| Thu 6 Sep 2007, 9:31 | | TAL - TiAuto - Audited group results for the year |
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TAL
TAL
TAL - TiAuto - Audited group results for the year ended 30 June 2007
TIGER AUTOMOTIVE LIMITED
(Incorporated in the Republic of South Africa)
Registration number 2005/042651/06
Share Code: TAL - ISIN Code: ZAE000087482
("TiAuto" or "the group" or "the company")
AUDITED GROUP RESULTS FOR THE YEAR ENDED 30 JUNE 2007
ABRIDGED INCOME STATEMENT
Pro forma
Year ended Year ended
30 June 30 June
Change 2007 2006
% R`000 R`000
Revenue 17.3% 1,136,517 968,599
Operating income 12.7% 96,197 85,341
Listing expenses (1,097) -
Finance income 8,022 4,896
Finance charges (1,871) (2,584)
Profit before taxation 15.5% 101,251 87,653
Taxation (27,597) (23,716)
Profit for the period 15.2% 73,654 63,937
Attributable to:
Equity holders of the parent 72,959 62,228
Minority interest 695 1,709
Profit for the period 73,654 63,937
Reconciliation of headline
earnings per share (cents)
Attributable earnings per share 122.4 104.4
Adjusted for:
Listing expenses 1.8 -
Headline earnings per share
(cents) 19.0% 124.2 104.4
Number of shares in issue (`000)
- At end of year 59,602 59,602
- Weighted average 59,602 59,602
ABRIDGED CASH FLOW STATEMENT
Pro forma
Year ended Year ended
30 June 30 June
2007 2006
R`000 R`000
Cash flows from:
Operating activities 53,478 72,341
Investing activities (1,150) (13,867)
Financing activities (7,445) 3,432
Movement in cash resources 44,883 61,906
Foreign entities translation
adjustment 697 472
Cash resources at beginning
of year 82,321 19,943
Cash resources at end of year 127,901 82,321
Comprising:
Bank, cash balances and financial
assets held for trade 128,993 88,797
Short-term borrowings (1,092) (6,476)
127,901 82,321
Free cash flow per share (cents) 87.8 98.1
ABRIDGED BALANCE SHEET
Pro forma
30 June 30 June
2007 2006
R`000 R`000
ASSETS
Property, plant and equipment 49,904 44,693
Financial assets 6,483 11,591
Deferred tax assets 8,771 8,522
Non current assets 65,158 64,806
Inventories 155,795 133,394
Trade and other receivables 159,701 139,537
Financial assets held for trade 60,294 68,768
Bank and cash balances 68,699 20,029
Current assets 444,489 361,728
Total assets 509,647 426,534
EQUITY AND LIABILTIES
Capital and reserves 223,731 153,916
Minority interest 19,786 17,647
Total equity 243,517 171,563
Operating lease liabilities 11,868 17,947
Deferred tax liabilities 18 1,006
Non-current liabilities 11,886 18,953
Trade and other payables 221,396 201,113
Financial liabilities 3,862 1,673
Provisions 19,448 19,322
Current portion operating
leases 2,049 -
Short term borrowings 1,092 6,476
Taxation payable 6,397 7,434
Current liabilities 254,244 236,018
Total liabilities 266,130 254,971
Total equity and liabilities 509,647 426,534
Net tangible asset value per share
(cents) 375 258
FOREIGN EXCHANGE RATES
Closing rate Average rate
2007 2006 2007 2006
Yen / Rand 17.45 16.04 16.47 17.89
Rand / US Dollar 7.07 7.15 7.22 6.46
Rand / Sterling 14.18 13.11 14.01 11.46
ABRIDGED STATEMENT OF CHANGES IN EQUITY
Pro forma
Year ended Year ended
30 June 30 June
2007 2006
R`000 R`000
Equity at beginning of year 171,563 -
Movement during period:
Reserves converted on acquisition of
subsidiaries - 171,563
Share capital - 596
Share premium - 153,320
Minority shareholders - 17,647
Share premium - repurchase of shares
to service options exercised (1,383) -
Share election reserve 3,076 -
Other reserves (3,393) -
Movement in foreign currency
translation reserve 1,978 -
Movement in hedging reserve (5,371) -
Earnings attributable to ordinary
shareholders and minorities 73,654 -
Equity at end of year 243,517 171,563
SEGMENTAL ANALYSIS
Year ended 30 June 2007
(R`m) (R`m) (R`m) (R`m)
Trading Trading Group
United South services
Kingdom Africa SA Total
Revenue 253 883 - 1 136
Operating income 3 90 3 96
Net finance income
(charges) 1 3 2 6
Capital expenditure - 8 3 11
Budgeted capital expenditure 1 6 44 51
Depreciation 1 5 - 6
Future operating
commitments 26 143 - 169
Contingent liabilities 8 5 - 13
Pro forma Year ended 30 June 2006
(R`m) (R`m) (R`m) (R`m)
Trading Trading Group
United South services
Kingdom Africa SA Total
Revenue 238 730 - 968
Operating income 7 80 (1) 86
Net finance income
(charges) - (2) 4 2
Capital expenditure 1 5 4 10
Budgeted capital expenditure 1 7 - 8
Depreciation 1 5 - 6
Future operating
commitments 31 177 - 208
Contingent liabilities 8 5 - 13
BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS).
COMPARATIVE FINANCIAL INFORMATION
Tiger Automotive Limited acquired the shares in the subsidiaries from Tiger
Wheels Limited with effect from 1 July 2006. At that date, Tiger Wheels Limited
owned 100% of the issued shares of Tiger Automotive Limited. As this was a
transaction under common control, the shares were acquired at the underlying
subsidiaries` net asset values on 1 July 2006.
As Tiger Automotive Limited only came into effect on 1 July 2006, the group has
no comparative financial information. However, the directors have included pro
forma comparative financial information comprising the balance sheet, income
statement, statement of changes in equity and cash flow statement, which
represents the comparative information of the financial position at 30 June 2006
and the financial performance and cash flows for the year ends of the businesses
acquired from Tiger Wheels Limited. This information does not form part of the
group`s annual financial statements and is presented so as to enable users to
make more informed decisions about the performance of the businesses now
included in the Tiger Automotive group. (Refer to "audit report" section below
for emphasis of matter paragraph included in the audit report in connection with
the comparative financial information.)
AUDIT REPORT
The consolidated results for the year have been audited by PKF (Jhb) Inc., and
their unqualified report is available for inspection at the Company`s registered
office. Their audit opinion includes an emphasis of matter paragraph which draws
attention to the fact that the pro forma 2006 balance sheet, income statement,
cash flow statement and changes in equity do not form part of the group`s annual
financial statements and that these comparatives have not been audited and
accordingly no opinion is expressed on them.
COMMENTARY ON RESULTS
Introduction
It is a great pleasure to present this commentary on the first annual results of
the group since its listing on the JSE in 2006, following its unbundling from
Tiger Wheels Limited.
Tiger Automotive Limited (TiAuto) is engaged primarily in the retail and
wholesale trading of vehicle tyres and aftermarket aluminium wheels in Southern
Africa and the United Kingdom, and the design, sourcing and distribution of
aftermarket aluminium wheels internationally.
TiAuto`s interests comprise:
- Tiger Wheel & Tyre (Pty) Limited (TWT), a retail network of specialised tyre
and wheel businesses comprising 52 retail stores (35 owned and 17 franchised),
covering all major centres and holding a significant share of the replacement
passenger tyre and aftermarket wheel business in the region.
- Yokohama Southern Africa (Pty) Limited (YSA), a wholesale distributor of
passenger, 4X4, light-truck, heavy truck, bus and off-the-road (earthmover)
tyres and aftermarket aluminium wheels to a large customer base that includes
independent retailers and TWT.
- YSA has appointed an independent sub-distributor, Yokohama Tyre Sales (YTS),
to distribute heavy truck and bus and off-the-road (earthmover) tyres on an
agency basis.
- The Real Estate Division, houses the portfolio of properties owned and
partially occupied by the company`s operations in South Africa.
- In the United Kingdom, Rubber & Metal (UK) Limited (the offshore investment
holding company of TiAuto and the European distributor of the private brand,
Velocity passenger and light-truck tyres) owns the following interests:-
* 50.8% of Yokohama High Performance Tyres (YHPT), the sole wholesale
distributor of Yokohama passenger, 4x4 and racing tyres and TSW and MAK
aluminium wheels for the United Kingdom.
* TSW International Limited (TSWI), which handles the design, outsource
manufacturing and worldwide distribution of TSW aluminium wheels (excluding
North and South America).
RESULTS OVERVIEW
Tiger Automotive Limited`s results for the financial year ended June 2007
reflect a pleasing 19,0% increase in headline earnings per share. Revenue
increased by 17,3% and operating income by 12,7%. The growth in operating income
has been negatively impacted by:
- foreign exchange losses caused by the cancellation of forward exchange
contracts covering tyre imports that Yokohama Japan failed to deliver
- relocation costs incurred by the South African wholesale business
- the increase in new retail store start-up expenses and,
- the reduction in income from YHPT in the UK.
Tiger Wheel & Tyre (TWT) opened 7 new stores during the year under review:-
- Johannesburg CBD
- Edenvale
- Riverside (Nelspruit)
- Kimberley *
- Worcester *
- Mosselbay *
- Secunda *
(3 owned and 4 franchised*)
A key development during the year was the establishment of the "Tiger Wheel &
Tyre Academy", (an in house training academy) to ensure that staff continue to
benefit from TWT`s philosophy of growing people from within the company.
YSA benefited positively during the second half of the year when the key
supplier, Japanese tyre manufacturer Yokohama Rubber Company, improved its
delivery situation. Resumed deliveries of YSA`s budget line of Runway Tyres as
well as the retraction of the 16.5% discriminatory anti-dumping duty imposed on
certain imported Chinese tyres also had a positive impact.
Global sales of TSW aftermarket wheels, now totally manufactured off-shore,
maintained market share year-on-year, albeit in a tough trading environment.
YHPT, the company`s 50.8% owned UK-based distributor of Yokohama tyres and TSW
wheels, was seriously affected for the full year by the poor supply of tyres
from Yokohama Rubber Company and only managed a small contribution to the
group`s earnings.
PROSPECTS
We are optimistic that the average historical rate of growth in earnings can be
maintained or improved upon. This is mainly as a consequence of the significant
increase in the Southern African vehicle population over the last three years
and the plans to slightly increase the rate of new store developments.
Furthermore, with a more stable supply of Yokohama and Runway tyres, the
wholesale business is budgeting on an improved performance.
Against this background however, the high cost of new retail sites and store
developments should be borne in mind. TWT has committed to two new stores
opening in the first six months of the 2008 financial year, with further
prospective sites presently under development or negotiation.
Budgeted capital expenditure in the coming financial year of R51 million
includes R44 million for the acquisition of certain new and existing leased
properties.
DISTRIBUTION TO SHAREHOLDERS
Subject to shareholders approval a capital distribution of 49 cents per ordinary
share will be distributed in lieu of an annual dividend for the year to 30 June
2007 and will be paid to shareholders recorded in the register of the company on
Tuesday, 18 December 2007. Shareholders are advised that the last day to trade
"cum" distribution will be Friday, 7 December 2007. The shares will trade "ex"
distribution as from Monday, 10 December 2007 and the record date will be
Friday, 14 December 2007.
Share certificates may not be dematerialised or rematerialised between Monday,
10 December 2007 and Friday, 14 December 2007, both dates inclusive. Payment is
to be made on Tuesday, 18 December 2007.
Keith Rivers
Group Managing Director
Josh Loots
Group Financial Director
Midrand
6 September 2007
DIRECTORS:
Eddie Keizan* (Non-Executive Chairman), Phillip Vallet* (Deputy Chairman), Keith
Rivers (Managing), Josh Loots (Financial), Martin Glatt*, Mike Groves**, Brian
Joffe*, Ray Meyers, Alex Taplin, Sybrand Pretorius* (Alternate)
* Non-executive
** Independent
REGISTERED OFFICE:
Cnr Old Pretoria Road and K101, Midrand, 1685
Telephone (011) 256 4500, Fax (011) 256 4515
COMPANY SECRETARY:
Erika Grundlingh (erikag@tiauto.co.za)
SPONSOR:
Sasfin Capital, a division of Sasfin Bank Limited
Registration number 1951/002280/06
TRANSFER SECRETARIES:
Computershare Investor Services 2004 (Pty) Limited
Registration number 2004/003647/07
70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107
Telephone (011) 370 5000
Date: 06/09/2007 09:31:50 Produced by the JSE SENS Department.
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