| Tue 10 Jun 2008, 17:56 | | IVT - Invicta Holdings - Audited Group Results For The Year Ended |
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IVT
IVT
IVT - Invicta Holdings - Audited Group Results For The Year Ended
31 March 2008 and dividend declaration
INVICTA HOLDINGS LIMITED
(Registration number 1966/002182/06)
(Incorporated in the Republic of South Africa)
(Share code: IVT) & (ISIN code: ZAE000029773)
FINANCIAL RESULTS
- Revenue up 25%
- Profit before taxation up 42%
- Headline earnings per share up 33%
AUDITED GROUP RESULTS FOR THE YEAR ENDED 31 MARCH 2008
CONSOLIDATED CONDENSED INCOME STATEMENT
2008 2007 %
R`000 R`000 change
Revenue 3 335 496 2 663 398 25
Operating income 360 379 281 229 28
Interest and preference dividend 212 270 137 247
received
Finance costs (209 147) (162 648)
Profit before taxation 363 502 255 828 42
Taxation (62 646) (38 104)
Profit for the year 300 856 217 724 38
Attributable to ordinary 263 365 215 994 22
shareholders
Minority interest 37 491 1 730
Earnings per share (cents) 356 292 22
Diluted earnings per share (cents) 354 288 23
Determination of headline earnings
Attributable earnings 263 365 215 994
Adjustments - after taxation and
minority interests where applicable
- Profit on disposal of a branch (700) -
- Negative goodwill on business (88) -
combination
- Profit on disposal of interest in - (779)
subsidiary
- Profit on issue of shares by (3 870) (22 565)
subsidiary
- Profit on disposal of property, (6 506) (1 040)
plant and equipment
- Total taxation effects of 1 861 415
adjustments
- Total minority interest of 1 094 -
adjustments
Headline earnings 255 156 192 025 33
Shares in issue
Weighted average (000`s) 74 007 73 866
At the end of the year (000`s) 72 703 74 341
Number of shares used for diluted 74 325 75 122
earnings per share (000`s)
Headline earnings per share (cents) 345 260 33
Diluted headline earnings per share 343 256 34
(cents)
Total dividends (cents) 138 104 33
CONSOLIDATED CONDENSED BALANCE SHEET
2008 2007
R`000 R`000
ASSETS
Non-current assets 3 183 780 1 553 891
Property, plant and equipment 154 996 118 097
Investments 1 195 303 1 195 303
Goodwill and other intangible assets 230 414 210 323
Deferred taxation 34 794 28 681
Other long-term financial assets 1 568 273 1 487
Current assets 2 032 453 1 443 374
Inventories 1 073 812 875 315
Trade and other receivables 733 466 372 316
Bank balances and cash 225 175 195 743
5 216 233 2 997 265
EQUITY AND LIABILITIES
Capital and reserves 1 117 738 930 846
Attributable to ordinary shareholders 1 025 591 886 161
Minority interest 92 147 44 685
Non-current liabilities 2 776 809 1 204 270
Long-term borrowings 2 764 662 1 193 311
Deferred taxation 12 147 10 959
Current liabilities 1 321 686 862 149
Short-term borrowings 7 325 19 440
Trade and other payables 1 236 315 780 066
Provisions 62 742 62 301
Bank overdrafts and bankers` acceptances 15 304 342
5 216 233 2 997 265
CONSOLIDATED CONDENSED CASH FLOW STATEMENT
2008 2007
R`000 R`000
Cash flows from operating activities
Cash generated from operations 292 574 364 698
Finance costs (209 147) (162 648)
Dividends paid (93 972) (55 152)
Taxation paid (58 317) (25 211)
Interest and dividend received 212 270 137 247
Cash flows from investing activities
Net cash effects of asset acquisitions (39 985) (11 474)
Net cash effects of other investing (1 427 511) 32 439
activities
Cash flows from financing activities
Net cash effects of shares issued 1 488 4 200
Net cash effects of borrowings raised 1 337 070 (9 424)
(repaid)
Net increase in cash and cash equivalents 14 470 274 675
Cash and cash equivalents at the 195 401 (79 274)
beginning of the year
Cash and cash equivalents at the end of 209 871 195 401
the year
CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN EQUITY
2008 2007
R`000 R`000
SHARE CAPITAL
Balance at beginning of year 3 717 3 693
Treasury shares (89) -
Shares issued 7 24
Balance at end of year 3 635 3 717
SHARE PREMIUM
Balance at beginning of year 281 234 277 058
Treasury shares (49 304) -
Shares issued 1 481 4 176
Balance at end of year 233 411 281 234
RETAINED EARNINGS
Balance at beginning of year 588 011 426 673
Earnings attributable to ordinary 263 365 215 994
shareholders
Dividends paid (87 679) (54 656)
Balance at end of year 763 697 588 011
OTHER RESERVES
Balance at beginning of year 13 199 8 872
Share appreciation rights issued 9 672 4 352
Arising on translation of foreign 1 977 (25)
operations
Balance at end of year 24 848 13 199
Attributable to ordinary shareholders 1 025 591 886 161
MINORITY INTEREST
Balance at beginning of year 44 685 2 235
Earnings attributable to minorities 37 491 1 730
Dividends paid to minorities (6 404) (580)
Net investment in subsidiaries 16 375 -
Equity input by minorities - 41 300
Balance at the end of year 92 147 44 685
OTHER INFORMATION 2008 2007
Debt: Equity ratio (%) (excluding the 1% -
long-term funding debt secured by
investments and loans)
Depreciation and amortisation (R`000) 22 918 22 696
Net asset value per share (cents) 1 410,7 1 192,0
Tangible net asset value per share 1 093,7 909,1
(cents)
Capital expenditure (R`000) 39 985 16 016
Contingent liabilities (R`000) 1 724 3 750
Capital commitments (R`000) 623 1 298
2008
BUSINESS ACQUISITIONS R`000
Property, plant and equipment 23 647
Inventory 33 919
Trade and other receivables 13 801
Bank balances and cash 13 685
Long-term borrowings (4 332)
Deferred taxation (2 342)
Trade and other payables (26 042)
Taxation (2 353)
Goodwill arising on acquisition 15 516
Fair value of assets acquired 65 499
Attributable to minority shareholders (19 378)
Cost of acquisitions 46 121
Bank balances and cash acquired (13 685)
Negative goodwill recognised in income (88)
Additional interest acquired in subsidiary 6 407
Net cash effect of acquisition of subsidiaries 38 755
SEGMENT INFORMATION ON THESE BUSINESSES IS PRESENTED BELOW:
Capital
Engineering equipment
consumables and spares
R`000 R`000 R`000 R`000
2008 2007 2008 2007
Revenue 1 542 741 1 355 179 1 700 909 1 308 219
Operating profit before 220 649 173 412 120 854 71 075
finance costs, interest
and preference dividend
received
Balance sheet
Assets 941 163 772 005 1 055 135 684 949
Liabilities 316 559 251 518 909 867 526 786
SEGMENT INFORMATION ON THESE BUSINESSES IS PRESENTED BELOW: (Contd)
Non-segment
allocations
R`000 R`000 R`000 R`000
2008 2007 2008 2007
Revenue 91 846 - 3 335 496 2 663 398
Operating profit before 18 876 36 742 360 379 281 229
finance costs, interest
and preference dividend
received
Balance sheet
Assets 3 219 935 1 540 311 5 216 233 2 997 265
Liabilities 2 872 069 1 288 115 4 098 495 2 066 419
Geographical segments: The group has not reported segment information by
geographical location as the operations occur substantially within Southern
Africa.NOTES TO THE FINANCIAL INFORMATION
Basis of PreparationThe consolidated condensed financial statements have
been prepared in accordance with IAS 34 Interim Financial Reporting, and in
the manner required by the Companies Act of South Africa and the JSE
Limited`s Listings Requirements. The accounting policies and methods of
computation are consistent with the prior year except for the adoption of
IFRS 7 which does not affect the group results.
COMMENTSGroup activitiesThe 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 overviewThe group has again delivered excellent results. Turnover
exceeded R3 billion for the first time, profit was in excess of R300
million and a number of strategic transactions were concluded.
Trading conditions in most of the sectors of the group were strong during
the year, underpinned by the mineral and agricultural resources boom. Group
revenue grew by a healthy R672 million (25%) to a new high of
R3 335 million. Operating income grew by 28% to R360 million, with
operating margins improving slightly from 10,6% to 10,8%. Profit before tax
increased by 42% to R364 million, mainly as a result of reduced borrowing
costs and additional investment income. Profit after tax improved by 38% to
R301 million and headline earnings per share grew by 33% to 345 cents per
share.
The results are particularly pleasing taking into account the dilutionary
effect of our BEE transaction, which contributed to the minority share of
profits growing from R1,7 million to R37,5 million, R31,3 million of which
relates to the BEE transaction.
Bearing ManBearing Man continued its good growth record. Revenue grew by
R188 million (14%) to R1 543 million. Good margin management and cost
control resulted in operating profit improving by 27% to R221 million,
which translates into an operating profit margin of 14,3%, up from 12,8%
last year. Bearing Man continues to be the major contributor to group
profits and has embarked on various initiatives to sustain its growth,
including a re-branding exercise and a major logistics review.
Capital equipmentInvicta`s capital equipment divisions performed well, with
turnover growing by R392 million to R1 701 million, 30% up on last year.
Most of this growth was from the agricultural sector, which was driven by
high grain prices and good rains. Export sales into Africa, which are
generally non-repetitive, were R100 million during the year. The combined
group tractor sales resulted in Invicta being the number one in tractor
sales in South Africa for the calendar year 2007. CSE, the earthmoving
machinery division, continued to experience competitive market conditions.
Although volumes in the industry were strong, competition kept margins
under pressure. CSE`s turnover grew by 18%, but pressure on margins
resulted in operating profit being only 5% higher than last year.
TiletoriaThe tile industry in South Africa has started feeling the effects
of the slow-down in the housing sector due to increased interest rates and
the slow-down in GDP growth. Nevertheless, Tiletoria, which was acquired
with effect from 1 June 2007, performed well, although its contribution to
the group is not yet material.
InvestmentsDuring the second half of the financial year, the group raised
an additional R1 568 million. The funds were utilised to invest in long
term financial assets, which has had the effect of lowering borrowing costs
and increasing investment income. The security for the increased long term
liabilities has been structured in such a way that the group`s operating
assets have been ring-fenced and the group`s working capital is not
affected in any way.
ProspectsThe engineering consumables sector is expected to continue trading
at current levels, underpinned by the resources boom, which should enable
Bearing Man to produce real growth. Bearing Man has recently been appointed
as the exclusive South African distributor for Pall Corporation for their
industrial filtration products, and for Gates industrial drive belts.
Although the acquisition by Bearing Man of Goldquest Hydraulics was not
concluded due to certain conditions precedent not being met, the group is
still exploring opportunities in the hydraulics industry.
Current trading conditions in the agricultural sector are also good,
although agricultural input costs have risen dramatically over the past few
months, which could reduce farmers` profitability and thereby temper sales
in the agricultural machinery markets. The demand for agricultural
machinery globally has risen sharply in the past few months, causing lead
times for machinery to lengthen, which may limit Invicta`s agricultural
machinery divisions from fully exploiting the market opportunities.
The acquisition of Doosan South Africa, the exclusive distributor of Doosan
construction machinery in South Africa was successfully completed and
became effective on 1 April 2008. This strategic acquisition puts the
Invicta group in a position to offer well priced, good quality excavators,
wheel loaders and skid-steers to the market, thereby complementing the
group`s existing range of premium quality construction machinery.
The first steps for expanding Tiletoria into a major national player have
been taken. A Durban based business has been acquired, which has been re-
branded Tiletoria, and will form the base for growth into the Gauteng
market. A new IT system is also in the process of being implemented, which
should provide the platform for national growth. Although management
expects the tile industry not to be buoyant in the short-term, it presents
Tiletoria with the opportunity to gear its infrastructure for going
national, and to seek well priced acquisitions, in order to take advantage
of what should be a buoyant industry in the long term.
Provided demand for mineral and agricultural resources remains buoyant,
overall prospects for the group for the coming year look good. The group
expects the high interest rate and weak Rand environment to result in good
value-for-money acquisition opportunities arising. Invicta, with its good
cash resources and strong balance sheet, will be well positioned to take
advantage of such opportunities.
Dr C H Wiese Chairman
A Goldstone
Managing Director
AUDIT OPINIONOur auditors, Deloitte & Touche, have issued their opinion on
the group`s financial statements for the year ended 31 March 2008. They
have issued an unmodified audit opinion. A copy of their report is
available for inspection at the company`s registered office. These
summarised financial statements have been derived from the group`s annual
financial statements and are consistent in all material respects with the
group annual financial statements.
DIVIDENDSThe board has declared a final cash dividend of 91 cents per
share.
In compliance with the requirements of Strate the following dates are
applicable:
Last date to trade cum dividend Friday, 27 June 2008
First date of trading ex dividend Monday, 30 June 2008
Record date Friday, 4 July 2008
Payment date Monday, 7 July 2008
Share certificates may not be dematerialised or rematerialised from Monday,
30 June 2008 to Friday, 4 July 2008, both days inclusive.
2008 Increase 2007
(cents) % (cents)
Interim Dividend 47 33
Final Dividend 91 71
138 33 104
By order of the board
C Barnard Secretary
Johannesburg
10 June 2008
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 (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: 10/06/2008 17:56:08 Produced by the JSE SENS Department.
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