| Fri 1 Jun 2007, 17:05 | | DLV - Dorbyl Limited - Preliminary Group Results: |
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DLV
DLV
DLV - Dorbyl Limited - Preliminary Group Results: Year Ended 31 March 2007
Dorbyl Limited
(Incorporated in the Republic of South Africa)
(Company registration number 1911/001510/06)
Share code: DLV & ISIN: ZAE000002184
PRELIMINARY GROUP RESULTS FOR THE YEAR ENDED 31 MARCH 2007
ABRIDGED INCOME STATEMENT
Audited Audited
Year to Year to
March March
2007 2006 %
R000 R000 Change
Continuing operations:
Revenue 962 069 986 016 (2)
Operating income before impairment 11 448 25 334 (55)
of assets, provision for benefit
funds and restructuring and
retrenchment costs
Impairment of assets 113 (55 029)
Increase in provision for (3 381) (15 000)
retirement funds
Restructuring and retrenchment (20 776) -
costs
Operating loss (12 596) (44 695)
Net financial income 20 769 27 361 (24)
Financial income 26 829 32 842
Financial costs (6 060) (5 481)
Income - associate 91 340
Income/(loss) before taxation 8 264 (16 994)
Income Tax - normal and deferred 1 578 (11 619)
Income Tax - Secondary Tax on (1 342) (111 110)
Companies
Income/(loss) after taxation from 8 500 (139 723)
continuing operations
Profit after taxation from - 33 237
discontinued operations
Profit on sale of discontinued 9 436 700 643
operations, net of taxation
Profit for the year 17 936 594 157
Attributable to:
Equity holders of the parent 13 603 585 912
Minority interest 4 333 8 245
17 936 594 157
Earnings per share (cents)
Basic earnings/(loss) per share 40.1 1 741.6
Continuing operations 12.3 (439.8)
Discontinued operations 27.8 2 181.5
Headline earnings/(loss) per share 7.3 (176.1)
Continuing operations 7.3 (274.9)
Discontinued operations - 98.8
Headline earnings per share before
Secondary
Tax on Companies (STC) on special 7.3 151.6
dividends
Continuing operations 7.3 52.8
Discontinued operations - 98.8
Dividends paid per ordinary share 20 2 675
(cents)
Final - year ended 31 March 2006 10 65
(2005)
Interim - period ended 30 10 10
September 2006 (2005)
Special - 29 August 2005 - 2 600
Dividend cover - headline earnings 0.4 2.0
before STC on special dividend/
normal dividends (times)
Dividends declared per ordinary 10 10
share (cents) subsequent to year
end
Headline earnings reconciliation
Earnings per the income statement 13 603 585 912
Adjusted for: (11 129) (645 174)
Profit on sale of discontinued (9 436) (700 361)
operations
Impairment of fixed assets (113) 55 029
(Profit)/loss on sale of other (1 903) 620
fixed assets
Tax charge attributable to 323 (462)
adjustments
Headline earnings/(loss) 2 474 (59 262)
STC relating to special dividends - 110 253
Headline earnings before STC on 2 474 50 991
special dividends
Depreciation and amortisation 21 210 35 028
Financial income 26 829 32 842
Interest received 21 765 29 853
Foreign exchange gains 5 064 2 989
Financial cost (6 060) (5 481)
Interest paid (266) (2 554)
Foreign exchange losses (5 582) (2 715)
Preference dividends (212) (212)
ABRIDGED CASH FLOW STATEMENT
Audited Audited
Year to Year to
March March
2007 2006
R000 R000
Net cash (utilised)/generated by operations (67 165) 33 082
Operating cash flow 13 685 111 122
Movement in working capital (96 812) 12 506
Net interest received 21 287 27 087
Taxation paid (5 325) (117 633)
Net cash effect from investing activities (21 745) 895 807
Capital expenditure (26 847) (51 925)
Disposals of fixed assets 4 844 6 017
Disposals of businesses - 941 675
Decrease in advances 258 40
Net cash effect from financing activities (10 500) (898 426)
Dividends paid to equity holders (6 785) (906 905)
Dividends paid to minority interest (3 715) (2 457)
Net repayment of long/short-term borrowings - (532)
Increase in stated capital - 11 468
Net cash (outflow)/inflow (99 410) 30 463
Foreign currency translation effect - (2 782)
(Decrease)/increase in cash and cash (99 410) 27 681
equivalents
Cash and cash equivalents at beginning of 359 319 331 638
year
Cash and cash equivalents at end of year 259 909 359 319
SEGMENTAL ANALYSIS
Audited Audited
Year to Year to
March March
2007 2006
R000 R000
Segment Revenue
Continuing operations
Automotive Manufacturing 962 069 986 016
Discontinued operations
Building Products - 383 695
Total Segment Revenue 962 069 1 369 711
Segment Result
Continuing operations
Automotive Manufacturing 14 915 (8 981)
Automotive Manufacturing before impairment 14 802 46 048
of assets
Impairment of assets 113 (55 029)
Corporate and consolidation (27 511) (35 714)
Corporate and consolidation before (24 130) (20 714)
provision for benefit funds
Provision for benefit funds (3 381) (15 000)
Total continuing operations (12 596) (44 695)
Discontinued operations
Building Products - 51 693
Total Segment Result (12 596) 6 998
STATEMENT OF CHANGES IN EQUITY
Audited Audited
Year to Year to
March March
2007 2006
R000 R000
Balance at beginning of year 512 105 775 674
Transfers affecting retained earnings - 25 096
Direct movement in reserves (284) 15 072
Profit for the period 17 936 594 157
Shares issued - 11 468
Ordinary and special dividends (10 500) (909 362)
Balance at end of year 519 257 512 105
ABRIDGED BALANCE SHEET
Audited Audited
March March
2007 2006
R000 R000
ASSETS
Non-current assets 220 434 217 836
Property, plant and equipment 214 810 212 113
Investment in associate 286 1 200
Deferred tax assets 5 338 4 523
Current assets 526 887 576 333
Inventories 130 488 94 188
Trade and other receivables 136 490 122 826
Cash and cash equivalents 259 909 359 319
Total assets 747 321 794 169
EQUITY AND LIABILITIES
Total equity 519 257 512 105
Equity attributable to equity holders of 471 076 464 569
the parent
Minority interest 48 181 47 536
Non-current liabilities 42 781 40 468
Deferred tax liabilities 11 139 10 287
Preference share capital 3 980 3 980
Provisions 27 662 26 201
Current liabilities 185 283 241 596
Trade and other payables 165 387 217 548
Provisions 19 896 24 048
Total equity and liabilities 747 321 794 169
Capital commitments authorised 9 846 5 737
Contracted for 9 846 5 737
Contingent liabilities - 200
Other - 200
Operating lease commitments 18 987 25 458
Operating lease receivables 11 827 1 128
Investments and advances to associate at 286 1 200
valuation
Net asset value per share (cents) 1 389 1 369
Audited Audited
Year to Year to
March March
2007 2006
R000 R000
Capital expenditure
Expansion 6 856 29 438
Replacement 19 991 22 487
Ordinary shares (000)
Issued (excluding Treasury shares) 33 924 33 924
Weighted average (excluding Treasury 33 924 33 643
shares)
Review of operations
The Group`s activities are now concentrated largely in the motor industry,
producing automotive components for the automotive manufacturers and the
aftermarket, locally and abroad.
The increasing trend by automotive manufacturers to source components on a
worldwide basis has resulted in strong price pressures with a concomitant
adverse effect on profitability. It has been recognised that efficiencies have
to be improved substantially, including cost cut-back, in order to remain
competitive - various activities to support this drive have been initiated. The
downsizing of the corporate head office has also assisted in this regard.
The Group`s profitability is also being adversely impacted by the cessation by
manufacturers of certain product lines as a result of the phasing out of various
vehicle models and the phased commencement in the supply of the replacement
products for new models. This temporary situation will improve during the course
of this year. It is however also necessary to aggressively keep abreast of new
technologies to secure ongoing business. Focus is being placed on ensuring that
the Group`s manufacturing facilities remain aligned with the needs of the
automotive manufacturers. Encouragingly, the motor industry continues to grow
and is providing opportunities for expansion. It is envisaged that investment,
both in additional capacity and new technologies will be required to participate
in this growth.
Selected explanatory notes
Financial Results
The Group reflected attributable profits for the year under review of R13,6
million or 40,1 cents per share. The profit attributable to continuing
operations amounted to R4,2 million or 12,3 cents per share after taking into
account an abnormal charge of R20,8 million in respect of
restructuring/retrenchment costs resulting from the decision to downsize the
corporate head office. The lease in respect of the Parktown premises expired at
end March 2007 and the head office was relocated to smaller premises at the
Group`s Benoni operation.
Turnover of the continuing operations for the year declined by 2% to R962
million. Increased and continuing industry pressure on prices, lower take-offs
by the motor manufacturers on some components and rising steel prices adversely
impacted margins and the profitability of most of the operations during the
year. Excessive downtime due to machinery breakdown at the Casting operation
also adversely affected the performance of that operation.
Net financial income (including forex profits and losses) amounted to R20,7
million compared to R27,4 million for the corresponding prior year. Non-
recurring interest earned on the proceeds from the disposal of Alpine prior to
the distribution of the special dividend, had made a significant contribution to
last year`s figure.
The profit on the sale of discontinued operations of R9,4 million comprises a
favourable adjustment to the provision for bonuses that was raised in respect of
the sale of Alpine of
R17,5 million offset by legal costs and provisions of R8,1 million.
The net cash position at R259,9 million is R99,4 million lower than the position
at 31 March 2006 due mainly to the adverse working capital movement. New vehicle
models and additional export contracts necessitated an increase in stock
holdings of R36 million in the second half of the year. Turnover in March 2007
was higher than at March 2006 resulting in R14 million higher debtors at year-
end. Creditors reduced significantly from the prior year mainly due to a change
in credit terms of the main raw material suppliers (R23 million). Payments of
R28 million relating to amounts provided for at 31 March 2006, mainly bonuses,
further negatively impacted the working capital movement.
Basis of preparation and Audit Opinion
The provisional financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS). The accounting policies are
consistent to those applied in the prior comparative year.
The unmodified audit reports of KPMG Inc. included in the financial statements
and on the summarised financial statements contained in this abridged report are
available for inspection at the company`s registered office.
Outstanding issues
As disclosed in the annual report for the year ended 31 March 2006, there are a
number of issues which remain unresolved, these being mainly of a litigious
nature. These include guarantees issued in favour of the liquidator of certain
companies against which the Group has claims in order for the liquidator to
pursue further claims against former directors and shareholders of those
companies. The directors and shareholders of these companies have indicated from
time to time during the proceedings, their intention to lodge claims against the
liquidator and, through the guarantees, Dorbyl Limited. The directors of Dorbyl
Limited and their legal advisors believe these claims to be spurious and without
substance. In addition, there are various legal claims relating to labour
disputes and a claim by a former director following his dismissal in the prior
financial year. All of these issues are ongoing.
Dorbyl Pension and Provident Funds
The Financial Services Board (FSB) approved the surplus apportionment proposal
as originally submitted in regard to the Provident Fund and the distribution has
largely been completed.
In regard to the Pension Fund, however, the valuation was rejected by the FSB
and its decision has been taken on appeal. The amount in dispute is R37,3
million inclusive of interest, which has not been provided for based on the
opinion of the actuaries. This is in addition to the Group`s exposure to the
deficit expected in the Pension Fund after the distribution of the surplus. The
current provision in respect of this deficit has been adjusted to R18,4 million.
Prospects
The Group is actively engaged in both restructuring its operations and
developing its future strategy. The operating results of the manufacturing
operations are not expected to improve materially in the 2007/2008 financial
year.
A major capital expenditure injection is under consideration in respect of the
refurbishment of the casting facility at Benoni in order to reduce downtime and
rejects. Capacity expansions are also being planned for the forging and
machining facilities in Uitenhage and Port Elizabeth. Acquisitions of strategic
businesses are also being considered and is an ongoing process. There have been
no concrete developments in this regard to date. Should any such acquisitions
materialise, appropriate announcements in accordance with the rules of the JSE
Limited will be made.
DIVIDEND NO. 115
A final dividend of 10 cents per ordinary share has been declared. The last date
to trade "cum" the final dividend in order to participate in the final dividend
will be Friday, 22 June 2007. The shares of Dorbyl will commence trading "ex"
the final dividend from the commencement of business on Monday, 25 June 2007 and
the record date will be Friday, 29 June 2007. The final dividend is payable on
Monday, 2 July 2007.
No dematerialisation or rematerialisation of share certificates may take place
between Monday, 25 June 2007 and Friday, 29 June 2007, both days inclusive.
On behalf of the board
John Newbury (Chairman)
Roland Rohrs (Chief Executive)
1 June 2007
Transfer secretaries:
Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street, Johannesburg 2001
(P O Box 61051, Marshalltown, 2107).
Company secretary and registered office:
BD Bhikha,
Lincoln Road, Industrial Sites,
Benoni South, 1501.
PO Box 5500, Benoni South, 1502
Sponsor: PSG Capital Limited
Building 8, Woodmead Office Park, 1 Woodmead Drive, Woodmead
PO Box 987, Parklands, 2121
Directors: JE Newbury (Chairman)**,
RF Rohrs (Group Chief Executive)*,
JB Magwaza**, T van Wyk***, PM Bester**.
* Executive director ** Independent non-executive directors
*** Non-executive director
Date: 01/06/2007 17:05:00 Produced by the JSE SENS Department.
