| Mon 30 Mar 2009, 7:30 | | CNL - Control Instruments - Results For The Year Ended 31 December 2008 |
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CNL
CNL
CNL - Control Instruments - Results For The Year Ended 31 December 2008
CONTROL INSTRUMENTS GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1964/003987/06)
Share Code: CNL
ISIN: ZAE000001665
("Control Instruments" or "the Company" or "the Group")
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2008
OVERVIEW
The past year was without doubt the most difficult in the history of the
Group. It was the first year in which the Group was focused exclusively on
the automotive industry and a year that was tumultuous for the economy as
a whole, and especially difficult for businesses in the automotive
industry, particularly in the fourth quarter.
Shareholders were warned in the 2007 annual report and again in the
commentary to the interim results for the six months ended 30 June 2008
that the prospects for 2008 were at best unclear, with a real possibility
of a downturn in the automotive industry. What took everyone by surprise is
that what lay ahead were not just storm clouds, but several tsunamis.
Worldwide volumes in the automotive industry have dropped between 35% and
50% on an annualised basis. This is completely unprecedented. Previously an
annualised downturn of 5% in the automotive industry was regarded as a
major drop. The levels at which the industry is currently operating are
below those of even the most pessimistic scenarios ever put together.
RESULTS AND BUSINESS OVERVIEW
The counter-cyclical nature of the Group`s two businesses is part of its
strategy. Trading downturns in the purchase of new vehicles affects our
original equipment manufacture ("OEM") business, but means that
individuals and businesses keep and operate their existing vehicles for
longer resulting in an increase in requests for replacement parts, which
should be positive for our Aftermarket business. This has held true,
however the negative effects of the credit crunch and economic downturn
have meant that people and businesses are using their vehicles less than
they normally would. The overall uptake of replacement parts has therefore
not been as rapid as anticipated.
Early in the third quarter of 2008 the Group was well under way with
aggressive programmes to reduce its cost base and infrastructural levels
significantly. These programmes were accelerated and intensified in the
fourth quarter when it became apparent that we were facing something much
more serious than a severe downturn.
Accordingly, significant reductions in headcount and other expenses have
been made in all our operations. In our original equipment manufacture
"(OEM)" business senior executives have taken salary reductions and factory
staff are working short-time. Every effort is being made to preserve jobs,
but in the current environment large-scale redundancies are unavoidable.
Since the end of 2007 the Group`s headcount has fallen by 512 people.
Aftermarket - CI Automotive
The main factors driving the Aftermarket business are the size and age of the
vehicle pool - both of which are growing in the current economy. South Africa`s
vehicle pool has grown significantly in recent years and the economic downturn
will result in a notably older pool of vehicles.
The Aftermarket business did not achieve the level of profitability aimed
for in 2008. The major contributing factor to this was the failure of the
management team to get on top of the issues arising from the consolidation
of the Johannesburg operations into a new office and warehouse facility
during the last quarter of 2007.
This is evident in CI Automotive`s results for the year ended 31 December
2008. These show a decrease in revenue of 3.6% to R450.6 million compared
with R467.4 million in the previous year. EBITDA decreased 80.0% to R8.8
million from R44.1 million in the year ended 31 December 2007. EBITDA for
the year ended 31 December 2008 includes R6.7 million of non-recurring
restructuring costs and EBITDA for the previous year includes a
R13.6 million profit on the sale of buildings. After deducting these non-
recurring and once-off amounts EBITDA for the year ended 31 December 2008
decreased 49.2% compared with the previous year.
The senior management team was changed in the third quarter of 2008 and the
benefits of the changes are already apparent. Customer service levels have
returned to their previous high standards and there have been reductions in
inventory. A number of changes aimed at increasing efficiency, quality and
service levels are being made throughout the business, including the
Gabriel manufacturing facility, on an ongoing basis.
Even in these difficult economic times, the prospects for the aftermarket
business are good. It should be a contributor of cash and profitability to
the Group during 2009.
OEM - Pi Shurlok
The South African manufacturing and the offshore (United Kingdom and United
States of America) engineering operations produced excellent results for
the year, in spite of the dramatic fall-off after September 2008.
At the end of the third quarter the OEM business appeared to be in an
excellent position and projections for 2009 were also excellent. Going into
the fourth quarter of 2008 we had a pipeline of new work that was filling
well, including a number of interesting contracts that were in the offing.
This situation reversed dramatically in October 2008. We took immediate and
radical action in an attempt to reduce our overheads in line with the
unprecedented fall-off in business.
The results for 2008 are as a result of concerted actions by Pi Shurlok`s
management teams. They contained costs and input prices and
ensured that marginal contracts were exited. Stock and work-in-progress
levels were significantly reduced and quality and production efficiencies
were significantly improved. The management teams all performed
exceptionally well under extremely difficult circumstances. Pi Shurlok is
probably operating at its best ever efficiency and quality levels - it is
just short of work!
Pi Shurlok`s revenue for the year increased 51.2% to R563.7 million
compared with R372.7 million in the previous year. EBITDA of R27.5 million
is a substantial increase compared with the loss of R15.8 million in the
previous year.
Worldwide, OEM related businesses are battling for survival. Volumes
collapsed in the last quarter of 2008 at a rate that made it virtually
impossible for businesses to adjust their cost bases rapidly enough to
avoid large scale losses in the future.
Companies operating in this space, including ours, are at risk and it would
be wrong to give the impression that it will be easy to weather the
storm. Actions that we have taken and actions that we may still have to
take will be aimed at no more than survival in the next 12 - 24 months.
Our key objective is to retain the core expertise and experience to ensure
that we have a business that is in a position to prosper and grow when an
upturn arrives.
The picture in the OEM market is not entirely bleak. There are areas in
which we have invested time and money that are bearing fruit. In North
America we are involved with a number of interesting programmes. These
programmes are focused on areas of global interest and include emissions
control and hybrid vehicles. In addition, Pi Shurlok has also developed a
range of electronic control units ("ECUs") that significantly reduce the
time and cost of the development of electronic products used in passenger
cars, large trucks and military and hybrid vehicles.
DEALSTREAM
The board deeply regrets the Group`s involvement with Dealstream, the
associated financial loss and the damage to the Group`s reputation. Our aim
was to repurchase shares in the Company and a number of funding options
were investigated in this regard and the method offered by Dealstream
appeared to be suitable. All instructions, whether given to Dealstream or
the brokers concerned, were for the purchase of shares and not for
derivative instruments; and all transactions were therefore disclosed in
the press and on SENS as purchases of shares and accounted for as share
purchases in the Group`s accounting records. As directors we believed we
were acting in the best interests of the Group, nevertheless we apologise
to shareholders for the resultant loss.
In retrospect and after much investigation it is clear that shares were not
in fact purchased. Following our internal investigations and reviews a
number of changes are being implemented to enhance our risk management
procedures. The investigation into the collapse of Dealstream also revealed
that Dealstream perpetrated high level fraud and misrepresentation.
The Group`s subsidiary, CI Automotive (Pty) Limited, lost 13 388 800
Control Instruments shares and The Control Instruments Share Incentive
Scheme lost 11 658 700 Control Instruments shares as a result of the
collapse of Dealstream and the fraud perpetrated by Dealstream.
Cash lost by the Group in respect of these shares amounted to R11 650 000.
No further losses are anticipated.
One of the immediate steps taken by the Group following the collapse of
Dealstream was to apply for the urgent liquidation of Dealstream. This was
primarily to protect the interests of the Group and its shareholders. It
ensured that the losses and potential losses of the Group (and other Dealstream
clients) were contained before the full effects of the collapse
of the market were realised.
The provisional liquidation of Dealstream was granted in terms of a High
Court order late on Sunday evening, 5 October 2008. A High Court order on
7 October 2008 granted the application by the Financial Services Board
("FSB") to place Dealstream under provisional curatorship. The provisional
liquidation and the provisional curatorship ran concurrently until the return
date of 18 November 2008.
In light of the progress made by the curator, Control Instruments was
advised by its legal advisors to allow the provisional liquidation to be
discharged on 18 November 2008. Control Instruments requested that certain
specific matters (particularly those relating to the parties in the
environment in which Dealstream was operating) be investigated by the
curator and the FSB. The Company may still assist the liquidators with a
section 417 enquiry should it be deemed necessary in future.
Following the Curator`s final report Dealstream was placed in final
liquidation on 20 February 2009.
AUDITOR`S REPORT
PricewaterhouseCoopers Inc. has audited the results for the year and their
unqualified audit reports on the 31 December 2008 annual financial
statements and the abridged financial statements are available on request
at the Company`s registered office.
PROSPECTS
While it has taken a huge knock, the automotive industry still exists and
people and businesses are still buying vehicles. The South African OEM
market is back to where it was about five years ago, which is approximately
30% lower than before the collapse of the industry. It is still a sizeable
market.
Our OEM technology has uses beyond the automotive industry and we will
continue to explore these openings.
Nevertheless, at the time of writing, the list of suppliers to the
automotive industry who have failed grows daily. In many cases this is
through no fault of their own. Events have either overtaken them or it is
as a result of a `domino effect` where one supplier folds elsewhere in the
chain and this in turn causes a number of other businesses to go under.
We are facing similar challenges throughout the Group. OEMs continue to
reduce and/or cancel orders. In the Aftermarket business we have the twin
danger of the potential for failure in either or both our customer and
supplier bases. This is going to be an exceptionally challenging period for
all businesses and particularly for those in the automotive industry. Under
these circumstances any guidance in respect of prospects for 2009 would be
inadequate and potentially misleading.
On behalf of the board
JPS O`Leary
Chairman
R Friedman
CEO and Group Managing Director
30 March 2009
BALANCE SHEETS
At 31 December 2008
Audited Audited
31/12/08 31/12/07
R 000 R 000
ASSETS
Non-current assets 300 908 316 724
Property, plant and equipment 139 788 152 206
Intangible assets 137 247 146 255
Investments in joint ventures and
Associates 2 421 2 003
Available-for-sale financial assets 384 900
Deferred income tax assets 21 068 15 360
Current assets 291 003 324 224
Inventories 152 378 159 508
Trade and other receivables 124 746 140 808
Derivative financial instruments 3 986 511
Financial assets at fair value through
profit or loss 81 4 050
Current income tax assets 1 883 3 485
Cash and cash equivalents 7 929 15 862
Non-current assets held for sale - 69 415
Total assets 591 911 710 363
EQUITY AND LIABILITIES
Capital and reserves 329 924 416 803
Share capital 6 972 6 972
Share premium 396 996 396 996
Treasury shares (3 117 (7 634)
Foreign currency translation reserve (3 185) (915)
Other reserves 1 338 245
(Accumulated loss)/retained earnings (69 080) 21 139
Reserves associated with non-current
assets held for sale - 5 210
Total equity 329 924 422 013
Non-current liabilities 109 884 113 685
Borrowings 76 791 76 765
Deferred income tax liabilities 27 699 34 088
Provisions 5 394 2 832
Current liabilities 152 103 163 859
Trade and other payables 106 633 126 356
Current income tax liabilities 9 342 9 277
Derivative financial instruments 1 848 485
Borrowings 28 560 22 768
Provisions 5 720 4 973
Liabilities associated with non-current
assets held for sale - 10 806
Total equity and liabilities 591 911 710 363
INCOME STATEMENTS
For the year ended 31 December 2008
Audited Audited
31/12/08 31/12/07
R 000 R 000
CONTINUING OPERATIONS
Revenue 1 014 229 840 070
Cost of sales (761 533) (629 414)
Gross profit 252 696 210 656
Other operating income 12 154 19 825
Marketing and selling expenses (32 370) (35 722)
Administrative expenses (133 348) (126 576)
Other operating expenses (137 585) (101 722)
Operating loss (38 453) (33 539)
Finance income 585 472
Finance costs (16 243) (30 023)
Share of profit from joint ventures 418 1 325
Loss before tax (53 693) (61 765)
Tax 3 520 13 165
Loss for the year from continuing
Operations (50 173) (48 600)
DISCONTINUED OPERATIONS
(Loss)/profit for the year from
discontinued operations (25 507) 509 352
(Loss)/profit for the year (75 680) 460 752
Attributable to equity holders of
the Company (75 680) 460 752
Loss per share (cents) - Continuing
- basic (36.4) (40.1)
- diluted (36.4) (38.7)
(Loss)/earnings per share
(cents) - Discontinued
- basic (18.5) 420.2
- diluted (18.5) 405.9
Dividends per share (cents)
- cash 8.0 3.5
- in specie - 410.0
CASH FLOW STATEMENTS
For the year ended 31 December 2008
Audited Audited
31/12/08 31/12/07
R 000 R 000
Cash flows from operating activities
Cash generated from operations 3 645 36 017
Finance income received 593 951
Finance costs paid (16 889) (35 104)
Dividends received - 1 500
Dividends paid (10 829) (4 832)
Tax paid (3 715) (6 205)
(27 195) (7 673)
Cash flows from investing activities
Purchase of property, plant and equipment (17 813) (22 666)
Proceeds from disposal of property, plant
and equipment 5 745 35 865
Increase in intangible assets (9 758) (21 195)
Proceeds from disposal of financial assets 3 591 65 600
Proceeds from disposal of subsidiaries,
net of cash 26 046 74 419
Acquisition of subsidiaries and operations,
net of cash - (8 240)
Decrease in non-current receivables - 43
Additional investments in subsidiaries - (21 895)
7 811 101 931
Cash flows from financing activities
Net proceeds from /(settlement of)
non-current borrowings 7 214 (141 107)
Net proceeds on disposal of treasury shares 129 252
Shares issued - 87 430
7 343 (53 425)
Net cash (outflow)/inflow for the year (12 041) 40 833
Forex translation adjustments on cash
and cash equivalents (2 459) (453)
Cash and cash equivalents at the beginning
of the year 2 390 (37 990)
Cash and cash equivalents at the end of
the year (12 110) 2 390
STATEMENTS OF CHANGES IN EQUITY
For the year ended 31 December 2008
Audited Audited Audited Audited
Foreign
currency
Share Share Treasury translation
capital premium shares reserve
R 000 R 000 R 000 R 000
GROUP
Balance at 1 January 2007 5 472 221 066 (10 282) 5 370
Gains on cash flow hedges
net of tax
Profit for the year
Fair value adjustment
Employee share option
scheme:
- Value of services
provided
- Transferred 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
Classified as held for sale (5 210)
6 972 396 99 (7 634) (915)
Gains on cash flow
hedges, net of tax
Fair value adjustments
Loss for the year
Employee share option
scheme:
- Value of services
provided
Realised on disposal of
Subsidiaries (7 008)
Utilisation of foreign
currency translation
reserve (472)
Movement of treasury
Shares 4 517
Dividends paid
Balance at
31 December 2008 6 972 396 996 (3 117) (3 185)
Audited Audited Audited
Retained
earnings /
Other (accumu-
reserves lated loss) Total
R 000 R 000 R 000
GROUP
Balance at 1 January 2007 12 563 116 042 350 231
Gains on cash flow
hedges, net of tax 345 345
Profit for the year 460 752 460 752
Fair value adjustment (2 309) (2 309)
Employee share option
scheme:
- Value of services
provided 4 059 4 059
- Transferred 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
Classified as held for sale (5 210)
245 21 139 416 803
Gains on cash flow
hedges, net of tax 1 524 1 524
Fair value adjustments (516) (516)
Loss for the year (75 680) (75 680)
Employee share option
scheme:
- Value of services
provided 85 85
Realised on disposal
of subsidiaries (7 008)
Utilisation of foreign
currency translation
reserve 678 206
Movement of treasury
Shares (4 388) 129
Dividends paid (10 829) (10 829)
Balance at
31 December 2008 1 338 (69 080) 329 924
SEGMENTS
Primary reporting
Original Equipment Manufacture ("OEM")
Automotive engineering services and the development and manufacturing
of electronic products for the international OEM market.
Aftermarket
The supply of high quality branded products to the sub-Saharan Africa
automotive aftermarket.
Fleet management
Design, development, sale and distribution of fleet management products
and systems.
The audited segment information for the year ended 31 December 2008
is as follows:
OEM Aftermarket Head office
R 000 R 000 R 000
Continuing operations
Total segment revenue 563 668 450 561 -
Inter-segment revenue 9 030 - 34 444
Revenue 572 698 450 561 34 444
EBITDA 27 456 8 798 (6 586)
Depreciation (11 972) (10 352) (239)
Amortisation (13 343) (4 568) (50)
Impairment of intangible
assets (136) - (353)
Impairment of property,
plant and equipment - (1 642) -
Operating profit/(loss) 2 005 (7 764) (7 228)
Net finance (costs)/income (11 062) (6 824) (19 019)
Share of profit from
joint ventures 418 - -
Loss before tax (8 639) (14 588) (26 247)
Tax 813 4 683 (1 976)
Loss for the year (7 826) (9 905) (28 223)
Unallocated /
Eliminations Total
R 000 R 000
Total segment revenue - 1 014 229
Inter-segment revenue (43 474) -
Revenue (43 474) 1 014 229
EBITDA (25 466) 4 202
Depreciation - (22 563)
Amortisation - (17 961)
Impairment of intangible assets - (489)
Impairment of property, plant and equipment - (1 642)
Operating profit/(loss) (25 466) (38 453)
Net finance (costs)/income 21 247 (15 658)
Share of profit from joint ventures - 418
Loss before tax (4 219) (53 693)
Tax - 3 520
Loss for the year (4 219) (50 173)
Discontinued operations
Fleet Unallocated/
Management OEM eliminations Total
R 000 R 000 R 000 R 000
Total segment revenue 6 633 13 573 - 20 206
Inter-segment revenue - - - -
Revenue 6 633 13 573 - 20 206
EBITDA (5 344) (5 994) - (11 338)
Depreciation - - - -
Amortisation - - - -
Operating loss (5 344) (5 994) - (11 338)
Net finance costs (45) (593) - (638)
Loss before tax (5 389) (6 587) - (11 976)
Tax (3 048) 1 844 - (1 204)
Loss after tax (8 437) (4 743) - (13 180)
Loss on disposal of
discontinued operations (12 327) - - (12 327)
Loss for the year (20 764) (4 743) - (25 507)
The audited segment information for the year ended 31 December 2007
is as follows:
OEM Aftermarket Head
Office
R 000 R 000 R 000
Continuing operations
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 84 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 /
Eliminations Total
R 000 R 000
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 Unallocated/
Management OEM eliminations Total
R 000 R 000 R 000 R 000
Total segment revenue 224 137 60 277 - 284 414
Inter-segment revenue - - - -
Revenue 224 137 60 277 - 284 414
EBITDA 12 376 (13 252) - (876)
Excess of acquirer`s
interest in the fair value
of the acquiree over cost 15 540 - - 15 540
Depreciation (1 453) (3 018) - (4 471)
Amortisation (3 179) (2 530) - (5 709)
Impairment of property,
plant and equipment - (6 456) - (6 456)
Impairment of
intangible assets (19 379) (42 106) - (61 485)
Operating profit/(loss) 3 905 (67 362) - (63 457)
Net finance costs (967) (3 635) - (4 602)
Profit/(loss) before tax 2 938 (70 997) - (68 059)
Tax (11 374) 11 649 - 275
Loss after tax (8 436) (59 348) - (67 784)
Profit on disposal of
discontinued operations 577 136 - - 577 136
Profit/(loss) for the year 568 700 (59 348) - 509 352
Fleet
Management OEM Aftermarket
R 000 R 000 R 000
The segment assets and
liabilities at 31 December 2008
and capital expenditure
for the year then ended
are as follows:
Assets - 320 523 358 612
Investments in joint ventures - 2 421 -
Total assets - 322 944 358 612
Liabilities - 333 383 213 399
Capital expenditure - 13 459 13 170
Head Unallocated/
Office Eliminations Total
R 000 R 000 R 000
Assets 373 645 (463 290) 589 490
Investments in joint ventures - - 2 421
Total assets 373 645 (463 290) 591 911
Liabilities 181 448 (466 243) 261 987
Capital expenditure 942 - 27 571
Fleet
Management OEM Aftermarket
R 000 R 000 R 000
The segment assets and
liabilities at
31 December 2007 and capital
expenditure for the year then
ended are as follows:
Assets 33 917 327 831 330 462
Investments in joint ventures - 2 003 -
Total assets 33 917 329 834 330 462
Liabilities 8 919 321 007 173 296
Capital expenditure 12 168 20 475 11 095
Head Unallocated/
Office Eliminations Total
R 000 R 000 R 000
Assets 375 602 (359 452) 708 360
Investments in joint ventures - - 2 003
Total assets 375 602 (359 452) 710 363
Liabilities 141 815 (356 687) 288 350
Capital expenditure - 123 43 861
NOTES
For the year ended 31 December 2008
1. Accounting policies and basis of presentation
The consolidated financial statements for the year ended 31 December 2008
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 2008 are consistent with those applied in the
annual financial statements for the year ended 31 December 2007 in terms of
IFRS.
2. Significant disposals
i) Fleet and vehicle management businesses
With effect from 1 April 2008 the Group sold its remaining fleet and
vehicle management operation, Tripmaster Incorporated, to TeliMatrix
Limited for US$1.00.
Book value
R 000
Property, plant and equipment 901
Intangible assets 21 703
Non-current receivables 361
Inventories 4 023
Trade and other receivables 8 817
Current income tax assets 1 704
Borrowings (877)
Deferred tax liabilities (7 152)
Trade and other payables (8 784)
Provisions (1 557)
Cash and cash equivalents 196
Total net asset value 19 335
Loss on sale of business (12 327)
Reserve realised on the disposal of subsidiaries (7 008)
Proceeds -
Purchase consideration -
Cash and cash equivalents in business disposed (196)
Net cash outflow from disposal (196)
ii) OEM plastics operations
Control Instruments reached agreement on 9 November 2007 to sell its OEM
automotive plastics operations to Smiths Plastics (Pty) Limited, a
subsidiary of Metair Investments Limited. Competition Commission approval
for the sale was received at the beginning of March 2008 and the effective
date of the transaction was 17 March 2008.
The purchase consideration of R19.5 million plus the carrying value of
inventories, debtors and certain creditors, was paid on the effective date.
Book value
R 000
Property, plant and equipment 19 378
Intangible assets 122
Inventories 8 486
Trade and other receivables 14 917
Trade and other payables (600)
Total net asset value 42 303
Repayment of borrowings (7 614)
Repayment of trade and other payables (8 447)
Net cash inflow from disposal 26 242
3. Reconciliation of EPS to Headline EPS (cents)
2008
Weighted average number of shares in issue (000) 137,891
Continuing Discontinued Total
operations operations
Loss for the year per share (39.0) (17.5) (56.5)
Loss on sale of subsidiaries 8.9 8.9
Loss on disposal of property, plant and
equipment - - -
Impairment of other intangible assets 0.4 - 0.4
Impairment of property, plant and equipment 1.2 - 1.2
Tax effect 2.2 (0.9) 1.3
Headline loss per share (35.2) (9.5) (44.7)
2007
Weighted average number of shares in issue (000) 121,211
Continuing Discontinued Total
operations operations
(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)
4. Sale of building
One of the buildings owned by Pi Shurlok in Pietermaritzburg was sold
during the year.
5. Commitments
2008 2007
R 000 R 000
Capital expenditure commitments
Authorised by directors and contracted for:
Property, plant and equipment 4 438 1 200
Authorised by directors and not yet contracted for:
Property, plant and equipment 3 814 4 933
The capital expenditure is to be financed as follows:
Internally generated funds 1 691 6 133
Existing credit facilities 6 561 -
8 252 6 133
6. Post Balance Sheet Events
6.1 Litigation with Sagercy
The Group acquired a 100% interest in the business of Sagercy PE, Ariston and
Specialised Plastics Engineering ("SPE") ("Sagercy business") with effect from
1 March 2006.
Notice has been served against the vendors of the Sagercy business for the
recovery of R34 million arising out of certain warranties and representations
made by them.
Ariston and SPE were sold to Smiths Plastics (Pty) Limited, a subsidiary of
Metair Investments Limited with effect from 17 March 2008.
6.2 Net working capital dispute
TeliMatrix Limited has declared a dispute with the Group with regard to the
calculation of the net working capital in certain of the businesses that the
Group sold to it with effect from 1 October 2007.
This dispute is in the process of being resolved. The Group has taken
independent professional advice and based on this advice the directors do not
believe that the Group has any liabilities with regard to this dispute.
Sponsor
Investec Bank Limited
Date: 30/03/2009 07:30:02 Produced by the JSE SENS Department.
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