|Cash flow analysis (R’m)||2015||2014||% change|
|Net cash from operating activities||2 512||2 134||18|
|Change in working capital||(546)||28|
|Cash effect from commodity hedging||16||(8)|
|Cash generated from operations||1 982||2 154||(8)|
Net cash from operating activities amounting to R2 512 million (2014: R2 134 million including discontinued operations) improved 18% on the prior year. Working capital investment for the year under review increased to 14.0% of revenue (2014: 11.5%). The increase was due to the timing of the payment for raw material imports and significant maize price inflation. Working capital continues to be managed optimally.
Proceeds on the sale of property, plant and equipment of R176 million (2014: R56 million) mainly included the disposal proceeds in respect of the old bakery fleet, and the biscuit and Pepsi lines.
Effective 1 March 2015, the Group invested R81 million for a 51% interest in Food Concepts Pioneer Limited, a Nigerian group of bakeries. A conservative fix and optimise strategy will be followed to achieve profitability in the medium term.
On 1 October 2015, all conditions precedent for the disposal of the Group’s interest in Maitland Vinegar Works (Pty) Ltd were met. At 30 September 2015, the assets and liabilities relating to this interest have been presented as assets held for sale.
As announced on SENS on 23 April 2015, Pioneer Foods entered into an agreement to acquire 50% in Future Life Health Products (Pty) Ltd. On 9 November 2015, the Competition Tribunal of South Africa granted conditional approval of this transaction. The conditions will have no negative impact on the commercial merits of this investment.
The Group is satisfied that the healthy cash generated from normal operating activities will continue and along with the above finance facilities, will meet working capital requirements and the expansion plans of the foreseeable future.