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UNI
UNI
UNI - Universal - Unaudited Interim Results For The Six Months Ended
30 June 2009
Universal Industries Corporation Limited
(Incorporated in the Republic of South Africa)
(Registration Number: 1996/004343/06)
(JSE code: UNI ISIN Code: ZAE000110664)
("Universal" or "the group")
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2009
- Revenue declined by 17,3%;
- HEPS declined by 74,5%;
- Cash resources of R147 million; and
- Gearing (net of cash) of only 5,0%
Consolidated Statement of Comprehensive Income
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 Jun 2009 30 Jun 2008 31 Dec 2008
R`000 R`000 R`000
Revenue 213 679 258 452 648 188
Cost of goods sold (169 483) (193 119) (462 165)
Gross profit 44 196 65 334 186 023
Other income 721 525 3 798
Operating expenses (32 046) (30 359) (89 486)
Profit from operations 12 871 35 499 100 335
Interest received 6 802 2 364 7 982
Interest paid (9 925) (2 622) (6 081)
Profit before taxation 9 748 35 241 102 236
Taxation (3 771) (10 624) (28 600)
Profit attributable to the 5 977 24 617 73 636
equity holders of the
parent
Other comprehensive income - - -
Total comprehensive income 5 977 24 617 73 636
attributable to the equity
holders of the parent
Number of shares in issue 448 912 469 004 448 912
(`000)
Weighted average number of 448 912 479 641 472 369
shares in issue (`000)
Earnings per share (cents) 1,3 5,1 15,6
Headline earnings per 1,3 5,1 15,6
share (cents)
Consolidated Statement of Financial Position
Unaudited Unaudited Audited
As at As at As at
30 Jun 2009 30 Jun 2008 31 Dec 2008
R`000 R`000 R`000
Assets
Non-current assets 208 478 194 721 210 676
Property, plant and 13 754 15 432 15 041
equipment
Intangible assets 193 184 176 223 194 305
Deferred taxation 1 540 3 066 1 330
Current assets 342 081 249 498 386 061
Inventories 87 247 99 808 91 365
Trade and other 101 593 118 033 153 427
receivables
Taxation prepaid 6 540 1 101 5 693
Bank and call deposits 146 701 30 556 135 576
Total assets 550 559 444 219 596 737
Equity and liabilities
Capital and reserves 308 597 279 309 316 079
Share capital and share 153 745 179 453 167 204
premium
Accumulated profits 154 852 99 856 148 875
Non-current liabilities 79 690 63 830 87 342
Interest bearing 76 025 763 82 843
liabilities
Deferred taxation 1 522 - 2 424
Other financial 2 143 63 067 2 075
liabilities
Current liabilities 162 272 101 080 193 316
Trade and other payables 76 853 95 419 88 472
Current portion of:
- interest bearing 16 791 686 14 956
liabilities
- other financial 67 233 - 79 887
liabilities
Taxation payable 1 395 4 975 10 001
Total equity and 550 559 444 219 596 737
liabilities
Number of shares in issue 448 912 469 004 448 912
(`000)
Net asset value per share 68,7 59,6 70,4
(cents)
Tangible net asset value 25,7 21,3 27,1
per share (cents)
Consolidated Cash Flow Statement
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 Jun 2009 30 Jun 2008 31 Dec 2008
R`000 R`000 R`000
Cash flows from operating 42 779 8 870 33 793
activities
Cash generated by 60 239 28 564 65 245
operations
Interest received 6 802 2 364 7 982
Interest paid (9 925) (2 622) (1 100)
Taxation paid (14 337) (19 436) (38 334)
Cash flows from investing
activities
Additions to property, (628) (4 333) (5 369)
plant and equipment
Cash flows from financing (31 026) (23 453) 57 680
activities
Net interest bearing (4 982) (1 093) 95 257
liabilities
(repaid)/raised
Net repayment of other (12 585) (11 979) (14 947)
financial liabilities
Capital distribution to (13 459) - -
shareholders
Share buy back and - (10 381) (22 630)
expenses
Increase/(decrease) in 11 125 (18 916) 86 104
cash resources
Cash resources at 135 576 49 472 49 472
beginning of period
Cash resources at end of 146 701 30 556 135 576
period
Consolidated Statement of Changes in Equity
Share Share Accumulated
capital premium profits Total
R`000 R`000 R`000 R`000
Balances as at 31 5 189 829 75 239 265 073
December 2007
Share buy back and - (10 381) - (10 381)
expenses
Total comprehensive - - 24 617 24 617
income for the six
month period to 30 June
2008
Balances as at 30 June 5 179 448 99 856 279 309
2008
Share buy back and (1) (12 248) - (12 249)
expenses
Total comprehensive - - 49 019 49 019
income for the six
month period to 31
December 2008
Balances as at 31 4 167 200 148 875 316 079
December 2008
Capital distribution to - (13 459) - (13 459)
shareholders
Total comprehensive - - 5 977 5 977
income for the six
month period to 30 June
2009
Balances as at 30 June 4 153 741 154 852 308 597
2009
Segment reporting
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 Jun 2009 30 Jun 2008 31 Dec 2008
R`000 R`000 R`000
Revenue 213 679 258 452 648 188
- Refrigeration 106 971 125 413 310 064
- Baking Systems 106 708 133 039 338 124
Segment profit from 12 871 35 499 100 335
operations
- Refrigeration 6 979 15 460 47 414
- Baking Systems 6 716 21 064 56 145
- Unallocated corporate (824) (1 025) (3 224)
expenses
Net interest (3 123) (258) 1 901
(paid)/received
Profit before taxation 9 748 35 241 102 236
COMMENTARY
TRADING ENVIRONMENT
The group operates as a major supplier of refrigerated and baking equipment to
the perishable foods industry encompassing the retail, wholesale and
manufacturing segments. Trading is primarily with the food retailers in South
Africa and to a lesser extent, Africa.
The global economic downturn and the crisis in the world`s banking sector have
had a profound effect on the group`s trading environment through the delay of
capital projects and/or the unavailability of finance to facilitate expansion by
our customer base. The group experienced a significant decline in demand with
revenue some 17% below the revenue reported for the six months to 30 June 2008
("prior period").
As the SA food chains remain our most significant client base it is encouraging
to see that they are still reporting reasonable results and all are in a sound
financial position. This should allow for continued capital expenditure on new
as well as replacement equipment. Aside from supplying new stores, the very
large base of both refrigeration and baking equipment that is already installed
in food retailers does require periodic replacement.
FINANCIAL RESULTS
When analysing the results it should be recognised that the group has
historically been seasonal with the second half of the year ended 31 December
2008, generating approximately 60% of revenue and 65% of operating profit.
Group turnover declined by approximately 17% and headline earnings per share by
74,5% compared to the prior period. Operating profit margin declined in line
with the lower manufacturing volumes as the majority of the group`s overhead is
fixed. Expenses were well controlled and remain an area of focus. The businesses
have taken measures to protect margin through variable expense control,
efficiency improvements and product re-engineering.
Notwithstanding the disappointing trading result the group generated operating
profit of R13 million and cash on hand increased from R136 million as at 31
December 2008 to R147 million. The increase in cash is attributed primarily to a
reduction in trade receivables in line with the lower sales levels, and improved
working capital management.
Group gearing net of cash decreased to 5,0% from 13,9% at 31 December 2008.
REVIEW OF OPERATIONS
Refrigeration businesses
The businesses significantly underperformed against budget due to a 15% decline
in sales compared to the prior period. The resultant lower production volumes
led to a decline in operating margins.
Export sales initiatives into Africa continue in co-operation with the baking
business and have yielded some promising results, albeit still small in relation
to overall group sales.
Baking business
The baking business also had a disappointing trading performance with revenue
decreasing by 20%, which has resulted in a substantially decreased operating
margin.
The export department also experienced a decline in sales with export sales
declining to 30% of total sales (prior period 35% of total sales). The business
however remains committed to the export market and continues to invest in staff
and resource to ensure its penetration into more territories.
PROSPECTS
The first half of the year has traditionally always been a difficult trading
period for the group. This year the effects of the global economic meltdown have
had a material effect on the business and looking forward the current
uncertainty makes forecasting the performance for the next six months very
difficult. Trading conditions seem to have stabilised and the group has had some
improvement in the level of its order books and accordingly the Board
anticipates an improved performance for the second half of the financial year,
provided that this statement has not been reviewed or reported on by the group`s
auditors.
The group has low gearing and a strong balance sheet and is actively looking in
the market for growth and acquisition opportunities.
DIVIDENDS
Universal has adopted an annual distribution policy.
BASIS OF PREPARATION
The unaudited interim results have been prepared in accordance with
International Financial Reporting Standards ("IFRS") and comply with IAS34 -
Interim Financial Reporting, the Listings Requirements of the JSE Limited and
the requirements of the Companies Act of South Africa. The accounting policies
used are consistent with those applied to the audited financial statements for
the year ended 31 December 2008. The group`s interim results have not been
audited or reviewed by the group`s auditors.
CAPITAL COMMITMENTS
The group has capital commitments of R7,5 million for plant and equipment, which
will be financed from banking facilities and internal cash flow.
APPRECIATION
The Board extends its thanks to management, employees and the non-executive
directors for their ongoing efforts.
By order of the Board
G Khan D Paynter
Chairman Chief Executive Officer
5 August 2009
CORPORATE INFORMATION
Executive directors:
D Paynter (CEO), I Morgan (CFO), J Martin, R Wilkes
Non-executive directors:
G Khan (Chairman), C Brayshaw, W Brett,
I Essa (alternate to G Khan), A Levy
Registration number: 1996/004343/06
Registered address: 16 Precision Street, Kya Sand, Randburg
Postal address: PO Box 3667, Randburg, 2125
Telephone: 011 462 2130
Facsimile: 011 704 3257
Company Secretary: Probity Business Services (Pty) Limited
Transfer Secretaries: Link Market Services (Pty) Limited
Auditors: PKF (Jhb) Inc
Sponsor: Java Capital (Proprietary) Limited
Date: 05/08/2009 17:15:00 Produced by the JSE SENS Department.
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