| Mon 21 May 2007, 9:29 | | ASO - Austro - Interim Results For The Six Months |
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ASO
ASO
ASO - Austro - Interim Results For The Six Months Ended 28 February 2007
Austro Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 2001/029771/07)
Share code: ASO & ISIN: ZAE000090882
("Austro" or "the company")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 28 FEBRUARY 2007
HIGHLIGHTS
Revenue increased by 27% to R94,8 million
Net profit before tax increased by 22% to R18,4 million
Core earnings per share increased by 65% from 3,27 cents to 5,39 cents per
share
Acquisition of New Way Motor and Diesel Engineering (Pty) Limited
CONDENSED INCOME STATEMENTS
Audited
year ended
28 February 28 February 31 August
2007 2006 2006
R R R
Revenue 94 796 755 74 489 726 175 850 787
Profit from operations 17 948 457 15 005 370 40 632 812
Finance income 484 053 99 444 32 189
Net profit before tax 18 432 510 15 104 814 40 665 001
Taxation 5 345 428 4 380 396 13 074 393
Net profit after tax 13 087 082 10 724 418 27 590 608
Dividends - - 9 000 000
Number of shares in 328 261 400 308 261 400 308 261 400
issue
Weighted average number 309 928 067 308 261 400 308 261 400
of shares Note
EPS (cents) 4,22 3,5 9,0
Net profit after tax 13 087 082 10 724 418 27 590 608
Net profit on disposal (1 075 323) - -
of assets
Headline earnings 12 011 759 10 724 418 27 590 608
Headline earnings per 3,9 3,5 9,0
share (cents) HEPS
Note: For comparative purposes the shares in issue in those periods have
been adjusted to provide more meaningful information.
CONDENSED BALANCE SHEETS
Audited
28 February 28 February at 31 August
2007 2006 2006
R R R
Assets
Non-current assets 24 389 498 29 350 522 30 360 498
Current assets 90 411 088 53 920 443 72 683 102
Inventories 54 000 399 26 984 186 35 402 419
Trade and other 13 255 879 11 313 367 23 546 069
receivables
Cash resources 23 154 810 15 622 890 13 734 614
Total assets 114 800 586 83 270 965 103 043 600
Equity and liabilities
Capital and reserves 53 766 965 11 855 052 19 721 242
Share capital and share 20 958 651 10 10
premium
Accumulated profits 32 808 314 11 855 042 19 721 232
Non-current liabilities 423 351 384 434 480 351
Deferred taxation 423 351 384 434 480 351
Current liabilities 60 610 270 71 031 479 82 842 007
Trade and other payables 40 787 852 23 528 326 40 438 272
Amount owing for 27 850 5 250 000 5 445 790
purchase of subsidiary
Other liabilities 85 755 3 111 008 358 636
Shareholders for - 23 000 000 22 000 000
dividends
Taxation 19 708 813 16 142 145 14 599 309
Total equity and 114 800 586 83 270 965 103 043 600
liabilities
CASH FLOW STATEMENTS
Audited
6 months 6 months 12 months
28 February 28 February 31 August
2007 2006 2006
R R R
Cash flows from 10 903 872 12 237 470 27 198 983
operating activities
Cash generated by 10 655 743 12 164 747 37 889 479
operations
Interest received 484 053 99 444 32 189
Taxation paid (235 924) (26 721) (10 722 685)
Cash flows from (169 436) (809 696) (3 552 425)
investing activities
Cash flows from (1 314 240) (6 433 148) (20 540 208)
financing activities
Issue of shares 20 958 641 - -
(Decrease) in non- (272 881) (6 433 148) (10 540 208)
trading liabilities
Dividends paid (22 000 000) - (10 000 000)
Net increase in cash 9 420 196 4 994 626 3 106 350
resources
Cash resources at 13 734 614 10 628 264 10 628 264
beginning of period
Cash resources at end of 23 154 810 15 622 890 13 734 614
period
STATEMENTS OF CHANGES IN EQUITY
Audited
6 months 6 months 12 months
28 February 28 February 31 August
2007 2006 2006
R R R
Share capital and share 20 958 651 10 10
premium
Balance at beginning of 10 10 10
period
Issued during period 24 953 024 - -
Share issue expenses (3 994 383) - -
written off
Accumulated profits 32 808 314 11 855 042 19 721 232
Balance at beginning of 19 721 232 1 130 624 1 130 624
period
Net profit for the 13 087 082 10 724 418 27 590 608
period
Dividends declared - - (9 000 000)
Total capital and 53 766 965 11 855 052 19 721 242
reserves
COMMENTARY
INTRODUCTION
Established in the 1980s, Austro is a distributor of premium quality
woodworking equipment and sells and maintains tools, blades and cutters for
this equipment. The group has more than 20% of the market for imported
woodworking equipment and long-standing distribution relationships with the
leading European equipment manufacturers such as Boere, Casolin, Felder,
Striebig and Weinig.
The directors are pleased to present the maiden interim financial results
of the company for the six months ended 28 February 2007 ("the interim
period").
FINANCIAL RESULTS
Austro has managed to maintain strong and consistent growth in revenue and
profitability and met its forecast for the first six months. It has
achieved its objectives of listing on the JSE Limited ("JSE") and
management has integrated well into the new corporate reporting structure.
The 27% growth in revenue from R74,5 million to R94,8 million was driven
by increased demand in the construction and allied sectors as well as price
increases.
Gross profit margins exceeded forecast levels and management have not seen
margin compression post the interim period.
Net profit after taxation for the period increased 22% from R10,7 million
to R13,09 million despite a loss of R3,6 million incurred on the fair
valuing of foreign exchange contracts ("FECs") required to be accounted for
through the income statement in terms of International Financial Reporting
Standards ("IFRS"). Included in net profit after taxation is a profit on
disposal of property, plant and equipment of approximately R1 million. A
further profit of R6,7 million on the disposal of property was realised
post the interim period.
In order to provide comparability with future periods, and as additional
disclosure of operational performance, core earnings have been calculated
whereby adjustments for the FECs are removed from the income statement. On
this basis, core earnings per share increased 65% from 3,27 cents to 5,39
cents.
Austro increased its stock levels significantly in order to meet customer
demand as well as taking advantage of competitive pricing from suppliers on
favourable terms. Despite the increase in stock the group improved cash and
cash equivalents by 48% from R15,6 million to R23,1 million. The share
capital and share premium increased as a result of the capital raising
undertaken at the time of listing.
PROSPECTS
The board of directors remain optimistic with regard to the group`s
prospects to August 2007 and beyond due to the strong organic growth
underpinned by high levels of economic activity in the construction
industry. The current construction boom is expected to continue for the
foreseeable future driven by the continued economic growth in the country,
an enlarged consumer base and increased consumer spending on a wide range
of construction and industrial products.
Historically the group has outperformed in the second half of the financial
year compared to the first due to the December and January shut-down
period. This trend is expected to positively affect the following six-month
period`s results.
In addition, Austro announced that it has concluded an agreement for the
acquisition of New Way Motor & Diesel Engineering (Pty) Limited ("New
Way"), subject to the fulfilment of certain outstanding conditions, the
details of which are included in the financial effects announcement below.
On implementation of the acquisition, the group is poised to benefit not
only from New Way`s organic growth potential but through the unlocking of
synergies within the enlarged group.
The strategic decision to expand Austro`s service offering and footprint in
the industrial supplies sector is based on the expectation that alternative
power is becoming critical for conducting business due to the frailty of
the power supply infrastructure as well as increased economic activity
towards 2010. Both Austro and New Way are highly regarded for the best of
breed products and excellent customer service that their respective markets
demand.
DIVIDEND POLICY
The dividend policy will be reviewed periodically taking into account
prevailing circumstances and future cash requirements. Initially, all
earnings generated by the company will be utilised to fund future growth.
Accordingly, in line with group policy, no dividend has been declared for
the interim period.
BASIS OF PREPARATION AND REVIEW OPINION
The interim results have been prepared in accordance with IAS 34 (Interim
Financial Reporting). The accounting policies applied in preparing these
interim financial statements are consistent with those applied in the prior
interim period and at previous year-end and are in accordance with IFRS.
These interim results have been reviewed by PKF (Jhb) Inc. Their
unqualified review report is available for inspection at the company`s
registered office.
CHANGES TO THE BOARD OF DIRECTORS
Subsequent to the interim period, W Hauser was appointed as a non-executive
director.
APPRECIATION
We thank our loyal staff for their commitment and hard work which
contributed to Austro`s achievement of its milestone listing on the JSE. We
also thank our customers, business partners, advisors, suppliers and most
importantly our shareholders for their ongoing support and faith in the
group.
By order of the board
Daniel Rothlisberger Brian Downs
Director Director
21 May 2007
Non-executive directors:
DS Brouze (Chairman), R Jonah
Executive directors:
D Rothlisberger, BD Downs
Registration number:
2001/029771/07
Business address:
1125 Leader Road, Stormill Ext 4, Roodepoort, Johannesburg
Business postal address:
PO Box 1914, Florida, Johannesburg 1710
Company secretary:
AL Pretorius (CA(SA), ACMA(UK))
Telephone: 011 472 0910
Facsimile: 011 472 0925
Transfer secretaries:
Computershare Investor Services 2004 (Pty) Limited
Sponsor:
Java Capital (Proprietary) Limited
Visit our website: www.austro.co.za
Date: 21/05/2007 09:29:25 Produced by the JSE SENS Department.
