SAN
18/11/2015 16:53
FLLYR
PRICE SENSITIVE
REL: 1653 HRS Sanford Limited
FLLYR: SAN: Sanford Limited - Annual Result Announcement
CONSOLIDATED INCOME STATEMENT
Revenue $455.319m ($460.521m) (-1.1%)
EBITDA $69.3m ($60.0m) (+15.5%)
PROFIT BEFORE INCOME TAX: $21.826m ($31.727m) (-31.2%)
PROFIT AFTER TAX BUT BEFORE NON CONTROLLING INTERESTS: $13.802m ($22.364m)
(-38.3%)
Non Controlling Interests: Loss $0.021m (Loss $0.066m)
NET SURPLUS ATTRIBUTABLE TO EQUITY HOLDERS OF THE GROUP: $13.823m ($22.430m)
(-38.4%)
EARNINGS PER SHARE: 14.8cps (24.0cps)
Final dividend: 14 cents per share
Record date: 2 December 2015
Payment date: 9 December 2015
Imputation tax credit on final dividend: 5.4444cps
18 November 2015
Name of Listed Issuer: SANFORD LIMITED (SAN)
FINANCIAL RESULTS for the Year Ended: 30 SEPTEMBER 2015
Sanford Limited reports very strong cash flow on the back of improved
operational business performance.
Highlights
1. Financials
o Strong cash flow from operations of $55m (2014: $32.5m), which resulted in
$27m debt reduction to $149m (2014 net debt: $176m), allowing full year
dividend of 23c per share
o Significantly improved operational business performance with adjusted EBIT
of $52.4m (2014:$42.0m), before one off items
o Addressed non performing parts of the business, incurring one off cost of
$16.3m, including $13.3m of non-cash impairment of assets
o NPAT of $13.8m (2014:$22.4m) impacted by one off items
2. Wild catch volume (Inshore and Deepwater)
o Catches were generally in line with expectations and last year at 86,000
tonnes
3. Aquaculture (Salmon and Mussel)
o Salmon harvest volume grew 10.6% from last year with good growth and feed
conversion ratio
o Mussel growth impacted by environmental conditions, leading to reduction in
harvest
o All South Island mussels now processed through automated Havelock plant
4. Strategic Initiatives
o Exit of non-profitable IPS business
o New brand incorporating our Sanford Values
o Complemented operational structure with financial expertise and dedicated
supply chain management
o Marine Operator Safety System certification across majority of our vessel
fleet
o Excellent progress of Primary Growth Partnership projects 'Precision
Seafood Harvesting' (PSH) and 'SPATnz'
5. Health and Safety
o Developed Health & Safety performance lead indicators to place emphasis on
prevention, education and employee involvement in decisions concerning the
safety of their workplace
6. Social responsibility
o Doubled our financial contribution to community and charity programmes,
including a new partnership with Paralympics NZ
o Increased participation in industry and cross sectoral groups and forums to
further our social license to operate
CEO Volker Kuntzsch is pleased with the progress Sanford had made in 2015, a
year which saw many key strategic decisions taken by the Board and
Management. This included exiting non-core and non-profitable activities like
the International Purse Seining Tuna business and shifting the focus in
Australia to marketing away from fishing. Another tuna fishing vessel was
divested and the remaining vessel is on the market. Australia remained a
strategically important market for Sanford although its limited quota holding
and the lack of economies of scale in fishing the Great Australian Bight
prevents the company from competitively fishing there. The decision to take a
NZD6.5 million non-cash impairment of that asset will re-focus the company's
efforts towards the marketing and selling of its NZ based catch which is in
high demand in Australia.
Kuntzsch is particularly delighted with the company's strong cash flow
performance which had enabled the company to reduce its borrowings by $27
million (15.3%) in 2015. "This remarkable achievement is partly due to the
new Supply Chain and Procurement team, which was introduced to focus on
streamlining the supply chain and enable efficient sourcing", Kuntzsch said.
"Sales and Operations Planning processes were introduced to the business to
efficiently link supply capabilities with customer demand. Better and more
effective planning had resulted in significantly improved mix of stock
holding with sell down of low value stock items like mackerel and fish meal.
An effective S&OP process is critical to the business in realising its
strategic goal of delivering fresh, beautiful New Zealand Seafood to the
world."
Sanford's deep water and inshore fishing businesses performed well. Catches
were generally in line with expectations and despite some pressure on
selected whitefish commodity prices, sales were satisfactory overall.
While Sanford's salmon farming operation performed well, Greenshell mussel
farming faced some environmental challenges which impacted on mussel growth
rates and quality. The reduced supply of mussels led to a consolidation of
Sanford's South Island operations into the automated mussel processing plant
in Havelock.
"The result of the company speaks for itself with adjusted EBIT of $52.4m,
before one off items, representing a 24.8% improvement on prior year on a
comparable basis (2014:$42.0m). However, addressing the non-performing parts
of the business came with a one off cost of $16.3m ($13.3m of non-cash
impairment), reducing the company's reported Profit after Tax for the year to
$13.8m compared to $22.4m in 2014."
Kuntzsch highlighted the progress his team has made in 2015. "The year was
marked by the introduction of a new direction which led to the introduction
of a new logo and tagline and changes in the organisational structure, the
way we work and in the focus on our resources. The next step will be a
consolidation of these changes into specific activities pointed at creating
value. In addition to the focus on delivering an increasing share of chilled
seafood we will continue our innovative approach to improved utilisation of
fish by-products, waste and alternative uses of commodities. The recent
commitment to investing in an additional freezer trawler will result in
greater value from our frozen seafood portfolio.
Global population growth and an ever increasing middle class with a greater
appreciation for healthy food options in many of our customer countries bode
well for New Zealand seafood and Sanford as a supplier of high quality
products. Now that we have aligned our organisational structure with the
strategy and vision, we will continue with dedication on our customer driven
journey."
Final dividend: 14cps (14cps)
Record date: 2 December 2015
Payment date: 9 December 2015
Imputation tax credit on final dividend: 5.4444cps
Non-GAAP Measures
2014 2015
($m) ($m)
Reported EBIT 44.1 36.1
Adjust for one off Items
Impairment of assets 2.3 13.3
Restructuring costs 3.0
Gain on business combination (2.2)
Insurance receipt (2.2)
Total one off items (2.1) 16.3
Adjusted EBIT 42.0 52.4
Information required by NZX
SANFORD LIMITED
Audited results for announcement to the market
Reporting Period 12 months to 30 September 2015
Previous Reporting Period 12 months to 30 September 2014
Amount Percentage change
Revenue from ordinary activities* $NZ 455.3m (1.1%)
Profit (loss) from ordinary activities after tax attributable to security
holder* $NZ 13.8m (38.4%)
Net profit (loss) attributable to security holders * $NZ 13.8m (38.4%)
Final Dividend Amount per security Imputed amount per security
14 cents per share 5.4444 cents per share
Record Date 2 December 2015
Dividend Payment Date 9 December 2015
*Includes both the continuing and discontinued businesses.
P G Norling V Kuntzsch
Chairman Chief Executive Officer
End CA:00273662 For:SAN Type:FLLYR Time:2015-11-18 16:53:53
