126,6 | |||||
| Short-term borrowings2** | 1 520,9 | 178,0 | 1 167,2 | |||||
| TOTAL EQUITY AND LIABILITIES | 25 900,5 | 22 142,5 | 24 018,8 | |||||
| Net (debt)/cash** | (1 664,3) | 318,2 | 143,1 |
| * | Right-of-use assets are included within property, plant and equipment amounting to R411,9 million (2022: R465,2 million). |
| ** | The lease liabilities have been included in the long and short-term borrowings respectively. The lease liabilities have been excluded from the net (debt)/cash as these are non-cash in nature. Total lease liabilities amount to R463,6 million (2022: R514,3 million). |
| 1 | Includes the utilisation of the revolving credit facility amounting to R1,0 billion (2022: R300,0 million). |
| 2 | Includes the utilisation of borrowing facilities with the group’s banking partners amounting to R1,3 billion (2022: Rnil). |
| R'million | Unaudited six months ended 31 March 2023 |
Unaudited six months ended 31 March 2022 |
Audited year ended 30 September 2022 |
|
| Cash operating profit | 1 999,7 | 2 088,2 | 4 271,0 | |
|---|---|---|---|---|
| Working capital changes | (1 695,1) | (1 571,5) | (1 630,2) | |
| Cash generated from operations | 304,6 | 516,7 | 2 640,8 | |
| Finance income and income from investments received | 33,6 | 22,0 | 44,7 | |
| Finance costs paid | (107,4) | (44,2) | (105,8) | |
| Dividends received from associated companies and subsidiaries | 27,4 | 222,8 | 372,0 | |
| Taxation paid | (462,2) | (476,6) | (961,5) | |
| Cash (utilised in)/available from operations | (204,0) | 240,7 | 1 990,2 | |
| Dividends paid | (1 049,0) | (859,0) | (1 386,4) | |
| Net cash (outflow)/inflow from operating activities | (1 253,0) | (618,3) | 603,8 | |
| Purchase of property, plant and equipment | (448,4) | (419,1) | (961,0) | |
| Funds held in escrow | 22,7 | (41,8) | (46,2) | |
| Proceeds from disposal of property, plant, equipment and vehicles | 19,7 | – | 3,1 | |
| Insurance proceeds on property, plant and equipment received relating to civil unrest | – | – | 28,3 | |
| Proceeds on disposal of investment | – | 1,9 | 2,4 | |
| Purchase of investment | – | (5,4) | (5,4) | |
| Loans advanced | – | – | (19,0) | |
| Cash outflow from investing activities | (406,0) | (464,4) | (997,8) | |
| Net cash outflow before financing activities | (1 659,0) | (1 082,7) | (394,0) | |
| Black Managers Trust (BMT) shares exercised | 1,9 | 1,8 | 5,0 | |
| Shares exercised relating to equity-settled scheme | (37,7) | (1,0) | (1,0) | |
| Repayment of principal portion of lease liabilities | (99,4) | (104,6) | (178,6) | |
| Short-term borrowings raised | 1 222,2 | – | 972,8 | |
| Short-term borrowings repaid | (880,0) | – | – | |
| Long-term borrowings raised | 1 000,0 | 300,0 | – | |
| Repurchase of shares | – | (675,7) | (1 453,1) | |
| Net cash inflow/(outflow) from financing activities | 1 207,0 | (479,5) | (654,9) | |
| Net decrease in cash and cash equivalents | (452,0) | (1 562,2) | (1 048,9) | |
| Effect of exchange rate changes on cash and cash equivalents | 8,6 | 18,6 | 90,7 | |
| Reclassification of cash and cash equivalents to other receivables1 | (14,6) | – | (87,7) | |
| Cash and cash equivalents at the beginning of the period | 1 115,9 | 2 161,8 | 2 161,8 | |
| Cash and cash equivalents at the end of the period | 657,9 | 618,2 | 1 115,9 | |
| Cash resources | 613,0 | 618,2 | 1 072,3 | |
| Cash relating to venture capital initiatives2 | 44,9 | – | 43,6 | |
| 657,9 | 618,2 | 1 115,9 |
| 1 | During the year ended September 2022, a garnishee order was served against the Chococam subsidiary resulting in several of Chococam’s bank accounts being blocked with an additional account being blocked in the current year. The amounts seized were reclassified to other receivables and not disclosed as cash and cash equivalents on the basis that the cash is not readily available. |
| 2 | In June 2021, the Tiger Brands Venture Capital Fund was launched with the aim of driving growth for Tiger Brands by investing in innovative businesses based in sub-Saharan Africa which offer healthier eating options in line with emerging consumer trends in health and nutrition, snackification and economical food options. Included in the group's cash balance is R44,9 million (2022: Rnil) held specifically for venture capital initiatives. |
| R'million | Unaudited six months ended 31 March 2023 |
Unaudited six months ended 31 March 2022 |
Audited year ended 30 September 2022 |
|
| Capital commitments | 1 260,0 | 1 191,0 | 1 615,2 | |
|---|---|---|---|---|
| – Contracted | 486,4 | 635,7 | 403,2 | |
| – Approved | 773,6 | 555,3 | 1 212,0 | |
| Capital commitments will be funded from normal operating cash flows and the utilisation of existing borrowing facilities. | ||||
| Capital expenditure | 448,4 | 419,1 | 961,0 | |
| – Replacement | 142,6 | 267,9 | 439,8 | |
| – Expansion | 305,8 | 151,2 | 521,2 | |
| Replacement capital expenditure in line with approved capex plan. | ||||
| Guarantees | ||||
| – Guarantees (unutilised) | 24,0 | 23,1 | 35,3 |
| R'million | Share capital and premium |
Non- distributable reserves |
Accumulated profits |
Shares held by subsidiary and empowerment entities |
Share-based payment reserve |
Total attributable to owners of the parent |
Non- controlling interests |
Total equity |
||
| Balance at 1 October 2021 | 142,0 | 3 094,4 | 13 812,6 | (2 193,5) | 699,5 | 15 555,0 | 147,4 | 15 702,4 | ||
|---|---|---|---|---|---|---|---|---|---|---|
| Profit for the period | – | – | 1 214,8 | – | – | 1 214,8 | 14,5 | 1 229,3 | ||
| Other comprehensive loss | – | (68,3) | – | – | – | (68,3) | (9,0) | (77,3) | ||
| Total comprehensive (loss)/income | – | (68,3) | 1 214,8 | – | – | 1 146,5 | 5,5 | 1 152,0 | ||
| Transfers between reserves | – | (41,1) | 41,1 | – | – | – | – | – | ||
| Share buy-back transaction3 | (123,4) | – | (552,3) | – | (675,7) | – | (675,7) | |||
| Share-based payments1 | – | – | – | – | 4,4 | 4,4 | – | 4,4 | ||
| Dividends on ordinary shares (net of dividend on treasury shares) | – | – | (858,1) | – | – | (858,1) | (0,9) | (859,0) | ||
| Sale of empowerment shares2 | – | – | – | 2,5 | – | 2,5 | – | 2,5 | ||
| Balance at 31 March 2022 | 18,6 | 2 985,0 | 13 658,1 | (2 191,0) | 703,9 | 15 174,6 | 152,0 | 15 326,6 | ||
| Profit for the period | – | – | 1 649,7 | – | – | 1 649,7 | 16,1 | 1 665,8 | ||
| Other comprehensive (loss)/income | – | (68,4) | 46,2 | – | – | (22,2) | 6,7 | (15,5) | ||
| Total comprehensive (loss)/income | – | (68,4) | 1 695,9 | – | – | 1 627,5 | 22,8 | 1 650,3 | ||
| Transfers between reserves | – | 147,1 | (147,6) | – | 0,5 | – | – | – | ||
| Share buy-back transaction3 | (0,6) | – | (776,8) | – | – | (777,4) | – | (777,4) | ||
| Share-based payments1 | – | – | – | – | 48,2 | 48,2 | – | 48,2 | ||
| Dividends on ordinary shares (net of dividend on treasury shares) | – | – | (526,1) | – | – | (526,1) | (32,5) | (558,6) | ||
| Sale of empowerment shares2 | – | – | – | 3,7 | – | 3,7 | – | 3,7 | ||
| Balance at 30 September 2022 | 18,0 | 3 063,7 | 13 903,5 | (2 187,3) | 752,6 | 15 550,5 | 142,3 | 15 692,8 | ||
| Profit for the period | – | – | 1 170,7 | – | – | 1 170,7 | 18,1 | 1 188,8 | ||
| Other comprehensive income | – | 834,6 | – | – | – | 834,6 | 16,8 | 851,4 | ||
| Total comprehensive income | – | 834,6 | 1 170,7 | – | – | 2 005,3 | 34,9 | 2 040,2 | ||
| Transfers between reserves | – | 247,3 | (251,2) | – | 3,9 | – | – | – | ||
| Share-based payments1 | – | – | – | – | (51,9) | (51,9) | – | (51,9) | ||
| Dividends on ordinary shares (net of dividend on treasury shares) | – | – | (1 048,5) | – | – | (1 048,5) | (0,5) | (1 049,0) | ||
| Sale of empowerment shares2 | – | – | – | 3,2 | – | 3,2 | – | 3,2 | ||
| Balance at 31 March 2023 | 18,0 | 4 145,6 | 13 774,5 | (2 184,1) | 704,6 | 16 458,6 | 176,7 | 16 635,3 |
| 1 | Included in the movement of the share-based payment are options of R33,9 million (2022: R1,0 million) exercised. |
| 2 | Relates to the exercising of options vested post the December 2014 lock-in period in terms of the Black Managers Participation Right Scheme (BMT). In the current year, R3,2 million (2022: R2,5 million) related to BMT I. |
| 3 | During the prior year, the group embarked on a share buy-back programme, in which 9 490 946 of the listed Tiger Brands shares were repurchased at an average price of R152,62 per share. The shares were issued at an original par value of R0,1 per share. |
| R'million | Unaudited six months ended 31 March 2023 |
Unaudited six months ended 31 March 2022 |
Audited year ended 30 September 2022 |
|||
| REVENUE | ||||||
| Domestic operations | 17 269,4 | 14 836,1 | 29 769,5 | |||
| Grains | 8 958,9 | 7 350,8 | 15 495,6 | |||
| Milling and Baking1 | 6 068,4 | 4 945,9 | 10 642,2 | |||
| Other Grains2 | 2 890,5 | 2 404,9 | 4 853,4 | |||
| Consumer Brands | 7 036,9 | 6 390,7 | 12 415,2 | |||
| Groceries | 3 413,6 | 3 400,8 | 6 376,9 | |||
| Snacks & Treats | 1 388,6 | 1 069,1 | 2 391,8 | |||
| Beverages | 1 220,5 | 1 033,3 | 1 841,5 | |||
| Baby | 585,3 | 577,8 | 1 135,9 | |||
| Out of Home | 428,9 | 309,7 | 669,1 | |||
| Home and Personal Care (HPC) | 1 273,6 | 1 094,6 | 1 858,7 | |||
| Personal Care | 371,8 | 279,3 | 671,8 | |||
| Home Care | 901,8 | 815,3 | 1 186,9 | |||
| Exports and International | 2 111,2 | 1 922,0 | 4 261,1 | |||
| Exports3 | 1 217,1 | 954,4 | 2 039,9 | |||
| International operation | ||||||
| – Central Africa (Chococam) | 682,5 | 542,2 | 1 109,9 | |||
| Deciduous Fruit (LAF) | 439,3 | 697,8 | 1 598,3 | |||
| Other intergroup sales | (227,7) | (272,4) | (487,0) | |||
| Total revenue from operations – before the product recall | 19 380,6 | 16 758,1 | 34 030,6 | |||
| Impact of product recall (refer note 2) | – | – | (1,7) | |||
| Total revenue | 19 380,6 | 16 758,1 | 34 028,9 |
| All segments operate on an arm’s-length basis in relation to inter-segment pricing. | |
| 1 | Comprises maize milling, wheat milling and baking and sorghum-based products. |
| 2 | Comprises rice, pasta and oat-based breakfast cereals. |
| 3 | The key markets contributing to Exports revenue is Mozambique at 37% (2022: 41%); Zambia at 11% (2022: 6%); Zimbabwe at 10% (2022: 10%); and Nigeria at 3% (2022: 2%). |
| R'million | Unaudited six months ended 31 March 2023 |
Unaudited six months ended 31 March 2022 |
Audited year ended 30 September 2022 |
|||
| OPERATING INCOME BEFORE IMPAIRMENTS AND NON–OPERATIONAL ITEMS |
||||||
| Domestic operations | 1 162,3 | 1 283,7 | 2 955,0 | |||
| Grains | 342,5 | 422,9 | 1 272,1 | |||
| Milling and Baking1 | 267,7 | 272,2 | 803,0 | |||
| Other Grains2 | 74,8 | 150,7 | 469,1 | |||
| Consumer Brands | 554,7 | 653,8 | 1 412,8 | |||
| Groceries | 126,4 | 290,8 | 597,4 | |||
| Snacks & Treats | 108,7 | 55,6 | 262,9 | |||
| Beverages | 196,2 | 175,1 | 268,9 | |||
| Baby | 45,7 | 65,1 | 147,2 | |||
| Out of Home | 77,7 | 67,2 | 136,4 | |||
| Home and Personal Care (HPC) | 255,8 | 212,2 | 307,7 | |||
| Personal Care | 14,6 | (14,2) | 16,1 | |||
| Home Care | 241,2 | 226,4 | 291,6 | |||
| Other3 | 9,3 | (5,2) | (37,6) | |||
| Exports and International | 163,2 | 63,5 | 350,4 | |||
| Exports | 76,4 | 29,2 | 143,3 | |||
| International operation | ||||||
| – Central Africa (Chococam) | 102,6 | 88,4 | 181,3 | |||
| Deciduous Fruit (LAF) | (15,8) | (54,1) | 25,8 | |||
| Total from operations before the following items | 1 325,5 | 1 347,2 | 3 305,4 | |||
| Impact of the civil unrest (refer note 3) | 20,0 | 143,8 | 137,5 | |||
| Impact of product recall (refer note 2) | – | 17,4 | 35,8 | |||
| IFRS 2 charges | 10,8 | (8,5) | (55,8) | |||
| Restructuring and related costs | – | (6,5) | 7,8 | |||
| Total operating income | 1 356,3 | 1 493,4 | 3 430,7 |
| All segments operate on an arm’s-length basis in relation to inter-segment pricing. | |
| 1 | Comprises maize milling, wheat milling and baking and sorghum-based products. |
| 2 | Comprises rice, pasta and oat-based breakfast cereals. |
| 3 | 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 directors take full responsibility for the preparation of these condensed consolidated interim results.
The condensed consolidated interim results for the six months ended 31 March 2023 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 2022. There have been no assets held for sale or discontinued operations during the period.
The going concern basis has been used in preparing these condensed consolidated interim results as the directors have a reasonable expectation that the group will continue as a going concern for the foreseeable future. The condensed consolidated interim results have been prepared on the historical cost basis, except for the measurement of certain financial instruments at fair value or at amortised cost.
2. IMPACT OF PRODUCT RECALL
Last year, a product recall was initiated on certain Baby Powder products as a precautionary measure. Trace levels of asbestos were detected in test samples from a batch of pharmaceutical-grade talc powder used as raw material in the production of finished powder products. The defective raw material was identified in August 2022. The decision was made, in the best interest of consumers, to recall all Baby Talc Powder products from store shelves and from consumers. Approximately 281,9 thousand units are estimated to be destroyed, of which 68,5 thousand units are estimated to be recalled from the trade.
The total impact of the recall has been accounted for on the income statement as follows:
| R’million | Unaudited six months ended 31 March 2023 |
Unaudited six months ended 31 March 2022 |
Audited year ended 30 September 2022 |
| Revenue impact | – | – | 1,7 |
|---|---|---|---|
| Cost of sales impact | – | – | 4,9 |
| Associated costs included in sales and distribution expenses | – | – | 6,8 |
| Associated costs included in marketing expenses | – | – | 3,0 |
| Insurance proceeds received included in sundry income | – | (17,4) | – |
| Total cost of product recall | – | (17,4) | 16,4 |
3. IMPACT OF CIVIL UNREST
The July 2021 civil unrest in KwaZulu-Natal (KZN) particularly impacted the Rice and Snacks & Treats businesses. This resulted in inventory write-offs across the two businesses, as well as physical damage to and loss of property, plant and equipment. The unrest also resulted in lost sales across the business up to 31 August 2021. During the current year, R20,0 million (net of Value Added Tax) was received from the group’s insurers relating to the Snacks & Treats business. During the year ended September 2022, the group received insurance claims relating to the civil unrest from the South African Special Risks Insurance Association (SASRIA). In total, R161 million (net of Value Added Tax) was received, of which R28,3 million relates to insurance proceeds on the fixed assets written off following the civil unrest. The remaining insurance proceeds of R137,5 million which relate to stock write-offs, repairs to damaged property, plant and equipment, cleaning and security costs, have been accounted for as sundry income.
4. OPERATING INCOME BEFORE IMPAIRMENTS AND NON-OPERATIONAL ITEMS
| R’million | Unaudited six months ended 31 March 2023 |
Unaudited six months ended 31 March 2022 |
Audited year ended 30 September 2022 |
| Operating income has been determined after charging/(crediting) | |||
| Depreciation (included in cost of sales and other operating expenses) | 462,5 | 419,7 | 852,7 |
| Amortisation | 4,1 | 3,7 | 8,1 |
| IFRS 2 (included in other operating expenses) | |||
| – Equity settled | (14,2) | 5,4 | 54,1 |
| – Cash settled | 3,4 | 3,1 | 1,7 |
5. IMPAIRMENTS
Goodwill and indefinite useful life intangible assets are tested for impairment annually (as at 30 September) and when circumstances that indicate 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 are disclosed in the annual consolidated financial statements for the year ended 30 September 2022. Property, plant and equipment in the Deciduous Fruit business (LAF) was impaired by R3,5 million in the prior year due to the downturn in the LAF business, which is predominantly an export business. In the prior year an impairment in Davita (which is included in the Exports and International cash-generating unit) of R9,0 million was also recognised on specific plant and equipment.
Based on management’s assumptions, no impairments have been recorded at 31 March 2023.
| R’million | Unaudited six months ended 31 March 2023 |
Unaudited six months ended 31 March 2022 |
Audited year ended 30 September 2022 |
| Impairment of property, plant and equipment | – | – | (12,9) |
|---|---|---|---|
| Fair value loss on unlisted investment | – | – | (3,0) |
| – | – | (15,9) |
6. NON-OPERATIONAL ITEMS
| Unaudited six months ended 31 March 2023 |
Unaudited six months ended 31 March 2022 |
Audited year ended 30 September 2022 |
|
| Proceeds on disposal of property, plant, equipment and vehicles | 33,0 | – | – |
|---|---|---|---|
| Insurance proceeds on civil unrest | – | 10,7 | 28,3 |
| 33,0 | 10,7 | 28,3 |
7. RECONCILIATION BETWEEN PROFIT FOR THE PERIOD AND HEADLINE EARNINGS
| Unaudited six months ended 31 March 2023 |
Unaudited six months ended 31 March 2022 |
Audited year ended 30 September 2022 |
|
| Total operations | |||
| Profit for the year attributable to owners of the parent | 1 170,7 | 1 214,8 | 2 864,5 |
| (Profit)/loss on disposal of property, plant, equipment and vehicles | (27,6) | 0,4 | 2,7 |
| Insurance proceeds on property, plant and equipment | – | (7,8) | (20,4) |
| Impairment of property, plant and equipment | – | – | 9,3 |
| Headline earnings adjustment – associates | |||
| Profit on disposal of investment | – | – | (88,5) |
| Profit on disposal of property, plant and equipment | – | – | (0,3) |
| Headline earnings for the period | 1 143,1 | 1 207,4 | 2 767,3 |
| Tax effect of headline earnings | 4,8 | 2,9 | 15,6 |
8. FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value hierarchy
Financial instruments measured at fair value are grouped into the following levels based on the significance of the inputs used in determining fair value:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.
As at 31 March 2023, the group held the following financial instruments measured at fair value:
| Unaudited six months ended 31 March 2023 |
Unaudited six months ended 31 March 2022 |
Audited year ended 30 September 2022 |
||||||||||
| (R’million) | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total |
| Assets measured at fair value | ||||||||||||
| Financial assets | ||||||||||||
| Other investments | 312,3 | 0,3 | 11,7 | 324,3 | 279,8 | 0,3 | 10,3 | 290,4 | 253,5 | 0,3 | 11,7 | 265,5 |
| Derivatives | – | – | – | – | – | 47,5 | – | 47,5 | – | 16,5 | – | 16,5 |
| Liabilities | ||||||||||||
| Derivatives | – | (29,5) | – | (29,5) | – | – | – | – | – | (19,8) | – | (19,8) |
9. SUBSEQUENT EVENTS
There are no material events that occurred during the period subsequent to 31 March 2023 and prior to these financial results being authorised for issue.