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AER
AER
AER - Amecor - Audited Results For The Year Ended 31 March 2007 and
dividend declaration
AMALGAMATED ELECTRONIC CORPORATION LIMITED ("AMECOR")
(Incorporated in the Republic of South Africa)
(Registration number 1997/010036/06)
Share code: AER & ISIN: ZAE000070587
("Amecor" or "the Company" or "the Group")
* Turnover R38,0 million; up 12,6%
* Operating profit R18,4 million
* Earnings per share maintained 20,1 cents
* Dividend maintained at 6,0 cents per share
* New products launched and new technology implemented
Audited Results For The Year Ended 31 March 2007 and dividend declaration
SUMMARISED GROUP INCOME STATEMENT
Twelve months Twelve months
ended ended
31 March 31 March
2007 2006
(Audited) (Audited)
R000`s R000`s
Turnover 38 000 33 756
Profit before interest, taxes, 18 518 18 772
depreciation and amortisation
(EBITDA)
Net interest received 572 264
Depreciation and amortisation (720) (852)
Operating profit before 18 370 18 184
taxation
Taxation (4 582) (4 632)
Profit attributable to 13 788 13 552
shareholders
Headline earnings per share 20,1 20,1
(cents)
Earnings per share (cents) 20,1 20,1
Shares in issue (000`s) 74 046 68 796
Adjustment for treasury shares (5 516) (1 481)
held
Shares in issue - weighted 68 530 67 315
average (000`s)
SUMMARISED GROUP BALANCE SHEET
31 March 31 March
2007 2006
(Audited) (Audited)
R000`s R000`s
Non-current assets
Property, plant and equipment 2 191 1 709
Patents, trade marks and 46 612 55 838
goodwill
Current assets 19 610 16 517
Cash resources 11 991 10 098
Other current assets 7 619 6 419
Total assets 68 413 74 064
Capital and reserves
Shareholders` funds 64 658 67 101
Non-current liabilities
Long-term liabilities - 18
Deferred tax 483 -
Current liabilities
Accounts payable 3 272 6 945
Total equity and liabilities 68 413 74 064
Tangible net asset value per 26,3 16,7
share (cents)
Net asset value per share 94,4 99,6
(cents)
SUMMARISED GROUP CASH FLOW STATEMENT
Twelve months Twelve months
ended ended
31 March 31 March
2007 2006
(Audited) (Audited)
R000`s R000`s
Net cash retained from 5 991 14 258
operating activities
Net income before tax,
adjusted for depreciation
and amortisation 20 216 19 036
Movement in working capital (4 873) (428)
Dividends paid (4 127) -
Tax paid (5 225) (4 350)
Cash utilised by investing (4 094) (45 486)
activities
Cash (utilised)/retained by (4) 40 080
financing activities
Net movements in cash 1 893 8 852
balances
Cash surplus/(deficit) at 10 098 (12)
beginning of period
Cash acquired - 1 258
Cash at end of period 11 991 10 098
STATEMENT OF CHANGES IN SHAREHOLDERS` EQUITY
Shares Distri-
Issued Share to be butable
capital premium issued reserve Total
R000`s R000`s R000`s R000`s R000`s
Balance at 1 673 68 973 11 655 (14 200) 67 101
April 2006
Dividends - - - (4 127) (4 127)
paid
Issue of 67 5 197 (11 655) - (6 391)
share
capital
Treasury (55) (5 658) - - (5 713)
shares
Profit - - - 13 788 13 788
attributable
to
shareholders
Balance 31 685 68 512 - (4 539) 64 658
March 2007
NOTES TO THE FINANCIAL RESULTS
BASIS OF PREPARATION
Amecor has adopted International Financial Reporting Standards (IFRS) for
the year ending 31 March 2007. The financial statements have been prepared
in accordance with South African Standards of Generally Accepted Accounting
Practice and the Listings Requirements of the JSE Limited ("JSE Listings
Requirements"). The accounting policies are consistent with those applied
in the comparative financial period.
COMMENTARY
Introduction
Amecor and its subsidiaries` principal businesses consist of the supply of
the following products and services to the security and security related
industries:
- digital long range wireless transmitters;
- computerised base stations, transmitters and intelligent data
repeaters;
- high speed data radio networks;
- guard monitoring units;
- radio, panic and transmitter packs; and
- the ownership and operation of licensed data radio networks throughout
South Africa.
Audit
The consolidated annual financial statements for the year ended 31 March
2007 have been audited by Moores Rowland Chartered Accountants (SA) and
their unqualified audit report on this set of summarised financial
statements is available for inspection at the Company`s registered office.
These summarised financial statements have been derived from the Group
financial statements and are consistent in all respects, with the Group
financial statements.
Financial and Operational Review
The FSK group faced a challenging year pursuant to the start up of a new
surface mount technology ("SMT") production line and the introduction of a
new range of SMT products.
Operating margins came under pressure due to:
- the phasing out of old conventional products;
- the conversion of designs and prototypes into new products and the
monitoring and design stress testing of pre-production on site test units;
- the establishment of new supply chains of SMT componentry and SMT
production lines;
- shorter less efficient production runs; and
- one time start up production inefficiencies, as a result of the
phasing out of old products and the introduction of new products.
Notwithstanding this evolutionary changeover in the FSK Group product
technology, the Group managed to increase turnover by 12,6% and achieved a
modest increase in operating profit.
Earnings per share have been maintained at 20,1 cents and the Group`s cash
position has improved by R1,9 million.
The board expresses its gratitude to the technical team for their sterling
efforts in implementing the changes necessary to bring about the new
generation products and technology.
Contingently Issuable Shares
The purchase price payable for the acquisition of the FSK Group in 2005 was
a minimum of R45 million which was fully discharged in 2006. Subject to the
achievement of certain excess profits, up to a further 5 250 000 ordinary
Amecor shares were to be made available for issue to the vendors (as set
out in paragraph 3.3.2 of the circular of 19 July 2005), the outcome of
which is subject to a dispute resolution arbitration process provided for
in the vendor agreements, which will occur during the last quarter of 2007,
and which will determine the quantum (if any) of additional shares to be
awarded.
Product Development
In the 2006 financial year the Group reported on its investment in research
and development and the broadening of the range of FSK products. Included
in the new product range introduced in the 2007 financial year are the
following principal new products:
- TX75X VHF synthesised alarm radio transmitter;
- R-Net decoder;
- GSM outstation; and
- GSM repeater/decoder.
These products have been well received by users and are expected to
contribute significantly to sustainable organic growth going forward.
Capital Commitments
The Group has committed to further product development costs in the sum of
approximately R1,5 million in the next financial year.
Outlook
Strong demand for the Group`s products and services continues. The board is
optimistic about the prospects of the Group and expects to achieve
continued organic growth in financial year 2008. FSK is well positioned to
benefit from longer production runs and benefits of scale from lower unit
manufacturing costs now that the new products and technology SMT production
lines are bedded in and operating at optimal capacity in house.
During the year under review Amecor was unable to conclude any strategic
acquisitions synergistic with FSK. Amecor remains committed to exploring
acquisition possibilities which would compliment the Group`s core strengths
in electronic manufacturing, distribution and electronic technology.
Change in Directorate
In terms of paragraph 3.59(b) of the JSE Listings Requirements, the Company
advises herewith the following:
In December 2006 Amecor`s chairman, Paul van Niekerk, took up residence
overseas, and is consequently no longer available as chairman. Paul
resigned his chairmanship at a board meeting on 29 May 2007 and Stephen
Courtney has taken over the role of non-executive chairman. Paul will
remain available as a technical adviser on a consultancy basis and
continues as a non-executive director.
Dividends
It is the Group`s policy to pay a single dividend annually and to retain a
3 times dividend cover. Accordingly, the board has approved a dividend
payment of 6,0 cents per ordinary share for the year ended 31 March 2007,
payable in terms of STRATE as follows:
Last day to trade cum dividend Friday, 15 June 2007
Trading ex dividend commences Monday, 18 June 2007
Record date Friday, 22 June 2007
Payment date Monday, 25 June 2007
Share certificates may not be dematerialised or rematerialised between
Monday, 18 June 2007 and Friday, 22 June 2007, both dates inclusive. The
certificated register will be closed for this period.
On behalf of the board
HS Courtney DH Alexander
Chairman Chief Executive
Johannesburg
30 May 2007
Directors
HS Courtney*, DH Alexander, KA Colley, M Noge**, P van Niekerk*
* non-executive ** independent non-executive
Transfer Secretaries
Link Market Services (Pty) Limited, 11 Diagonal Street, Johannesburg, 2001
(PO Box 4844, Johannesburg, 2000)
Registered office
2nd Floor, Moores Rowland House, 5 St Davids Place, Parktown, 2193
(PO Box 6697, Johannesburg, 2000)
Sponsor
Sansara Independent Sponsor Services (Pty) Ltd, First Floor, Block C
65 Central Street, Houghton, 2041
Visit us at www.amecor.com
INNOVATION THROUGH TECHNOLOGY
Date: 29/05/2007 17:30:19 Produced by the JSE SENS Department.
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