Notes
1. Basis of preparation and changes to the group’s accounting policies
The preparation of these results have been supervised by Noel Doyle, Chief Financial Officer of Tiger Brands Limited.
The condensed consolidated interim results for the six months ended 31 March 2017 are prepared in accordance with IAS 34 Interim Financial Reporting as issued by the IASB, 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.
The accounting policies applied in the preparation of the condensed consolidated interim results are in terms of IFRS and are consistent with those applied in preparation of the group’s annual consolidated financial statements for the year ended 30 September 2016, except for the impact resulting from the early adoption of IFRS 15. 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 2017 |
Unaudited six months ended 31 March 2016 Restated# |
Unaudited year ended 30 September 2016 Restated# |
|||
|---|---|---|---|---|---|---|
| Depreciation (included in cost of sales and other operating expenses) | (280,5) | (260,1) | (524,5) | |||
| Amortisation | (6,1) | (6,0) | (11,6) | |||
| IFRS 2 (included in other operating expenses) | ||||||
| – Equity settled | (42,7) | (30,9) | (70,9) | |||
| – Cash settled | (11,3) | (11,0) | (18,0) |
| # | Restated as required by IFRS 5 in relation to the treatment of East African Tiger Brands Industries Plc. (EATBI) and Haco Tiger Brands (E.A.) Limited (Haco) as discontinued operations. |
3. Impairments
| R'million | Unaudited six months ended 31 March 2017 |
Unaudited six months ended 31 March 2016 Restated# |
Unaudited year ended 30 September 2016 Restated# |
|||
|---|---|---|---|---|---|---|
| Goodwill and indefinite useful life intangible assets are tested for impairment annually (as at 30 September) and when circumstances 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 were disclosed in the annual consolidated financial statements for the year ended 30 September 2016. No impairment was recognised at 31 March 2017 relating to goodwill and indefinite useful life intangible assets. | ||||||
| Impairment of property, plant and equipment | – | (3,2) | (34,8) | |||
| Impairment of intangible assets | – | – | (300,0) | |||
| – | (3,2) | (334,8) |
| # | Restated as required by IFRS 5 in relation to the treatment of East African Tiger Brands Industries Plc. (EATBI) and Haco Tiger Brands (E.A.) Limited (Haco) as discontinued operations. |
4. Abnormal items
| R'million | Unaudited six months ended 31 March 2017 |
Unaudited six months ended 31 March 2016 Restated# |
Unaudited year ended 30 September 2016 Restated# |
|||
|---|---|---|---|---|---|---|
| Once-off consulting fees | (91,5) | – | – | |||
| Proceeds from warranty claim settlement | 28,4 | – | – | |||
| Proceeds from insurance claim | 85,7 | – | – | |||
| Profit on disposal of property, plant and equipment | – | – | 11,0 | |||
| 22,6 | – | 11,0 |
| # | Restated as required by IFRS 5 in relation to the treatment of East African Tiger Brands Industries Plc. (EATBI) and Haco Tiger Brands (E.A.) Limited (Haco) as discontinued operations. |
5. Reconciliation between profit for the period and headline earnings
| R'million | Unaudited six months ended 31 March 2017 |
Unaudited six months ended 31 March 2016 Restated# |
Unaudited year ended 30 September 2016 Restated# |
|||
|---|---|---|---|---|---|---|
| Continuing operations | ||||||
| Profit for the year attributable to owners of the parent | 1 686,4 | 1 645,9 | 3 243,1 | |||
| Loss/(profit) on disposal of property, plant and equipment | – | 0,1 | (8,3) | |||
| Impairment of property, plant and equipment | – | 2,3 | 25,3 | |||
| Impairment of intangible assets | – | – | 300,0 | |||
| Headline earnings adjustment – associates | – | – | – | |||
| – Profit on disposal of property, plant, equipment and intangible assets | (0,1) | (73,1) | (116,9) | |||
| Headline earnings for the period | 1 686,3 | 1 575,2 | 3 443,2 | |||
| Tax effect of headline earnings adjustments | – | 19,5 | (7,0) | |||
| Attributable to non-controlling interest | – | – | – | |||
| Discontinued operations | ||||||
| Profit for the year attributable to owners of the parent | 0,2 | 57,4 | 62,5 | |||
| (Profit)/loss on sale of property, plant and equipment | (0,4) | 0,1 | 0,1 | |||
| Profit on disposal of subsidiary | – | (49,7) | (49,7) | |||
| Headline earnings for the period | (0,2) | 7,8 | 12,9 | |||
| Tax effect of headline earnings adjustments | 0,2 | – | – | |||
| Attributable to non-controlling interest | (0,3) | – | – |
| # | Restated as required by IFRS 5 in relation to the treatment of East African Tiger Brands Industries Plc. (EATBI) and Haco Tiger Brands (E.A.) Limited (Haco) as discontinued operations. |
6. Analysis of (loss)/profit from discontinued operations
| R'million | Unaudited six months ended 31 March 2017 |
Unaudited six months ended 31 March 2016 Restated# |
Unaudited year ended 30 September 2016 Restated# |
|||
|---|---|---|---|---|---|---|
| (Loss)/profit for the period from discontinued operations | ||||||
| Turnover | 387,1 | 2 111,6 | 2 556,8 | |||
| Expenses | (387,3) | (2 012,7) | (2 442,7) | |||
| Operating (loss)/income before impairments and abnormal items | (0,2) | 98,9 | 114,1 | |||
| Impairments | – | – | – | |||
| Abnormal items | (1,2) | 49,7 | 49,7 | |||
| Operating (loss)/income after impairments and abnormal items | (1,4) | 148,6 | 163,8 | |||
| Finance costs | (0,3) | (90,6) | (99,5) | |||
| (Loss)/profit before taxation | (1,7) | 58,0 | 64,3 | |||
| Taxation | 0,6 | (8,2) | (11,4) | |||
| (Loss)/profit for the period from discontinued operations | (1,1) | 49,8 | 52,9 | |||
| Attributable to non-controlling interest | 1,3 | 7,6 | 9,6 | |||
| Attributable to owners of parent | 0,2 | 57,4 | 62,5 | |||
| Cash flows from discontinued operations | ||||||
| Net cash inflows from operating activities | 68,3 | 61,8 | 363,6 | |||
| Net cash outflows from investing activities | (12,7) | (21,1) | (65,9) | |||
| Net cash (outflows)/inflows from financing activities | (3,6) | (0,1) | 90,5 | |||
| Net cash inflows | 52,0 | 40,6 | 388,2 |
| # | Restated as required by IFRS 5 in relation to the treatment of East African Tiger Brands Industries Plc. (EATBI) and Haco Tiger Brands (E.A.) Limited (Haco) as discontinued operations. |
7. Restatement of turnover
| R'million | Unaudited six months ended 31 March 2017 |
Unaudited six months ended 31 March 2016 Restated# |
Unaudited year ended 30 September 2016 Restated# |
|||
|---|---|---|---|---|---|---|
| The group has early adopted IFRS 15 Revenue from
Contracts with Customers and therefore restated the
comparatives applying the full retrospective transition
method, as allowed in the transition provisions of
IFRS 15. The impact of early adopting IFRS 15
resulted in a reallocation of costs from selling and
distribution in March 2016 of R51,3 million (September 2016: R105,6 million), marketing of R18,0 million in March 2016 (September 2016: R41,3 million) and cost of sales of R1,5 million in March 2016 (September 2016: R4,1 million) to turnover, totalling R70,8 million in March 2016 (September 2016: R151,0 million). There has been no impact on the basic earnings or basic headline earnings per share. The reconciliation of the adjustments to the turnover comparatives are as follows: |
||||||
| As previously reported | 15 893,5 | 31 697,5 | ||||
| Reclassified to discontinued operations | (513,1) | (958,3) | ||||
| Reallocation of costs due to early adoption of IFRS 15 | (70,8) | (151,0) | ||||
| Restated turnover after reclassification | 15 309,6 | 30 588,2 |
| # | Restated as required by IFRS 5 in relation to the treatment of East African Tiger Brands Industries Plc. (EATBI) and Haco Tiger Brands (E.A.) Limited (Haco) as discontinued operations. |
8. Net financing costs
| R'million | Unaudited six months ended 31 March 2017 |
Unaudited six months ended 31 March 2016 Restated# |
Unaudited year ended 30 September 2016 Restated# |
|||
|---|---|---|---|---|---|---|
| Net interest paid | (110,4) | (145,0) | (297,0) | |||
| Net foreign exchange (loss)/profit | (9,9) | 32,7 | 128,6 | |||
| Net financing costs | (120,3) | (112,3) | (168,4) |
| # | Restated as required by IFRS 5 in relation to the treatment of East African Tiger Brands Industries Plc. (EATBI) and Haco Tiger Brands (E.A.) Limited (Haco) as discontinued operations. |
9. Subsequent events
Effective 4 April 2017, Tiger Brands Limited disposed of its 51% shareholding in East African Tiger Brands Industries Plc. (EATBI) to its existing Ethiopian partner, East African Group (ETH.) Plc. for USD18,55 million. The estimated profit or loss on disposal is not expected to be material.
| # | Restated as required by IFRS 5 in relation to the treatment of East African Tiger Brands Industries Plc. (EATBI) and Haco Tiger Brands (E.A.) Limited (Haco) as discontinued operations. |