| Mon 16 Nov 2009, 16:30 | | AER - Amecor - Unaudited results for the six months ended 30 September 2009 |
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AER
AER
AER - Amecor - Unaudited results for the six months ended 30 September 2009
AMALGAMATED ELECTRONIC CORPORATION LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/002405/06)
Share code: AER ISIN: ZAE000070587
("Amecor", "the Group" or "the Company")
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2009
- Revenue increased by 21,6%
- Profit attributable to Amecor shareholders increased by 24,4%
- Cash and cash equivalents increased by R6,8 million, 52,5%
- Earnings per share increased by 15,5%
- Tangible net asset value per share increased by 28,5%
FINANCIAL HIGHLIGHTS
Six months ended Six months ended
30 September 30 September
2009 2008 %
R`000 R`000 increase
Revenue 67 389 55 421 21,6
EBITDA 20 112 16 329 23,2
Profit attributable to
Amecor shareholders 12 224 9 823 24,4
Cash and cash equivalents 19 782 12 975 52,5
Earnings per share (cents) 16,2 14,0 15,5
Net asset value per share (cents) 164,4 140,5 17,0
Tangible net asset value
per share (cents) 80,3 62,5 28,5
GROUP CONDENSED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
Six months Six months Twelve months
ended ended ended
30 September 30 September 31 March
2009 2008 2009
Note R`000 R`000 R`000
Revenue 67 389 55 421 140 459
EBITDA 20 112 16 329 42 337
Depreciation and
amortisation (1 186) (583) (2 351)
Net financing costs (254) 688 371
Profit before taxation 18 672 16 434 40 357
Taxation (4 695) (4 329) (10 700)
Profit and total
comprehensive
income for the period 13 977 12 105 29 657
Attributable to:
Ordinary shareholders
of Amecor 12 224 9 823 23 762
Minority interest 1 753 2 282 5 895
13 977 12 105 29 657
Earnings per share
(cents) 3 16,2 14,0 33,7
Diluted earnings
per share (cents) 3 16,2 14,0 31,9
GROUP CONDENSED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
30 September 30 September 31 March
2009 2008 2009
R`000 R`000 R`000
Non-current assets 72 545 60 895 69 941
Property, plant and equipment 8 246 4 518 7 183
Intangible assets 9 473 6 381 7 725
Goodwill 54 034 49 517 54 034
Deferred tax 792 479 999
Current assets 83 112 65 136 88 152
Inventories 21 070 18 938 22 952
Cash resources 19 782 12 975 16 711
Receivables and other
current assets 39 459 32 470 46 030
Taxation 2 801 753 2 459
Total assets 155 657 126 031 158 093
Capital and reserves 124 210 100 713 115 474
Share capital and premium 72 903 71 550 71 904
Retained income 36 534 16 611 30 550
Minority interest 14 773 12 552 13 020
Non-current liabilities 12 085 11 425 12 051
Interest bearing borrowings 9 962 11 354 10 601
Deferred taxation 2 123 71 1 450
Current liabilities 19 362 13 893 30 568
Trade and other payables 16 081 12 448 26 938
Taxation payable 1 875 1 445 1 198
Short-term portion of
interest bearing borrowings 1 406 - 2 432
Total equity and liabilities 155 657 126 031 158 093
GROUP CONDENSED STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
Six months Six months Twelve months
ended ended ended
30 September 30 September 31 March
2009 2008 2009
R`000 R`000 R`000
Cash flows from operations 17 708 5 418 22 573
Interest paid (1 218) (167) (1 282)
Interest received 964 855 1 653
Taxation paid (3 480) (5 315) (11 359)
Dividends paid (6 240) - -
Cash flows from
operating activities 7 734 791 11 585
Cash flows from
investing activities (3 997) (16 721) (21 426)
Cash flows from
financing activities (666) 13 562 10 506
Net increase/(decrease) in
cash and cash equivalents 3 071 (2 368) 665
Cash and cash equivalents
at the beginning of the period 16 711 14 640 15 343
Cash acquired - 703 703
Cash and cash equivalents
and the end of the period 19 782 12 975 16 711
GROUP STATEMENT OF CHANGES IN SHAREHOLDERS` EQUITY
Attributable
to ordinary
Issued shareholders Minority Total
capital of Amecor interest equity
R`000 R`000 R`000 R`000
Balance at 1 April 2008 69 193 6 788 - 75 981
Minority interest - - 7 125 7 125
Net movement: treasury
shares 2 711 - - 2 711
Profit - 23 762 5 895 29 657
Total changes 2 711 23 762 13 020 39 493
Balance at 1 April 2009 71 904 30 550 13 020 115 474
Increase in issued shares 985 - - 985
Net movement: treasury shares 14 - - 14
Dividends paid - (6 240) - (6 240)
Profit - 12 224 1 753 13 977
Total changes 999 5 984 1 753 8 736
Balance at 30 September
2009 72 903 36 534 14 773 124 210
MANAGEMENT COMMENTARY
Amalgamated Electronic Corporation ("Amecor") is the holding company of a
number of synergetic subsidiary businesses, providing electronic security
equipment and alternate power solutions.
The core divisions of the Group comprise of electronic security equipment,
transmission networks, both radio frequency ("RF") and General Packet Radio
Service ("GPRS"), power generation through generators and uninterrupted power
supply ("UPS") devices, and a research and development team who continue to
uphold our robust reputation of Innovation through Technology. We continually
strive to keep abreast of international technology developments.
Amecor`s principal products and services include:
- Electronic security based products essential for the transmitting and
receiving of alarm signals;
- National licensed radio network: creating bandwidth for the transmission and
receipt of security based signals;
- Alternative power solutions: generators, inverters, UPS systems designed and
assembled for individual customers` needs; and
- Ongoing research and development into new product offerings as well as
existing product upgrades.
FINANCIAL REVIEW
The board of directors is pleased to report earnings and headline earnings for
the six months ended 30 September 2009 of 16,2 cents per share (2008: 14,0
cents), an increase of 15,5% on the comparative period. Revenue increased by
21,6% to R67,4 million (F2009: R55,4 million) and profit attributable to Amecor
shareholders increased by 24,4% to R12,2 million (F2009: R9,8 million) compared
to the previous corresponding period. The analysis of turnover and profit
before tax on a segmental basis is detailed herein.
Capital expenditure of R4,0 million was incurred in the period under review, as
follows:
Research and Development R2,1 million
Assets acquired R1,9 million
OPERATIONAL REVIEW
FSK Electronics ("FSK")
FSK manufactures an extensive range of security related electronic equipment,
which enables an alarm transmission via RF and/or Global Systems for Mobile
Communication ("GSM") to be signaled from an industrial, commercial or domestic
site, to a security control room, where a reaction team is dispatched. FSK`s
array of RF and GSM based products enable operational functionality of security
equipment, providing the primary link between a secured site and security
response teams. Products include transmitters, base stations, repeaters, guard
monitoring units and remotes amongst others, which are adaptable to any site
requiring security.
FSK remains profitable. The continuous development of new FSK products in 2009,
has allowed FSK to branch into other avenues of the security industry, where
the procurement of complimentary products has added to the diversity and
adaptability of the enhanced FSK product range. The product range has been
extended by a total of four completed products, and continues to grow with the
Research and Development division team`s relentless devotion to innovation and
technology.
Sabre Radio Networks ("Sabre")
Sabre has contributed to its client base as its continuous growth and recurring
annuity income has served the Group well. Sabre will, as new products and
emerging clients continue to expand the network use, steadily increase, as
previously demonstrated.
Sabre owns, installs, manages and maintains all the equipment used on the RF
networks. These networks enable the sending and receiving of data signals to
and from secured sites and security control rooms. Sabre`s networks are
situated throughout all major centres in South Africa, permitting national
coverage, with real time monitoring of sites from anywhere in the country.
In addition to the radio network, Sabre provides a GSM private Access Point
Name ("APN") and servers for the routing of alarm information via the GSM
network. The GSM network allows for national routing of alarm signals, along
with a high speed back-up to the radio networks. Consequently, the network
transmits signals using the two mediums of RF and GPRS mobile technology. This
dual medium ensures instantaneous transmission of data via routing equipment
which automatically selects the most effective path for signals.
PDS Group
The PDS Group of companies, comprising Power Development Services ("PDS"),
Gillespie Diesel Services ("GDS") and Durapower Manufacturing ("DM") operate as
a cohesive unit, complementing individual business operations through the
manufacturing, distribution and installation of power solutions.
The PDS brand has managed to live up to its long standing reputation of
superior quality in the power industry, trading in only top of the range
equipment. This high standard of product has superseded the influx of cheap
unreliable imports without service support. PDS has managed to raise the bar
and set the benchmark in alternative power solutions through product quality,
reliability, after sales service and above all safety.
The demand for alternative electricity and back-up power around South Africa
has positioned PDS advantageously.
DM continues to supply tailor made UPS solutions of a superior quality to a
broad market spectrum, consisting of leading companies within South Africa.
Contingently issuable shares
The Company has been engaged for a number of years in an arbitration against
its former director, Mr Rabie van der Merwe. The Company was advised by its
legal counsel that Mr Van der Merwe`s conduct was such as to constitute a
repudiation of the arbitration process, which repudiation has been accepted
by the Company.
The Company accordingly considers the arbitration to be at an end, although it
is understood than Mr Van der Merwe disputes this position.
Product development
The Group continues to invest in Research and Development resulting in further
high quality products being launched into local and international markets.
Capital commitment
FSK has committed to ongoing product development costs in the next financial
year. The Group has also committed a further R5,0 million for alterations and
improvements on the new FSK manufacturing premises acquired in the previous
reporting period.
NOTES TO THE CONDENSED CONSOLIDATED REVIEWED FINANCIAL STATEMENTS
1. Significant accounting policies
Amecor is a company domiciled in South Africa. The condensed consolidated
unaudited financial statements of Amecor for the six months ended 30 September
2009 comprise the Company and its subsidiaries (collectively referred to as the
"Group").
The condensed consolidated unaudited financial statements were authorised for
issue by the directors on 16 November 2009.
1.1 Basis of preparation
The condensed consolidated interim financial statements have been prepared in
accordance with International Financial Reporting Standards ("IFRS"),
specifically IAS 34 Interim Financial Reporting and in compliance with the
South African Companies Act, 1973 and the Listings Requirements of the JSE. The
condensed consolidated unaudited interim financial statements are prepared on
the historical cost basis, with the exception of certain financial instruments
which are measured at fair value. The results of the interim period are not
necessarily indicative of the results for the entire year, and these unaudited
financial statements should be read in conjunction with the audited financial
statements for the year ended 31 March 2009.
The preparation of condensed consolidated unaudited interim financial
statements requires the use of estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the condensed consolidated unaudited interim
financial statements and the reported amounts of revenue and expenses during
the reporting periods. Although these estimates are based on management`s best
knowledge of current events and actions that the Group may undertake in the
future, actual results may differ from those estimates.
The accounting policies have been applied consistently by Group companies to
all periods presented in these condensed consolidated unaudited financial
statements.
2. Earnings per share ("EPS")
EPS is based on the Group`s profit for the six month period ended 30 September
2009, divided by the weighted average number of shares in issue during the
six-month period.
Unaudited Unaudited Audited
Six months Six months Twelve months
ended ended ended
30 September 30 September 31 March
2009 2008 2009
R`000 R`000 R`000
Basis for calculation of
basic earnings per share
Earnings attributable to
Amecor shareholders 12 224 9 823 23 762
Weighted average number of
shares in issue (000`s) 75 572 70 096 70 602
Earnings per share (cents) 16,2 14,0 33,7
Basis for calculation of
diluted earnings per share
Earnings attributable to
Amecor shareholders 12 224 9 823 23 762
Weighted average number of
shares in issue (000`s) 75 572 70 096 74 542
Diluted earnings per
share (cents) 16,2 14,0 31,9
Basis for calculation of
headline earnings per share
Headline earnings
attributable to Amecor
shareholders 12 224 9 823 23 762
Weighted average number of
shares in issue (000`s) 75 572 70 096 70 602
Headline earnings per
share (cents) 16,2 14,0 33,7
Basis for calculation of
diluted headline earnings
per share
Headline earnings
attributable to Amecor
shareholders 12 224 9 823 23 762
Weighted average number of
shares in issue (000`s) 75 572 70 096 74 542
Diluted headline earnings
per share (cents) 16,2 14,0 31,9
3. Net asset value ("NAV") per share
The net asset value per share is the value of the Group`s assets, less the sum
of the value of its non-current liabilities and current liabilities, divided by
the number of shares in issue.
Unaudited Unaudited Audited
30 September 30 September 31 March
2009 2008 2009
Ordinary share capital and
reserves (R`000) 124 210 100 713 115 474
Total number of shares in
issue (net of treasury shares)
000`s) 75 572 71 663 71 921
NAV per share (cents) 164,4 140,5 160,6
Ordinary share capital and
reserves (R`000) 124 210 100 713 115 474
Intangible assets (R`000) (63 507) (55 898) (61 759)
Tangible net asset value
(R`000) 60 703 44 815 53 715
Tangible NAV per share (cents) 80,3 62,5 74,7
4. Segmental analysis
The Group`s business segments and segmental information presented in the
condensed consolidated reviewed results for the six month period ended 30
September 2009 represents the primary basis for segmental reporting.
The business segment reporting format reflects the Group`s management and
internal reporting structure. Inter segment transactions are concluded at arm`s
length terms and conditions.
Unaudited Unaudited Audited
Six months Six months Twelve months
ended ended ended
30 September 30 September 31 March
2009 2008 2009
R`000 R`000 R`000
Segment turnover
Security and related
production and sales 21 358 17 399 42 380
Network and annuity income 5 588 4 653 13 235
Supply and maintenance of
alternative power sources 40 755 37 281 80 338
Holding and management
subsidiaries 11 998 3 175 19 270
Elimination of
inter-company sales (13 593) (8 169) (17 123)
Total turnover 66 106 54 339 138 100
Profit/(loss) before tax
Security and related
production and sales 6 739 5 503 11 558
Network and annuity income 4 723 4 266 10 038
Supply and maintenance of
alternative power sources 4 886 6 360 16 426
Holding and management
subsidiaries 2 773 (210) 640
Elimination of
consolidating items (449) 515 1 695
Total 18 672 16 434 40 357
5. Related party transactions
Unaudited Unaudited Audited
Six months Six months Twelve months
ended ended ended
30 September 30 September 31 March
2009 2008 2009
R`000 R`000 R`000
Purchases from fellow
subsidiary companies 7 413 4 391 7 630
Purchases from related
parties are made at normal
market prices
Management fees paid to
fellow subsidiary company 6 180 3 491 9 493
Management fees were paid
for services rendered in the
areas of administration and
technical advice, based on the
apportioned time spent by
the fellow subsidiary staff.
Sales to related parties - - 9 771
These transactions occurred under arms length, market related terms and
conditions.
6. Dividends
No interim dividend has been declared.
7. Directors
HS Courtney (Non-executive Chairman)
DH Alexander (Chief Executive Officer)
KA Colley (Financial Director)
M Noge (Non-executive Director)
KA Vieira (Operational Director)
All of the above directors are South African and are resident in South Africa.
8. Outlook
Economists predict a challenging year ahead, but we remain confident that our
focused strategy and operational efficiency will enable us to deliver positive
returns for our shareholders.
We believe that the Group`s market position, high quality products, and
commitment to operational improvement and expansion will ensure our ongoing
success.
On behalf of the board
HS Courtney DH Alexander
Non-executive Chairman Chief Executive
17 November 2009
Sponsor
Sasfin Capital
A division of Sasfin Bank Limited
Legal Advisers and Attorneys
HR Levin Attorneys Notaries and Conveyancers
Auditors
Mazars Moores Rowland
Transfer Secretaries
Link Market Services South Africa (Proprietary) Limited
Visit us at
www.amecor.com
INNOVATION THROUGH TECHNOLOGY
Date: 16/11/2009 16:30:01 Produced by the JSE SENS Department.
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