| Wed 27 May 2009, 17:25 | | IVT - Invicta Holdings Limited - Audited Group Results for the Year Ended 31 |
|
IVT
IVT
IVT - Invicta Holdings Limited - Audited Group Results for the Year Ended 31
March 2009 Financial Highlights
INVICTA HOLDINGS LIMITED
Registration number: 1966/002182/06
(Incorporated in the Republic of South Africa)
Share code: IVT
ISIN: ZAE000029773
("Invicta" or "the Group")
AUDITED GROUP RESULTS FOR THE YEAR ENDED 31 MARCH 2009 FINANCIAL HIGHLIGHTS
Revenue increased by 35,6%
Profit before taxation increased by 30,6%
Headline earnings per share increased by 25,8%
Annual dividend maintained
Consolidated condensed INCOME STATEMENT
for the year ended 31 March
% 2009 2008
change R`000 R`000
Revenue 35,6 4 523 535 3 335 496
Operating income 38,0 497 356 360 379
Interest and preference
dividends received 360 115 212 270
Finance costs 382 719 209 147
Profit before taxation 30,6 474 752 363 502
Taxation 111 940 62 646
Profit for the year 20,6 362 812 300 856
Minority interest 50 000 37 491
Attributable to ordinary
shareholders 18,8 312 812 263 365
Earnings per share (cents) 22,8 437 356
Diluted earnings per
share (cents) 23,4 437 354
Determination of headline
earnings
Attributable earnings 312 812 263 365
Adjustments - after taxation
and minority interest
where applicable
- Negative goodwill on
business combination - (70)
- Impairment of property,
plant and equipment 2 752 -
- Impairment of goodwill 510 -
- Profit on issue of shares
by subsidiaries (3 246) (3 246)
- Profit on disposal of
investment (160) -
- Profit on disposal of branch - (599)
- Profit on disposal of
property, plant and
equipment (1 862) (4 294)
Headline earnings 21,8 310 806 255 156
Shares in issue
Weighted average (000`s) 71 536 74 007
At the end of the year (000`s) 70 801 72 703
Number of shares used for
diluted earnings
per share (000`s) 71 536 74 325
Headline earnings
per share (cents) 25,8 434 345
Diluted headline earnings
per share (cents) 26,5 434 343
Dividends per share* (cents) 0,0 138 138
- Interim 12,8 53 47
- Final (6,6) 85 91
* In accordance with IAS 10 the final dividend of 85 cents per share proposed by
the directors has not been reflected in the year-end results.
SEGMENT INFORMATION
for the year ended 31 March
Group,
Capital financing
Engineering equipment and other
consumables and spares operations Total
R`000 R`000 R`000 R`000
2009
Revenue 2 056 754 2 334 424 132 357 4 523 535
Operating income 318 619 155 919 22 818 497 356
Total assets 1 212 328 1 211 360 3 581 042 6 004 730
Total liabilities 516 846 971 929 3 179 704 4 668 479
2008
Revenue 1 542 741 1 700 909 91 846 3 335 496
Operating income 220 649 120 854 18 876 360 379
Total assets 941 163 1 055 135 3 219 935 5 216 233
Total liabilities 316 559 909 867 2 872 069 4 098 495
Consolidated condensed BALANCE SHEET
as at 31 March
2009 2008
R`000 R`000
Assets
Non-current assets 3 495 310 3 183 780
Property, plant and equipment 228 997 154 996
Investments 1 195 100 1 195 303
Goodwill and other intangible assets 253 649 230 414
Loan receivable and financial assets 1 760 387 1 568 273
Deferred taxation 57 177 34 794
Current assets 2 509 420 2 032 453
Inventories 1 645 913 1 073 812
Trade and other receivables 688 106 728 082
Tax prepaid 50 340 5 384
Bank balances and cash 125 061 225 175
Total assets 6 004 730 5 216 233
Equity and liabilities
Capital and reserves 1 336 251 1 117 738
Attributable to ordinary shareholders 1 206 055 1 025 591
Minority interest 130 196 92 147
Non-current liabilities 3 096 348 2 776 809
Long-term borrowings and financial
liabilities 3 083 072 2 764 662
Deferred taxation 13 276 12 147
Current liabilities 1 572 131 1 321 686
Short-term borrowings 5 546 7 325
Trade, other payables and provisions 1 295 130 1 267 748
Tax liabilities 14 935 31 309
Bank overdrafts and bankers` acceptances 256 520 15 304
Total equity and liabilities 6 004 730 5 216 233
Consolidated condensed CASH FLOW STATEMENT
for the year ended 31 March
2009 2008
R`000 R`000
Cash flows from operating activities
Cash generated from operations 87 972 292 574
Finance costs (382 719) (209 147)
Dividends paid (112 626) (93 972)
Taxation paid (194 445) (58 317)
Interest and preference dividends received 360 115 212 270
Net cash (outflow) inflow from
operating activities (241 703) 143 408
Cash flows from investing activities
Net cash effects of asset acquisitions (82 816) (39 985)
Net cash effects of other
investing activities (266 763) (1 378 118)
Net cash effects of treasury
share investments (44 854) (49 393)
Net cash outflow from investing activities (394 433) (1 467 496)
Cash flows from financing activities
Net cash effects of shares issued
in terms of Bearing Man
debenture scheme - 1 488
Net cash effects of borrowings raised 294 806 1 337 070
Net cash inflow from financing activities 294 806 1 338 558
Net (decrease) increase in cash and
cash equivalents (341 330) 14 470
Cash and cash equivalents at the
beginning of the year 209 871 195 401
Cash and cash equivalents at the end
of the year (131 459) 209 871
OTHER INFORMATION
2009 2008
Debt-equity ratio (excluding the
long-term funding debt secured by
investments and loans) (%) 10 1
Depreciation and amortisation (R`000) 28 612 22 918
Net asset value per share (cents) 1 703,4 1 410,7
Tangible net asset value
per share (cents) 1 345,2 1 093,7
Capital expenditure (R`000) 91 984 39 985
Contingent liabilities (R`000) 1 428 1 724
Capital commitments (R`000) 7 026 623
Consolidated condensed STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March
2009 2008
R`000 R`000
Share capital
Balance at beginning of the year 3 724 3 717
Shares issued in terms of Bearing Man
debenture scheme - 7
Balance at end of the year 3 724 3 724
Share premium
Balance at beginning of the year 282 715 281 234
Shares issued in terms of
Bearing Man debenture scheme - 1 481
Balance at end of the year 282 715 282 715
Treasury shares
Balance at beginning of the year (49 393) -
Treasury shares bought (44 854) (49 393)
Balance at end of the year (94 247) (49 393)
Retained earnings
Balance at beginning of the year 763 697 588 011
Earnings attributable to ordinary
shareholders 312 812 263 365
Dividends paid (103 685) (87 679)
Balance at end of the year 972 824 763 697
Other reserves
Balance at beginning of the year 24 848 13 199
Arising from the issue of share
appreciation rights 19 270 9 672
Arising on translation of
foreign operations (3 079) 1 977
Balance at end of the year 41 039 24 848
1 206 055 1 025 591
Minority interest
Balance at beginning of the year 92 147 44 685
Earnings attributable to outside
shareholders 50 000 37 491
Net investment in subsidiaries (2 952) 16 375
Dividends paid (8 999) (6 404)
Balance at end of the year 130 196 92 147
BUSINESS ACQUISITIONS
Goldquest
Interna-
tional
Hydraulics
(Pty)
Disa Limited
Equipment and
(Pty) Limited others Total
R`000 R`000 R`000
Acquired 100%
effective 1 April 1 August
2008 2008
Property, plant and equipment 1 546 18 849 20 395
Deferred taxation 6 814 (1 209) 5 605
Long-term liabilities - (7 585) (7 585)
Trade and other receivables 11 392 17 924 29 316
Cash and cash equivalents 5 960 2 774 8 734
Inventories 137 565 41 267 178 832
Trade and other payables (141 353) (11 169) (152 522)
Provisions (3 939) (2 247) (6 186)
Taxation (4 606) (920) (5 526)
Fair value of assets acquired 13 379 57 684 71 063
Goodwill on acquisition 11 793 5 259 17 052
Cost of acquisitions 25 172 62 943 88 115
Cash and cash equivalents
acquired 5 960 2 774 8 734
Net cash effect of acquisition
of subsidiaries 19 212 60 169 79 381
Profit after tax since
acquisition date included in
the consolidated condensed
results for the year 15 138 9 870 25 008
Profit after tax should the
above business combinations
have been included for
the entire year 15 138 14 687 29 825
Revenue should the above
business combinations
have been included for
the entire year 247 727 125 183 372 910
NOTES TO THE FINANCIAL INFORMATION
Basis of Preparation
The consolidated condensed financial statements have been prepared in accordance
with IAS 34 Interim Financial Reporting, International Financial Reporting
Standards, the JSE Limited`s Listings Requirements and in the manner required by
the Companies Act of South Africa. The principal accounting policies as set out
in the Group`s 2008 annual report have been applied consistently throughout the
year ended 31 March 2009.
COMMENTS
Group Activities
The Invicta Group continues to be a major regional player in the importation and
distribution of:
- Bearings, belts, seals, power transmission products, geared motors, fasteners
and hydraulics ("BMG")
- Agricultural machinery and equipment ("Northmec") and New Holland SA ("New
Holland")
- Construction and earthmoving equipment, turf grooming and golf utility cars
("CSE and Doosan SA")
- Automotive and motorcycle parts ("Autobax")
- Floor tiles, wall tiles and sanitary ware ("Tiletoria")
Financial Overview
The Group has again delivered excellent results in a challenging year which was
overshadowed by the global financial crisis.
The first eight months of trading were buoyant, followed by four months of
poorer trading and declining confidence evident in the Group`s trading sectors.
Although the financial crisis hit globally in about July 2008, its effects were
only felt in South Africa from October 2008 onwards, when demand for mineral
resources fell in earnest and the banks felt the liquidity crunch and started
tightening credit severely. The high interest rates in South Africa at the time
further compounded the situation. Notwithstanding, Group turnover grew by a most
pleasing 35,6% to exceed R4,5 billion for the first time. Organic growth in
turnover was 25,7%, with acquisitions contributing 9,9%. Improved margins and
tight cost controls resulted in operating profits increasing by 38,0% to R497
million, yielding an operating margin of 11,0%, marginally higher than the prior
year. The Group tax rate increased to 23,6%, resulting in after tax profit for
the year of R363 million, up 20,6% on last year.
BMG (Bearing Man Group)
BMG continued its excellent growth record. Revenue grew by R514 million (33,3%)
to R2,057 billion. Organic growth was 28,0% and 5,3% due to acquisitions. Good
margin management and cost control resulted in operating profit improving by
44,4% to R319 million, which translates into an operating profit margin of
15,5%, up from the 14,3% achieved in the prior year. All divisions performed
well except for the automotive division which suffered from reduced demand in
line with the decline in the automotive industry. BMG continues to be the major
contributor to Group profits and is bearing the fruits of initiatives undertaken
last year to improve sustainable profit growth. On 1 August 2008 BMG acquired
100% of Goldquest International Hydraulics for cash in a transaction valued at
R63 million. This strategic acquisition will enable BMG to grow into the
hydraulics market in a meaningful way. BMG was also appointed Pall Filtrations`
Southern African distributor for its premium filtration products.
During the period under review, Bearing Man embarked on a major re-branding
exercise, which saw it consolidate its numerous trading divisional brands into
one brand, BMG. This will eliminate duplication of expenditure and strengthen
the market awareness of a consolidated brand which reflects the heritage and
product range of the Bearing Man Group. The costs associated with the re-
branding were expensed during the year under review. The re-branding has been
extremely well received in the marketplace.
Capital Equipment
Invicta`s capital equipment divisions performed well, with turnover growing by
R633 million to R2,334 billion, 37,2% up on last year, of which 22,7% was
organic growth and 14,5% due to acquisitions. Most of the organic growth arose
from the agricultural sector which was driven largely by high prices and
exceptional yields in the grain industry. Growth in operating profit was diluted
to 29% due to the Group`s earthmoving (and turf equipment) divisions (CSE and
Doosan SA) contributing R663 million to turnover, but only contributing a
nominal amount to operating profit. CSE continues to struggle with competitive
pricing in the earthmoving industry. Its turf equipment division is also under
severe pressure with a steep decline in demand for turf machinery and golf carts
from golf courses. Fortunately this is a very small division. Doosan SA,
acquired effective 1 April 2008, incurred large once-off costs in order to
reduce overheads and improve profitability. These steps have been successful and
should ensure that Doosan SA makes a meaningful contribution to the Group`s
profits in future when demand for construction and earthmoving machinery in
South Africa normalises.
Tiletoria
As anticipated, the tile industry in South Africa has declined in line with the
slowdown in the building sector due to increased interest rates and the slowdown
in GDP growth. Nevertheless, Tiletoria improved its turnover by 23% year-on-
year, although its operating margins were under pressure. Its contribution to
the Group is not yet material, but should grow substantially in the next five
years, following the expansion plans currently being undertaken.
General
In the second half of the 2008 financial year, the Group entered financial
transactions aimed at reducing the Group`s cost of funding operations and
working capital. This has resulted in both the interest and preference dividend
received and finance costs paid increasing during the year.
Prospects
With the global financial crisis taking a firm hold locally towards the end of
2008, Invicta started picking up head winds. In spite thereof, due to good
management and business models, the Group managed to close the year on a high
note. Looking ahead, however, we expect trading to be challenging.
International mineral and agricultural commodity prices are well below their
peaks of last year, which is likely to keep pressure on the customers of BMG and
the Group`s agricultural machinery divisions. Although there has been a slight
improvement in commodity prices recently, the recovery of the South African
economy is likely to be gradual over the next 12 to 18 months. Volumes in the
construction equipment industry are, on average, well down on last year and are
not expected to recover in the short term. Group revenue so far in the new
financial year has been marginally below that of last year.
In light of the aforegoing and the prevailing uncertainty in markets, management
has adopted a cautious approach to the coming year. A prudent approach to the
paying of a final dividend has been adopted, with the annual dividend being
maintained, resulting in a dividend cover for the year of 3,14 times. It is
anticipated that when markets return to normal the dividend cover will return to
2,5 times.
Current market conditions are expected to give rise to acquisition opportunities
and the Group has ensured that it has access to sufficient funding to enable it
to take advantage of these opportunities as and when they arise, so as to ensure
the continued growth of the Group.
In view of the uncertain market conditions, no view can be expressed as to the
earnings for the current year. Management is however confident that the Group is
well positioned to weather the storm.
Audit opinion
The auditors, Deloitte & Touche, have issued the unmodified opinion on the Group
consolidated financial statements for the year ended 31 March 2009. A copy of
the audit report is available for inspection at the Company`s registered office.
DIVIDENDS
The Board has declared a cash dividend of 85 cents per share.
The following dates are applicable:
Last date to trade "CUM" dividend Friday, 3 July 2009
First date to trade "EX" dividend Monday, 6 July 2009
Record date Friday, 10 July 2009
Payment date Monday, 13 July 2009
Share certificates may not be dematerialised or rematerialised between Monday, 6
July 2009 and Friday, 10 July 2009, both days inclusive.
By order of the Board
C Barnard
Secretary
Johannesburg
27 May 2009
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#, DI Samuels*, RE Sherrell*, AM Sinclair, CE Walters#
* Non-executive # Alternate
Sponsor: Deloitte & Touche Sponsor Services (Pty) Limited
www.invictaholdings.co.za
Date: 27/05/2009 17:25:15 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
