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CMH
CMH
CMH - Combined Motor Holdings - Interim report for the six months ended 31
August 2007 and dividend declaration
Combined Motor Holdings Limited
(Registration number 1965/000270/06)
(Share code: CMH ISIN: ZAE000088050)
("the Company" or "the Group")
Interim report for the six months ended 31 August 2007
- REVENUE INCREASED 4%
- EARNINGS DECLINE REFLECTS DOWNTURN IN TRADING CONDITIONS
- RECOMMENDED DIVIDEND UNCHANGED AT 10,6 CENTS PER SHARE
Group financial highlights
6 months 6 months
31 August 31 August
2007 2006
Revenue (R`000) 4 575 744 4 386 891
Operating profit (R`000) 103 552 133 249
Weighted average number of
shares in issue (`000) 107 075 105 710
Number of shares for dilution
calculation (`000) 110 035 109 413
Earnings per share (cents) 50,7 76,6
Diluted earnings per share (cents) 49,3 74,0
Headline earnings per share (cents) 50,1 76,1
Diluted headline earnings per share (cents) 48,7 73,5
Dividend payable - December 2007 (cents) 10,6 10,6
Total assets (R`000) 2 053 983 1 768 457
12 months
Change 28 February
% 2007
Revenue 4 9 085 649
Operating profit (22) 339 757
Weighted average number of
shares in issue 1 105 867
Number of shares for dilution
calculation 1 109 104
Earnings per share (34) 175,4
Diluted earnings per share (33) 170,2
Headline earnings per share (34) 174,0
Diluted headline earnings per share (34) 168,8
Dividend payable - December 2007 -
Total assets 16 2 371 165
Abridged group income statement
Unaudited Unaudited Audited
6 months 6 months 12 months
31 August 31 August 28 February
2007 2006 Change 2007
R`000 R`000 % R`000
Revenue 4 575 744 4 386 891 4 9 085 649
Cost of sales (3 988 308) (3 829 031) 4 (7 718 177)
Gross profit 587 436 557 860 5 1 367 472
Selling and
administration
expenses (483 884) (424 611) 14 (1 027 715)
Operating profit 103 552 133 249 (22) 339 757
Net finance costs (9 745) (10 945) (11) (32 082)
Profit before
taxation 93 807 122 304 (23) 307 675
Taxation (29 910) (39 749) (25) (113 997)
Net profit for the
period 63 897 82 555 (23) 193 678
Attributable to:
Equity holders of
the Company 54 256 80 965 (33) 185 683
Minority shareholders 9 641 1 590 506 7 995
63 897 82 555 (23) 193 678
Reconciliation of
headline earnings
Net profit attributable
to equity holders 54 256 80 965 185 683
Non-trading items
- capital profit on
sale of business (750) (600) (1 666)
Less: capital gains
tax 109 55 193
(641) (545) (1 473)
Headline earnings 53 615 80 420 (33) 184 210
Abridged group balance sheet
Unaudited Unaudited Audited
31 August 31 August 28 February
2007 2006 2007
R`000 R`000 R`000
Assets
Non-current assets
Plant and equipment 78 034 66 930 69 441
Goodwill 154 574 153 174 154 574
Investments 112 942 1 082 106 001
Deferred taxation 34 720 22 851 32 296
380 270 244 037 362 312
Current assets 1 673 713 1 524 420 2 008 853
Total assets 2 053 983 1 768 457 2 371 165
Equity and liabilities
Capital and reserves
Share capital and reserves 438 558 515 356 438 089
Minority interest 15 882 2 879 12 217
Total equity 454 440 518 235 450 306
Non-current liabilities
Advance from minority shareholders 260 596 5 668 269 953
Lease liabilities 71 849 54 167 63 491
Life assurance funds 40 048 31 134 37 669
Interest-bearing borrowings 7 133 - 7 092
379 626 90 969 378 205
Current liabilities 1 219 917 1 159 253 1 542 654
Total equity and liabilities 2 053 983 1 768 457 2 371 165
Net asset value per share (cents) 424 489 421
Abridged group cash flow statement
Unaudited Unaudited Audited
6 months 6 months 12 months
31 August 31 August 28 February
2007 2006 2007
R`000 R`000 R`000
Operating profit adjusted for
non-cash items 114 858 142 101 383 945
Working capital changes:
Movement in inventory 53 805 21 192 (231 528)
Movement in trade and other
receivables (35 883) (51 972) (53 588)
Movement in trade and other payables(136 064) (39 028) 141 895
Cash generated from operations (3 284) 72 293 240 724
Net finance costs paid (9 745) (10 945) (32 082)
Dividends paid (210 432) (44 480) (55 745)
Taxation paid (69 414) (34 797) (92 119)
Cash flow from operating activities (292 875) (17 929) 60 778
Cash flow from investing activities (15 532) (17 309) (157 789)
Cash flow from financing activities (8 811) 1 720 293 590
Net cash flow for period (317 218) (33 518) 196 579
Cash and cash equivalents at
beginning of period 330 513 133 934 133 934
Cash and cash equivalents at end of
period 13 295 100 416 330 513
SEGMENT ANALYSIS
TOTAL RETAIL MOTOR
2007 2006 2007 2006
R`000 R`000 R`000 R`000
Revenue 4 575 744 4 386 891 4 281 811 4 092 753
Operating profit 103 552 133 249 101 298 124 334
Net finance costs (9 745) (10 945) (37 980) (27 476)
Profit before taxation 93 807 122 304 63 318 96 858
Total assets 2 053 983 1 768 457 1 425 842 1 243 235
Total liabilities 1 599 543 1 250 222 874 182 830 652
Number of employees 3 123 2 800 2 642 2 383
CAR HIRE MARINE AND LEISURE
2007 2006 2007 2006
R`000 R`000 R`000 R`000
Revenue 112 758 87 820 154 242 173 621
Operating profit 2 969 5 553 (3 668) 4 805
Net finance costs (34) (40) (3 786) (1 019)
Profit before taxation 2 935 5 513 (7 454) 3 786
Total assets 397 486 312 250 150 167 156 261
Total liabilities 361 187 293 311 32 410 50 351
Number of employees 285 228 134 123
CORPORATE
FINANCIAL SERVICES SERVICES/OTHER
2007 2006 2007 2006
R`000 R`000 R`000 R`000
Revenue 10 271 14 941 16 662 17 756
Operating profit 10 110 8 228 (7 157) (9 671)
Net finance costs 1 883 1 080 30 172 16 510
Profit before taxation 11 993 9 308 23 015 6 839
Total assets 52 565 39 528 27 923 17 183
Total liabilities 47 486 34 890 284 278 41 018
Number of employees 3 3 59 63
Group statement of changes in equity
Non- Share-based
Share distributable payment Retained
capital reserve reserve earnings
R`000 R`000 R`000 R`000
At 28 February 2006 14 475 5 896 2 320 454 450
Issue of shares 720
Net profit for period 80 965
Dividends paid (44 480)
Share-based payment reserve 1 010
At 31 August 2006 15 195 5 896 3 330 490 935
Issue of shares 3 562
Net profit for period 104 718
Dividends paid - traditional (11 265)
Dividend paid - special (149 853)
Share-based payment reserve 1 010
Sale of interest to minority
shareholder (3 355)
Cost relating to sale of
interest to minority (22 084)
At 28 February 2007 18 757 5 896 4 340 409 096
Issue of shares 247
Net profit for period 54 256
Dividends paid (54 603)
Share-based payment reserve 569 569
At 31 August 2007 19 004 5 896 4 909 408 749
Attributable
to equity
holders of Minority Total
the Company interest equity
R`000 R`000 R`000
At 28 February 2006 477 141 1 289 478 430
Issue of shares 720 720
Net profit for period 80 965 1 590 82 555
Dividends paid (44 480) (44 480)
Share-based payment reserve 1 010 1 010
At 31 August 2006 515 356 2 879 518 235
Issue of shares 3 562 3 562
Net profit for period 104 718 6 405 111 123
Dividends paid - traditional (11 265) (422) (11 687)
Dividend paid - special (149 853) (149 853)
Share-based payment reserve 1 010 1 010
Sale of interest to minority
shareholder (3 355) 3 355 -
Cost relating to sale of
interest to minority (22 084) (22 084)
At 28 February 2007 438 089 12 217 450 306
Issue of shares 247 247
Net profit for period 54 256 9 641 63 897
Dividends paid (54 603) (5 976) (60 579)
Share-based payment reserve 569
At 31 August 2007 438 558 15 882 454 440
COMMENTARY ON RESULTS
1. Group results for the period under review were adversely affected by
external factors and a general slowdown in the economy. The combination of the
introduction of the new National Credit Act and higher interest rates has
translated into six consecutive monthly reductions in year-on-year national new
vehicle sales. Lower demand for new vehicles, and consequent higher stocking
levels, has placed pressure on used vehicle prices.
2. From marginally increased revenue of R4,6 billion, Group operating profit
declined 22% to R103,6 million. Shareholders are reminded that a 15% equity
share in the Group was sold in terms of a Black Economic Empowerment deal
concluded in December 2006. From the proceeds of the transaction shareholders
were paid a special dividend of 140 cents per share in March 2007. The
increased share of earnings attributable to minority shareholders has resulted
in headline earnings declining 34% to R53,6 million.
3. Tighter margins, increased costs of financing the fleet, and lower resale
values have resulted in a 47% decline in profit before taxation of the Car Hire
division. The second half of the financial year represents the "high" season
and improved results are expected.
4. Volumes in the Marine and Leisure division were negatively impacted by the
dampened consumer demand. Cost-cutting and restructuring measures have been
implemented and, with the summer months approaching, a substantial improvement
is anticipated.
5. Tough trading conditions are expected to prevail during the balance of the
financial year. The Group has tightened control over operating costs and
working capital levels; however the directors believe that the Group will be
hard-pressed to match the record earnings achieved in the year ended 28
February 2007.
DIVIDEND
A dividend (dividend number 41) of 10,6 cents per share will be paid on
Tuesday, 18 December 2007 to members reflected in the share register of the
Company at the close of business on the record date, Friday, 14 December 2007.
Last day to trade "cum" dividend is Friday, 7 December 2007. First day to trade
"ex" dividend is Monday, 10 December 2007. Share certificates may not be
dematerialised or rematerialised from Monday, 10 December 2007 to Friday, 14
December 2007, both days inclusive.
BASIS OF PREPARATION
The results of the Group for the six month period ended 31 August 2007 have
been prepared in accordance with IAS34: Interim Financial Reporting,
International Financial Reporting Standards, the Listing Requirements of the
JSE Limited and Schedule 4 of the Companies Act of South Africa. The accounting
policies of the Group have been consistently applied to these results and are
the same as those applied to the results at 28 February 2007.
CORPORATE GOVERNANCE
The Group is committed to maintaining the high standards of governance as
embodied in the King Report on Corporate Governance and complies with the
significant principles of both the Report and the JSE Limited Listing
Requirements.
The results have not been audited or reviewed by the Group`s external auditors.
By order of the Board of Directors
SK Jackson BCom (Hons) (Tax Law), CA(SA)
Secretary
8 October 2007
REGISTERED OFFICE
1 Wilton Crescent
Umhlanga Ridge
4319
TRANSFER SECRETARIES
Computershare Investor Services 2004
(Proprietary) Limited
PO Box 61051
Marshalltown, 2107
SPONSOR
PricewaterhouseCoopers
Corporate Finance (Pty) Limited
Private Bag X36
Sunninghill, 2157
DIRECTORS
M Zimmerman (Chairman), JD McIntosh (Managing), LCZ Cele, MPD Conway,
JTM Edwards, L Gadd, SK Jackson, VP Khanyile, RTAC Nethercott, CL Odendaal,
JW Alderslade (alternate)
www.cmh.co.za
Date: 08/10/2007 12:00:01 Produced by the JSE SENS Department.
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