Unaudited business segment results

Twelve months ended 30 June 2009 versus twelve

months ended 30 June 2008

 

 

  AFGRI AGRI SERVICES  
  Producer Services  
  Primary Inputs     Retail  
  12 months  
ended  
30 June  
2009  
R’000  		 12 months  
ended  
30 June  
2008  
R’000  		   12 months
ended  
30 June  
2009  
R’000  		 12 months  
ended  
30 June  
2008  
R’000  
Revenue   1 234 721   1 399 680     3 131 240   2 816 279  
– sale of goods and services   1 234 721   1 399 680     3 131 240   2 816 279  
– interest   –   –     –   –  
Operating profit/(loss) (before corporate costs)  75 128   66 031     198 157   75 273  
Other amounts included in operating profit/(loss)  (14 069)  (14 005)    (40 544)  (30 246) 
– other operating income   –   –     –   –  
– pension fund surplus   –   –     –   –  
– depreciation and amortisation   (5 148)  (6 137)    (17 024)  (11 755) 
– allocation of Corporate costs   (8 921)  (7 868)    (23 520)  (18 491) 
Operating profit/(loss)  61 059   52 026     157 613   45 027  
Other items of profit or loss   –   –     31 492   –  
– fair value adjustment to disposal group assets   –   –     –   –  
– share of profit/(loss) of associates   –   –     31 492   –  
Profit/(loss) before finance costs   61 059   52 026     189 105   45 027  
Finance costs   (23 555)  (2 730)    (51 023)  (13 630) 
Profit/(loss) before income tax   37 504   49 296     138 082   31 397  
Income tax            
Profit/(loss) after income tax            
Assets   254 542   364 077     1 557 190   1 194 227  
Non-current assets   57 539   99 023     284 616   295 545  
Other current assets   122 074   165 938     945 393   767 146  
Trade and other receivables   59 346   87 862     303 914   71 631  
Cash and cash equivalents   15 583   11 254     23 267   59 905  
Liabilities   146 152   225 962     889 545   663 006  
Non-current liabilities   3 371   4 310     4 850   4 822  
Other current liabilities   142 781   221 652     884 695   658 184  
Borrowings to finance trade receivables   –   –     –   –  
Call loans and overdrafts   –   –     –   –  
Capital expenditure (including other intangible assets)   13 628   31 659     38 359   46 673  
Contribution to Group continuing operations (%)           
Revenue   14   17     36   35  
Profit before tax   7   12     25   8  
Number of employees (total)  240   351     753   1 815  
Full-time   193   232     630   1 668  
Part-time   47   119     123   147  
Highlights  
AFGRI Primary Inputs
Operating margins in this division improved by 1,4% to 6,3% increasing operating profits by 14%. A higher interest charge resulted in this division reporting a 24% decrease in profit before tax to R38 million (2008:  R49 million).

The sale of the loss-making AFGRI Seed, previously housed in this segment, was successfully negotiated and concluded after year-end. The assets of AFGRI Seed are reflected as a disposal group held-for-sale and the results of its operations included under discontinued operations. 		  
 
AFGRI Retail
Not only did the current year’s strong agricultural performance of high yields and firm commodity prices result in AFGRI Retail stores reporting a very profitable year, but the strengthening balance sheets of farmers, following two good seasons, saw a substantial increase in the investment of new equipment such as tractors, combine harvesters and implements. As such, both the retail and equipment aspects of the business performed well.

The full benefits of store rationalisation and other cost-focused initiatives over the past two years was realised for the full year for the first time. The implementation of a centralised supply chain resulted in an improved product offering but reduced inventories. This, together with improved margins through the elimination of non-profitable lines and focussed management allowed the division to report a considerable improvement in profits.   		 
Challenges  
Margin growth
Services levels to customers
Management of stock levels
Conclude the exiting of non-core businesses   		 
 
Margin growth
Services levels to customers
Management of stock levels
Increase equipment market share   		 
       
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