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IVT
IVT
IVT - Invicta Holdings Limited - Unaudited Interim Results For The Six Months
Ended 30 September 2009
INVICTA HOLDINGS LIMITED
Registration number: 1966/002182/06
(Incorporated in the Republic of South Africa)
Share code: IVT
ISIN: ZAE000029773
("Invicta" or "the Group")
UNAUDITED INTERIM RESULTS for the six months ended 30 September 2009
Revenue down 11%
Profit for the period down 9%
Earnings per share down 7%
Dividend down 8%
Consolidated Condensed INCOME STATEMENT
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept 30 Sept 31 Mar
Change 2009 2008 2009
% R`000 R`000 R`000
Revenue (11) 1 985 960 2 228 987 4 523 535
Operating income (18) 174 134 212 222 497 356
Interest and dividends
received 182 171 179 900 360 115
Finance costs 175 093 181 967 382 719
Equity accounted
earnings 594 - -
Profit before taxation (13) 181 806 210 155 474 752
Taxation 42 184 57 324 111 940
Profit for the period (9) 139 622 152 831 362 812
Minority interest 17 868 20 946 50 000
Attributable to
ordinary shareholders (8) 121 754 131 885 312 812
Earnings per share
(cents) (7) 172 184 437
Diluted earnings per
share (cents) (6) 172 183 437
Determination of
headline earnings
Attributable earnings 121 754 131 885 312 812
Adjustments - after
taxation and
minority interest
where applicable
- Profit on disposal
of property, plant
and equipment (331) (3 201) (1 862)
- Profit on disposal of
Investment - - (160)
- Negative goodwill (4 379) - -
- Profit on issue of
shares by subsidiaries - - (3 246)
- Impairment loss on
property, plant and
equipment - 3 200 2 752
- Impairment of goodwill - - 510
Headline earnings 117 044 131 884 310 806
Shares in issue
Weighted average (000`s) 70 780 71 536 71 536
At the end of the
period (000`s) 70 774 70 801 70 801
Number of shares used
for diluted earnings
per share (000`s) 70 780 71 989 71 536
Headline earnings per
share (cents) (10) 165 184 434
Diluted headline
earnings per
share (cents) (10) 165 183 434
Dividends per
share* (cents) 49 53 138
- Interim (8) 49 53 53
- Final - - 85
* In accordance with IAS 10 the interim dividend of 49 cents per share
proposed by the directors has not been reflected in the interim results.
Consolidated Condensed STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept 30 Sept 31 Mar
2009 2008 2009
R`000 R`000 R`000
Share capital
Balance at beginning of
the period 3 724 3 724 3 724
Closing balance 3 724 3 724 3 724
Share premium
Balance at beginning of
the period 282 715 282 715 282 715
Closing balance 282 715 282 715 282 715
Treasury shares
Balance at beginning of
the period (94 247) (49 393) (49 393)
Treasury shares acquired (596) (44 854) (44 854)
Closing balance (94 843) (94 247) (94 247)
Retained earnings
Balance at beginning of
the period 972 824 763 697 763 697
Earnings attributable to
ordinary shareholders 121 754 131 885 312 812
Dividends paid (61 805) (66 160) (103 685)
Closing balance 1 032 773 829 422 972 824
Other reserves
Balance at beginning of
the period 41 039 24 848 24 848
Arising from the issue of
share appreciation rights 11 910 6 420 19 270
Arising on translation of
foreign operations (7 103) 758 (3 079)
Closing balance 45 846 32 026 41 039
1 270 215 1 053 640 1 206 055
Minority interest
Balance at beginning of
the period 130 196 92 147 92 147
Earnings attributable to
outside shareholders 17 868 20 946 50 000
Net acquisition of minorities - - (2 952)
Net investment in subsidiaries 2 112 - -
Dividends paid (462) (3 130) (8 999)
Closing balance 149 714 109 963 130 196
Consolidated Condensed CASH FLOW STATEMENT
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept 30 Sept 31 Mar
2009 2008 2009
R`000 R`000 R`000
Cash flows from operating
activities
Cash generated from
operations 38 751 163 422 87 972
Finance costs (175 093) (181 967) (382 719)
Dividends paid (62 267) (69 290) (112 626)
Taxation paid (9 004) (86 694) (194 445)
Interest and dividends
received 182 171 179 900 360 115
Net cash (outflow) inflow
from operating activities (25 442) 5 371 (241 703)
Cash flows from investing
activities
Net cash effects of
asset acquisitions (3 078) (48 252) (82 816)
Net cash effects of other
investing activities (108 559) (80 355) (266 763)
Net cash effects of
treasury share investments (596) (44 854) (44 854)
Cash flows from financing
activities
Net cash effects of
borrowings raised 55 934 24 057 294 806
Net decrease in cash and
cash equivalents (81 741) (144 033) (341 330)
Cash and cash equivalents
at the beginning of
the period (131 459) 209 871 209 871
Cash and cash equivalents
at the end of the period (213 200) 65 838 (131 459)
OTHER INFORMATION
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept 30 Sept 31 Mar
2009 2008 2009
R`000 R`000 R`000
Debt-equity ratio (excluding
the long-term funding debt
secured by investments
and loans) (%) 12 2 10
Depreciation and
amortisation (R`000) 16 601 12 449 28 612
Net asset value per
share (cents) 1 794,6 1 488,2 1 703,4
Tangible net asset value
per share (cents) 1 706,9 1 131,0 1 345,2
Capital expenditure (R`000) 10 972 54 946 91 984
Contingent liabilities (R`000) 1 428 1 505 1 428
Capital commitments (R`000) 1 000 32 390 7 026
Consolidated Condensed BALANCE SHEET
Unaudited Unaudited Audited
30 Sept 30 Sept 31 Mar
2009 2008 2009
R`000 R`000 R`000
Assets
Non-current assets 3 611 694 3 385 789 3 495 310
Property, plant and
Equipment 255 828 197 251 228 997
Investments 1 197 608 1 195 100 1 195 100
Goodwill and other
intangible assets 253 043 252 908 253 649
Financial assets 231 463 226 074 232 512
Long-term assets 1 611 659 1 458 081 1 527 875
Deferred taxation 62 093 56 375 57 177
Current assets 2 048 192 2 351 512 2 509 420
Inventories 1 305 475 1 360 111 1 645 913
Trade and other
receivables 665 819 910 749 688 106
Taxation prepaid 6 776 - 50 340
Bank balances and cash 70 122 80 652 125 061
Total assets 5 659 886 5 737 301 6 004 730
Equity and liabilities
Capital and reserves 1 419 929 1 163 603 1 336 251
Attributable to ordinary
shareholders 1 270 215 1 053 640 1 206 055
Minority interest 149 714 109 963 130 196
Non-current liabilities 3 181 184 2 913 274 3 096 348
Long-term borrowings 2 933 810 2 675 032 2 846 638
Financial liabilities 234 753 226 074 236 434
Deferred taxation 12 621 12 168 13 276
Current liabilities 1 058 773 1 660 424 1 572 131
Trade, other payables
and provisions 756 458 1 622 670 1 295 130
Tax liabilities 9 348 16 147 14 935
Short-term borrowings 9 645 6 793 5 546
Bank overdrafts and
bankers` acceptances 283 322 14 814 256 520
Total equity and
Liabilities 5 659 886 5 737 301 6 004 730
SEGMENT INFORMATION
Group,
Capital financing
Engineering equipment and other
consumables and spares operations Total
R`000 R`000 R`000 R`000
Unaudited six
months ended
30 September 2009
Revenue 943 748 938 899 103 313 1 985 960
Operating income 106 921 48 191 19 022 174 134
Total assets 993 834 1 038 256 3 627 796 5 659 886
Total liabilities 229 354 742 691 3 267 912 4 239 957
Unaudited six
months ended
30 September 2008
Revenue 1 004 633 1 149 713 74 641 2 228 987
Operating income 144 245 59 700 8 277 212 222
Total assets 1 040 081 1 095 908 3 601 312 5 737 301
Total liabilities 389 044 926 537 3 258 117 4 573 698
Audited year
ended 31 March 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
NOTES TO THE FINANCIAL INFORMATION
Basis of Preparation
The consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards including IAS 34: Interim
Financial Reporting, 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 2009 annual report have been consistently
applied throughout the six-month period under review.
NOTES TO THE FINANCIAL STATEMENTS
Acquisitions
The following acquisitions were made during the period ended 30 September
2009:
- On 1 June 2009 Humulani Investments (Pty) Limited acquired 100%
of Criterion Equipment (Pty) Limited.
- On 1 April 2009 the Group acquired 40% of Compact Computer
Solutions (Pty) Limited.
Post-balance Sheet Events
Morgan Stanley Vaal LLC gave notice of exercising the forward sale agreement
on the long-term receivable. The settlement took place on 15 October 2009. A
transaction was entered into with Gryphon Asset Managers on the same day to
invest the proceeds from the settlement.
COMMENTS
Group activities fall within the following Group operating divisions:
- Bearing Man Group ("BMG") in bearings, belts, seals, power
transmission products, geared motors, fasteners and hydraulics.
- Capital Equipment Division ("CED") in agricultural,
earthmoving, construction, turf grooming, material handling
equipment and golf utility cars.
- Other businesses include automotive and motorcycle parts and a
floor and wall tile business.
Financial Overview
The Group has produced a most satisfactory result for the six-month period,
considering the challenging economic environment. The market was characterised
by weak demand for product, a strong Rand and generally tough economic
conditions.
Turnover was maintained at acceptable levels with a modest decline of 11% to
R1 986 million. Operating income declined by 18% to R174 million with earnings
attributable to ordinary
shareholders down by 8% to R122 million. Earnings per share declined by 7% to
172 cents per share.
Plans which were put in place at the prior year-end to improve the Group`s
working capital position, have started to show positive results. Inventory was
reduced by R340 million, which was offset by a similar reduction in accounts
payable. Cash generated from operations was R39 million. Management`s focus
will continue to be on maximising cash generation and the second half of the
year should yield good cash flow.
The Group took advantage of weak market conditions and made a number of
relatively minor, but tactically sound acquisitions, that will add to the
Group`s product offering and provide a further enhanced platform for growth
and profitability. The most significant of these was the acquisition of 100%
of the shares in Criterion Equipment (Pty) Limited, which operates in the
materials handling sector of the market with TCM forklifts being its primary
product.
Bearing Man Group (BMG)
BMG continues to be the core profit base of the Group. Reduced volumes and
price reductions resulted in revenue declining by 6% to R944 million. Margins
were under pressure, due to stock being imported at weaker exchange rates in
the prior period. This was partially offset by good cost control with
overheads declining by 7% resulting in profit from operations declining by 26%
to R107 million. All divisions experienced declines in activity due to
prevailing economic conditions. A highlight of the period was the successful
re-branding of Goldquest International Hydraulics to BMG Hydraulics.
Capital Equipment Division (CED)
The CED, being the more cyclical of the Group operations, showed an 18%
decline in revenue to R939 million, while profit from operations declined by
19% to R48 million.
The construction equipment divisions continue to be the weaker performers.
Currently there is no real demand for product materialising from
infrastructural spend by government. The low level of building plans being
passed further exacerbated the problem. The agricultural equipment divisions
continued to perform well despite agricultural commodity product`s pricing
declining at a greater rate than the reciprocal input costs for farming
operations.
Other Operations
The Group continued to solidify its distribution base and structures in all of
its smaller operations, as well as to bed down its strategic property
acquisitions which took place in the previous year.
Prospects
The economy and market conditions appear to have stabilised. However, the
current strength of the Rand and its overall volatility continue to be risk
factors going forward.
Volumes in BMG appear to have bottomed out, but there are no clear signs of a
recovery yet. Trading is volatile and patchy. However the macro global
environment suggests that demand for BMG`s customers` products should increase
in the short to medium term. This should, in turn, result in increased demand
for BMG`s products and services.
In the CED, agricultural machinery conditions are expected to be challenging.
Confidence in the agricultural sector is declining due to low grain prices and
relatively high input costs. Conditions in the construction equipment market
are still depressed and management does not expect this to improve in the next
12 to 18 months. The division has taken steps to protect itself by cutting
costs and it is carefully managing working capital. The acquisition of
Criterion Equipment (Pty) Limited is not expected to have any material effect
on the Group in the second half of the year, but it has helped to spread the
construction equipment section`s overheads and should start making a
contribution in the next financial year.
Notwithstanding the continued market uncertainty, the board has declared an
interim dividend of 49 cents at a 3,5 times dividend cover ratio, in line with
last year`s interim results.
The Board remains confident of the continued success of the Group and will
continue to look for opportunities to increase its product range and penetrate
new markets.
Dividend
The Board has declared an interim dividend of 49 cents per share.
In compliance with the requirements of Strate the following dates are
applicable:
Last date to trade "cum" dividend Friday, 27 November 2009
First date of trading "ex" dividend Monday, 30 November 2009
Record date Friday, 4 December 2009
Payment date Monday, 7 December 2009
Share certificates may not be dematerialised or rematerialised between Monday,
30 November 2009 and Friday, 4 December 2009, both days inclusive.
By order of the Board
C Barnard Johannesburg
Secretary 6 November 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*, LR Sherrell#,RE Sherrell*, AM Sinclair, CE Walters
* Non-executive # Alternate
Sponsor: Deloitte & Touche Sponsor Services (Pty) Limited
www.invictaholdings.co.za
Date: 06/11/2009 12:18:11 Produced by the JSE SENS Department.
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