| Wed 6 Jun 2007, 17:15 | | IVT - Invicta Holdings Limited - Audited group res |
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IVT
IVT
IVT - Invicta Holdings Limited - Audited group results: year ended 31 March 2007
INVICTA HOLDINGS LIMITED
www.invictaholdings.co.za
(Registration number 1966/002182/06)
(Incorporated in the Republic of South Africa)
(Share code: IVT)
(ISIN code: ZAE000029773)
FINANCIAL RESULTS
Revenue up 40%
Earnings per share up 73%
Dividend up 53%
AUDITED GROUP RESULTS FOR THE YEAR ENDED 31 MARCH 2007
CONSOLIDATED CONDENSED INCOME STATEMENT
2007 2006 %
R`000 R`000 change
Revenue 2 663 398 1 907 754 40
Operating income 281 229 197 843 42
Interest and preference dividend received 137 247 21 396
Finance costs (162 648) (40 552)
Profit before taxation 255 828 178 687 43
Taxation 38 104 53 522
Profit for the year 217 724 125 165
Attributable to ordinary shareholders 215 994 125 455 73
Minority interest 1 730 (290)
Earnings per share (cents) 292 170 73
Diluted earnings per share (cents) 288 169 70
Determination of headline earnings
Attributable earnings 215 994 125 455
Adjustments - after taxation and minority
interests where applicable
- Profit on issue of shares by subsidiary 666 -
- Profit on disposal of interest in 22 565 -
subsidiary
- Profit on disposal of property, plant 738 29
and equipment
Headline earnings 192 025 125 426 53
Shares in issue
Weighted average (000s) 73 866 73 861
At the end of the year (000s) 74 341 73 861
Number of shares used for diluted 75 122 74 246
earnings per shares (000s)
Headline earnings per share (cents) 260 170 53
Diluted headline earnings per share 256 169 51
(cents)
CONSOLIDATED CONDENSED BALANCE SHEET
2007 2006
R`000 R`000
ASSETS
Non-current assets 1 542 932 1 547 755
Property, plant and equipment 118 097 123 220
Investments 1 195 303 1 195 303
Goodwill and other intangible assets 210 323 203 701
Deferred taxation 17 722 19 843
Loan receivable 1 487 5 688
Current assets 1 443 374 949 924
Inventories 875 315 633 901
Accounts receivable 372 316 289 655
Bank balances and cash 195 743 26 368
2 986 306 2 497 679
EQUITY AND LIABILITIES
Capital and reserves 930 846 718 531
Attributable to ordinary shareholders 886 161 716 296
Minority interest 44 685 2 235
Non-current liabilities 1 193 311 1 203 060
Long-term borrowings 1 193 311 1 203 060
Current liabilities 862 149 576 088
Bank overdrafts and bankers` acceptances 342 105 642
Short-term borrowings 19 440 19 984
Accounts payable 780 066 401 574
Provisions 62 301 48 888
2 986 306 2 497 679
CONSOLIDATED CONDENSED CASH FLOW STATEMENT
2007 2006
R`000 R`000
Cash flows from operating activities
Cash generated from operations 364 698 98 372
Finance costs (162 648) (40 552)
Dividends paid (55 152) (46 494)
Taxation paid (25 211) (58 704)
Interest and dividend received 137 247 21 396
Net cash inflow (outflow) from operating 258 934 (25 982)
activities
Cash flows from investing activities
Net cash effects of asset acquisitions (11 474) (31 129)
Net cash effects of other investing 32 439 (1 523 416)
activities
Cash flows from financing activities
Net cash effects of shares issued 4 200 271 505
Net cash effects of borrowings (repaid) (9 424) 1 203 645
raised
Net increase (decrease) in cash and cash 274 675 (105 377)
equivalents
Cash and cash equivalents at the (79 274) 26 103
beginning of the year
Cash and cash equivalents at the end of 195 401 (79 274)
the year
CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN EQUITY
2007 2006
R`000 R`000
SHARE CAPITAL
Balance at beginning of year 3 693 2 894
Shares issued - 799
Share options issued 24 -
Balance at end of year 3 717 3 693
SHARE PREMIUM
Balance at beginning of year 277 058 6 352
Shares issued - 270 706
Share options issued 4 176 -
Balance at end of year 281 234 277 058
RETAINED EARNINGS
Balance at beginning of year 426 673 347 787
Earnings attributable to ordinary 215 994 125 455
shareholders
Dividends paid (54 656) (46 569)
Balance at end of year 588 011 426 673
OTHER RESERVES
Balance at beginning of year 8 872 8 042
Share appreciation rights issued 4 352 -
Arising on translation of foreign (25) 830
operations
Balance at end of year 13 199 8 872
Attributable to ordinary shareholders 886 161 716 296
MINORITY INTEREST
Balance at beginning of year 2 235 163 739
Earnings attributable to minorities 1 730 (290)
Dividends paid to minorities (580)
Net investment in subsidiaries - (161 214)
Equity input by minorities 41 300 -
Balance at the end of year 44 685 2 235
OTHER INFORMATION
Debt: Equity ratio (%) (excluding the - 18
long-term BEE funding debt secured by
investments)
Depreciation and amortisation (R`000) 22 696 22 566
Net asset value per share (cents) 1 192,0 969,8
Tangible net asset value per share 909,1 694,0
(cents)
Capital expenditure 16 016 35 863
Contingent liabilities (R`000) 3 750 3 954
Segment information on these businesses is presented below:
Capital
Engineering equipment
consumables and spares
R`000 R`000 R`000 R`000
2007 2006 2007 2006
Revenue 1 355 179 1 172 670 1 308 219 735 084
Operating profit 173 412 154 564 71 075 43 279
before finance
costs, interest and
preference dividend
received
Balance sheet
Assets 772 005 707 515 684 949 797 518
Liabilities 251 518 284 800 526 786 295 391
Segment information on these businesses is presented below: (Contd)
Non-segment
allocations
R`000 R`000 R`000 R`000
2007 2006 2007 2006
Revenue - - 2 663 398 1 907 754
Operating profit 36 742 - 281 229 197 843
before finance
costs, interest and
preference dividend
received
Balance sheet
Assets 1 529 352 992 646 2 986 306 2 497 679
Liabilities 1 277 156 1 198 957 2 055 460 1 779 148
Geographical segments: The group has not reported segment information by
geographical location as the operations occur substantially within Southern
Africa.
NOTES TO THE FINANCIAL INFORMATION
Basis of Preparation
The consolidated condensed financial statements have been prepared in accordance
with IAS 34 - Interim Financial Reporting and in the manner required by the
Companies Act of South Africa and the JSE Limited`s Listing Requirements. The
principal accounting policies as set out in the group`s 2006 annual report have
been consistently applied throughout the year under review.
The group previously reflected discounts received from suppliers and discounts
allowed to customers as selling, administration and distribution expenses. In
terms of circular 9/2006 issued by the South African Institute of Chartered
Accountants, the group now accounts for discount received as part of costs of
sales R3 095 000 (2006: R1 289 000) and sets off discount allowed against sales
R7 425 000 (2006: R5 450 000).
Comments
Group activities
The Invicta Group continues to be a major regional player in the importation and
distribution of:
* Bearings, belts, seals, power transmission products, geared motors and
fasteners (Bearing Man Limited ("Bearing Man"))
* Agricultural machinery and equipment (Northmec Division ("Northmec") and New
Holland SA ("New Holland"))
* Construction and earthmoving equipment, turf grooming equipment and golf
utility cars(CSE Division ("CSE"))
* Automotive and motorcycle parts (Autobax Division ("Autobax"))
Financial overview
The group has again achieved excellent results in a record breaking year, as
well as concluding its BEE transaction with aloeCap (Pty) Ltd in March 2007.
The Group experienced improved trading conditions in all its sectors, save for
earthmoving machinery. Group turnover grew by a healthy R756 million (40%) to an
all time high of R2 663 million. New Holland (acquired 1 April 2006) contributed
R331 million of the growth, Bearing Man R183 million, and the balance of R242
million came primarily from Northmec.
Operating income grew by 42% to R281 million, which translated into profit
before tax of R256 million, an increase of 43%. Earnings attributable to
ordinary shareholders improved by 73% to R216 million, which translates into
earnings per share of 292 cents per share, up 73% on last year. Headline
earnings per share, determined after adjusting for profits on disposal of a
subsidiary arising mainly from the issue of 20% of Humulani Investments (Pty)
Ltd (which houses all the group`s trading assets) to aloeCap, grew by 53% to 260
cents per share. The increased focus during the year on cash flow management
resulted in strong cash generation and the group ended the year with net cash
and cash equivalents of R195 million, an increase of R275 million over last
year.
Bearing Man turned in another good performance. Good trading conditions in the
engineering consumables sector, a weaker Rand in the second half and
contributions from acquisitions made last year, saw turnover grow by 16% to R1
355 million. However, greater growth in lower margin business resulted in
operating income growing by only 12% to R173 million.
The agricultural sector improved considerably from last year. Grain plantings
returned to normal, grain prices recovered, and early summer rains were good.
This, combined with significant export sales into Africa, contributed to
Northmec`s large growth in turnover. The group acquired 100% of the share
capital of New Holland and its subsidiary, Farmmac, on 1 April 2006. The cash
outflow on the acquisition was R64 million, comprising cash flow on acquisition
of R22 million and bank overdraft of R42 million. The acquisition of New Holland
was bedded down within 3 months, and it recorded a small profit for the year,
despite significant once-off restructuring costs, which is a laudable feat by
management.
CSE, the earthmoving machinery division experienced very competitive market
conditions. The market was buoyant due to increased infrastructural expenditure
and growth in the construction industry. This resulted in good volume growth in
the industry and CSE`s turnover grew by 8%, but pressure on margins resulted in
operating profit being 5% lower than last year. The entry of cheaper products
into the market, mainly from the Far East, increased competition in an already
competitive market, which is not likely to change in the short term.
BEE TRANSACTION
On 16 March 2007, the group announced its BEE equity transaction. It issued 20%
of Humulani Investments (Pty) Ltd (see above) to aloeCap for R93 million cash,
and 5% to a Group staff trust which was established to benefit the black staff
of the group, for R23 million. AloeCap has over the past 10 years built a solid
track record as a significant advisor to the public sector, an investor in
various businesses in the mining, fabrication, wholesaling, IT and events
management industries, and a raiser of substantial funds from financial
institutions for its clients. The group is delighted to welcome its new partners
aboard and we look forward to their participation in growing the group.
Appointments to the board
The group is delighted to announce the following appointments to the board of
directors of Invicta Holdings Ltd, effective 7 June 2007:
* Attlee Masuku, as non-executive director. He is the managing director of the
aloeCap group;
* Joe Mthimunye, as alternate director to Attlee Masuku. He is the executive
chairman of the aloeCap group;
* Tony Sinclair, who was previously an alternate director to Michael Rose-Innes,
is the managing director of the Agricultural and Construction machinery
divisions;
* Craig Barnard, the company secretary, as Commercial director; and
* Charles Walters, as alternate director to David Samuels. He is the managing
director of Bearing Man.
Prospects
The engineering consumables sector is expected to continue at current levels,
which should enable Bearing Man to produce real growth. The current trading
conditions in the agricultural sector are, however, less than ideal, with a
large part of the grain growing areas of the country in the grips of a drought,
which, combined with reduced exports into Africa, are likely to result in a
reduced profit contribution from the group`s agricultural machinery divisions in
the coming year. As noted above, the group`s earthmoving machinery division,
CSE, faces severe competition in its markets as more and more Eastern Bloc
products flood onto the market, making it unlikely that it will be able to
improve on its performance next year. The acquisition of 60% of Tiletoria,
announced by Invicta on 22 December 2006 was completed on 1 June 2007 with the
payment of R42 million in cash to the vendors. Tiletoria`s results will be
consolidated into the group from that 1 June 2007. Its contribution will not be
material in the coming year as its expansion plans will take some time to
achieve, whereafter we anticipate a considerable contribution from this company.
The group continues to pursue various acquisitions to underpin long term growth.
Given the uncertain conditions mentioned earlier and the slight dilution arising
from the introduction of BEE partners in Humulani, management is expecting a
much reduced growth in the coming year. It is however confident, that its long
term strategies will continue to provide a solid platform for sustained growth
in future years.
Dr C H Wiese A Goldstone
Chairman Managing Director
Audit opinion
Our auditors, Deloitte & Touche, have issued their opinion on the group`s
financial statements for the year ended 31 March 2007. They have issued an
unmodified audit opinion. A copy of their report is available for inspection at
the company`s registered office. These summarised financial statements have been
derived from the group`s annual financial statements and are consistent in all
material respects with the group annual financial statements.
Dividends
The board has declared a final cash dividend of 71 cents per share.
In compliance with the requirements of STRATE the following dates are
applicable:
Last date to trade cum dividend Friday, 22 June 2007
First date of trading ex dividend Monday, 25 June 2007
Record date Friday, 29 June 2007
Payment date Monday, 2 July 2007
Share certificates may not be dematerialised or rematerialised from Monday, 25
June 2007 to Friday, 29 June 2007, both days inclusive
2007 Increase % 2006
(cents) (cents)
Interim Dividend 33 27
Final Dividend 71 48
104 53 68
By order of the board
C Barnard
Secretary
Johannesburg
6 June 2007
REGISTERED OFFICE
Invicta Holdings Limited
Unit 1A, Ground Floor
Seardel House
Alphen Park
Constantia Main Road
Constantia 7806
PO Box 89
Constantia 7848
TRANSFER SECRETARIES
Computershare Investor Services 2004 (Pty) Limited
Ground Floor
70 Marshall Street
Johannesburg 2001
PO Box 61051
Marshalltown 2107
DIRECTORS
Dr CH Wiese*, A Goldstone, M Rose-Innes*, DI Samuels*, RE Sherrell*, AM
Sinclair#,
* Non-executive # Alternate
C Barnard - Company Secretary
SPONSOR
Deloitte & Touche Sponsor Services (Pty) Ltd
www.invictaholdings.co.za
Date: 06/06/2007 17:15:00 Produced by the JSE SENS Department.
