Good results for Capespan despite uncertain market
Net profit before taxation increased by 59.1% to R222,0 million. Revenue grew by 77.0% to R5,63 billion; on a like-for-like basis revenue increased by 6.6%.
The revenue in the Farming Division increased due to the change in the year-end of Capespan Farms to be coterminous with the Group’s year-end. This resulted in two grape seasons’ harvest being included the current year’s revenues. Volumes in the Fruit Division declined as a result of tough trading conditions in the Middle East, lower South African citrus and Chilean grape volumes. Despite the decline in volumes, revenues increased by 5.3% on a like-for-like basis. Revenue from the Logistics Division increased by 10.9% mainly due to additional shipping revenues and logistical services in Mozambique.
During the year the Group disposed of certain non-core assets, generating a profit on sale of R35,1 million, together with the accounting profit of R67,0 million on the deemed disposal arising from the conversion of CIHL from an associate to a subsidiary and is included in other income. The performance of the wine people group limited remained in a loss-making position and the Group reviewed its carrying value of the associate which resulted in an impairment charge of R22,0 million in 2012. The Group impaired non-performing assets and intangible assets amounting to R24,2 million.
The performance of associate companies improved significantly during the year as the acquisition of the 25% stake in Golden Wing Mau in China was equity accounted partially in the prior year, with 12 months’ results being incorporated in the current year.
The balance sheet has changed substantially as the consolidation of CIHL has increased the current assets and current liabilities of the Group. Working capital increased by R222,3 million mainly as a result of the consolidation of CIHL. The share capital and reserves have increased as a result of the share issue as part payment for the CIHL acquisition, the increase in retained earnings and currency translation gains. At year-end when compared to the prior year, the ZAR depreciated against all the currencies relevant to the Group, namely USD (4.8%), GBP (9.7%), JPY (-5.6%) and HKD (5.0%).
Positive cash from operations and disposal of non-core assets was invested in fixed asset replacements, the acquisition of the 50% shareholding in CIHL. The Group repositioned its borrowings and converted part of the ongoing short-term borrowings of R100,0 million into a term loan, resulting in a net outflow of cash of R2,6 million.
