| Mon 17 Mar 2008, 7:29 | | CNL - Control Instruments - Results for the year ended 31 December 2007 |
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CNL
CNL
CNL - Control Instruments - Results for the year ended 31 December 2007
Control Instruments Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1964/003987/06)
Share code: CNL
ISIN code: ZAE000001665
("Control Instruments" or "the Group" or "the Company")
RESULTS COMMENTARY
CONTROL INSTRUMENTS GROUP LIMITED
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2007
OVERVIEW
The past three years have seen enormous change in the Control Instruments
Group. During 2007 the Group completed the implementation of the strategic plan
that was initiated at the end of 2004.
The last two legs to complete the plan dominated management`s time in 2007.
These two legs were:
i) The acquisition of SiemensVDO`s fleet and vehicle management business, which
included reacquiring the worldwide distribution rights for CI OmniBridge`s
fleet management products ("Datatrak business").
The Group`s relationship with SiemensVDO goes back more than forty years, with
SiemensVDO distributing CI OmniBridge`s fleet and vehicle management products
throughout the world for the past twelve years. Changes within the structure at
Siemens created an opportunity for the Group to buy the Datatrak business.
ii) The TeliMatrix transaction, which involved the sale of the Group`s fleet
and vehicle management businesses (CI OmniBridge and the Datatrak business) to
TeliMatrix Limited ("TeliMatrix"); the listing of TeliMatrix on the JSE; and the
distribution of TeliMatrix shares to Control Instruments shareholders.
Selling the Group`s fleet and vehicle management businesses to TeliMatrix and
unbundling the majority of the shares received in TeliMatrix to Control
Instruments shareholders, gave shareholders a direct interest in a company
comprising Matrix Vehicle Tracking with its strong local annuity revenue stream
and Control Instruments` highly profitable worldwide fleet and vehicle
management businesses. The transaction also enabled the Group to significantly
reduce its debt.
Overall, the board is satisfied that the strategic plan was well executed. Over
the three years, the Group was able to take advantage of low interest rates and
favourable stock market conditions to fund its internal growth and significant
acquisitions. It was also able to complete the implementation of the strategic
plan before the current adverse conditions arose in global financial markets.
The acquisitions gave rise to some complexities and problems were encountered
in certain of the business units. Once identified, corrective action was taken
where necessary.
RESULTS
The significant changes to the Group and the number of acquisitions and
disposals made over the past three years, coupled with the increasing number of
IFRS requirements has resulted in financial statements that are neither simple
to read nor easy to understand. In these circumstances, management and the
board use EBITDA (earnings before interest, tax, depreciation and
amortisation), cash generation and the payment of dividends, as their primary
measures of business performance as these are not distorted by items such as
impairment and negative goodwill.
A detailed segmental analysis of the Group`s results is included in the notes
to the financial statements below.
Discontinued operations
Discontinued operations include the fleet and vehicle management businesses
sold to TeliMatrix with effect from 1 October 2007; as well as Tripmaster and
the OEM plastics businesses, both of which are in the process of being sold.
These operations made an after tax profit for the year of R509.4 million. This
includes impairment of intangible assets of R61.5 million and the profit of
R577.1 million on the sale of the fleet and vehicle management
businesses.
As part of the TeliMatrix transaction, Control Instruments acquired the
remaining 49% of the shares in Tripmaster Corporation ("Tripmaster") with
effect from 1 July 2007.
Tripmaster did not perform in line with expectations in the year under review.
This was mainly due to the delayed introduction of new products, which were
being developed by CI OmniBridge, specifically for the North American market.
As a result of this Tripmaster was not sold to TeliMatrix along with the other
fleet and vehicle management businesses as originally intended. Tripmaster has
subsequently been restructured and the new products have been introduced. The
Group is currently negotiating with TeliMatrix regarding the sale of
Tripmaster.
The OEM plastics businesses, which were acquired in 2006 as part of the Port
Elizabeth based Sagercy business, encountered a number of problems during 2007
that were not anticipated and required considerable resources to resolve.
As it is unlikely that these businesses will meet the Group`s minimum operating
performance criteria in the medium-term they are in the process of being sold
to Smiths Plastics (Proprietary) Limited, a subsidiary of Metair Investments
Limited. This has resulted in impairment charges of R48.6 million and the Group
is investigating steps to recover the value lost. Competition Board approval
for the sale was received at the beginning of March 2008 and the effective date
of the transaction is expected to be on or about 17 March 2008.
Continuing operations
Continuing operations represent Control Instruments going forward. They
comprise CI Automotive, which supplies branded products to the sub-Saharan
Africa automotive aftermarket; and Pi Shurlok, a supplier of automotive
electronics and engineering services to the international OEM market.
The continuing operations increased revenue by 57% in 2007 to R840.1 million,
compared with R536.0 million in the previous year. EBITDA of R20.0 million for
the year represents a decrease of 8% compared with the previous year.
Aftermarket - CI Automotive
CI Automotive owns and represents a number of well known high quality
automotive brands, including Gabriel (shock absorbers); Echlin (automotive
electronics); VDO (instrumentation and vehicle electronic components); Mag
Brakes (airbrakes and components); Truck-lite (automotive lighting) and Warn
(winches and off-road products). With its extensive basket of products CI
Automotive is able to compete effectively for shelf space in the southern
African Automotive Parts Aftermarket.
2007 was a year of integration and consolidation for CI Automotive. Gabriel
(the aftermarket shock absorber business acquired in September 2006), was
integrated into CI Automotive and all CI Automotive`s Johannesburg operations
were consolidated in a new office and warehouse facility that has an eventual
capacity of 20 000m2. The consolidation will improve efficiencies and reduce
operating, distribution and handling costs. It has also created an
infrastructure that can incorporate additional products relatively easily.
CI Automotive`s revenue increased 55% to R467.4 million during the year
compared with R301.1 million in the previous year. EBITDA increased 106% from
R21.4 million in 2006 to R44.1 million in the year under review. A profit of
R13.6 million was made on the sale of buildings during the year.
OEM - Pi Shurlok
Pi Shurlok was acutely affected by the turmoil in the international automotive
OEM market. The worldwide impact of cancelled orders, delayed new model
launches locally and significant downward price pressure from the OEMs
continued throughout the year. The consulting arm of the business acquired from
Pi Technology experienced a considerable drop off in its business in the middle
of the year, mainly due to problems experienced by some of its major customers.
This lost business has subsequently been replaced and the customer base
significantly expanded, particularly in the USA.
Surplus engineering resources in the United Kingdom and South Africa, which
arose when Pi Technology was merged with CI Shurlok, were rationalised during
the year albeit at a cost.
The acquisition of Pi Technology provided Pi Shurlok with an engineering
presence in the United States, the United Kingdom and Germany. This was
previously a major shortcoming in the Group`s offering to its OEM customers,
all of whom now carry out the bulk of their product development work at their
international engineering centres and no longer in South Africa. Pi Technology
also provided Pi Shurlok with its own Intellectual Property in the high growth
areas of engine management systems, emission controls and adaptive suspension
technology.
During 2007 the newly combined Pi Shurlok won its first contract, against
international competition, to design and manufacture an engine management
system for the South African based operation of a major international OEM. The
product went into production in the fourth quarter of 2007 at Pi Shurlok`s
manufacturing facilities in Pietermaritzburg, South Africa.
OEM revenue increased 43% to R395.9 million in the current year compared with
R277.6 million in the prior year. The OEM business made an EBITDA loss of R15.8
million in 2007, compared with a positive contribution at EBITDA level of R26.1
million in 2006.
General
Net borrowings were reduced from R307.2 million to R83.7 million. In December
2007 the Group entered into a five year trade receivables securitisation
funding programme in respect of R64.0 million of this debt. The debtors`
securitisation gives the Group access to cash at attractive fixed interest
rates in a flexible environment.
SHARES IN ISSUE
The number of shares in issue increased from 109.4 million to 139.4 million at
the end of 2007.
Vendor placement and issue of shares for cash
On 30 May 2007, in terms of the agreement with SiemensVDO, the Group settled
the final consideration in respect of the Datatrak business using a vendor
placement in terms of which Control Instruments placed 15.0 million Control
Instruments ordinary shares, with a par value of 5 (five) cents each at a price
of R6.00 per share, with third parties.
On 30 May 2007 the directors also authorised the issue of 15.0 million ordinary
shares, with a par value of five cents each, at a price of R6.00 per share
under the general authority granted to directors to issue shares for cash.
Share repurchase
Subsequent to the year-end, the Group has repurchased 16.7 million shares at an
average price of R1.33 and a total value of R22.2 million. This is equivalent
to 12.0% of the issued share capital at the time of the granting of the general
authority. These shares are being held as treasury shares (in a subsidiary and
The Control Instruments Share Incentive Scheme).
Subject to current and future cash requirements, the prevailing share price and
shareholder approval, the board will continue to authorise the acquisition of
additional shares in the business.
PROSPECTS
The completion of the strategic plan has put the Group is in a strong position
to cope with the current unstable global and local economic environments.
Additional work still needs to be done to rationalise the cost base and
although debt has been significantly reduced, we aim to continue to strengthen
the balance sheet.
Control Instruments has strong brands, a diversified base of blue chip local
and global customers, an international engineering presence and a world-class
manufacturing capability. However we operate in niche sectors of global markets
and, as the past twelve months have reminded us, are therefore subject to local
and international disruptions that are not under our control.
DIVIDEND
In line with our stated objectives to return value to shareholders, a final
dividend of 4.5 cents per share has been declared for the year ended 31
December 2007 (2006: nil).
In terms of the requirements of Strate, the last day to trade cum dividend is
Friday, 4 April 2008; the shares trade ex dividend on Monday, 7 April 2008; the
record date is Friday, 11 April 2008 and the payment date will be Monday, 14
April 2008. Share certificates may not be dematerialised or rematerialised
between Monday, 7 April 2008 and Friday, 11 April 2008, both days inclusive.
AUDITOR`S REPORT
PricewaterhouseCoopers Inc. have audited the results for the year and their
unqualified audit reports on the 31 December 2007 annual financial statements
and the abridged financial statements are available on request at the Company`s
registered office.
On behalf of the board
JPS O`Leary R Friedman
Chairman CEO and Group Managing Director
17 March 2008
BALANCE SHEETS
At 31 December 2007
Audited Audited
31/12/07 31/12/06
R 000 R 000
ASSETS
Non-current assets 316 724 511 673
Property, plant and equipment 152 206 229 248
Intangible assets 146 255 274 887
Investments in joint ventures and associates 2 003 2 178
Available-for-sale financial assets 900 -
Non-current receivables - 366
Deferred income tax assets 15 360 4 994
Current assets 323 751 403 601
Inventories 159 508 176 656
Trade and other receivables 140 808 212 888
Derivative financial instruments 38 -
Financial assets at fair value through profit or loss 4 050 -
Current income tax assets 3 485 5 675
Cash and cash equivalents 15 862 8 382
Non-current assets held for sale 69 415 -
Total assets 709 890 915 274
EQUITY AND LIABILITIES
Capital and reserves 416 803 350 231
Share capital 6 972 5 472
Share premium 396 996 221 066
Treasury shares (7 634) (10 282)
Foreign currency translation reserve ( 915) 5 370
Other reserves 245 12 563
Retained earnings 21 139 116 042
Reserves directly associated with non-current
assets held for sale 5 210 -
Total equity 422 013 350 231
Non-current liabilities 113 685 295 652
Borrowings 76 765 221 764
Deferred income tax liabilities 34 088 73 322
Provisions 2 832 566
Current liabilities 163 386 269 391
Trade and other payables 126 356 156 463
Current income tax liabilities 9 277 6 857
Derivative financial instruments 12 466
Borrowings 22 768 93 842
Provisions 4 973 11 763
Liabilities directly associated with non-current
assets classified as held for sale 10 806 -
Total equity and liabilities 709 890 915 274
Additional information
Net asset value per share (cents) 306 349
Tangible net asset value per share (cents) 207 109
INCOME STATEMENTS
For the year ended 31 December 2007
Audited Audited
31/12/07 31/12/06
R 000 R 000
Continuing operations
Revenue 840 070 535 968
Cost of sales (629 414) (385 073)
Gross profit 210 656 150 895
Other operating income 19 825 76 318
Marketing and selling expenses (35 722) (30 262)
Administrative expenses (126 576) (77 278)
Other operating expenses (101 722) (64 040)
Operating (loss)/profit (33 539) 55 633
Finance income 24 012 9 812
Finance costs (53 563) (24 482)
Share of profit from joint ventures 1 325 1 939
(Loss)/profit before tax (61 765) 42 902
Tax 13 165 785
(Loss)/profit for the year from continuing
operations (48 600) 43 687
Discontinued operations
Profit for the year from discontinued operations 509 352 13 032
Profit for the year 460 752 56 719
Attributable to equity holders of the Company 460 752 56 719
(Loss)/earnings per share (cents) - continuing
- basic (40.1) 46.9
- diluted (38.7) 43.9
Earnings per share (cents) - discontinued
- basic 420.2 14.0
- diluted 405.9 13.1
Dividends per share (cents)
Cash 3.5 7.5
Special 410.0 -
CASH FLOW STATEMENTS
For the year ended 31 December 2007
Audited Audited
31/12/07 31/12/06
R 000 R 000
Cash flows from operating activities
Cash generated from operations 36 017 40 777
Finance income received 25 382 -
Finance costs paid (59 535) (19 498)
Dividend received 1 500 2 526
Dividends paid (4 832) (7 179)
Tax paid (6 205) (8 509)
(7 673) 8 117
Cash flows from investing activities
Purchase of property, plant and equipment (22 666) (32 240)
Proceeds from disposal of property, plant and
equipment 35 865 9 998
Increase in intangible assets (21 195) (20 173)
Proceeds from disposal of financial assets 65 600 -
Proceeds from disposal of subsidiaries 74 419 -
Acquisition of subsidiaries and operations, net of cash (8 240) (54 371)
Decrease/(increase) in non-current receivables 43 ( 366)
Additional investments in subsidiaries (21 895) -
101 931 (97 152)
Cash flows from financing activities
Net (settlement of)/proceeds from non-current
borrowings (141 107) 25 786
Net proceeds on disposal of treasury shares 252 1 062
Shares issued 87 430 24 233
(53 425) 51 081
Net cash inflow / (outflow) for the year 40 833 (37 954)
Forex translation adjustments on cash and cash
equivalents (453) 1 204
Cash and cash equivalents at the beginning of the
year (37 990) (1 240)
Cash and cash equivalents at the end of the year 2 390 (37 990)
STATEMENTS OF CHANGES IN EQUITY
For the year ended 31 December 2007
Foreign
currency
Share Share Treasury translation
capital premium shares reserve
R 000 R 000 R 000 R 000
GROUP
Balance at 1 January 2006 4 826 97 886 (20 692) -
Gains on cash flow hedges,
net of tax
Profit for the year
Employee share option scheme:
- Value of services provided
Creation of foreign
currency translation reserve 5 370
Movement of treasury shares 483
Shares issued 1 053 123 277
Cancellation of treasury
shares (407) ( 97) 9 927
Dividends paid
Balance at 31 December 2006 5 472 221 066 (10 282) 5 370
Gains on cash flow hedges,
net of tax
Fair value adjustments
Profit for the year
Employee share option scheme:
- Value of services provided
- Transfer to retained earnings
Realised on disposal of
subsidiaries 1 857
Utilisation of foreign
currency translation reserve (2 932)
Movement of treasury shares 2 648
Shares issued 1 500 175 930
Dividends paid
Balance at 31 December 2007 6 972 396 996 (7 634) 4 295
Other Retained
reserves earnings Total
R 000 R 000 R 000
GROUP
Balance at 1 January 2006 7 564 75 443 165 027
Gains on cash flow hedges, net of tax 95 95
Profit for the year 56 719 56 719
Employee share option scheme:
- Value of services provided 4 904 4 904
Creation of foreign currency
translation reserve 5 370
Movement of treasury shares 579 1 062
Shares issued 124 330
Cancellation of treasury shares (9 520) ( 97)
Dividends paid (7 179) (7 179)
Balance at 31 December 2006 12 563 116 042 350 231
Gains on cash flow hedges, net of tax 345 345
Fair value adjustments (2 309) (2 309)
Profit for the year 460 752 460 752
Employee share option scheme:
- Value of services provided 4 059 4 059
- Transfer to retained earnings (16 393) 16 393 -
Realised on disposal of subsidiaries 1 980 3 837
Utilisation of foreign currency
translation reserve (2 932)
Movement of treasury shares (2 396) 252
Shares issued 177 430
Dividends paid (569 652) (569 652)
Balance at 31 December 2007 245 21 139 422 013
NOTES
For the year ended 31 December 2007
1 Accounting policies and basis of presentation
The consolidated financial statements for the year ended 31 December 2007 are
prepared in accordance with International Financial Reporting Standards (IFRS),
IAS 34 - Interim Financial Reporting and in compliance with the Listing
Requirements of the JSE Limited. These are the Group`s abridged consolidated
financial statements for the year for which annual financial statements are
prepared in terms of IFRS.
The principle accounting policies used in preparing the audited results for the
year ended 31 December 2007 are consistent with those applied in the annual
financial statements for the year ended 31 December 2006 in terms of IFRS.
In the 2007 balance sheet and income statement, CI OmniBridge, the Datatrak
business, Tripmaster Corporation and the OEM plastics businesses are presented
in terms of IFRS 5 - Non-current Assets Held for Sale and Discontinued
Operations. The income statement comparatives for 2006 have been restated.
2 Significant acquisitions and disposals
i) Datatrak business
During 2007, the Group acquired a 100% interest in the fleet and vehicle
management business of Siemens VDO. The business consisted of the following
divisions:
Datatrak United Kingdom (effective date 1 June 2007)
A vehicle tracking, fleet management and vehicle telematics business based in
the United Kingdom and One-Stop-Shop, a specialised vehicle fitment business
that focuses on non-standard solutions for commercial vehicles, including the
installation of fleet management products.
FM Europe (effective date 1 July 2007)
A division of Datatrak United Kingdom, based in Donaueschingen, Germany.
Responsible for the sale and distribution of the products through the ex
Siemens VDO network and other independent distributors in Europe and holds the
worldwide (excluding the United States of America and sub-Saharan Africa)
distribution rights for the FM products that are developed and manufactured by
the Group and for which Control Instruments owns the Intellectual Property.
Details of the net assets acquired are as follows:
Audited
31/12/07
R 000
Purchase consideration:
Paid 91 130
Direct costs relating to the acquisition 7 110
Total purchase consideration 98 240
Less: Fair value of net assets acquired (113 780)
Excess of acquirer`s interest in the fair value of
the acquiree over cost (15 540)
Acquiree`s
Fair carrying
value amount
The assets and liabilities arising from the
acquisition are as follows: R 000 R 000
Property, plant and equipment 13 156 8 728
Intangible assets 75 673 -
Available-for-sale financial assets 6 912 6 912
Deferred income tax assets 4 059 -
Inventories 29 336 31 436
Trade and other receivables 29 094 28 115
Trade and other payables (21 061) (22 367)
Provisions (23 389) (9 480)
113 780 43 344
R 000
Purchase consideration 98 240
Consideration settled in shares issued (15 000 000
shares issued at R6.00 each) (90 000)
Cash outflow on acquisition 8 240
The excess of acquirer`s interest in the fair value of the acquiree over cost
is included in other income in the income statement.
ii) Disposal of subsidiaries and operations
Fleet and vehicle management operations
With effect from 1 October 2007 the Group sold its fleet and vehicle
management operations to TeliMatrix Limited ("TeliMatrix") in return for
50% of the shares in TeliMatrix, i.e. 320 000 000 shares. Control Instruments
unbundled 278 873 508 of these shares to Control Instruments shareholders
registered in the books of Control Instruments on 16 November 2007.
Shareholders received two TeliMatrix shares for every one share they
held in Control Instruments. TeliMatrix was valued by an independent expert,
giving a value of R2.05 per TeliMatrix share.
Fair
value
Details of the net assets disposed and related cash flows are as
follows: R 000
Property, plant and equipment 38 039
Goodwill 2 338
Intangible assets 103 625
Available-for-sale financial assets 4 932
Deferred income tax assets 2 331
Inventories 37 172
Trade and other receivables 80 629
Cash and cash equivalents 16 573
Borrowings (23 207)
Deferred income tax liabilities (6 291)
Trade and other payables (49 427)
Current income tax liabilities (14 622)
Provisions (24 983)
Related party loans (102 355)
Related party short-term loans (1 538)
63 216
Value of shares (655 552)
Profit on disposal of businesses 577 136
Costs directly attributable to the profit on disposal of
businesses 11 363
Reserve realised on the disposal of subsidiaries 3 837
-
Repayment of related party loans 102 355
Costs directly attributable to the profit on disposal of
businesses (11 363)
Cash and cash equivalents in businesses disposed (16 573)
Net cash inflow from disposal 74 419
3 Segment results
Primary reporting format - business segments
At 31 December 2007, the Group is organised on a worldwide basis into the
following business segments:
- OEM: Automotive engineering services and the development and manufacturing
of electronic products for the international OEM market
- Aftermarket: The supply of branded products to the sub-Saharan Africa
automotive aftermarket
- Fleet management: Design, development, sale and distribution of fleet
management products and systems
The segment information for the year ended 31 December 2007 is as follows:
Continuing operations
OEM Aftermarket Head Office
Total segment revenue 372 716 467 354 -
Inter-segment revenue 23 166 - 84 951
Revenue 395 882 467 354 84 951
EBITDA (15 824) 44 085 47 637
Depreciation (11 649) (10 338) (65)
Amortisation (14 810) (4 488) (108)
Impairment of intangible assets (7 141) (4 412) (550)
Operating (loss)/profit (49 424) 24 847 46 914
Net finance (costs)/income (20 694) (11 431) 2 574
Share of profit from joint ventures 1 325 - -
(Loss)/profit before tax (68 793) 13 416 49 488
Tax 17 575 (5 199) 789
(Loss)/profit for the year (51 218) 8 217 50 277
Unallocated / TOTAL
Eliminations CONTINUING
Total segment revenue - 840 070
Inter-segment revenue (108 117) -
Revenue (108 117) 840 070
EBITDA (55 876) 20 022
Depreciation - (22 052)
Amortisation - (19 406)
Impairment of intangible assets - (12 103)
Operating (loss)/profit (55 876) (33 539)
Net finance (costs)/income - (29 551)
Share of profit from joint ventures - 1 325
(Loss)/profit before tax (55 876) (61 765)
Tax - 13 165
(Loss)/profit for the year (55 876) (48 600)
Discontinued operations
Fleet
Management OEM
Total segment revenue 224 137 60 277
Inter-segment revenue - -
Revenue 224 137 60 277
EBITDA 12 376 (13 252)
Excess of acquirer`s interest in the fair value
of the acquiree over cost 15 540 -
Depreciation (1 453) (3 018)
Amortisation (3 179) (2 530)
Impairment of property, plant and equipment - (6 456)
Impairment of intangible assets (19 379) (42 106)
Operating profit/(loss) 3 905 (67 362)
Net finance (costs)/income ( 967) (3 635)
Profit/(loss) before tax 2 938 (70 997)
Tax (11 374) 11 649
Loss after tax (8 436) (59 348)
Profit from sale of discontinued operations 577 136 -
(Loss)/profit for the year 568 700 (59 348)
Unallocated / TOTAL
Eliminations DISCONTINUED
Total segment revenue - 284 414
Inter-segment revenue - -
Revenue - 284 414
EBITDA - (876)
Excess of acquirer`s interest in the fair
value of the acquiree over cost - 15 540
Depreciation - (4 471)
Amortisation - (5 709)
Impairment of property, plant and equipment - (6 456)
Impairment of intangible assets - (61 485)
Operating profit/(loss) - (63 457)
Net finance (costs)/income - (4 602)
Profit/(loss) before tax - (68 059)
Tax - 275
Loss after tax - (67 784)
Profit from sale of discontinued operations - 577 136
(Loss)/profit for the year - 509 352
In 2006 the segment information disclosed was "Fleet Management" and
"Automotive components". Following the sale of the Group`s fleet and vehicle
management businesses on 1 October 2007, the "Automotive components" segment
has been split into "Aftermarket" and "OEM".
The segment information for the year ended 31 December 2006 is as follows:
Continuing operations
OEM Aftermarket Head Office
Total segment revenue 234 823 301 145 -
Inter-segment revenue 42 759 - 12 926
Revenue 277 582 301 145 12 926
EBITDA 26 061 21 406 (25 203)
Excess of acquirer`s interest in
the fair value of the
acquiree over cost - 59 539 -
Depreciation (9 888) (4 274) (318)
Amortisation (8 239) (2 474) (409)
Operating profit/(loss) 7 934 74 197 (25 930)
Net finance costs (8 407) (5 042) (1 221)
Share of profit from joint ventures 1 939 - -
Profit/(loss) before tax 1 466 69 155 (27 151)
Tax (13) (1 755) 2 553
Profit/(loss) for the year 1 453 67 400 (24 598)
Unallocated / TOTAL
Eliminations CONTINUING
Total segment revenue - 535 968
Inter-segment revenue (55 685) -
Revenue (55 685) 535 968
EBITDA (568) 21 696
Excess of acquirer`s interest in the fair
value of the
acquiree over cost - 59 539
Depreciation - (14 480)
Amortisation - (11 122)
Operating profit/(loss) (568) 55 633
Net finance (costs)/income - (14 670)
Share of profit from joint ventures - 1 939
Profit/(loss) before tax (568) 42 902
Tax - 785
Profit/(loss) for the year (568) 43 687
Discontinued operations
Fleet
Management OEM
Total segment revenue 179 143 57 044
Inter-segment revenue 4 737 733
Revenue 183 880 57 777
EBITDA 39 596 2 551
Depreciation (3 417) (2 069)
Amortisation (8 368) (2 281)
Impairment of intangible assets (282) -
Operating profit/(loss) 27 529 (1 799)
Net finance costs (2 865) (1 963)
Profit/(loss) before tax 24 664 (3 762)
Tax (8 408) 538
Profit/(loss) for the year 16 256 (3 224)
Unallocated / TOTAL
Eliminations DISCONTINUED
Total segment revenue - 236 187
Inter-segment revenue (5 470) -
Revenue (5 470) 236 187
EBITDA - 42 147
Depreciation - (5 486)
Amortisation - (10 649)
Impairment of intangible assets - (282)
Operating profit/(loss) - 25 730
Net finance costs - (4 828)
Profit/(loss) before tax - 20 902
Tax - (7 870)
Profit/(loss) for the year - 13 032
4 Non-current assets held for sale
OEM Automotive plastics operations
It was announced on 9 November 2007 that Control Instruments had reached
agreement to sell its OEM automotive plastics operations to Smiths Plastics
(Proprietary) Limited, a subsidiary of Metair Investments Limited.
Competition Board approval for the sale was received at the beginning of
March 2008 and the effective date of the transaction is expected to be on
or about 17 March 2008. The purchase consideration of R19.5 million plus the
carrying value of inventories, debtors and certain creditors; will be paid
on the effective date.
Impairment charges arose in the OEM segment cash generating units of Ariston
and SPE as follows:
R 000
Property, plant and equipment 6 456
Goodwill 32 304
Intangible assets 9 802
48 562
Tripmaster
Tripmaster is classified as held for sale, as the Group has decided to dispose
of its investment in Tripmaster and its net assets have been written down to
fair value less costs to sell.
Impairment charges were as follows:
R000
Goodwill 1 779
Intangible assets 11 368
13 147
5 Reconciliation of EPS to Headline EPS (cents)
2007
Weighted average number of shares
in issue (000) 121,211
Continuing Discontinued
operations operations Total
(Loss)/earnings for the year per share (51.0) 420.0 369.0
Profit on sale of subsidiaries - (476.1) (476.1)
Profit on disposal of property,
plant and equipment (9.5) (2.3) (11.8)
Excess of acquirer`s interest in
the fair value of the acquiree over cost - (12.8) (12.8)
Impairment of goodwill 1.9 28.1 30.0
Impairment of other intangible assets 8.1 22.6 30.7
Impairment of property, plant
and equipment - 5.3 5.3
Tax effect 9.3 (4.7) 4.6
Headline loss per share (41.2) (19.9) (61.1)
2006
Weighted average number of shares in
issue (000) 93,247
Continuing Discontinued
operations operations Total
Earnings for the year per share 46.0 22.4 68.4
(Profit)/loss on disposal of
property, plant and equipment (1.4) 0.1 (1.3)
Excess of acquirer`s interest in the
fair value of the acquiree over cost (63.9) - (63.9)
Impairment of available-for-sale
financial assets 3.4 - 3.4
Impairment of other intangible assets - 0.3 0.3
Tax effect 1.0 (8.5) (7.5)
Headline (loss)/earnings per share (14.9) 14.3 (0.6)
6 Restatement of prior year figures
In 2006 the purchase accounting for the acquisition of the Pi UK business was
determined provisionally in terms of IFRS 3 - Business Combinations. As a
result of all valuations and the purchase consideration now having been
finalised the prior year balance sheet has been restated as follows:
Previously Restated
stated Restatement balance
R 000 R 000 R 000
Property, plant and
equipment 229 748 (500) 229 248
Goodwill 71 660 2 212 73 872
Intangible assets 209 459 (8 444) 201 015
Deferred income tax
liabilities (81 169) 7 847 (73 322)
Trade and other
payables (154 748) (1 715) (156 463)
Retirement benefit
obligations (600) 600 -
The retirement benefit obligation was reclassified to trade and other
payables.
Date: 17/03/2008 07:29:53 Produced by the JSE SENS Department.
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