Interim Results

Tiger Brands Ld
18 May 2000


Tiger Brands
Interim report to shareholders for the six months ended 31 March 2000
Tiger Brands Limited (Formerly Tiger Oats Limited) 
(Registration number 1994/017881/06)  
(Incorporated in the Republic of South Africa)
Strategic positioning through
- focus on brands
- acquisitions
- divestments
Operating income from continuing operations up 14%
The unaudited results for the six months ended 31 March 2000 are set out
below. This report has been prepared in compliance with generally accepted
accounting practice and in accordance with the principles applied in the most
recent published annual financial statements.
REVIEW OF OPERATIONS
Tiger Brands Limited ('Tiger') achieved an increase of 9% in headline earnings
per share for the six months ended 31 March 2000. 
The strategic positioning of Tiger as a branded food and healthcare products
group has continued during the review period. As an integral part of this
strategy the minorities of Beacon Sweets & Chocolates and Adcock Ingram were
acquired and a number of non-core businesses were disposed of. The short-term
impact of these divestments has been to limit the growth in turnover to 1% and
the growth in operating income to 9%. More importantly, however, turnover and
operating income from continuing operations rose by 14% and 13% respectively
compared to the same period last year. 
The group incurred a net interest charge of R109 million in the first six
months compared to net interest received of R24 million in the prior year.
This was primarily caused by the acquisition, in December 1999, of the
outstanding ordinary and 'N' ordinary shares in Adcock Ingram, the acquisition
of Lagap Pharmaceuticals in October 1999 and the acquisition of the
outstanding minority shares in Langeberg Holdings at the end of the previous
financial year. On an after tax basis, however, the adverse movement in
interest was offset by a R90 million reduction in the share of profits
attributable to outside shareholders.
Non-core operations disposed of since September 1999 include Island View
Shipping, the 50% interest in The Cold Chain, and the 50% interest in SA Bulk
Terminals. The latter two disposals are subject to the approval of the
competition authorities and accordingly the proceeds have not as yet been
received. 
The Marine Oil Refineries business in Cape Town has been closed. A decision in
principle has been made to dispose of the egg producer Golden Lay Farms; and
to dispose of Tiger's 30% interest in the Jumbo Cash & Carry joint venture.
Food Brands The branded foods division performed well, growing profit from
continuing operations by 28% on a 9% increase in turnover. This was a
particularly pleasing result, given the difficult trading conditions and the
disruption in certain areas arising from the unusually heavy summer rainfall. 
The enhanced profitability was driven in part by Beacon, which is now trading
profitably, and by pleasing turnarounds at DairyBelle and the baking
operations where significant losses have been turned around into marginal
profits through the closure of loss-making bakeries. The losses in maize
milling have also been substantially curtailed. 
Langeberg produced a good result, although export volumes were depressed as a
result of a slower offtake by customers in the European Union. Improved
performances were also achieved by County Fair, King Food and Jungle Oats.
Notwithstanding strong volume growth, Tastic's results were marginally below
the previous year due to the deliberate decision to reduce prices on premium
brands in order to offer better value to the consumer. 
The Oceana Fishing Group improved headline earnings per share by 35%, whilst
Sea Harvest improved headline earnings per share by 5% despite catch rates
both in South Africa and Namibia being lower than in the previous year.
Agri-Poultry
Operating profit declined by 2% in the Agri-Poultry division. Although Meadow
Feeds and the poultry operations performed satisfactorily, the results were
affected by continuing losses in Golden Lay Farms. As noted above, a decision
has been taken to dispose of Golden Lay Farms and negotiations with regard to
the sale are at an advanced stage.
Wholesaling
The Wholesaling division, which includes the Spar Group and the 30% interest
in Jumbo Cash & Carry, improved operating income by 9%. This result was made
possible by a good performance from Spar, which benefited from growth in new
stores and an increased market share.
Healthcare
Adcock Ingram produced a good performance in the first six months, recording a
16% increase in operating profit on a turnover growth of 29%. The results were
favourably influenced by the acquisition of the UK-based Lagap
Pharmaceuticals.
Adcock Ingram is expected to make a growing contribution to Tiger's results. 
Associates
Income from associates showed good growth following a recovery in
profitability at Enterprise Foods and a sound performance by Chilean based
Empresas Carozzi. ConAgra Malt incurred a loss for the period as a result of
continued pressure on volumes and margins. 
YEAR 2000 COMPLIANCE
Following the comprehensive exercise undertaken to ensure that the company's
critical systems and processes were Year 2000 compliant, no difficulties were
experienced as a result of the millennium date change.
DIVIDEND
The company has declared an interim dividend of 68 cents per share (1999: 62,5
cents), which represents an increase of 9% over last year.
PROSPECTS
The group is well positioned to benefit from any improvement in consumer
spending. It is anticipated that the performance levels achieved in the first
six months will be sustained in the second half of the year, translating into
further real growth in earnings from continuing operations.
For and on behalf of the Board
R A WILLIAMS 
Chairman
N DENNIS 
Managing Director
18 May 2000

GROUP INCOME STATEMENT
                                 Unaudited                 Audited
                              Six months ended          Year ended
                                   31 March                30 Sept
                      Notes    2000        1999     Change    1999
                                 Rm          Rm     %           Rm
Turnover                    9 680.6     9 590.7     1     19 097.8
  Continuing operations     9 394.6     8 264.3    14     16 695.5
  Discontinued operations     286.0     1 326.4            2 402.3
Operating income before 
interest                   1  855.0       785.2     9      1 641.8
  Continuing operations       848.3       751.1    13      1 577.1
  Discontinued operations       6.7        34.1               64.7
  Income from investments 
including associates           21.4        21.2               46.5
  Interest (paid)/received, 
  net                        (109.1)       24.3               43.7
Income before taxation and 
abnormal items                767.3       830.7   (8)      1 732.0
  Abnormal items           2    3.1         7.3               69.6
Income before taxation        770.4       838.0            1 801.6
  Taxation                    259.3       260.1              529.5
Income after taxation         511.1       577.9            1 272.1
  Share of associated companies' 
retained income                28.1        18.9               56.2
Income after taxation 
including                     539.2       596.8            1 328.3
associate companies
  Attributable to outside 
  shareholders in 
  subsidiaries                 74.5       164.1              347.3
Net income for the period     464.7       432.7              981.0
Number of ordinary shares in 
issue (000's)               165 594     165 365            165 442
Weighted average number of 
ordinary shares on which headline 
earnings and net income
per share are based (000's) 165 504     165 156            165 290
Headline earnings per 
ordinary share (cents)        278.2       255.6     9        550.9
Net income per ordinary 
share (cents)                 280.8       262.0              593.5
Dividends per ordinary 
share (cents)                  68.0        62.5     9        194.0
Reconciliation of headline earnings
                                 Rm          Rm                 Rm
Net income for the period     464.7       432.7              981.0
  Adjusted for:
    Losses on sale or 
discontinuation of 
operations, net                18.0         3.5               52.7
    Profits on sale of fixed 
assets, net                    (6.5)       (3.2)             (4.4)
    Profits on change of interest 
in subsidiaries, associates 
and other investments         (15.8)     (10.8)            (118.7)
Headline earnings for the 
period                        460.4       422.2     9        910.6

Segmental analysis
                          Unaudited    Unaudited          Audited
                         Six months    Six months           Year
                            ended       ended              ended
Contribution to           31 March     31 March           30 Sept
operating income            2000         1999  Change       1999
before interest           Rm     %     Rm     %     %     Rm     %
Tiger Foods
  Food Brands          325.5    38  255.0    34    28  530.9    34
  Agri-Poultry          75.3     9   76.7    10    (2) 142.8     9
  Wholesaling & Other  103.9    12  123.2    16   (16) 280.4    18
                       504.7    59  454.9    60    11  954.1    61
Healthcare             343.6    41  296.2    40    16  623.0    39
Continuing operations  848.3   100  751.1   100    13 1 577.1  100
Discontinued operations  6.7         34.1         (80)  64.7      
                       855.0        785.2           9 1 641.8     

OTHER GROUP SALIENT FEATURES
                                            Unaudited      Audited
                                       Six months ended  Year ended
                                            31 March       30 Sept
                                          2000      1999      1999
Net worth per ordinary share (cents)       867     2 446     2 513
Net borrowings: Total funding* (%)        67.3  positive  positive
Interest cover - net (times)               8.0  positive  positive
Current ratio (:1)                         0.8       1.3       1.3
Capital expenditure (R million)          156.0     168.3     334.6
 - expansion                              76.6      88.3     151.0
 - replacement                            79.4      80.0     183.6
Capital commitments (R million)          131.6     143.8     257.6
 - contracted                             65.4      74.4     125.1
 - approved                               66.2      69.4     132.5
Capital commitments will be funded by operating cash flows 
and the utilisation of existing borrowing facilities.
Contingent liabilities
  Guarantees and contingent 
  liabilities                            235.0     138.4      92.0
Market and directors' valuation of investments and loans
  Listed - market value                  175.7     568.4     490.0
  Unlisted - directors' valuation      1 607.3   1 503.6   1 394.1
* Total funding represents net borrowings plus interest of all shareholders.

GROUP BALANCE SHEET
                                            Unaudited     Audited
                                             31 March     30 Sept
                                          2000      1999     1999
                                Notes       Rm        Rm       Rm
Capital employed
Share capital and premium                699.8     690.1     693.2
Non-distributable reserves and 
retained surplus                   3     123.4   3 001.1   2 555.5
Interest of shareholders of 
Tiger Brands Limited                     823.2   3 691.2   3 248.7
Interest of outside shareholders 
in subsidiaries                          262.9   1 085.3   1 086.7
Interest of all shareholders           1 086.1   4 776.5   4 335.4
Deferred taxation                         (1.7)     89.1     (5.4)
Long-term borrowings                     172.4     624.6     272.7
                                       1 256.8   5 490.2   4 602.7
Employment of capital
Fixed assets                           2 000.8   2 126.1   2 046.2
Investments                            1 008.0   1 734.7     975.5
Current assets                         6 788.7   6 808.5   6 615.7
  Inventories                          1 930.8   1 875.3   1 758.9
  Debtors                              2 693.1   2 719.0   2 609.6
  Cash resources                       2 164.8   2 214.2   2 247.2
Total assets                           9 797.5  10 669.3   9 637.4
Current liabilities                    8 540.7   5 179.1   5 034.7
  Short-term borrowings                4 227.3     862.3     923.3
  Creditors including shareholders 
  for dividends                        4 313.4   4 316.8   4 111.4
Net current (liabilities)/assets      (1 752.0)  1 629.4   1 581.0
                                       1 256.8   5 490.2   4 602.7

GROUP CASH FLOW STATEMENT
                                            Unaudited     Audited
                                             31 March     30 Sept
                                          2000      1999     1999
                                            Rm        Rm       Rm
Cash operating profit                  1 028.6     950.5   1 986.9
Working capital changes                  (61.7)   (135.0)   (76.4)
Net interest (paid)/received            (109.1)     24.3     43.7
Dividends received                        21.4      21.2     46.5
Taxation paid                           (175.8)   (130.5)  (634.0)
Cash available from operations           703.4     730.5   1 366.7
Dividends paid                          (226.9)   (281.6)  (433.2)
Net cash inflow from operating 
activities                               476.5     448.9     933.5
Net cash outflow from investing 
activities                            (3 854.7) (1 224.1)(1 407.8)
Net cash outflow before financing 
activities                            (3 378.2)   (775.2)  (474.3)
Net cash inflow from financing 
activities                             3 295.8     492.8     435.4
Net decrease in cash and cash 
equivalents                              (82.4)   (282.4)   (38.9)
NOTES
                                            Unaudited     Audited
                                             31 March     30 Sept
                                          2000      1999     1999
                                            Rm        Rm       Rm
1. Operating income
Operating income is reflected after charging:
  Cost of inventories utilised         6 697.9   6 767.7  12 339.0
  Depreciation                           130.3     131.6     293.6
2. Abnormal items
Net loss on discontinued and disposed 
operations                               (18.0)     (5.0)    (51.3)
Profit on sale of land and buildings       2.7       1.5      12.4
Profit on change of interest in 
subsidiaries, associates and 
other investments                         18.4      10.8     113.5
Other                                                         (5.0)
Abnormal profit before taxation            3.1       7.3      69.6
Taxation                                            (1.4)     (5.5)
                                           3.1       8.7      75.1
Outside shareholders' interest             1.6       0.3       0.4
Abnormal profit attributable to 
shareholders in Tiger Brands Limited       1.5       8.4      74.7
3. Non-distributable reserves and retained surplus
At the beginning of the year           2 555.5   3 291.9   3 291.9
Translation reserve movement             (29.6)    (33.5)     (1.4)
Arising on consolidation of 
subsidiaries                                                  (0.1)
Legal reserves created                                         3.4
Retained earnings for the period         345.3     329.0     659.7
Goodwill on associates written off                          (762.4)
Goodwill and trademarks in subsidiaries 
and joint ventures written off        (2 747.8)   (586.3)   (635.6)
At the end of the period                 123.4   3 001.1   2 555.5

ORDINARY (INTERIM) DIVIDEND NUMBER 111
Notice is hereby given that an interim dividend (number 111) of 68 cents per
share has been declared payable to shareholders who are registered in the
books of the company at the close of business on 9 June 2000. The transfer
books and registers of members will be closed from 10 June 2000, to 18 June
2000, both days inclusive.
The dividend is payable in the currency of the Republic of South Africa and
warrants in payment thereof dated 7 July 2000, will be posted to shareholders
by the company's transfer secretaries in South Africa and the United Kingdom
on or about 4 July 2000. Payments made by way of electronic transfer will be
made on 7 July 2000.
Registered shareholders paid from the United Kingdom will receive the United
Kingdom currency equivalent of the rand currency value of their dividends
(less appropriate taxes), the rate of exchange being determined on 19 June
2000.
By order of the Board
I W M Isdale
Secretary       18 May 2000
http://www.tigerbrands.co.za

Directors
Messrs RAWilliams (Chairman), D E Cooper (Deputy Chairman), N Dennis (Managing
Director) (British),B HAdams, C A Apsey, B P Connellan, G A L Ebedes*, 
M H Franklin*, WRCHolmes*, Ms W Y N Luhabe, JHMcBain* (British), P S Nortier*,
I B Skosana, R V Smither*, J L van den Berg, C F H Vaux*, C Wolpert      
*Executive directors

Company secretary
I W M Isdale

Registered office
85 Bute Lane, Sandown 
Sandton, South Africa
Postal address: 
POBox 78056 
Sandton, 2146, South Africa

London office
St James's Corporate 
Services Limited
6 St James's Place
London
SW1A 1NP

Share transfer secretaries
South Africa:
Mercantile Registrars Limited
11 Diagonal Street
Johannesburg
2001
Postal address: 
POBox 1053, Johannesburg, 2000 

United Kingdom: 
Computershare Services plc, POBox 82, 
Caxton House 
Redcliffe Way, Bristol, BS99 7NH