AVI LIMITED: Strong Growth, Dividend Boost

  • Strong Financial Performance: AVI LIMITED's 2023 results reveal growth despite challenges, with revenue up 7.8% and increased profitability.
  • Resilience Amidst Adversities: The company's ability to offset macroeconomic challenges and maintain stable margins underscores its resilience.
  • Shareholder Reward: AVI LIMITED declares a final dividend of 310 cents per share, emphasizing its commitment to shareholders.
AVI

AVI LIMITED has revealed its financial performance for the year ended 30 June 2023. The company faced challenges in a turbulent macroeconomic environment, but its resilience and strategic measures have yielded positive results.

Key Financial Highlights

AVI LIMITED reported a series of key financial statistics for the year, demonstrating both growth and resilience in the face of adversities:

Financial Metric% Change
Revenue+7.8%
Gross Profit+9.1%
Operating Profit+6.9%
Headline Earnings+4.4%
Headline Earnings per Share+4.3%
Earnings per Share+4.8%

The company operated in a challenging macroeconomic environment, dealing with increased levels of load-shedding that disrupted operations. These challenges translated into a direct operating cost of R58.5 million and significant indirect costs.

One of AVI LIMITED’s subsidiaries, I&J, faced profitability challenges due to higher fuel prices, poor catch-rates, load-shedding costs, and lockdown-induced impacts on abalone sales mix during the first semester.

However, despite these hurdles, the company managed to increase its Group revenue by 7.8%. To counter the weaker Rand and rising raw material costs, AVI implemented price increases across all categories, resulting in stable gross margins.

The second semester brought improved operating profit, with a notable increase of 14.5%. For the year, the operating profit increased by 6.9%. When excluding I&J, the operating profit for the year soared by an impressive 12.7%.

AVI LIMITED also benefited from a lower corporate tax rate, providing a R9.4 million tax benefit. This led to a 4.3% increase in headline earnings per share, reaching 553.6 cents.

Strong Cash Generation and Dividend Declaration

One of the company’s standout achievements was its strong cash generation, supported by a reduction in working capital during the second half of the year. As a result, AVI LIMITED has declared a final gross ordinary dividend, No. 102, of 310 cents per share for the year ending 30 June 2023.

Shareholders should take note that this dividend will be subject to a 20% dividend withholding tax, resulting in a net final dividend of 248 cents per share for shareholders who are not exempt from paying dividend tax. Shareholders are advised to declare their status to their regulated intermediary, as they may qualify for a reduced dividend tax rate or exemption.

Here are the important dates related to the dividend:

  • Last day to trade cum dividend on the JSE: Tuesday, 17 October 2023
  • First trading day ex-dividend on the JSE: Wednesday, 18 October 2023
  • Record date: Friday, 20 October 2023
  • Payment date: Monday, 23 October 2023

In accordance with the requirements of Strate Limited, share certificates may not be dematerialized or rematerialized between Wednesday, 18 October 2023, and Friday, 20 October 2023, inclusive.

Dividends for certificated shareholders will be transferred electronically to shareholders’ bank accounts on the payment date. AVI LIMITED no longer issues cheques, and all payments will only be made into a nominated bank account by electronic funds transfer. Shareholders who have not yet provided their bank account details to Computershare Investor Services Proprietary Limited are reminded to contact Computershare on 0861 100 950 with their bank account details into which the dividends can be paid electronically. Shareholders who hold dematerialized shares will have their accounts at their CSDP or broker credited on Monday, 23 October 2023.

Independent Auditors’ Report

The summarised consolidated annual financial statements for the year ended 30 June 2023 have been audited by Ernst & Young Inc., who expressed an unmodified opinion. The auditor also expressed an unmodified opinion on the consolidated annual financial statements from which the summarised annual consolidated financial statements were derived. The consolidated annual financial statements and auditor’s report, including key audit matters, are available on the Company’s website.

Conclusion

Despite the challenging economic conditions and operational disruptions, AVI LIMITED has shown remarkable resilience and growth in its financial performance. The declaration of a final dividend underscores the company’s commitment to its shareholders. As the South African economy continues to navigate uncertainties, AVI LIMITED’s ability to adapt and prosper is a testament to its strength and strategic foresight.

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