| Fri 15 May 2009, 10:52 | | ASO - Austro Group Limited - Unaudited Consolidated Interim Financial Results |
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ASO
ASO
ASO - Austro Group Limited - Unaudited Consolidated Interim Financial Results
For The Six Months Ended 28 February 2009
Austro Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 2001/029771/06)
Share code: ASO
ISIN: ZAE000090882
("The Group")
UNAUDITED CONSOLIDATED INTERIM FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 28
FEBRUARY 2009
CONSOLIDATED INCOME STATEMENTS
Unaudited Unaudited Audited
six months six months year
ended ended ended
28 February 29 February 31 August
2009 2008 2008
R`000 R`000 R`000
Revenue 315 381 273 944 715 131
Cost of sales (182 533) (158 004) (435 038)
Gross profit 132 848 115 940 280 093
Other operating income 1 011 2 788 6 187
Operating expenses (89 875) (55 186) (131 682)
Profit from operations 43 984 63 542 154 598
Finance income 3 858 2 866 6 957
Finance expense (11 644) (17) (7 522)
Profit before taxation 36 198 66 391 154 034
Taxation expense (11 144) (19 645) (42 070)
Net profit for the period 25 054 46 746 111 964
Dividends declared 8 628 - -
Number of shares in issue 431 413 425 927 431 413
(`000)
Weighted average number 431 413 425 927 428 221
of shares (`000)
Diluted weighted average 431 413 429 631 428 221
number of shares (`000)
Earnings per share 5,8 11,0 26,1
(cents)
Diluted earnings per 5,8 10,9 26,1
share (cents)
Dividends per share 2,0 - -
(cents)
Net asset value per 121,6 101,3 117,8
share (cents)
Headline earnings per 5,7 10,9 25,9
share (cents)
Diluted headline earnings 5,7 10,8 25,9
per share (cents)
Reconciliation of
earnings to headline
earnings:
Net profit for the period 25 054 46 746 111 964
Net profit on disposal of (407) (322) (1 259)
property, plant and
equipment
Headline earnings 24 647 46 424 110 705
CONSOLIDATED BALANCE SHEETS
Unaudited Unaudited Audited
as at as at as at
28 February 29 February 31 August
2009 2008 2008
R`000 R`000 R`000
Assets
Non-current assets 279 666 237 538 282 281
Property, plant and 52 861 34 953 56 008
equipment
Deferred taxation 6 856 695 6 304
Goodwill and other 219 949 201 890 219 969
intangibles
Current assets 478 291 384 091 556 770
Inventories 390 058 211 432 414 416
Trade and other 88 233 79 140 142 354
receivables
Cash resources - 93 519 -
Total assets 757 957 621 629 839 051
Equity and liabilities
Capital and reserves 524 813 431 592 508 408
Share capital 4 4 4
Share premium 322 760 308 003 308 003
Shares to be issued - 3 179 14 778
Accumulated profits 202 049 120 406 185 623
Non-current liabilities 4 056 1 925 4 448
Interest bearing 3 467 - 3 453
liabilities
Deferred taxation 589 1 925 995
Current liabilities 229 088 188 112 326 194
Trade and other payables 83 388 127 940 203 438
Amount owing for purchase 8 228 13 676 13 228
of subsidiaries
Shareholders for 8 437 - -
dividends
Taxation payable 44 394 46 496 38 989
Bank overdrafts 84 641 - 70 539
Total equity and 757 957 621 629 839 051
liabilities
SUMMARISED CONSOLIDATED CASH FLOW STATEMENTS
Unaudited Unaudited Audited
six months six months year
ended ended ended
28 February 29 February 31 August
2009 2008 2008
R`000 R`000 R`000
Cash flows from operating (7 035) 12 923 (109 665)
activities
Cash generated 7 639 12 328 (71 201)
by/(utilised in)
operations
Interest received 3 858 2 866 6 958
Interest paid (11 644) (17) (6 397)
Dividends paid (191) - -
Taxation paid (6 697) (2 254) (39 025)
Cash flows from investing (2 081) (18 454) (55 478)
activities
Cash flows from financing (4 986) (109 712) (114 158)
activities
Net decrease in cash (14 102) (115 243) (279 301)
resources
Cash resources at (70 539) 208 762 208 762
beginning of period
Cash resources at end of (84 641) 93 519 (70 539)
period
SUMMARISED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Unaudited Unaudited Audited
six months six months year
ended ended ended
28 February 29 February 31 August
2009 2008 2008
R`000 R`000 R`000
Share capital and share 322 764 311 186 322 785
premium
Balance at beginning of 322 785 314 141 314 141
period
Issued during period 14 757 133 284 133 284
Movement in shares to be (14 778) (139 418) (139 418)
issued reserve
Shares to be issued - 3 179 14 778
Accumulated profits 202 049 120 406 185 623
Balance at beginning of 185 623 73 660 73 659
period
Net profit for the period 25 054 46 746 111 964
Dividends declared (8 628) - -
Total capital and 524 813 431 592 508 408
reserves
SEGMENTAL ANALYSIS
Revenue
(external)
28 February 29 February
R`000 2009 2008
Wood 88 065 101 466
Power 227 316 172 478
Total 315 381 273 944
Profit before
taxation
28 February 29 February
R`000 2009 2008
Wood 1 780 21 009
Power 34 418 45 382
Total 36 198 66 391
Net asset
value
28 February 29 February
R`000 2009 2008
Wood 312 502 388 236
Power 212 311 43 356
Total 524 813 431 592
COMMENTARY
INTRODUCTION
Austro Group Limited is a distributor and manufacturer of specialised and
quality branded industrial equipment to corporate, commercial and infrastructure
markets, principally in South Africa. The Group has two operating divisions, the
Woodworking Division ("Wood"), which specialises in the distribution of
professional woodworking machinery and tooling, and the Power Division
("Power"), which manufactures, rents and markets alternative power products such
as generators, diesel engines and switchgear.
Wood contributed 27,9% to revenue (2008: 37,0%) and 10,9% to operating profit
(2008: 29,0%). The economic downturn had a negative effect on this division.
During the period under review, Power contributed 72,1% to revenue (2008: 62,9%)
and 89,1% (2008: 71,0%) to operating profit. Power performed satisfactorily in
spite of difficult market conditions. Although the frequency of power outages
has declined since last year, the demand for generating systems remains at a
high level.
FINANCIAL REVIEW
Income statement
Revenue increased by 15% from R274 million to R315 million. This was mainly
driven by the Group`s Power Division due to acquisitions and a healthy demand in
the alternative power supply industry.
Operating profit decreased by 32% to R43 million (2008: R63 million), as a
result of the sharp reduction in Wood`s revenue without a corresponding
reduction in the fixed overhead structure, as well as tougher trading conditions
throughout the Group. Operating profit was further impacted by foreign exchange
losses of R12 million during the current period.
Earnings per share decreased to 5,8 cents per share (2008: 11,0 cents per
share), while headline earnings per share decreased to 5,7 cents per share
(2008: 10,9 cents per share).
Balance sheet
Group gearing remained at an acceptable level of 20,1% (2008: 17,2%). The
Group`s inventory remains at a high level. This aspect is receiving management`s
attention. In spite of the high value, there is little likelihood of write downs
due to obsolescence.
There was no significant investment in capital expenditure during the period.
Cash flow
During the period under review, the Group generated cash of R7,6 million
compared to cash absorbed of R71,2 million during the year ended 31 August 2008.
The cash absorbed during the year ended 31 August 2008 was mainly due to an
increase in working capital and investment in acquisitions.
OPERATING REVIEW
Wood
The economic slowdown impacted strongly on this division. Negative sentiment
resulted in a large portion of Wood`s customer base curbing spending and
striving to retain cash for the uncertain times ahead. Wood`s customers have
been affected by the drop in residential and commercial developments, along with
reduced consumer spending.
Revenue decreased by 13% to R88,1 million (2008: R101,5 million) and operating
profit decreased by 70% to R5,4 million (2008: R18,4 million).
Progress has been made in reducing overheads and this will have a positive
effect in the next trading period.
Within the Woodworking Division, the Cape Town operation and Gearing Moss have
performed particularly well, with Gauteng performing poorly.
The recently formed 2nd Cut, which trades in used woodworking equipment, is
showing encouraging results and will contribute towards the facilitation of the
sale of new equipment.
Power
Revenue increased by 32% to R227,3 million (2008: R172,4 million) and operating
profit decreased by 14% to R38,6 million (2008: R45,1 million). New Way, the
supplier and manufacturer of generator sets, industrial diesel engines and
related components, continued to be the Group`s biggest contributor to revenue
and profit.
Neptune, the generator rental business, had a mixed set of results, with the
Cape branch producing results in line with prior periods, whilst the
Johannesburg branch has yet to reach the required fleet utilisation. Potential
penetration into the Johannesburg market is being assessed to ensure the
viability of this new initiative.
Considerable progress has been made to exploit the synergies between New Way and
Quad. The latter has recently moved into larger premises that will considerably
increase its production capacity. Quad produces electrical panels and soundproof
enclosures.
PROSPECTS
The Group is taking a conservative approach due to the current economic climate.
It will concentrate on ensuring that Wood remains profitable in spite of a
further expected decrease in revenues. This will be achieved by reducing
overheads and increasing efficiencies.
The outlook for Power is more positive. It is well positioned to take advantage
of infrastructure expenditure, with the World Cup activity set to have a
particularly positive effect.
New Way is consolidating its operations, at present housed in four separate
facilities, which will result in efficiencies in warehousing, manufacturing and
logistics.
Quad`s new facilities should help it to considerably increase its revenue.
Neptune`s Gauteng operation is starting to generate interest in the generator
rental market and should replicate the success of the Cape operation.
Quinlec, the Durban rental operation, has shown signs of recovery and should
increase its share of the KwaZulu-Natal market.
The Group is mindful of the volatile environment in which it operates, but is
confident that with conservative policies it will show modest improvement in the
short term until markets normalise, when it should be well positioned to take
full advantage of this situation.
DIVIDEND
It is the Group`s policy to pay a dividend at the end of the financial year.
BASIS OF PREPARATION
The interim financial results have been prepared in accordance with IAS 34
(Interim Financial Reporting). The accounting policies applied in preparing
these interim financial results are consistent with those applied in the prior
year end and the prior interim period, and are in accordance with International
Financial Reporting Standards and comply with the Companies Act, 1973. This
announcement has been prepared in accordance with the Listings Requirements of
the JSE Limited. These interim financial results have not been audited or
reviewed by the Group`s auditors, PKF (Jhb) Inc..
CHANGES TO THE BOARD OF DIRECTORS
Chief executive officer Robert Friese resigned with effect from 31 March 2009
from the Board for personal reasons. Neill Davies, a non-executive director of
the Group, has taken on the role of acting CEO until a suitable candidate can be
found.
The Group is actively interviewing candidates and is confident of finding a
suitable replacement within the next few months.
There were no other changes to the Board.
By order of the Board
Anthony John Phillips David Brouze
Chairman Non-Executive Director
Johannesburg
15 May 2009
Non-executive directors:
AJ Phillips* (Chairman), DS Brouze, W Hauser* (*Independent)
Executive directors:
N Davies (acting CEO), BD Downs, JO Freed,
MR Petzer, J Freed (alt to JO Freed)
Registration number:
2001/029771/06
Business/registered address:
1125 Leader Avenue, Stormill Ext. 4, Roodepoort, Johannesburg
Business postal address:
PO Box 1914, Florida, 1710, Johannesburg
Company secretary:
Probity Business Services (Proprietary) Limited
Transfer secretaries:
Computershare Investor Services (Proprietary) Limited
Sponsor:
Java Capital (Proprietary) Limited
Visit our website: www.austrogrouplimited.com
Date: 15/05/2009 10:52:02 Produced by the JSE SENS Department.
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