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WNH
WNH
WNH - Winhold Limited - Audited abridged consolidated results of the group for
the year ended 30 September 2007
WINHOLD LIMITED
(Registration number 1945/019679/06)
(Incorporated in the Republic of South Africa)
(Share code: WNH) &(ISIN number: ZAE000033916)
Statement of results
The board announces the audited abridged consolidated results of the group for
the year ended 30 September 2007
- Highlights
- Headline earnings up by 15%
- Dividend 7,5 cents per share, up by 7%
Consolidated Income Statement
Year ended
30 September
`2007 `2006
R`000 R`000
Revenue 917,220 863,385
Operating profit 42,060 37,756
Investment income 22,283 14,656
Profit on sale of - 3,116
investment property
Restructuring costs - (1,636)
Net finance costs (31,226) (19,812)
Profit before taxation 33,117 34,080
Taxation (3,960) (7,877)
Net profit after taxation 29,157 26,203
Share of after tax profits 497 419
of associate companies
Attributable to outside (2,850) (2,257)
shareholders
Ordinary shareholders 26,804 24,365
profit
Earnings 26,804 24,365
Headline earnings 26,768 23,161
EBITDA 53,802 47,702
Earnings per ordinary 21,4 19,4
share ( cents )
Headline earnings per 21,3 18,5
ordinary share ( cents )
Weighted average ordinary
shares in issue adjusted
for shares held in group
on which the earnings per
share has been calculated
(000`s)
125 506 125,506
Ordinary shares in issue 126,215 126,215
( 000`s )
Dividend per ordinary 7,5 7,0
share
Reconciliation of headline
earnings
Ordinary shareholders 26,804 24,365
profit
Net profit on disposal of - (3,116)
investment property
Net (loss) / profit on (98) 118
disposal of fixed assets
Taxation effect on 62 158
disposals
Restructuring costs - 1,636
Headline earnings for the 26,768 23,161
year
Reconciliation of Earnings
before interest, tax,
depreciation and
amortisation ("EBITDA")
Profit from operations 42,060 37,756
Depreciation 11,447 9,884
Ammortisation of 295 62
intangibles
EBITDA 53,802 47,702
Summarised consolidated balance sheet
Year ended 30 September
`2007 `2006
R`000 R`000
ASSETS
Property plant and equipment 119,102 94,755
Trade marks and patents 1,506 1,493
Investments 160,788 160,788
Investments in associates 1,015 729
Goodwill 26,541 26,541
Deferred taxation 1,771 1,449
Current assets
- inventory 138,678 124,792
- receivables 176,833 157,615
- bank and cash 22,980 19,408
Total assets 649,214 587,570
EQUITY AND LIABILITIES
Ordinary share capital and 122,793 122,793
premium
Retained earnings 94,209 76,240
Shareholder`s interest 217,002 199,033
Outside shareholders 4,862 2,287
interest
Total Equity 221,864 201,320
Non-current liabilities
- interest bearing 193,736 187,736
- interest free 1,531 904
- deferred taxation 5,198 3,399
Current liabilities
- bank overdraft 23,652 20,680
- short term 19,908 12,971
borrowings
Current liabilities -
interest free
- payables 183,061 156,182
- taxation 264 4,378
Total equity and liabilities 649,214 587,570
Supplementary information
Capital commitments 15,383 20,116
Capital expenditure 37,015 10,333
Depreciation 11,742 9,946
Interest bearing borrowings 237,296 221,386
Interest earning deposits 22,826 19,323
Net asset value per ordinary 171,9 157,7
share ( cents )
Net tangible asset value per 149,7 135,5
ordinary share ( cents )
Summarised consolidated cash flow statement
Year ended
30 September
`2007 `2006
R`000 R`000
Cash flow from operating 23,107 18,923
activities
Profit before interest, tax and 61,507 45,659
non-cash items
Increase in inventory (13,886) (21,864)
Increase in receivables (4,946) (11,956)
Increase in payables 14,335 26,771
Cash flow from operations 57,010 38,610
Net finance costs (18,682) (6,756)
Share of results from associates 211 76
Taxation paid (6,597) (4,172)
Dividends paid (8,835) (8,835)
Cash flow used in investing (36,071) (161,518)
activities
Buyout of minorities in a (68) -
subsidiary
Investment in fixed assets (37,015) (10,333)
Investment in preference shares - 160,788
Proceeds from disposal of fixed 1,012 9,603
assets
Cash flow from financing 13,564 154,029
activities
Interest bearing borrowings 31,125 167,605
raised
Interest bearing borrowings (17,561) (13,709)
repaid
Loans advanced - 133
Net increase in cash & cash 600 11,434
equivalents
Cash and cash equivalents at (1,272) (12,706)
beginning of period
Cash and cash equivalents at end (672) (1,272)
of period
Summarised consolidated statement of changes in equity
Year ended
30 September
`2007 `2006
R`000 R`000
Shareholders` funds at beginning 199,033 184,337
of the year
Adjustment for cost of shares - (834)
held in group
Changes in retained earnings 26,804 24,365
Dividend paid (8,835) (8,835)
Shareholders` interests at end of 217,002 199,033
the period
BUSINESS Mining Industrial Flexible
SEGMENTS Consum- Consum- Plastics
(R`000) Ables Ables
2007 2006 2007 2006 2007 2006
Re- Re- Re-stated
stated stated
Turnover 341,333 354,946 137,552 133,676 437,191 374,763
Operating 6,170 8,387 6,328 6,179 29,270 22,729
profit
Investment - - - - - -
income
Depreciation 1,085 847 619 447 9,103 8,495
Capital 1,263 835 1,442 671 7,165 8,097
expenditure
Total assets 124,264 117,659 45,358 40,635 246,774 224,000
Total 70,558 62,570 20,833 20,864 152,168 137,704
liabilities
Table continues:...
BUSINESS Propert
SEGMENTS y
(R`000) and Totals
Other
2007 2006 2007 2006
Re- Re-
stated stated
Turnover 1,144 - 917,220 863,385
Operating 292 461 42,060 37,756
profit
Investment 22,283 14,656 22,283 14,656
income
Depreciation 935 157 11,742 9,946
Capital 27,145 730 37,015 10,333
expenditure
Total assets 232,818 205,276 649,214 587,570
Total 183,791 165,112 427,350 386,250
liabilities
REVIEW OF RESULTS
The Winhold Group increased its headline earnings per share by 15% to 21,3
cents (2006: 18,5 cents). Earnings increased by 10%, up from R24,4 million to
R26,8 million. Revenue grew by 6,2% to R917,2 million (2006: R863,4 million).
Revenue is net of settlement discounts (2006 figures adjusted accordingly). The
ordinary dividend increased by 7% to 7,5 cents per share (2006: 7,0 cents).
Gearing remains high due to the 10 year BEE loan raised in February 2006, and
will reduce as the loan is repaid. Excluding the BEE restructuring, the gearing
is 38% (2006 : 30%).
Interest paid has increased to R31,2 million (2006: R19,8 million) mainly due
to the funding of the BEE restructuring, this being for a full twelve month
period (2006: eight months) and the general increase in prime rates.
During the reporting period there was a net cash inflow of R0,6 million. Cash
flow has been impacted negatively by an increase in receivables, inventory
levels and capital expenditure. Long lead times in steel supply necessitated
higher inventory levels, while the polymer raw material inventory levels also
increased due to significant price increases and the necessity to import in
order to supplement the availability of locally produced raw materials.
GROUP PROFILE
Winhold Limited is an investment holding company with its main investments
being 100% stakes in Inmins Limited ("Inmins") and Gundle Limited ("Gundle"),
as well as a 50,1% holding in Novara Profile Extrusions (Pty) Ltd.
Gundle manufactures and distributes polyethylene and polypropylene bags,
sheeting and packaging to the agricultural, chemical, construction, food
processing, industrial and consumer markets.
Inmins services the mining and industrial sectors, supplying mainly consumer
goods.
Novara Profile Extrusions manufactures various products made out of recycled
PET plastic products.
OPERATIONAL OVERVIEW
Gundle - best ever results were produced. Turnover at Gundle increased by
16,7%, and profit before tax increased by 22,4%. This strong performance was
achieved by organic growth, despite high raw material price incrteases,
shortage of local raw material, increased competition and lower margins.
Various investments in capital equipment are now paying off as innovative
products have captured dominating market share. More capital expenditure has
been approved for the coming financial year, which will ensure that this trend
and the market position be maintained and improved upon. This industry is
capital intensive and continuous investment is required to improve the product
and productivity. Gundle should continue to play a major role in the Winhold
Group`s improved future profitability.
Inmins - Nine out of sixteen operating divisions within the Inmins group
increased profitability. Six of these divisions recorded an all time high
profit. Our investments in the two Zenzele BEE trading businesses, focused on
the coal mines and power stations in Mpumalanga and on industrial supply to the
KwaZulu-Natal industrial hubs, delivered their best results ever. These trading
businesses successfully leveraged on the buying power of the Winhold Group to
buy and sell locally produced products.
The manufacturing division had a poor year due mainly to the impact of low
capital spending by the gold mining sector, a trend which continued from the
previous financial year. As a result thereof, this division carried out a
retrenchment programme and the cost savings will impact positively on future
profitability.
Capital spending by the gold mining sector started improving in the fourth
quarter of our financial year and orders have increased significantly since
then, which will lead to a substantial improvement in future results. In
addition the platinum mines are beginning to mine at deeper levels, so demand
for the products of this division is increasing.
Conveyor belt sales reduced significantly during the past year, due to the
termination of a long standing distribution agreement with a local
manufacturer. An exclusive distribution agreement with an overseas manufacturer
has been secured. These new conveyor belts have been tested in the gold and
coal mines, which should lead to improved sales in the future.
Novara - The Novara plant has been commissioned successfully with pallet and
crate manufacturing underway. Market acceptance of the pallets and crates has
been slower than anticipated. However, other exciting new applications are
being explored, which are expected to be accepted by the market more quickly.
PROSPECTS
Gundle continues to invest in new capital equipment for productivity
improvements and to increase its output.
The expected turnaround of the Inmins manufacturing arm and improved sales in
conveyor belting should improve the group`s performance significantly.
Winhold will continue to explore other growth opportunities.
CAPITAL COMMITMENTS
The amount of R15,4 million reflected in the supplementary information was
made up as follows:
Plant and equipment for existing plastics operations R14,033,000
Property extensions for existing plastics operations R1,350,000
ACCOUNTING POLICIES
The results for the year ended 30 September 2007 have been prepared in
accordance with International Financial Reporting Standards ("IFRS")and IAS 34,
in compliance with the South African Companies Act (1973), and the Listing
Requirements of the JSE Limited.
AUDIT
The financial information set out in these abridged consolidated group results
has been audited by BDO Spencer Steward (Johannesburg) Inc. Their unqualified
report is available for inspection at the company`s registered office. The
annual report will be posted to shareholders in February 2008.
CORPORATE GOVERNANCE
The Group subscribes to the value of good corporate governance and is committed
to continued implementation of the recommendations of the King II Report and
the requirements of the JSE Ltd. The Group endeavours to conduct its business
in accordance with the principles of accountability, transparency and
integrity.
DIRECTORATE
During the year two independent non-executive directors have been appointed to
the board. Ms Patience Mnxasana is also a member of the remuneration committee
and is now serving as the chairman of the audit committee, while Ms Nosisa Fubu
has been appointed to the audit committee. The group looks forward to valuable
contributions from these two well qualified directors.
DIVIDENDS
Notice is hereby given that a dividend of 7,5 cents (2006: 7 cents) per share
for the year ended 30 September 2007 has been declared to holders of shares
recorded in the share register of the company at the close of business on 22
February 2008.
Last day to trade "cum" dividend is Friday, 15 February 2008
Commence trading "ex" dividend from Monday, 18 February 2008
Record date is Friday, 22 February 2008
Payment date is Monday, 25 February 2008
Share certificates may not be de-materialised / re-materialised between Monday
18 February 2008 and Friday 22 February 2008, both dates inclusive.
Individual shareholders to whom a dividend of less than R10,00 (ten rand) has
been declared, are reminded that in terms of a special resolution registered on
26 March 2003, such amounts shall not be paid to the individual shareholders
but shall be donated to an independent charity chosen by the directors.
The dividend cover is 2,8 times.
On behalf of the board
WAR WENTELER DB MOSTERT
Chairman Non-executive deputy chairman
5 December 2007
Directors:
WAR Wenteler (Chairman),
DB Mostert (Deputy Chairman) , W Fourie (Financial ), PJ Kruger,NP Mnxasana
, N Fubu
( Independent non-executive)
E-mail: secretary@winhold.co.za Website: www.winhold.co.za
Company Secretary and registered office :
D J de Villiers
884 Linton Jones Street, Industries East, Germiston
Telephone: +27 11 345 9800
Fax: +27 11 86 631 6386
(PO Box 5324, Johannesburg 2000)
(Email: davedevilliers@winhold.co.za)
Transfer Secretaries:
Computershare Investor Services 2004 (Pty)Ltd
70 Marshall Street, Johannesburg
Telephone: +27 11 370 5000
Fax: +27 11 688 5248
(PO Box 61051, Marshalltown 2107)
(Email: registrar@computershare.co.za )
Sponsor:
Arcay Moela Sponsors (Pty) Ltd
Arcay House, 3 Anerley Road, Parktown 2193
(PO Box 62397, Marshalltown, 2107)
Telephone: +27 11 325 6008
Fax: +27 11 325 6337
(Email: dougg@arcaymoela.co.za)
Auditors:
BDO Spencer Steward (Johannesburg) Inc
13 Wellington Road, Parktown, 2193
Telephone: +27 11 643 7271
Fax: +27 11 643 6585
(Pvt Bag X60500, Houghton, 2041)
(Email: bdojhb@bdo.co.za )
Date: 05/12/2007 16:05:03 Produced by the JSE SENS Department.
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