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IVT
IVT
IVT - Invicta Holdings Limited - Unaudited Group results for the six
months ended 30 September 2007 and dividend declaration
(Registration number 1966/002182/06)
(Incorporated in the Republic of South Africa)
(Share code: IVT)
(ISIN code: ZAE000029773)
Unaudited Group results for the six months ended 30 September 2007
- Revenue up 27%
- Profit for the period up 61%
- Earnings per share up 42%
- Dividend up 42%
Condensed income statement
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 Sept 30 Sept 31 March
2007 2006 % 2007
R`000 R`000 change R`000
Revenue 1 598 960 1 256 634 27 2 663 398
Operating income 141 447 105 488 34 281 229
Interest and preference 70 006 65 584 137 247
dividend received
Finance costs 79 982 87 521 162 648
Profit before taxation 131 471 83 551 57 255 828
Taxation 13 842 10 445 38 104
Profit for the period 117 629 73 106 61 217 724
Minority interest (12 664) (316) (1 730)
Attributable to ordinary 104 965 72 790 44 215 994
shareholders
Earnings per share 141 99 42 292
(cents)
Diluted earnings per 139 98 42 288
share (cents)
Determination of headline
earnings
Attributable earnings 104 965 72 790 215 994
Adjustments - after
taxation and minority
interests where
applicable
- Negative goodwill on (88) - -
business combination
- Profit on issue of - - (22 565)
shares by subsidiary
- Profit on disposal of - (740) (666)
interest in subsidiary
- Profit on disposal of (410) (340) (738)
property, plant and
equipment
Headline earnings 104 467 71 710 192 025
Shares in issue
Weighted average (000s) 74 341 73 861 73 866
At the end of the period 74 341 73 861 74 341
(000s)
Number of shares used for 75 604 74 441 75 122
diluted earnings per
shares (000s)
Headline earnings per 141 97 45 260
share (cents)
Diluted headline earnings 139 96 45 256
per share (cents)
Dividends per share* 104
(cents)
Interim 47 33 33
Final 71
* In accordance with IAS10, the interim dividend of 47 cents per share
proposed by the directors has not been reflected in the interim results.
Condensed balance sheet
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 Sept 30 Sept 31 March
2007 2006 2007
R`000 R`000 R`000
ASSETS
Non-current assets 1 583 219 1 553 260 1 542 932
Property, plant and equipment 138 789 121 163 118 097
Deferred taxation 22 570 26 824 17 722
Investments 1 195 303 1 195 303 1 195 303
Goodwill and other intangible 225 070 204 282 210 323
assets
Loan receivable 1 487 5 688 1 487
Current assets 1 477 611 1 032 473 1 443 374
Inventories 822 785 672 300 875 315
Trade and other receivables 500 299 360 173 372 316
Bank balances and cash 154 527 - 195 743
Total assets 3 060 830 2 585 733 2 986 306
EQUITY AND LIABILITIES
Capital and reserves 1 014 405 767 714 930 846
Attributable to ordinary 940 494 762 683 886 161
shareholders
Minority interest 73 911 5 031 44 685
Non-current liabilities 1 199 894 1 212 436 1 193 311
Long-term borrowings 1 199 894 1 212 436 1 193 311
Current liabilities 846 531 605 583 862 149
Bank overdrafts and bankers` 5 127 19 614 342
acceptances
Short-term borrowings 12 121 18 916 19 440
Trade, other payables and 815 371 567 053 829 609
provisions
Tax liabilities 13 912 - 12 758
Total equity and liability 3 060 830 2 585 733 2 986 306
Condensed cash flow statement
Cash flows from operating
activities
Cash generated from operations 86 366 199 558 364 698
Finance costs (79 982) (87 521) (162 648)
Dividends paid (55 600) (30 235) (55 152)
Taxation paid (22 222) (13 793) (25 211)
Interest and dividend received 70 006 65 584 137 247
Net cash (outflow) inflow from
operating activities
Cash flows from investing (1 432) 133 593 258 934
activities
Net cash effects of asset (7 260) (3 635) (16 016)
acquisitions
Net cash effects of other (32 241) (60 559) 36 981
investing activities
Cash flows from financing
activities
Net cash effects of shares - - 4 200
issued in terms of Bearing Man
debenture scheme
Net cash effects of borrowings (5 068) (9 739) (9 424)
raised
Net (decrease) increase in cash (46 001) 59 660 274 675
and cash equivalents
Cash and cash equivalents at 195 401 (79 274) (79 274)
the beginning of the year
Cash and cash equivalents at 149 400 (19 614) 195 401
the end of the year
Other information
Debt: Equity ratio (%) 2 7 -
(excluding long-term BEE
funding debt secured by
investments)
Depreciation and amortisation 11 531 11 088 22 696
(R`000)
Net asset value per share 1 265,1 1 032,6 1 192,0
(cents)
Tangible net asset value per 962,4 756,0 909,1
share (cents)
Contingent liabilities 4 724 3 991 3 750
Business Acquisitions Total
R`000
Acquired effective June 2007
Property, plant and equipment 23 646
Deferred taxation (2 342)
Long-term liabilities (4 332)
Trade and other receivables 13 444
Cash and cash equivalents 13 687
Inventory 33 920
Trade and other payables (25 684)
Taxation (2 354)
Fair value of assets acquired 49 985
Attributable to minority shareholders (19 379)
Goodwill on acquisition 15 322
Cost of acquisitions 45 928
Cash and cash equivalents acquired (13 687)
Net cash effect of acquisition of subsidiaries 32 241
Profit after tax since acquisition date included in the 2 349
consolidated condensed results for the period
Profit after tax should the above business combinations 2 823
have been included for the entire period
Condensed statement of changes in equity
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 Sept 30 Sept 31 March
2007 2006 2007
R`000 R`000 R`000
SHARE CAPITAL
Balance at beginning of year 3 717 3 693 3 693
Shares issued in terms of - - 24
Bearing Man debenture scheme
Balance at end of year 3 717 3 693 3 717
SHARE PREMIUM
Balance at beginning of year 281 234 277 058 277 058
Shares issue in terms of - - 4 176
Bearing Man debenture scheme
Balance at end of year 281 234 277 058 281 234
RETAINED EARNINGS
Balance at beginning of year 588 011 426 673 426 673
Earnings attributable to 104 965 72 790 215 994
ordinary shareholders
Dividends paid (52 782) (30 282) (54 656)
Balance at end of year 640 194 469 181 588 011
OTHER RESERVES
Balance at beginning of year 13 199 8 872 8 872
Arising from the issue of share 2 290 3 634 4 352
appreciation rights
Arising on translation of (140) 245 (25)
foreign operations
Balance at end of year 15 349 12 751 13 199
940 494 762 683 886 161
MINORITY INTEREST
Balance at beginning of year 44 685 2 235 2 235
Earnings attributable to 12 664 316 1 730
outside shareholders
Net investment in subsidiaries 19 379 2 480 -
Dividend paid (2 817) - (580)
Equity input by minorities - - 41 300
Balance at end of year 73 911 5 031 44 685
Segment information
Capital Non
Engineering equipment segment
consumables and spares allocations Total
R`000 R`000 R`000 R`000
Unaudited six months
ended 30 September
2007
Revenue - 2007 761 717 801 290 35 953 1 598 960
Revenue - 2006 638 057 618 577 - 1 256 634
Profit from 98 035 46 478 (3 066) 141 447
operations before
finance costs,
interest and
preference dividend
received - 2007
Profit from 79 277 25 772 439 105 488
operations before
finance costs,
interest and
preference dividend
received - 2006
Total assets - 2007 723 669 732 236 1 604 925 3 060 830
Total assets - 2006 705 496 685 137 1 195 100 2 585 733
Total liabilities - 184 537 627 245 1 234 643 2 046 425
2007
Total liabilities - 251 161 371 758 1 195 100 1 818 019
2006
Notes to the financial information
Basis of preparation
The consolidated financial statements have been prepared in accordance
with IAS34 Interim Financial Reporting, International Financial Reporting
Standards, the JSE Limited`s Listings Requirements and in the manner
required by the Companies Act of South Africa. The principal accounting
policies as set out in the Group`s 2007 annual report have been
consistently applied throughout the six month period under review.
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")
- Agricultural machinery and equipment ("Northmec") and New Holland SA
("New Holland")
- Construction and earthmoving equipment, turf grooming equipment and
golf utility cars ("CSE")
- Automotive and motorcycle parts ("Autobax")
- Floor tiles, wall tiles and sanitary ware ("Tiletoria")
Financial Overview
The group has again achieved excellent results and has made a number of
strategic acquisitions.
Trading conditions in all sectors of the group continued to be strong
during the six months under review. Group turnover grew by a healthy
R342 million (27%) while improved margins and greater operating
efficiencies led to operating income growing by R36 million (34%) to R141
million. Profit for the period was up 61% , while earnings attributable
to ordinary shareholders improved by 44% to R105 million, which
translates into headline earnings of 141 cents per share, up 42% on last
year.
The results are particularly pleasing considering the dilutionary effect
of our BEE transaction, which contributed to the minority share of
profits growing to R12.6 million from R0.3 million, R9.2 million of which
relates to the BEE transaction.
Bearing Man continued its good growth record. Revenue grew by R123
million (19%), and improved margins and cost control led to operating
profit growing by 24% to R98 million. All divisions performed well
except for automotive, which has subsequently been restructured.
The capital equipment divisions performed well, with turnover increasing
by R183 million (30%) to R801 million. Trading in the agricultural sector
remained buoyant during the period under review. At the beginning of the
period, large parts of the grain growing areas of the country were
experiencing drought conditions. Following widespread rains the market
has improved. Notwithstanding that, total unit sales of tractors in the
domestic market in South Africa are slightly below those of last year.
Northmec`s turnover grew by a healthy 58%. New Holland has returned to
profitability and the combined New Holland and Case tractor sales place
the Invicta group at number 1 in tractor unit sales in South Africa for
this calendar year. Export sales into Africa, which by their nature are
unpredictable, were R90 million. CSE, the earthmoving machinery division,
continued to experience very competitive market conditions. Although
volumes in the industry were strong, competition kept margins under
pressure. Nevertheless CSE managed to grow turnover by 16% and improved
its margins slightly. CSE will endeavour to improve margins in the
second half of the year.
The acquisition of 60% of Tiletoria was completed on 1 June 2007.
Tiletoria`s contribution to the group was not material during the period
under review, but its expansion plans are well under way and it should
start making a meaningful contribution in the next financial year.
Prospects
Bearing Man recently announced the acquisition of Goldquest International
Hydraulics (Pty) Ltd, a specialist hydraulics components and services
business in South Africa. This strategic acquisition will enable Bearing
Man to broaden its product offering in industrial consumables and enable
it to penetrate deeper into that market.
In addition, the group recently announced the acquisition of Doosan South
Africa from Doosan Infracore Company Ltd, South Korea. Doosan Infracore
manufactures excavators, loaders and skidsteer loaders and is one of the
fastest growing construction equipment companies in the world. The
acquisition will enable the Invicta group to broaden its product offering
to the construction industry, and, while the Doosan distribution will be
kept separate from Invicta`s other construction equipment operations,
synergies will be achieved through economies of scale.
The engineering consumables sector is expected to continue at current
levels for the second half of the year, but management expects the sector
to start showing signs of cooling down towards the end of the financial
year, as the strong Rand and high interest rates in the country are
expected to dampen demand for engineering consumables. Bearing Man is
focusing on improving operational efficiencies which should help to
counter any slowdown in revenue growth.
The agricultural sector remains buoyant and management does not expect
any change to this in the coming period.
The acquisitions of Doosan and Goldquest are subject to conditions
precedent and are expected to be completed towards the end of the current
financial year. The group continues to pursue acquisitions, but will
focus on consolidating the most recent acquisitions in the short term.
Earnings per share in the second half of the year are not anticipated to
be higher than those of the second half of last year.
Dr C H Wiese A Goldstone
Chairman Managing Director
Cape Town 9 November 2007
Dividend
Notice is hereby given that an interim dividend of 47 cents per share has
been declared. The last day to trade ("CUM" the dividend) in order to
participate in the dividend will be Friday, 30 November 2007.
The shares of Invicta Holdings Limited will commence trading "EX" the
dividend from Monday, 3 December 2007 and the record date will be Friday,
7 December 2007. The dividend will be paid to shareholders on Monday, 10
December 2007.
Share certificates may not be dematerialised or rematerialised between
Monday, 3 December 2007 and Friday, 7 December 2007, both days inclusive.
In accordance with IAS10, the interim dividend of 47 cents per share
declared by the directors and as shown in the share information, has not
been reflected in the financial statements.
By order of the board
C Barnard Johannesburg
Secretary 9 November 2007
REGISTERED OFFICE
Invicta Holdings Limited
3rd Floor, Pepkor House
36 Stellenberg Road
Parow Industria 7493
PO Box 6077
Parow East 7501
TRANSFER SECRETARIES
Computershare Investor Services 2004 (Pty) Limited
Ground Floor
70 Marshall Street
Johannesburg 2001
PO Box 61051
Marshalltown 2107
DIRECTORS
Dr CH Wiese*, C Barnard, A Goldstone, AK Masuku*, J Mthimunye#, M Rose-
Innes*, DI Samuels*, RE Sherrell*, AM Sinclair, , CE Walters#,
* Non-executive # Alternate
SPONSOR
Deloitte & Touche Sponsor Services (Pty) Ltd
www.invictaholdings.co.za
Date: 09/11/2007 17:15:01 Produced by the JSE SENS Department.
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