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EQS
EQS
EQS - Eqstra Holdings - Audited results for the year ended 30 June 2009
EQSTRA HOLDINGS LIMITED
Registration number 1998/011672/06
Share code: EQS ISIN: ZAE000117123
("Eqstra" or "the group")
AUDITED RESULTS for the year ended 30 June 2009
SALIENT FEATURES
Revenue up by 4.6% to R7 889 million
EBITDA up by 2.7% to R2 477 million
Operating margin down from 16.4% to 12.0%
Headline earnings per share down by 92.4% to 12.0 cps
Cash generated by operations up by 19.0% to R2 096 million
Leasing assets up by 9.0% to R7 138 million
INTRODUCTION
Eqstra`s first full trading year as a listed company coincided with the
global
economic downturn. However, Eqstra`s vertically integrated business model
proved its worth despite precipitous declines in several core customer
sectors.
Eqstra is an integrated capital equipment and leasing provider with value-
added
services in Construction and Mining, Passenger and Commercial Vehicles and
Industrial Equipment with operations in South Africa, the rest of Africa and
the United Kingdom ("UK").
In a year characterised by change, more specifically the speed and magnitude
of the downturn, Eqstra`s business model has demonstrated its ability to
provide a uniquely solid foundation through extreme market fluctuations by
providing total solutions for a diverse spectrum of customers. We are able to
rapidly move into new markets, flexibly switch between capital intensive
activities to value added services limiting capital expenditure and protect
revenue streams
through our comprehensive after-market services.
The ongoing actions taken to limit the impact of this downturn is having the
desired effect. Our Construction and Mining division was awarded three
opencast mining and rehabilitation contracts in coal which will replace
platinum contracts that ended. Two of these contracts commenced during the
latter part of the period under review whilst the other will commence once
the mining licence is granted.
In addition, Eqstra`s South African bank-funding package was reaffirmed and
covenants renegotiated to incorporate a change of the group`s interest cover
ratio covenant methodology from EBIT (earnings before interest and taxation)
to EBITDA (earnings before interest, taxation, depreciation and
amortisation). This methodology is more appropriate for a company focused on
cash flow and cash generation.
Prior year comparative pro forma unaudited financial statements which
comprise the ten months trading for the period 26 June 2007 to 30 April 2008
that represent the divisional financial statements of the Leasing and Capital
Equipment division of Imperial Holdings Limited prior to unbundling and two
months audited financial statements from 1 May 2008 to 30 June 2008 have been
prepared for illustrative purposes only, providing a more meaningful
comparison.
OVERVIEW OF RESULTS
At the interim results we advised shareholders that the remainder of the year
would be extremely challenging, given the combined effects of depressed
commodities prices, slowing economic growth, inclement weather and stricter
criteria by banks for financing capital equipment. These predictions
materialised, resulting in losses after tax for the second half of the
financial year of R179 million against the first half profit after tax of
R224 million.
Full year basic earnings and headline earnings per share to 30 June 2009
were 16.6 cents and 12.0 cents per share respectively, which is 90.3% and
92.4% lower than the 2008 comparable pro-forma basic earnings of 170.3 cents
and pro-forma headline earnings of 158.7 cents per share.
Revenue for the year ended 30 June 2009 grew by R347 million to R7 889
million, 4.6% higher compared to prior year.
Operating profit decreased by 23.8% to R943 million mainly due to increased
depreciation charges based on a leasing fleet that increased by 9.0% to R7
138 million. This resulted in operating margins reducing from 16.4% to 12.0%.
Net working capital (inventories, receivables and payables) increased by
R566 million to R1 349 million mainly due to the large reduction in trade and
other payables as inventory became fully paid and slower sales in the second
half of the year.
Debt levels increased by R976 million to R6 730 million in order to finance
the acquisition of long term revenue producing assets and net working
capital. The increased debt and high interest rates during the year resulted
in net finance costs increasing by 55.3% to R795 million.
Cash generated by operations increased by 19.0% to R2 096 million as a
result of strong operating cash flows and focused management of working
capital throughout the year. Net capital expenditure decreased by R313
million to R2 446 million. The group`s commercial paper issuance continues
successfully with R1 603 million in issue at year-end supported by a standby-
liquidity facility of R1 950 million.
DIVISIONAL REVIEW
Construction and Mining: Contract mining and plant rental
Revenue increased by 31.8% to R3 162 million in spite of the conclusion of
mining contracts for Zimplats and Lonmin in November 2008 and the decrease in
production for other platinum projects. Increases in net finance costs of
107.7% and depreciation of 62.9% resulted in net profit before tax reducing
by 68.7% to R135 million. Leasing assets increased by 23.7% to R3 117 million
in anticipation of increased activity in coal.
The commodity slowdown, conclusion of two platinum mining contracts, lower
resulting utilisation of equipment and illegal industrial action at one of
our sites resulted in revenue losses in excess of R70 million per month for
the second half of the financial year. This was further worsened by the later
than expected start up of projects that were awarded in coal that did not
generate
income in the period.
The plant rental division delivered solid results for the year. It also
benefited from the current scarcity of accessible funding, with many
customers electing to rent rather than purchase heavy equipment.
In this competitive market, this division is widely recognised for its
ability to add value through expertise as opposed to merely supplying
equipment. This attribute underpins steady activity levels, even when markets
are as volatile as they are at present.
Construction and Mining: Distributorships
Performance for the year was heavily affected by the economic downturn as
construction equipment sales declined by more than 50%. In addition sales to
the diamond and platinum mining sectors reduced materially where the
divisions mining sales were concentrated. This caused revenue to decrease by
10.6% to R1 969 million. An operating loss of R16 million was incurred as a
result of the lower revenue and non-recurring costs of R114 million for
restructuring and inventory impairments due to the stronger Rand.
Inventory and debtors reduced by R247 million to R1 528 million which was
offset by creditors reducing by R753 million to R315 million. This increase
in net working capital resulted in increased net finance costs of 146.6% to
R143 million.
Significantly lower revenue in the second half was primarily due to global
credit markets effectively freezing around September 2008. This led to a
significant number of customers not being able to obtain finance for their
capital equipment and, in some cases, for their projects.
The division will continue to concentrate on reducing discretionary costs,
targeting sales to reduce inventory and diversifying its markets to balance
its exposure to platinum and diamonds. Its geographic footprint is now
streamlined and optimal use will be made of synergies within the group.
Passenger and Commercial Vehicles
The division was able to withstand prevailing economic conditions due to the
annuity business model and develop new product opportunities that are less
capital intensive. Revenue remained constant at R1 847 million. Operating
profit decreased by 9.3% to R361 million partly as a result of the conclusion
of the Government of Lesotho contract in the prior year and higher
depreciation charges on the leasing fleet due to conservative residual
values.
The shift in focus towards commercial vehicles has resulted in optimised
life-cycle management opportunities with consequent downstream benefits for
the entire division. Energies were concentrated on selective business
opportunities and managing the balance between risk and reward.
The primary focus areas will continue to be maintaining the integrity of the
balance sheet, working capital management, key employee and customer
retention and true value creation through product diversification to non-
capital intensive initiatives and supplier management.
Industrial Equipment
The division`s revenue increased by 4.5% to R1 503 million, despite the
market reducing by over 51% compared to the prior year. Operating profit
decreased by 14.0% to R191 million as a result of a significant shift
recorded from outright sales to rental sales with 61% of forklifts sold into
the rental fleet compared to 47% in the previous year.
Inventory levels were well-managed during the year, reinforcing the strength
of relationships built with suppliers over many years. The benefits of
restructuring and the consolidation of back-office functions, while
maintaining the front-line skills required for sustainable growth, will
enhance performance as economic conditions improve.
In the UK, with the long-term dealer agreement with Nissan forklifts
concluded in February 2008, the business now covers more than 50% of the
market. Management focused on restructuring operations to reposition the
flagship Nissan brand. The results of this focus are evident in a profitable
performance for the year, despite declines of 36% in forklift sales.
DIVIDEND POLICY
As a result of the poor trading environment, results for the year and high
gearing, Eqstra is proposing not to declare a dividend this year.
OUTLOOK
For a company that listed at the peak of the market, particularly a geared
company such as Eqstra, the economic events of the past year might have
proved disastrous. Eqstra has proved its resilience in arguably the worst
market conditions in decades, emerging with a keener understanding of its
businesses, markets and embedded strengths.
We believe that the fallout of the global crisis will be felt in the southern
African economy for months to come. Realistically we do not expect a "V-
shape" recovery in the economy and have positioned Eqstra by entering new
markets i.e. coal, renegotiating banking covenants and cutting costs to
operate in an environment where liquidity, growth and margins will be under
pressure.
Notwithstanding the foreseeable challenges, we anticipate that the business
will again deliver real earnings growth for the next financial year.
By order of the Board
D C Cronje W S Hill
Chairman Chief executive officer
25 August 2009
GROUP BALANCE SHEET
as at Audited Pro-forma
30 June 30 June
2009 2008
Restated(3)
Rm Rm
ASSETS
Non-current assets 7 734 7 100
Intangible assets 9 5
Property, plant and equipment 348 353
Leasing assets 7 138 6 550
Deferred tax assets 89 60
Other investments and loans (4) 150 132
Current assets 2 499 2 990
Inventories 1 612 1 690
Trade and other receivables 785 1 108
Derivative financial assets (3a) 18
Taxation in advance 51 46
Cash and cash equivalents 51 128
Total assets 10 233 10 090
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 1 475 1 475
Other reserves (2) 72
Retained income 334 291
Ordinary shareholders` interest 1 807 1 838
Minority interest 19 17
Total shareholders` equity 1 826 1 855
Non-current liabilities 4 772 5 166
Interest-bearing borrowings 4 256 4 727
Deferred tax liabilities 516 439
Current liabilities 3 635 3 069
Trade and other payables 1 031 1 986
Provisions for liabilities and other charges (3b) 17 29
Derivative financial liabilities 54
Current tax liabilities 59 27
Current portion of interest-bearing borrowings (5) 2 474 1 027
Total liabilities 8 407 8 235
Total equity and liabilities 10 233 10 090
GROUP INCOME STATEMENT
for the years ended
Audited Pro-forma
30 June 30 June
2009 2008(9)
Rm Rm
Revenue 7 889 7 542
Profit from operations before depreciation and
recoupments 2 477 2 412
Depreciation and recoupments (1 534) (1 174)
Operating profit 943 1 238
Foreign exchange losses (4) (25)
Fair value losses arising from foreign exchange
derivatives (42) (3)
Impairment of share scheme loan (9) (6)
Profit before net finance costs 888 1 204
Net finance costs (795) (512)
Finance costs including fair value (losses) gains(11) (833) (532)
Finance income 38 20
Profit before taxation 93 692
Income tax expense 48 188
Profit for the year 45 504
Attributable to:
Equity holders 43 382
Minority interest 2 122
Profit for the year 45 504
Earnings per share 16.6 170.3
Dilluted earnings per share 14.9 150.4
GROUP CASH FLOW STATEMENT
for the years ended Audited Pro-forma
30 June 30 June
2009 2008(9)
Rm Rm
Cash flows from operating activities
Cash generated by operations before changes in
working capital 2 408 2 406
Net working capital movements (312) (645)
Cash generated by operations 2 096 1 761
Net finance costs, excluding fair value adjustments (779) (523)
1 317 1 238
Income tax received (paid) 33 (110)
Net cash flows generated from operating activities 1 350 1 128
Cash flows from investing activities
Net acquisition of subsidiaries and businesses (61)
Gross capital expenditure (3 214) (3 854)
Proceeds on disposal of assets 768 1 095
Increase in other investments and loans (19) (84)
Net cash flows utilised in investing activities (2 465) (2 904)
Cash flows from financing activities
Additional capital introduced 400
Share issue expenses (19)
Acquisition of share call option (27)
Net increase in interest-bearing borrowings 1 074 1 604
Dividends paid (250)
Net cash flows generated from financing activities 1 047 1 735
Net decrease in cash and cash equivalents (68) (41)
Foreign exchange movement on cash and cash equivalents (9)
Cash and cash equivalents at beginning of year 128 169
Cash and cash equivalents at end of year 51 128
GROUP STATEMENT OF CHANGES IN EQUITY
for the years ended Share capital Group equity Other
and premium funding reserves
Rm Rm Rm
Pro-forma balance at 25 June
2007 391 4
Net gains arising on
translation of foreign
companies 29
Impairment of Lereko call option (33)
Movement in hedge accounting
reserve 20
Net gains not recognised in the
income statement 16
Profit for the year
Dividends
Subsidiaries not acquired
Goodwill written off due to
unbundling
Acquisition of Lereko call
option 52
MCC minority purchase 274
Additional capital introduce 1 220 (391)
Unbundling adjustments 1 494 (391) 52
Share issue expenses (19)
Balance at 30 June 2008 1 475 72
Net losses arising on
translation of foreign
subsidiaries (17)
Fair value losses (50)
Impairment of Lereko call option (1)
Share based payments expense 13
Acquisition of share call option (19)
Gross (27)
Tax effect 8
Expenses recognised directly in
equity (74)
Profit for the year
Balance at 30 June 2009 1 475 (2)
Retained Minority
income interest Total
Rm Rm Rm
Pro-forma balance at 25 June 2007 741 254 1 390
Net gains arising on translation of foreign
companies 29
Impairment of Lereko call option (33)
Movement in hedge accounting reserve 20
Net gains not recognised in the income
statement 16
Profit for the year 382 122 504
Dividends (178) (72) (250)
Subsidiaries not acquired (131) (13) (144)
Goodwill written off due to unbundling (94) (94)
Acquisition of Lereko call option 52
MCC minority purchase (274)
Additional capital introduce (429) 400
Unbundling adjustments (654) (287) 214
Share issue expenses (19)
Balance at 30 June 2008 291 17 1 855
Net losses arising on translation of
foreign subsidiaries (17)
Fair value losses (50)
Impairment of Lereko call option (1)
Share based payments expense 13
Acquisition of share call option (19)
Gross (27)
Tax effect 8
Expenses recognised directly in equity (74)
Profit for the year 43 2 45
Balance at 30 June 2009 334 19 1 826
NOTES
(1) Basis of preparation
This audited financial information has been prepared in accordance with IAS
34
Interim Financial Reporting and the audited 30 June 2009 financial results.
(2) Accounting policies
The accounting policies and methods of computation adopted in preparation of
the audited financial statements are consistent with those of the annual
financial statements for the year ended 30 June 2009.
(3) (a) The prior year numbers have been reclassified to disclose the
derivative financial asset separately on the balance sheet. In the prior year
it was included in Trade and other receivables.
(b) In the prior year employee related accruals of R71m were included as part
of Provisions for liabilities and other charges. In the current year it is
disclosed as part of Trade and other payables.
(c) In the prior year this segment was disclosed as a consolidated segment.
In the current year the Contract mining and plant rental division and the
Distributorships have been disclosed separately.
(4) Other investments and loans Rm Rm
Listed, at market value 35 27
Unlisted, at fair value or directors` valuation 63 57
Loans receivable 52 48
150 132
(5) Current portion of interest-bearing borrowings
The current portion of interest bearing borrowings includes
R1 603 million commercial paper that is supported by a R1950 million standby
liquidity faciliity that has an 18 month notice period.
(6) Net asset value per share (cents) 706.7 718.2
(7) Number of shares used in calculations
Number of ordinary shares (million)
in issue 258.4 258.4
weighted average 258.4 224.0
dilutionary shares 30.4 29.5
diluted weighted average 288.8 253.5
(8) Capital commitments and contingent liabilities Rm Rm
Capital commitments 2 342 2 758
Contracted 172 792
Authorised by directors but not contracted 2 170 1 966
Contingent liabilities 30 192
(9) These prior year comparative results are per the pro-forma financial
statements presented in the Eqstra Holdings Limited annual report for 30 June
2008. The prior year pro-forma results are a summary of the group`s unaudited
financial statements and have been prepared for illustrative purposes to
provide a more meaningful comparison year on year. These financial statements
are the responsibility of the directors and may not fairly present the
financial position of Eqstra, its results of operations, cash flow or changes
in equity.
(10) Earnings per share (cents) (7)
Ordinary shares
Basic (#) 16.6 170.3
Diluted (##) 14.9 150.4
Headline earnings per share
Basic (#) 12.0 158.7
Diluted (##) 10.7 140.1
Earnings per share reconciliation (cents)
Basic earnings per share 16.6 170.3
(Profit) loss on sale of property, plant and equipment (0.8) 3.5
Profit on sale of leasing assets (5.8) (19.6)
Taxation effect 2.0 4.5
Headline earnings per share 12.0 158.7
(#) Based on the weighted average number of shares in
issue for the year.
(##) Based on the diluted weighted average number of
shares in issue for the year.
(11) Finance costs including fair value losses (gains) Rm Rm
Interest expense 817 543
Fair value losses (gains) on borrowings and interest swaps 16 (11)
833 532
GROUP BALANCE SHEET
PRO-FORMA SEGMENT INFORMATION BALANCE SHEET
for the years ended
Construction
and Mining (3c)
Group
Contract mining
and plant rental
Audited Pro forma
30 June 30 June 30 June 30 June
2009 2008 2009 2008
Rm Rm Rm Rm
BUSINESS SEGMENTATION
ASSETS
Intangible assets 9 5 1
Property, plant and equipment 348 353 113 94
Leasing assets 7 138 6 550 3 117 2 519
Other investments and loans 150 132 53 29
Inventories 1 612 1 690 79 40
Trade and other receivables 785 1 126 302 296
Operating assets 10 042 9 856 3 664 2 979
Deferred tax assets 89 60
Taxation in advance 51 46
Cash and cash equivalents 51 128
Total assets per balance sheet 10 233 10 090
LIABILITIES
Accounts payable and
provisions 1 102 2 015 261 401
Non-interest-bearing
liabilities 1 102 2 015 401
Interest-bearing borrowings 6 730 5 754
Deferred tax liabilities 516 439
Current tax liabilities 59 27
Total liabilities per balance
sheet 8 407 8 235
GEOGRAPHIC SEGMENTATION
Operating assets 10 042 9 856 3 664 2 979
South Africa 9 135 8 756 3 563 2 871
Rest of Africa 457 440 101 108
Rest of World 450 660
Non-interest bearing
liabilities 1 102 2 015 261 401
South Africa 867 1 888 255 397
Rest of Africa 166 61 6 4
Rest of world 69 66
Interest-bearing borrowings 6 730 5 754 2 387 1 669
South Africa 6 204 4 927 2 317 1 563
Rest of Africa 182 350 70 106
Rest of world 344 477
Gross capital expenditure 3 214 3 854 1 279 1 636
South Africa 2 949 3 397 1 270 1 539
Rest of Africa 67 266 9 97
Rest of world 198 191
Gross capital expenditure 3 214 3 854 1 279 1 636
Less: Proceeds on disposal (768) (1 095) (57) (127)
Net capital expenditure 2 446 2 759 1 222 1 509
Passenger and
Commercial Vehicles
Distributorships
30 June 30 June 30 June 30 June
2009 2008 2009 2008
Rm Rm Rm Rm
BUSINESS SEGMENTATION
ASSETS
Intangible assets 4 5 4
Property, plant and equipment 77 61 54 70
Leasing assets 75 36 2 760 2 757
Other investments and loans 2 12
Inventories 1 266 1 286 31 68
Trade and other receivables 262 489 121 188
Operating assets 1 684 1 872 2 973 3 099
Deferred tax assets
Taxation in advance
Cash and cash equivalents
Total assets per balance sheet
LIABILITIES
Accounts payable and provisions 315 1 068 288 309
Non-interest-bearing liabilities 315 1 068 288 309
Interest-bearing borrowings
Deferred tax liabilities
Current tax liabilities
Total liabilities per balance sheet
GEOGRAPHIC SEGMENTATION
Operating assets 1 684 1 872 2 973 3 099
South Africa 1 578 1 824 2 723 2 815
Rest of Africa 106 48 250 284
Rest of World
Non-interest bearing liabilities 315 1 068 288 309
South Africa 205 1 060 238 259
Rest of Africa 110 8 50 50
Rest of world
Interest-bearing borrowings 1 422 631 1 801 1 884
South Africa 1 422 587 1 689 1 684
Rest of Africa 44 112 200
Rest of world
Gross capital expenditure 86 84 983 1 434
South Africa 86 84 925 1 265
Rest of Africa 58 169
Rest of world
Gross capital expenditure 86 84 983 1 434
Less: Proceeds on disposal (15) (5) (158) (709)
Net capital expenditure 71 79 825 725
Industrial Corporate office and
Equipment eliminations
30 June 30 June 30 June 30 June
2009 2008 2009 2008
Rm Rm Rm Rm
BUSINESS SEGMENTATION
ASSETS
Intangible assets
Property, plant and equipment 79 103 25 25
Leasing assets 1 227 1 270 (41) (32)
Other investments and loans 95 91
Inventories 236 296
Trade and other receivables 152 207 (52) (54)
Operating assets 1 694 1 876 27 30
Deferred tax assets
Taxation in advance
Cash and cash equivalents
Total assets per balance sheet
LIABILITIES
Accounts payable and provisions 150 167 88 70
Non-interest-bearing liabilities 150 167 88 70
Interest-bearing borrowings
Deferred tax liabilities
Current tax liabilities
Total liabilities per balance sheet
GEOGRAPHIC SEGMENTATION
Operating assets 1 694 1 876 27 30
South Africa 1 244 1 216 27 30
Rest of Africa
Rest of World 450 660
Non-interest bearing liabilities 150 167 88 70
South Africa 81 101 88 71
Rest of Africa (1)
Rest of world 69 66
Interest-bearing borrowings 1 237 1 473 (117) 97
South Africa 893 996 (117) 97
Rest of Africa
Rest of world 344 477
Gross capital expenditure 877 726 (11) (26)
South Africa 679 535 (11) (26)
Rest of Africa
Rest of world 198 191
Gross capital expenditure 877 726 (11) (26)
Less: Proceeds on disposal (532) (254)
Net capital expenditure 345 472 (11) (26)
PRO-FORMA SEGMENT INFORMATION INCOME STATEMENT
for the years ended
Construction
and Mining (3c)
Group
Contract mining and plant rental
Audited Pro forma
30 June 30 June 30 June 30 June
2009 2008 2009 2008
Rm Rm Rm Rm
BUSINESS SEGMENTATION
Revenue
Sales of goods 2 421 2 867 1
Rendering of services 5 464 4 673 2 888 2 256
Other 4 2
7 889 7 542 2 888 2 257
Inter-segment revenue 274 143
7 889 7 542 3 162 2 400
Operating expenses (5 412) (5 130) ( 2 134) (1 464)
Depreciation (1 551) (1 211) (611) (375)
Recoupments 17 37 5 13
Operating profit 943 1 238 422 574
Foreign exchange losses (4) (25) 10
Fair value losses on foreign
exchange
derivatives (42) (3)
Impairment of share scheme
loan (9) (6)
Profit before net finance
costs 888 1 204 432 574
Net finance costs (795) (512) (297) (143)
Profit before taxation 93 692 135 431
GEOGRAPHIC SEGMENTATION
Revenue 7 889 7 542 3 162 2 400
South Africa 7 042 6 808 3 034 2 362
Rest of Africa 431 340 128 38
Rest of world 416 394
Operating profit 943 1 238 422 574
South Africa 844 1 141 386 571
Rest of Africa 72 77 36 3
Rest of world 27 20
Net finance costs 795 512 297 143
South Africa 738 488 286 139
Rest of Africa 33 18 11 4
Rest of world 24 6
Passenger and
Commercial Vehicles
Distributorships
30 June 30 June 30 June 30 June
2009 2008 2009 2008
Rm Rm Rm Rm
BUSINESS SEGMENTATION
Revenue
Sales of goods 1 549 1 830 302 368
Rendering of services 118 169 1 517 1 478
Other
1 667 1 999 1 819 1 846
Inter-segment revenue 302 203 28
1 969 2 202 1 847 1 846
Operating expenses (1 972) (2 091) (898) (944)
Depreciation (13) (3) (599) (528)
Recoupments 11 24
Operating profit (16) 108 361 398
Foreign exchange losses (8) (9) (5)
Fair value losses on foreign
exchange
derivatives (42)
Impairment of share scheme loan
Profit before net finance costs (66) 99 356 398
Net finance costs (143) (58) (233) (215)
Profit before taxation (209) 41 123 183
GEOGRAPHIC SEGMENTATION
Revenue 1 969 2 202 1 847 1 846
South Africa 1 828 2 137 1 685 1 586
Rest of Africa 141 65 162 260
Rest of world
Operating profit (16) 108 361 398
South Africa (19) 96 328 332
Rest of Africa 3 12 33 66
Rest of world
Net finance costs 143 58 233 215
South Africa 143 54 211 200
Rest of Africa 4 22 15
Rest of world
Industrial Corporate office and
Equipment eliminations
30 June 30 June 30 June 30 June
2009 2008 2009 2008
Rm Rm Rm Rm
BUSINESS SEGMENTATION
Revenue
Sales of goods 570 668
Rendering of services 933 770 8
Other 4 2
1 503 1 438 12 2
Inter-segment revenue (604) (346)
1 503 1 438 (592) (344)
Operating expenses (983) (910) 575 279
Depreciation (331) (306) 3 1
Recoupments 2 (1)
Operating profit 191 222 (15) (64)
Foreign exchange losses (2) (16) 1
Fair value losses on foreign
exchange
derivatives (3)
Impairment of share scheme loan (9) (6)
Profit before net finance costs 189 203 (23) (70)
Net finance costs (129) (98) 7 2
Profit before taxation 60 105 (16) (68)
GEOGRAPHIC SEGMENTATION
Revenue 1 503 1 438 (592) (344)
South Africa 1 087 1 044 (592) (321)
Rest of Africa (23)
Rest of world 416 394
Operating profit 191 222 (15) (64)
South Africa 164 202 (15) (60)
Rest of Africa (4)
Rest of world 27 20
Net finance costs 129 98 (7) (2)
South Africa 105 92 (7) 3
Rest of Africa (5)
Rest of world 24 6
as at Audited Audited
30 June 30 June
2009 2008
Restated(3)
Rm Rm
ASSETS
Non-current assets 7 734 7 100
Intangible assets 9 5
Property, plant and equipment 348 353
Leasing assets 7 138 6 550
Deferred tax assets 89 60
Other investments and loans (4) 150 132
Current assets 2 499 2 990
Inventories 1 612 1 690
Trade and other receivables 785 1 108
Derivatives financial assets (3a) 18
Taxation in advance 51 46
Cash and cash equivalents 51 128
Total assets 10 233 10 090
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 1 475 1 475
Other reserves (2) 72
Retained income 334 291
Ordinary shareholders` interest 1 807 1 838
Minority interest 19 17
Total shareholders` equity 1 826 1 855
Non-current liabilities 4 772 5 166
Interest-bearing borrowings 4 256 4 727
Deferred tax liabilities 516 439
Current liabilities 3 635 3 069
Trade and other payables 1 031 1 986
Provisions for liabilities and other charges (3b) 17 29
Derivatives financial liabilities 54
Current tax liabilities 59 27
Current portion of interest-bearing borrowings (5) 2 474 1 027
Total liabilities 8 407 8 235
Total equity and liabilities 10 233 10 090
GROUP INCOME STATEMENT
for the years ended Audited Audited
30 June 30 June
2009 2008
Rm Rm
Revenue 7 889 1 741
Net operating expenses (5 412) (1 239)
Profit from operations before depreciation and
recoupments 2 477 502
Depreciation and recoupments (1 534) (227)
Operating profit 943 275
Foreign exchange losses (46) (5)
Impairment of share scheme loan (9) (6)
Profit before net finance costs 888 264
Net finance costs (795) (105)
Finance costs including fair value (losses) gains (10) (833) (111)
Finance income 38 6
Profit before taxation 93 159
Income tax expense 48 43
Profit for the year 45 116
Attributable to:
Equity holders 43 114
Minority interest 2 2
Profit for the year 45 116
Earnings per share:
Basic 16.6 43.9
Diluted 14.9 39.4
GROUP CASH FLOW STATEMENT
for the years ended Audited Audited
30 June 30 June
2009 2008
Rm Rm
Cash flows from operating activities
Cash receipts from customers 8 211 1 688
Cash paid to suppliers and employees (6 115) (1 444)
Cash generated by operations 2 096 244
Finance income 38 6
Interest expense (817) (122)
Income tax received (paid) 33 (8)
Net cash flows generated from operating activities 1 350 120
Cash flows from investing activities
Net acquisition of subsidiaries and businesses on
unbundling (1 446)
Purchase of intangible assets (8)
Purchase of property, plant and equipment (90) (38)
Purchase of leasing assets (3 116) (701)
Proceeds from sale or property, plant and equipment 43 8
Proceeds from sale of leasing assets 719 267
Proceeds from sale of listed investments 6
Increase in other investments and loans (19) (38)
Net cash flows utilised in investing activities (2 465) (1 948)
Cash flows from financing activities
Issue of shares on unbundling 1 504
Additional capital introduced 349
Share issue expenses (19)
Acquisition of share call option (27)
Net increase in interest-bearing borrowings 1 074 122
Net cash flows generated from financing activities 1 047 1 956
Net (decrease) increase in cash and cash equivalents (68) 128
Foreign exchange movement on cash and cash equivalents (9)
Cash and cash equivalents at beginning of year 128
Cash and cash equivalents at end of year 51 128
GROUP STATEMENT OF CHANGES IN EQUITY
for the years ended
Share capital Other Retained
and premium reserves income
Rm Rm Rm
Balance at 25 June 2007
Shares issued for net assets
acquired on unbundling 871 73 271
Goodwill not realised on unbundling (94)
Acquisition of Lereko call option 52
MCC minority purchase 274
Additional capital introduced 349
Unbundling adjustments 623 52 (94)
Impairment of Lereko call option (33)
Movement in hedge accounting reserve (20)
Net losses not recognised in the
income statement (53)
Profit for the year 114
Share issue expenses (19)
Balance at 30 June 2008 1 475 72 291
Net gains arising on translation of
foreign subsidiaries (17)
Fair value losses (50)
Impairment of Lereko call option (1)
Share-based payments expense 13
Acquisition of share call option (19)
Gross (27)
Tax effect 8
Expenses recognised directly in
equity (74)
Profit for the year 43
Balance at 30 June 2009 1 475 (2) 334
Minority
interest Total
Rm Rm
Balance at 25 June 2007
Shares issued for net assets acquired
on unbundling 289 1 504
Goodwill not realised on unbundling (94)
Acquisition of Lereko call option 52
MCC minority purchase (274)
Additional capital introduced 349
Unbundling adjustments (274) 307
Impairment of Lereko call option (33)
Movement in hedge accounting reserve (20)
Net losses not recognised in the income statement (53)
Profit for the year 2 116
Share issue expenses (19)
Balance at 30 June 2008 17 1 855
Net gains arising on translation of foreign
subsidiaries (17)
Fair value losses (50)
Impairment of Lereko call option (1)
Share-based payments expense 13
Acquisition of share call option (19)
Gross (27)
Tax effect 8
Expenses recognised directly in equity (74)
Profit for the year 2 45
Balance at 30 June 2009 19 1 826
Business Segmentation
for the years ended
Audited Audited
30 June 30 June
2009 2008
Rm Rm
BUSINESS SEGMENTS
Segment revenues
Construction and Mining 4 556 1 109
Passenger and Commercial Vehicles 1 847 309
Industrial Equipment 1 503 321
7 906 1 739
Group and eliminations (17) 2
7 889 1 741
Segment result (profit before net finance costs)
Construction and Mining 356 181
Passenger and Commercial Vehicles 356 70
Industrial Equipment 189 35
901 286
Group and eliminations (13) (22)
888 264
Segment assets
Construction and Mining 5 375 4 845
Passenger and Commercial Vehicles 3 082 3 116
Industrial Equipment 1 731 2 038
10 188 9 999
Group and eliminations 45 91
Segment liabilities 10 233 10 090
Construction and Mining 4 512 4 010
Passenger and Commercial Vehicles 2 461 2 429
Industrial Equipment 1 456 1 738
financial results. 8 429 8 177
Group and eliminations (22) 58
Segment capital expenditure 8 407 8 235
Construction and Mining 1 352 294
Passenger and Commercial Vehicles 983 282
Industrial Equipment 877 163
3 212 739
Group and eliminations 2
Gross capital expenditure 3 214 739
Less: proceeds on disposal (768) (275)
Net capital expenditure 2 446 464
Segment depreciation
Construction and Mining 624 88
Passenger and Commercial Vehicles 599 92
Industrial Equipment 331 59
1 554 239
Group and eliminations (3)
1 551 239
Geographical Segmentation
for the years ended
Audited Audited
30 June 30 June
2009 2008
Rm Rm
GEOGRAPHIC SEGMENTS
Segment revenues
South Africa 7 042 1 567
Rest of Africa 431 63
Rest of world 416 111
7 889 1 741
Segment result (profit before net finance costs)
South Africa 794 243
Rest of Africa 68 19
Rest of world 26 2
888 264
Segment assets
South Africa 9 263 8 908
Rest of Africa 504 511
Rest of world 466 671
10 233 10 090
Segment liabilities
South Africa 7 565 7 251
Rest of Africa 413 417
Rest of world 429 567
8 407 8 235
Segment capital expenditure
South Africa 2 949 556
Rest of Africa 67 136
Rest of world 198 47
Gross capital expenditure 3 214 739
Less: proceeds on disposal (768) (275)
Net capital expenditure 2 446 464
Segment depreciation
South Africa 1 384 207
Rest of Africa 63 11
Rest of world 104 21
1 551 239
NOTES
(1) Basis of preparation
This audited financial information has been prepared in accordance with IAS
34
- Interim Financial Reporting and the audited 30 June 2009
(2) Accounting policies
The accounting policies and methods of computation adopted in preparation of
the audited financial statements are consistent with those of the annual
financial statements for the year ended 30 June 2009.
(3) (a) The prior year numbers have been reclassified to disclose the
derivative financial asset separately on the balance sheet.
In the prior year it was included in Trade and other receivables.
(b) In the prior year employee related accruals of R71 million were included
as part of Provisions for liabilities and other charges. In the current year
it is disclosed as part of Trade and other payables.
(4) Other investments and loans 30 June 30 June
2009 2008
Rm Rm
Listed, at market value 35 27
Unlisted, at fair value or directors` valuation 63 57
Loans receivable 52 48
150 132
(5) Current portion of interest-bearing borrowings
The current portion of interest bearing borrowings
includes
R1 603 million commercial paper that is supported by a
R1 950 million standby
liquidity faciliity that has an 18 month notice period.
(6) Net asset value per share (cents) 706.7 718.2
(7) Number of ordinary shares used in calculations
Number of ordinary shares (million)
in issue 258.4 258.4
weighted average 258.4 258.4
dilutionary shares 30.4 29.5
diluted weighted average 288.8 287.9
(8) Capital commitments and contingent liabilities Rm Rm
Capital commitments 2 342 2 758
Contracted 172 792
Authorised by directors but not contracted 2 170 1 966
Contingent liabilities 30 192
(9) Earnings per share (cents) (7)
Ordinary shares
Basic (#) 16.6 43.9
Diluted (# #) 14.9 39.4
Headline earnings per share (cents)
Ordinary shares
Basic (#) 12.0 40.7
Diluted (# #) 10.7 36.5
Earnings per share reconciliation (cents)
Basic earnings per share 16.6 43.9
(Profit) loss on sale of property, plant and equipment (0.8) 3.9
Profit on sale of leasing assets (5.8) (8.3)
Taxation effect 2.0 1.2
Headline earnings per share 12.0 40.7
(#) Based on the weighted average number of shares in issue
for the period.
(##) Based on the diluted weighted average number of shares
in issue for the period.
(10) Finance costs including fair value losses (gains) Rm Rm
Interest expenses 817 122
Fair value losses (gains) on borrowings and interest
swaps 16 (11)
833 111
(11) Audit opinion
The auditors, Deloitte & Touche, have issued their unmodified opinion on the
group`s financial statements for the year ended 30 June 2009.
The audit was concluded in accordance with International Standards on
Auditing.
A copy of their audit report is available for inspection at the company`s
registered office. These summarised financial statements have been derived
from the group`s financial statements and are consistent in all material
aspects with the group financial statements.
Directors: E Clarke (Chief Financial Offier), D C Cronje (Chairman)*,
M J Croucamp*, S Dakile-Hlongwane, W S Hill (Chief Executive Officer),
V J Mokoena, P S Molefe, S D Mthembi-Mahanyele*, A J Philips*, T D A Ross*
* Independent
Company Secretary: L Moller
Registered office
12 Corobrik Road, Meadowdale. PO Box 1050, Bedfordview, 2008
Transfer Secretaries
Computershare Investor Services (Proprietary) Limited
Ground Floor, 70 Marshall Street, Johannesburg, 2001
Date: 26/08/2009 08:07:02 Produced by the JSE SENS Department.
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information disseminated through SENS.
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