RNS Number:1685Y
SABMiller PLC
30 April 2004
REVIEWED PRELIMINARY RESULTS FOR THE ABI GROUP
FOR THE YEAR ENDED
31 MARCH 2004
Amalgamated Beverage Industries Limited (ABI), a subsidiary of SABMiller plc,
has reported its preliminary reviewed group results in Johannesburg for the year
ended 31 March 2004. The text of ABI's announcement follows. It should be
noted that the preliminary group results have been prepared to conform to South
African Statements of Generally Accepted Accounting Practice.
Enquiries to:
Sandra Pienaar
Company secretary
Telephone: +27 11 719 1400
Highlights
* Beverage volumes up 7.8% to 13 million hectolitres
* Sales revenue grows by 12.9% to R5.6 billion
* Trading profit increases by 20.4%, exceeding R1 billion
* Adjusted headline earnings increase by 21.1% to R775 million
* Dividends per share increase by 21.7% to 280 cents per share
Overview
ABI has delivered a good set of results for the year ended March 2004 through
strong volume growth, revenue management and ongoing productivity gains. The
sales volume growth of 7.8% for the year was a function of sustained increases
in consumer disposable income, favourable weather conditions in the peak summer
season, brand innovations and effective market execution. Mainstream carbonated
soft drink volumes increased by 6.8%, while other soft drinks grew by 31.0%.
The latter now contribute 5.0% to the total volumes sold, up from 4.3% at the
end of the previous financial year.
Financial performance
Adjusted headline earnings increased by 21.1% compared to the prior year. This
increase is calculated after adjusting for the benefit of the R69 million
deferred tax adjustment arising from an assessed tax loss within New Age
Beverages, which was accounted for in the F03 results, and more correctly
reflects ABI's underlying trading performance. Unadjusted headline earnings
increased by 9.3%.
The positive sales revenue growth of 12.9% was driven by the combined effect of
volume growth and selling price increases. This was partly offset by package
mix changes and growth in non-carbonated soft drink contributions.
Gross margins reflected an improvement from 38.4% to 40.1%, largely as a result
of moderated increases in raw material costs in the latter half of the year.
Results also benefited from sustained improvements in manufacturing and supply
chain efficiencies.
Trading profit grew by 20.4% over the prior year, strengthening ABI's trading
margin to 18.7% from 17.5%, as further overhead productivity gains were realised
in areas of manufacturing and distribution. These sustainable productivity
improvements were temporarily moderated by the impact of a write-down of fixed
assets in the hands of customers following a detailed review of coolers and
discontinued returnable containers in the trade.
Working capital management excluding an increase in prepayments for the purchase
of glass and resin at attractive Rand rates, continued to show improvements.
ABI has more than R800 million cash on hand and in the financial year invested
R450 million in fixed assets to maintain and expand operations. The large
investment in returnable containers was made to ensure sufficient capacity to
meet peak and future market demands.
Sustainability
ABI continues to take a holistic approach to business sustainability with
appropriate investment in health and safety, the environment and the communities
within which the company operates. In this regard, good progress was made in
NOSA and ISO 14000 ratings during the year. Further investments in
sophisticated bottle inspection equipment resulted in improved product quality
results.
ABI's staff Hiv/Aids programme, covering awareness, voluntary testing and
treatment at company cost progressed in the year. Reasonable progress has been
made in staff volunteering for testing - this is seen as the key first step in
the management and prevention of the disease within the group.
In the broader community, ABI continues to support initiatives that lessen the
effect of Hiv/Aids through partnerships with NOAH (Nurturing Orphans of Aids for
Humanity) and The Starfish Foundation. Two NOAH community 'Arks' have been
built with ABI support.
ABI has participated in, and met the requirements for, the JSE Socially
Responsible Investment Index, which is to be launched shortly.
Outlook
Sales volumes are expected to continue the positive momentum in the new
financial year albeit at a lower rate than achieved in the year under review.
Alongside a constructive pricing outlook, major input costs are likely to remain
relatively stable for the year, subject to Rand volatility. Further
productivity improvements are planned in the optimisation of the distribution
grid. While the level of competition has increased over the past year, ABI
remains confident that through proactive brand and marketing initiatives the
company's market position will be maintained. Management expects continued real
growth in earnings in the coming year but at a lower rate than that of the
current year.
Accounting policies
These results have been compiled in accordance with the South African Statements
of Generally Accepted Accounting Practice and the listing requirements of the
JSE Securities Exchange South Africa and Schedule 4 of the South African
Companies Act. With the exceptions noted below, the accounting policies and
methods of computation used in the preparation of the results are consistent in
all material respects with those adopted in the annual financial statements for
the year ended 31 March 2003. The following exceptions should be noted:
* Accounting statement AC133 dealing with the recognition and measurement
of financial instruments, has been applied in preparation of the results
for the year.
* The ABI Executive Share Incentive Scheme and ABI Share Purchase Scheme
have been consolidated in accordance with the requirements of the JSE
Securities Exchange South Africa.
The net effect of the above changes in accounting policy on retained income was
immaterial.
Ernst & Young, the company's external auditors, have reviewed the financial
results. A copy of their unmodified report is available for inspection at the
company's registered office.
Declaration of dividend number 57
Notice is hereby given that on 29 April 2004, the board of directors declared a
final dividend of 231 cents per share (2003: 189.6 cents) for the year ending 31
March 2004. This dividend will be paid out of profit on ordinary activities
after taxation, as determined by the directors, to ordinary shareholders
recorded as such in the register at the close of business on the record date,
Friday, 25 June 2004. The last date to trade to participate in the dividend is
Friday, 18 June 2004. Shares will commence trading ex-dividend from Monday, 21
June 2004.
The important dates pertaining to this dividend are as follows:
Last day to trade 'cum' dividend Friday, 18 June 2004
Shares trade 'ex' dividend Monday, 21 June 2004
Record date Friday, 25 June 2004
Payment date Monday, 28 June 2004
Share certificates may not be dematerialised or rematerialised between Monday,
21 June 2004 and Friday, 25 June 2004, both days inclusive.
Group income statements
2004 2003 % Change
Year ended Year ended
31 March 31 March
Rm Rm
(Reviewed) (Audited)
Revenue 5,666 5,016 13
Sales revenue 5,571 4,933 13
Cost of sales (3,339) (3,041)
Gross profit 2,232 1,892
Net operating costs (1,192) (1,028)
Trading profit before goodwill amortisation 1,040 864 20
Goodwill amortisation (78) (78)
Operating profit 962 786
Income from an associate 48 47
Profit on ordinary activities before interest and 1,010 833 21
taxation
Net finance income 66 56
Profit on ordinary activities before tax 1,076 889
Taxation (377) (242)
Current taxation (342) (276)
Deferred taxation 7 65
Secondary tax on companies (42) (31)
Profit on ordinary activities after tax 699 647
Equity minority interests (11) (15)
Net profit for the year 688 632
Reconciliation of headline earnings (Rm)
Net profit for the year 688 632 9
Loss/(profit) on disposal of property, plant and 9 (1)
equipment after tax
Goodwill amortisation 78 78
Headline earnings 775 709 9
Deferred tax adjustment due to assessed loss - (69)
Adjusted headline earnings 775 640 21
Earnings per share (cents)
Basic earnings 450 416 8
Headline earnings 507 466 9
Adjusted headline earnings 507 421 20
Dividends per share (cents) 280 230 22
Net asset value per share (cents) 2 359 2 154 10
Number of ordinary shares in issue (million) 153 152
Weighted average number of ordinary shares in
issue (million) 153 152
Group balance sheets
2004 2003
31 March 31 March
Rm Rm
(Reviewed) (Audited)
ASSETS
Non-current assets 3,010 2,933
Property, plant and equipment 1,615 1,459
Investment properties 3 4
Goodwill 1,107 1,185
Investment in an associate 235 216
Deferred taxation asset 50 69
Current assets 1,580 1,370
Inventories 309 270
Trade and other receivables 309 298
Prepayments 160 29
Cash and cash equivalents 802 773
Total assets 4,590 4,303
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 1,614 1,599
Non-distributable reserves (5) 2
Accumulated profits 1,976 1,652
Ordinary shareholders' funds 3,585 3,253
Minority interest 24 21
Total shareholders' funds 3,609 3,274
Non-current liabilities 214 255
Long-term loans 6 11
Deferred taxation liability 107 130
Deferred income 74 89
Retirement benefit obligation 27 25
Current liabilities 767 774
Trade and other payables 707 688
Provisions 47 18
Current taxation 13 68
Total equity and liabilities 4,590 4,303
Future capital expenditure
Contracted 6 76
Authorised by the directors but not yet contracted 437 401
Group cash flow statements
2004 2003
Year ended Year ended
31 March 31 March
Rm Rm
(Reviewed) (Audited)
Trading profit before goodwill amortisation 1,040 864
Depreciation 217 180
Non-cash items 1 56
(Increase) / decrease in working capital (126) 37
Cash generated from operating activities 1,132 1,137
Dividend income 28 23
Normal tax paid (394) (266)
Secondary tax on companies paid (42) (31)
Net cash inflow from operating activities 724 863
Finance income received 73 53
Finance costs paid - (3)
Dividends paid (366) (277)
Net cash retained 431 636
Cash utilised in investment activities (409) (321)
Investment to maintain and upgrade operations (209) (127)
Investment to expand operations (241) (227)
Proceeds on assets sold 41 33
Cash effects of financing activities 10 11
Long-term loans (repaid) / incurred (5) 11
Premium on issue of share capital used for share options 15 -
Analysis of movement in cash and cash equivalents
Balance at the beginning of the year (773) (450)
Currency translation reserve 3 3
Balance at the end of the year 802 773
Increase in cash and cash equivalents 32 326
Statements of changes in equity
Ordinary Ordinary Non-distri-butable Accu-mulated Ordinary Minority Total
share share reserves profit share-holders' interests share-holders'
capital premium funds funds
Rm Rm Rm Rm Rm Rm Rm
Balance at 31 March
2002 1 1,598 5 1 297 2,901 10 2,911
Foreign currency
translation
differences - - (3) - (3) (3) (6)
Net profit for the
year - - - 632 632 15 647
Dividend - - - (277) (277) (1) (278)
Balance at 31 March
2003 1 1,598 2 1,652 3,253 21 3,274
Premium on issue of
share capital used
for share options - 15 - - 15 - 15
Foreign currency
translation
differences - - (7) - (7) (6) (13)
Net profit for the
year - - - 688 688 11 699
Dividend - - - (364) (364) (2) (366)
Balance at 31 March
2004 1 1613 (5) 1,976 3,585 24 3,609
By order of the board
MJ Bowman V Pillay
Managing director Financial director
29 April 2004
Directorate and administration
Non-executive chairman
EAG Mackay
Independent non-executive directors
MP Adonisi
PM Bester
Non-executive directors
JA Mabuza
MI Wyman (British)
Executive directors
MJ Bowman (managing director)
EM Borcherds
TK Gibbon
MJ Hoy
AP Lemmert
HBB Lloyd
V Pillay
TC Sanderson
Company secretary
S Pienaar
Registered office
ABI House
14 Pongola Crescent
Eastgate Extension 17
Sandton 2199
P O Box 76202
Wendywood 2144
South Africa
Transfer secretaries
Computershare Limited
70 Marshall Street
Johannesburg 2001
PO Box 61051
Marshalltown 2107
South Africa
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