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CROOKES BROTHERS LIMITED
INTERIM REPORT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2000
THE SEASONAL NATURE OF THE GROUP'S FARMING OPERATIONS MAKES THE ANALYSIS OF OUR
INTERIM FIGURES EXTREMELY DIFFICULT, ESPECIALLY WHEN THE INTERIM FIGURES MATCH
OR EXCEED THE FULL YEAR'S RESULTS OR ESTIMATES. THE COMMENTS ON THE HALF YEAR
RESULTS AND PROSPECTS FOR THE FULL YEAR FOLLOW THE INTERIM REPORT FIGURES.
ABRIDGED GROUP INCOME STATEMENT
SIX MONTHS ENDED YEAR ENDED
30 SEPT 30 SEPT 31 MARCH
2000 1999 2000
(RESTATED) (RESTATED)
(R000'S) (UNAUDITED) (UNAUDITED) (AUDITED)
REVENUE 74 239 73 126 117 255
OPERATING PROFIT BEFORE
INTEREST 12 499 18 126 13 977
INCOME FROM INVESTMENTS 259 610 1 162
NET INTEREST RECEIVED 1 053 672 2 911
PROFIT BEFORE TAXATION AND
ABNORMAL ITEMS 13 811 19 408 18 050
ABNORMAL ITEMS 2 457 - 41 247
PROFIT BEFORE TAXATION 16 268 19 408 59 297
TAXATION (4 701) (6 576) (6 601)
NET PROFIT ATTRIBUTABLE TO
SHAREHOLDERS 11 567 12 832 52 696
RECONCILIATION OF HEADLINE
EARNINGS
NET PROFIT ATTRIBUTABLE
TO SHAREHOLDERS 11 567 12 832 52 696
PROFIT ON DISPOSAL OF SHARES (2 422) - (41 247)
PROFIT ON DISPOSAL OF LAND (35) - -
HEADLINE EARNINGS 9 110 12 832 11 449
NUMBER OF SHARES IN
ISSUE (000'S) 12 000 12 000 12 000
HEADLINE EARNINGS PER
SHARE (CENTS) 75,9 106,9 95,4
EARNINGS PER SHARE (CENTS) 96,4 106,9 439,1
DIVIDENDS PER SHARE (CENTS) 22,0 20,0 360,0
ABRIDGED GROUP CASH FLOW STATEMENT
SIX MONTHS ENDED YEAR ENDED
30 SEPT 30 SEPT 31 MARCH
2000 1999 2000
(R000'S) (UNAUDITED) (UNAUDITED) (AUDITED)
CASH GENERATED BY OPERATIONS 17 667 22 909 22 826
INVESTMENT INCOME 259 610 1 162
NET INTEREST RECEIVED 1 053 672 2 911
CHANGES IN WORKING CAPITAL (1 479) (2 762) 475
TAXATION PAID (7 596) (2 953) (5 820)
CASH AVAILABLE FROM
OPERATIONS 9 904 18 476 21 554
DIVIDENDS PAID (4 800) (5 160) (7 560)
CASH RETAINED FROM OPERATIONS 5 104 13 316 13 994
NET INVESTMENT ACTIVITIES (5 361) (7 327) (11 201)
NET CASH RETAINED - SALE
OF CG SMITH LIMITED SHARES
AND PAYMENT OF
SPECIAL DIVIDEND - - 7 768
NET CASH FLOW (257) 5 989 10 561
NET INCREASE/(DECREASE)
IN SHORT-TERM LOANS 103 (16) (54)
NET (DECREASE)/INCREASE IN
CASH RESOURCES (154) 5 973 10 507
CASH FLOW FROM OPERATING
ACTIVITIES - PER
SHARE (CENTS) 82,5 154,0 179,6
ABRIDGED GROUP BALANCE SHEET
30 SEPT 30 SEPT 31 MARCH
2000 1999 2000
(RESTATED) (RESTATED)
(R000'S) (UNAUDITED) (UNAUDITED) (AUDITED)
ASSETS
NON-CURRENT ASSETS 201 223 191 471 189 256
PROPERTY, PLANT AND EQUIPMENT 191 035 179 532 179 751
INVESTMENTS 537 5 721 3 201
OTHER NON-CURRENT ASSETS 9 651 6 218 6 304
CURRENT ASSETS 44 758 40 773 38 012
TOTAL ASSETS 245 981 232 244 227 268
EQUITY AND LIABILITIES
ORDINARY SHAREHOLDERS' FUNDS 185 736 176 370 170 954
NON-CURRENT LIABILITIES 39 756 35 333 36 232
DEFERRED TAXATION 31 395 28 043 28 443
POST-RETIREMENT MEDICAL
OBLIGATION 8 361 7 290 7 789
CURRENT LIABILITIES 20 489 20 541 20 082
ACCOUNTS PAYABLE, ACCRUALS
AND
SHAREHOLDERS
FOR DIVIDEND 20 114 20 231 19 810
INTEREST BEARING DEBT - SHORT
TERM 375 310 272
TOTAL EQUITY AND LIABILITIES 245 981 232 244 227 268
NET ASSET VALUE PER
SHARE (CENTS) 1 548 1 470 1 425
SEGMENTAL ANALYSIS
SIX MONTHS ENDED YEAR ENDED
30 SEPT 30 SEPT 31 MARCH
2000 1999 2000
(R000'S) (UNAUDITED) (UNAUDITED) (AUDITED)
OPERATING PROFIT BEFORE
INTEREST
SUGAR CANE 20 531 23 487 19 680
BANANAS 2 258 1 094 2 495
CITRUS 841 4 168 1 974
GRAIN AND SHEEP (4 411) (5 396) (881)
DECIDUOUS FRUIT (1 893) (657) (579)
CROCODILE FARMING/TOURISM (153) (385) (45)
CATTLE (201) (54) 9
OTHER OPERATIONS 151 253 243
GROUP ADMINISTRATION (4 624) (4 384) (8 919)
12 499 18 126 13 977
NOTES
ACCOUNTING POLICIES
DUE TO THE SEASONAL NATURE OF OUR FARMING OPERATIONS, WE HAVE IN PAST YEARS,
PUBLISHED INCOME STATEMENT FIGURES BASED ON HALF OF THE ESTIMATED ANNUAL
FIGURES AND THE COMPARATIVE FIGURES WERE HALF OF THE ACTUALS OF THE PREVIOUS
YEAR. IN TERMS OF THE SOUTH AFRICAN STATEMENT OF GENERALLY ACCEPTED ACCOUNTING
PRACTICE AC127, INTERIM FINANCIAL REPORTING MUST BE BASED ON THE ACTUAL
FINANCIAL RESULTS FOR THE SPECIFIC FISCAL PERIOD AND THE ABOVE FIGURES
THEREFORE COMPLY WITH THE REQUIREMENTS OF THAT STATEMENT.
WITH EFFECT FROM 1 APRIL 2000 THE GROUP HAS CHANGED ITS ACCOUNTING POLICIES TO
COMPLY WITH THE REQUIREMENTS OF AC102 (REVISED) ON INCOME TAXES. CERTAIN ITEMS
WHICH WERE PREVIOUSLY CLASSIFIED AS PERMANENT DIFFERENCES FOR DEFERRED TAXATION
PURPOSES (GROWING CROPS, FARM BUILDINGS, UNDERGROUND IRRIGATION EQUIPMENT) ARE
REQUIRED TO BE CLASSIFIED AS TEMPORARY DIFFERENCES. THE EFFECT OF THIS CHANGE
WILL BE A NET REDUCTION OF R24,27 MILLION (202 CENTS) IN NET ASSET VALUE AS AT
31 MARCH 2000 AND A PRIOR YEAR ADJUSTMENT TO THE 1999/2000 DEFERRED TAX CHARGE
WHICH WILL INCREASE BY R1,17 MILLION. AS A RESULT OF THIS CHANGE IN ACCOUNTING
POLICY THE COMPARATIVE FIGURES FOR THE YEAR ENDED 31 MARCH 2000 AND THE HALF
YEAR ENDED 30 SEPTEMBER 1999 HAVE BEEN RESTATED TO SHOW THE RESULTS AND
FINANCIAL POSITION BASED ON THE AMENDED POLICY.
COMMENTS ON THE RESULTS
THE SEASONAL NATURE OF THE GROUP'S FARMING OPERATIONS MAKES THE ANALYSIS OF OUR
INTERIM FIGURES EXTREMELY DIFFICULT, ESPECIALLY WHEN THE INTERIM FIGURES MATCH
OR EXCEED THE FULL YEAR'S RESULTS OR ESTIMATES. SUGAR CANE IS HARVESTED BETWEEN
APRIL AND DECEMBER, CITRUS - BETWEEN MAY AND AUGUST, GRAIN - DURING OCTOBER AND
NOVEMBER, DECIDUOUS FRUIT - BETWEEN JANUARY AND MAY, AND BANANAS - THROUGHOUT
THE YEAR. THE SEGMENTAL ANALYSIS OF OPERATING PROFITS BY CROP HIGHLIGHTS THE
FOLLOWING MOVEMENTS BETWEEN THE INTERIM RESULTS:
(A) SUGAR CANE - EARNINGS ARE R3,0 MILLION LOWER THAN THE PREVIOUS PERIOD AS A
RESULT OF LOWER YEAR TO DATE SWAZILAND CANE REVENUE AND HIGHER AGRICULTURAL
PRODUCTION COSTS (E.G. FERTILIZER) ON ALL ESTATES.
(B) CITRUS - A DISASTROUS MARKETING SEASON HAS RESULTED IN A DECREASE OF R3,0
MILLION IN BOTH REVENUE AND EARNINGS COMPARED TO THE PREVIOUS SEASON.
PROSPECTS
AT THE ANNUAL GENERAL MEETING IN JULY IT WAS STATED THAT THIS YEAR'S EARNINGS
WILL APPROXIMATE THOSE OF LAST YEAR ON A COMPARABLE BASIS I.E. EXCLUDING THE
NON-RECURRING DIVIDENDS RECEIVED FROM CG SMITH LIMITED IN THE PREVIOUS YEAR.
THE REVISED ESTIMATE OF HEADLINE EARNINGS FOR THE FULL YEAR, AT R10,893
MILLION, IS 5% LOWER THAN THE RESTATED 1999/2000 FIGURE OF R11,449 MILLION,
HOWEVER ON A COMPARABLE BASIS (EXCLUDING THE R1,0 MILLION CG SMITH DIVIDENDS)
THE REVISED ESTIMATE IS 4% HIGHER THAN THE PREVIOUS YEAR.
THE MAJOR FACTORS AFFECTING OPERATING PROFITS ARE AS FOLLOWS:
(A) SUGAR CANE - EARNINGS ARE ESTIMATED TO INCREASE BY R3,2 MILLION TO R22,9
MILLION (2000: R19,7 MILLION) AS A RESULT OF INCREASED YIELDS AND A RECOVERY OF
THE SOUTH AFRICAN SUCROSE PRICE.
(B) CITRUS - A DECREASE OF R5,1 MILLION IN CITRUS REVENUE WILL RESULT IN A
SWING FROM THE R2,5 MILLION PROFIT IN THE 1999/2000 YEAR TO AN ESTIMATED
OPERATING LOSS OF R3,3 MILLION DURING THE CURRENT YEAR.
(C) BANANAS - THE CONTRIBUTION FROM BANANAS IS EXPECTED TO BE R0,9 MILLION
HIGHER AT R3,4 MILLION (2000:R2,5 MILLION).
(D) GRAIN AND SHEEP - A NORMAL HARVESTING SEASON IS IN PROGRESS AND IT IS
ESTIMATED THAT THIS OPERATION WILL CONTRIBUTE R1,4 MILLION TO OPERATING PROFITS
(2000: R0,9 MILLION LOSS).
THE COMPANY HAS DISPOSED OF ITS EQUITY INVESTMENT IN EDULIS MUSHROOM (PTY)
LIMITED TO THE CONTROLLING SHAREHOLDER. THE SELLING PRICE WAS BASED ON THE
ORIGINAL PURCHASE PRICE AND REPAYMENT TERMS COVER A THREE YEAR PERIOD WITH
INTEREST APPLICABLE ON OUTSTANDING AMOUNTS AS FROM 1 APRIL 2000, PAYABLE FROM
31 MARCH 2001.
THE COMPANY'S PACKING AND MARKETING OF ITS DECIDUOUS FRUIT PRODUCTION WILL IN
FUTURE BE HANDLED BY THE TWO-A-DAY GROUP. OUR INVESTMENT OF R0,8 MILLION IN
VALLEY PACKERS CO-OPERATIVE LIMITED WILL BE REPAID OVER AN EXTENDED PERIOD.
INTERIM DIVIDEND NUMBER 171
AN INTERIM DIVIDEND OF 22,0 CENTS (1999/2000: 20,0 CENTS) PER SHARE HAS BEEN
DECLARED PAYABLE ON MONDAY, 15 JANUARY 2001 TO SHAREHOLDERS REGISTERED IN THE
BOOKS OF THE COMPANY AT THE CLOSE OF BUSINESS ON FRIDAY, 15 DECEMBER 2000.
FOR AND ON BEHALF OF THE BOARD
JFC PALMER (CHAIRMAN) RENISHAW
DJ CROOKES (MANAGING DIRECTOR)
21 NOVEMBER 2000
REGISTERED OFFICE AND POSTAL ADDRESS
RENISHAW, KWAZULU-NATAL
P O RENISHAW
4181
TRANSFER SECRETARIES
MERCANTILE REGISTRARS LIMITED
11 DIAGONAL STREET, JOHANNESBURG 2001
TEL: (011) 370-5000
DIRECTORS: JFC PALMER (CHAIRMAN), DJ CROOKES (MANAGING), P BHENGU, PL
CAMPBELL, CJH CHANCE, AC CROOKES
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