Performance Analyses

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->   Value Added Statement

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QUARTERLY RESULTS
For The Financial Year Ended 30 September 2007

 

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FULL-YEAR RESULTS
For the financial year ended 30 September 2007

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FINANCIAL CHART

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OVERVIEW

By focusing on its core businesses of Health Supplements, Coffee and Sauces, the Group continues to improve its profitability, delivering on its corporate vision of creating value for stakeholders and maintaining long-term sustainable growth.

The Group's net profit amounted to $84.4 million, up 21% against the net profit of $69.6 million last year. Basic and diluted earnings per share for the financial year ended 30 September 2007 were 26.85 cents and 26.82 cents respectively, showing significant improvement compared to last year's basic and diluted earnings per share of 22.15 cents and 22.13 cents respectively.

The proposed dividend per share of 25.0 cents, tax exempt one-tier, represents a yield of 7.0%, based on the average share price for the financial year.

The shareholders' equity as at 30 September 2007 was $372.0 million, a 5% increase from $354.3 million in 2006. This was mainly due to net currency translation differences on translation of financial statements of foreignbased subsidiaries during the financial year and the increase in net profit attributable to shareholders. Return on shareholders’ equity was 22.7% compared to last year's return of 19.6%.

1. Turnover
The Group ended the financial year with a double-digit sales growth of 13%. Excluding the currency translation of $12.2 million, largely due to the appreciation of the Australian dollar, New Zealand dollar and Thai Baht, turnover would still reflect a healthy growth of 11%. The sales growth was generated by all business segments.

For Australasia, excluding the favorable exchange gain of $9.0 million, turnover would have been 11% above last year, mainly driven by strong Retail performance in the gravies category, growth in the Foodservice division and the sales from Caffe L'affare, a coffee business which was acquired at the end of last financial year.

The Health Supplement business, which included an exchange gain of $3.2 million, saw a 12% growth in sales, primarily due to strong performances from Thailand and Malaysia.

2. Earnings
The Group's operating profit increased by 25% from $93.7 million in 2006 to $116.8 million in 2007. Excluding the favorable currency translation of $3.5 million, the growth in operating profit would have been 21%, and was mainly generated from the Health Supplement business.

Australasia's operating profit, which included a favorable currency translation of $0.4 million, showed a marginal decline of 1% compared to last year. The decline in Australasia's operating profit was primarily due to the higher operating expenses for both Australia and New Zealand, partially mitigated by profit from the higher turnover.

Total BRAND'S operating profit of $111.5 million surged 28% higher compared to last year's operating profit of $87.4 million. Excluding the favorable currency translation of $3.1 million, total BRAND'S operating profit would have improved 21%, largely contributed by the improved profits from Thailand, Malaysia and Singapore, as a result of higher sales.

The Group's profit before tax of $130.3 million went up by 21% compared to last year's profit before tax of $108.0 million, primarily driven by the sales improvement. Full year effective tax rate was 31% compared to last year's effective tax rate of 32%.

3. Financial Position
The net asset value per share at 109.8 cents improved by 4.7% compared to 104.9 cents last year.

This is due to the higher profit attributable to the shareholders of the company after deducting the dividend for 2006 and also the favourable currency translation on overseas assets.

As at 30 September 2007, the net tangible assets for the Group were $345.4 million (2006: $329.5 million).

4. Cashflow
Despite higher tax payment and unfavorable working capital changes for inventories, net cash generated from operating activities of $94.7 million was 38% higher than last year's $68.7 million. This was primarily driven by the higher net profit after tax and also favorable adjustments for non-cash items like exchange differences.

Excluding the effects of acquisition of business and proceeds from disposal of property, plant and equipment and last year's liquidation of an associated company, the net cash inflow from investing activities was lower than last year mainly due to the higher capital expenditure (2007: $16.5 million, 2006: $12.6 million).

The net cash of $94.6 million used in financing activities was lower than last year's $110.5 million, largely due to last year's repayment of loan by an associated company.

As at 30 September 2007, the Group's cash and cash equivalents stood at $202.9 million (equivalent to 65 cents per ordinary share), an increase of 2% against last year.

5. Dividend
The Directors have proposed a first and final dividend for the financial year ended 30 September 2007 of 6 cents per ordinary share, tax exempt one-tier (based on the number of shares in issue at the balance sheet date) amounting to $18.9 million. The Directors also
proposed a bonus dividend of 19 cents per ordinary share, tax exempt one-tier (based on the number of shares in issue at the balance
sheet date) amounting to $59.7 million. The total dividend for this financial year is maintained at 25 cents per ordinary share.

No interim dividend was paid during the year. Payment of the final dividend is subject to the approval of the shareholders of the Company at the forthcoming Annual General Meeting.

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VALUE ADDED STATEMENT

2007 $'000 2006 $'000 Turnover 745,508 657,768 Less : Purchase of goods and services (480,088) (425,153) Value added from operations 265,420 232,615 Other operating (expenses)/income (1,240) 1,538 Interest income 12,510 13,248 Exchange gain/(loss) 190 (1,175) Share of results of: - associated companies - joint ventures 3,193 6,185 4,208 5,630 Total value added available for distribution 286,258 256,064   Distribution To employees in salaries, wages and beneifts 117,793 112,005 To government in income and other taxes 40,401 35,359 To providers of capital - Interest paid on borrowings - Dividends paid to shareholders 8,338 78,612 8,819 78,520 Retained in business - Depreciation and amortisation - Retained profit - Minority interest 16,552 5,810 6,062 14,574 (8,939) 3,662 Other non-operating income / (expenses) - Interest income - Exchange gain/(loss) - Provision for doubtful debts - Bad debts written back 12,510 190 (14) 4 13,248 (1,175) (51) 42 Total distribution 286,258 256,064 Number of employees 2,580 2,652   Productivity Analysis Value added per employee ($'000) 111.0 96.6 Value added per dollar of employment cost 2.4 2.3 Value added per dollar sales 0.4 0.4

 

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