| Wed 11 Nov 2009, 16:00 | | ASO - Austro Group Limited - Reviewed Consolidated Financial Results For The |
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ASO
ASO
ASO - Austro Group Limited - Reviewed Consolidated Financial Results For The
Year Ended 31 August 2009
AUSTRO GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2001/029771/06)
Share code: ASO ISIN: ZAE000090882
("the Group")
REVIEWED CONSOLIDATED FINANCIAL RESULTS FOR THE YEAR ENDED 31 AUGUST 2009
SUMMARY
Revenue R580,6 million
Operating profit R88,0 million
Headline earnings per share 10,0 cents
Dividend per share maintained at 2,0 cents
CONSOLIDATED INCOME STATEMENT
For the year ended
31 August 31 August
2009 2008
Reviewed Audited
R`000 R`000
Revenue 580 519 715 131
Cost of sales (343 925) (435 038)
Gross profit 236 594 280 093
Other operating income 2 465 6 187
Operating expenses (151 019) (131 682)
Profit from operations 88 040 154 598
Interest received 8 123 6 958
Interest paid (24 766) (7 522)
Profit before taxation 71 397 154 034
Taxation expense (27 692) (42 070)
Net profit for the year 43 705 111 964
Number of shares in issue 431 413 384 425 927 491
Weighted average number of shares 431 413 384 428 220 774
Earnings per share (cents) 10,1 26,1
Headline earnings per share (cents) 10,0 25,9
Reconciliation of earnings to headline earnings:
Net profit for the year 43 705 111 964
Profit on disposal of property, plant and (504) (1 464)
equipment
Taxation effect thereon 71 205
Headline earnings 43 272 110 705
CONSOLIDATED BALANCE SHEET
As at
Restated
31 August 31 August
2009 2008
Reviewed Audited
R`000 R`000
Assets
Non-current assets 271 542 283 174
Property, plant and equipment 51 064 55 760
Goodwill and other intangibles 219 465 221 110
Deferred taxation 1 013 6 304
Current assets 412 972 559 365
Inventories 336 110 414 416
Trade and other receivables 70 773 142 354
Taxation receivables 3 856 136
Cash resources 2 233 2 459
Total assets 684 514 842 539
Equity and liabilities
Capital and reserves 542 807 508 408
Share capital 4 4
Share premium 322 103 308 003
Shares to be issued - 14 778
Accumulated profits 220 700 185 623
Non-current liabilities 3 961 4 448
Interest bearing liabilities 1 370 3 453
Deferred taxation 2 591 995
Current liabilities 137 746 329 683
Trade and other payables 35 676 202 045
Provisions - 1 394
Amount owing for purchase of subsidiaries - 13 228
Taxation 2 425 40 018
Bank overdraft 99 645 72 998
Total equity and liabilities 684 514 842 539
Net asset value per share (cents) 125,8 118,7
Tangible net asset value per share (cents) 75,0 67,1
SUMMARISED CONSOLIDATED CASH FLOW STATEMENT
For the year ended
31 August 31 August
2009 2008
Reviewed Audited
R`000 R`000
Cash flows from operating activities (5 632) (109 665)
Cash generated by operations 81 758 (71 201)
Interest received 8 123 6 958
Interest paid (24 766) (6 397)
Dividends paid (8 628) -
Taxation paid (62 119) (39 025)
Cash flows from investing activities (5 292) (55 478)
Cash flows from financing activities (15 948) (114 158)
Net decrease in cash resources (26 873) (279 301)
Cash resources at beginning of year (70 539) 208 762
Cash resources at end of year (97 412) (70 539)
SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended
31 August 31 August
2009 2008
Reviewed Audited
R`000 R`000
Share capital and share premium 322 107 322 785
Balance at beginning of year 322 785 314 141
Share issued during the year 14 757 133 284
Reversal of shares to be issued reserve (14 778) (139 418)
Shares to be issued reserve - 14 778
Share issue expenses (657) -
Accumulated profits 220 700 185 623
Balance at beginning of year 185 623 73 659
Dividend paid (8 628) -
Net profit for the year 43 705 111 964
Total capital and reserves 542 807 508 408
SEGMENTAL ANALYSIS
Revenue (external) Profit before tax Net asset value
31 August 31 August 31 August 31 August 31 August 31 August
2009 2008 2009 2008 2009 2008
R`000 R`000 R`000 R`000 R`000 R`000
Power 422 501 492 494 78 249 127 402 411 439 218 874
Gross 425 750 492 744 81 498 127 463 - -
Intersegment (3 249) (250) (3 249) (61) - -
Wood 158 018 222 637 (6 852) 26 632 131 368 289 534
Gross 153 365 271 156 (11 504) 32 417 - -
Intersegment 4 653 (48 519) 4 652 (5 785) - -
Total 580 519 715 131 71 397 154 034 542 807 508 408
COMMENTARY
INTRODUCTION
Austro Group Limited is listed in the Support Services sector of the JSE
Limited. The Group is a supplier of specialised and quality branded
industrial equipment to corporate, commercial and infrastructure markets in
South and southern Africa. The Group services clients ranging from heavy
industrial, mining and construction groups to wholesalers, retailers and
manufacturers.
The Group has two distinct and focused business offerings - the production,
supply and rental of generators and related components such as industrial
engines, alternators and switchgear to the generator manufacture and supply
industry and the distribution of professional woodworking equipment and
tooling.
Group structure:
New Way Power (Pty) Limited
- New Way Motor and Diesel Engineering
- Neptune Plant Hire
- Quinlec Power
- Quad Technical Services
Austro Wood (Pty) Limited
- Austro Woodworking Machines and Tools
- Gearing Moss Supplies
2nd Cut Pre-Owned Woodworking Equipment
The two main businesses have been in existence for close on 30 years.
RESULTS OVERVIEW
FINANCIAL REVIEW
The Group delivered moderate results considering the effect of the depressed
economy on the Woodworking Division and the significant management changes
and restructuring that occurred during the year.
Demand for the products supplied by the Power Division remained reasonable.
Income statement
Revenue decreased from R715,1 million to R580,6 million. This was mainly due
to the effect of the depressed economy on the Woodworking Division.
Profit from operations decreased by 43,0% to R88,0 million (2008: R154,6
million) as a result of the sharp reduction in revenues in the Woodworking
Division without a corresponding reduction in the overhead structure due to
restructuring costs.
Earnings per share decreased to 10,1 cents per share (2008: 26,1 cents per
share) while headline earnings per share decreased to 10,0 cents per share
(2008: 25,9 cents per share).
Balance sheet
Group gearing remained at an acceptable level of 18,6% (2008: 17,2%). The
Group`s inventory has reduced by R78,3 million to R336,1 million at year-end.
This has been a specific area of management focus. Debtors collections have
shown a significant improvement with outstanding debtors reducing by R71,6
million to R70,8 million.
There has been no significant capital expenditure during the year and the
Group is confident that it can comfortably service its debt.
The focus of the Group on asset management during the year has resulted in a
strong balance sheet and has allowed the dividend per share to be maintained
at 2,0 cents.
As stated in the annual report for the year ended 31 August 2008, the
acquisition of Quad Technical Services (Pty) Limited and Quinlec Electrical
was accounted for using provisional figures as at the effective date 1 April
2008. The detailed assessment of the assets, liabilities and contingent
liabilities has been completed and has resulted in the following adjustments
in the prior year.
Property, plant and equipment and other assets on business combination have
been revalued downwards in the amount of R0,6 million and liabilities were
revalued upwards by R0,5 million resulting in an increase of R1,1 million in
goodwill. The depreciation charged on the revalued property, plant and
equipment was not considered to be material and no adjustment was made
accordingly to the income statement for the previous period. Comparative
figures for the balance sheet was restated to reflect these changes.
Cash flow
During the year under review, the Group utilised cash of R5,6 million (2008:
R109,7 million). Levels of inventory showed a significant reduction over the
year, but a reduction in trade creditors of R167,7 million was the reason for
the negative cash position.
CHANGES IN EQUITY
On 1 September 2008, 5 485 893 shares were issued as part of the purchase
price in acquiring Quinlec Power (Pty) Limited and Quad Technical Services
(Pty) Limited.
SUBSEQUENT EVENTS
The directors have become aware of a potential claim against the company, of
R10 million, which they believe they can successfully defend.
OPERATING REVIEW
Power
Revenue decreased by 14,2% to R422,5 million (2008: R492,5 million). This
Division contributed 72,8% to Group revenue (2008: 68,9%).
New Way, the supplier and manufacturer of generator sets, industrial diesel
engines and related components, continued to be the Group`s biggest
contributor to revenues and profits.
Neptune, the generator rental business, continues to produce strong results.
Efforts are being made to maximise the synergies between New Way and Quad and
Quinlec. Quad manufactures electrical panels and soundproof enclosures, while
Quinlec specialises in the installation and maintenance of generators as well
as compliance certifications.
Wood
While the economic slowdown has impacted this Division, the last two months
of the year saw a definite recovery. While Wood`s customers have been
affected by the depressed residential market, they have yet to feel the
effects of the 2010 World Cup as they supply the finishes to the
developments.
This Division contributed 27,2% (2008: 31,1%) to Group revenue. Revenue
decreased by 29,0% to R158,0 million (2008: R222,6 million).
A significant restructuring took place in the Division during the year with a
new Managing Director being appointed and a retrenchment process which
resulted in a reduction of 25% in the workforce. The benefits of this are
already being felt.
Within the Division, Gearing Moss continues to perform well while the Cape
Town operation produced a satisfactory result.
The KZN and Gauteng operations performed poorly but have been dramatically
restructured which exercise is already showing results.
PROSPECTS
The Group is currently in a consolidation phase and is attempting to maximise
the synergies to be gained from the various divisions. The Group has been
restructured with all Power interests being housed in one entity, New Way
Power (Pty) Limited and the Wood interests in Austro Wood (Pty) Limited. This
is expected to result in more efficiencies, greater focus and lower costs.
The Power Division is in the process of consolidating four of its Gauteng
operations into one facility which will result in efficiencies in
warehousing, manufacturing and logistics.
Quad is well positioned to increase revenues in its new premises and the
resultant improvement in its manufacturing equipment.
Neptune`s Gauteng operation is beginning to show increased revenue and is
increasing its market share.
The restructuring of the Gauteng and KZN operations has placed the Wood
Division in a good position to benefit from an upturn in the economy. As our
customers supply the finishes to construction projects, they are yet to feel
the benefits of the 2010 World Cup which when realised will have a positive
effect on revenues in this Division.
DIVIDEND DISTRIBUTION
Shareholders are advised that a dividend of 2 cents per share has been
declared.
The salient dates in respect of the dividend are as 2009
follows
Last day to trade cum dividend on Friday, 27 November
Trading ex dividend commences on Monday, 30 November
Record date Friday, 4 December
Payment of dividend on Monday, 7 December
Shareholders may not dematerialise or rematerialise their shares between
Monday, 30 November 2009 and Friday 4 December 2009, both dates inclusive.
BASIS OF PREPARATION
The annual results have been prepared in accordance with IAS 34 (Interim
Financial Reporting). The accounting policies applied in preparing these
annual financial statements are consistent with those applied in the prior
year and are in accordance with International Financial Reporting Standards.
This announcement was prepared in accordance with the listings requirements
of the JSE Limited and the Companies Act. These reviewed results have been
reviewed by Austro Group Limited`s auditors PKF (JHB) Inc. Their unqualified
review opinion is available for inspection at the company`s registered
office.
CHANGES TO THE BOARD OF DIRECTORS
The following directors were appointed to strengthen the Board of Directors.
The executive directors appointed were:
- JA Bennie as Group Financial Director
- JR Freed as alternate to JO Freed, an Executive Director
- RE Moss as Executive Director
The non-executive directors appointed were:
- GS Nzalo (member of the audit committee).
- U Schackermann (chairman of the audit committee)
During the year the following directors resigned from the Board of Directors:
- NO Davies as Non-executive Director and then Acting CEO
- BD Downs as Executive Director
- RJ Friese as CEO
- M Petzer as Financial Director
By order of the Board
Anthony John Phillips James Andrew Bennie
Chairman Group Financial Director
Johannesburg
11 November 2009
Non-executive directors:
AJ Phillips* (Chairman), DS Brouze, W Hauser (Austrian), GS Nzalo*, U
Schackermann* (German), (* Independent)
Executive directors:
JA Bennie, JO Freed, RE Moss
Registration number:
2001/029771/06
Business/registered address:
1125 Leader Road, Stormill Ext 4, Roodepoort, Johannesburg
Business postal address:
PO Box 1914, Florida, 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: 11/11/2009 16:00:02 Produced by the JSE SENS Department.
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