|
FWD
FWD
FWD - Freeworld Coatings Limited - Audited Results And Cash Dividend
Declaration For The Year Ending 30 September 2009
FREEWORLD COATINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2007/021624/06)
Share code: FWD
ISIN: ZAE000109450
("Freeworld Coatings", "the Group" or "the Company")
AUDITED RESULTS AND CASH DIVIDEND DECLARATION FOR THE YEAR ENDING 30
SEPTEMBER 2009
HIGHLIGHTS
- Revenues of R2 703 million maintained at last year`s record levels
- EBITDA excluding fair value adjustments on financial instruments at R425
million is 5% down on last year`s record result
- Cash flows from operations remained strong at R375 million,
the same as last year
- Final dividend 7 cents per share; Total dividend 12 cents per share
- Acquired the intellectual property rights of Napier Environmental
Technologies for North America to complement our existing rights for the
rest of world
- Three new product ranges were successfully launched
FREEWORLD CEO, ANDRE LAMPRECHT, COMMENTED
"In continuing tough recessionary economic conditions, Freeworld Coatings
produced a solid set of results for the year. We continue to invest in the
business with over R100 million in capital investment over the past year and
the recent launch of three new exciting product ranges. We also remain
focused on achieving greater efficiencies across the business. With the
strong portfolio of coatings brands, the company is well positioned to
benefit from any upturn in the economy when it comes."
COMMENTARY
TRADING ENVIRONMENT
The trading environment, post the global financial crisis, has been
particularly difficult given the resultant impact on both economic conditions
and the availability of credit reducing consumer discretionary spending and
impacting demand for paint products. Product mix changes accompanied single
digit volume decline.
At the time of releasing our 2008 results, our prognosis for 2009 was that it
will be a tough year, and that whilst the slow down in consumer spending will
impact our targets in the Decorative Coatings segment, this would be offset,
at least to some extent, by continued increases in public infrastructure
spending. In this area the pace of spending has slowed and in some instances
been delayed.
FINANCIAL RESULTS
Against the prevailing economic conditions, we believe that these results
represent a solid performance, and must express our sincere appreciation to
all the staff for their efforts and dedication.
The uncertainty and increased volatility in financial markets and in
particular currency markets has had a significant impact on the Group`s
result and consequently we are reflecting both EBITDA excluding and including
fair value adjustments on financial instruments as separate line items.
Income statement
Revenue from operations for the financial year to September at R2,7 billion
is in line with that achieved last year, which in itself was an all time high
for the Group.
EBITDA excluding fair value adjustments on financial instruments at R425
million is only 5% down on last year`s record result of R449 million. Input
costs remained at relatively high levels for the most part of the year, and
with market conditions being difficult, prices were held firm and not
increased with costs being absorbed so as not to further impact demand.
Management`s focus on managing the expense base paid dividends and limited
the decline in the EBITDA margin, excluding fair value adjustments, to 100
basis points (15,7% vs 16,7%).
The Group has a long established policy of taking forward cover for imported
raw materials and capital expenditure items, which in the past has served us
well. However, the strengthening of the Rand in this financial year resulted
in the Group recording a mark to market fair value loss on financial
instruments of R26,2 million as against last year`s profit of R15,4 million.
Operating profit at R322 million is 19% down on last year due to a 5% lower
trading result, a R9 million higher depreciation charge as a consequence of
the capex programme, and the negative mark to market fair value adjustments
on financial instruments. If these fair value adjustments were excluded, on a
comparable basis, operating profit would be 9% lower at R348 million.
Net finance costs, as a consequence of reduction in JIBAR, coupled with a
slightly lower level of borrowings are 5% down on last year.
The effective tax rate at 31,7%, excluding STC, compares adversely against
last year`s rate of 28,8%, which included a rate change adjustment, following
the reduction in the corporate tax rate, of R8,7 million, equivalent to 3.1%
of profit before tax.
Income from associates at R8,6 million is substantially lower than last
year`s after tax income of R22,4 million.
A major contributor to this shortfall was the performance of DuPont Freeworld
which supplies OEM paint products as it was severely impacted by the motor
manufacturers cutting back significantly on unit builds.
Net profit at R147 million is 32% down on last year, due in the main to a pre
tax R42 million adverse swing in mark to market fair value adjustments to
financial instruments, a R14 million shortfall in after tax profits from
associates, together with a 5% lower trading result.
Earnings per share at 70 cents is 34% lower, based on 203,9 million shares in
issue as against last year`s weighted average of 201,1 million shares.
The directors have declared a final dividend of 7 cents per share as
Freeworld Coatings is positioned as a growth company. Dividends declared for
the year total 12 cents, which the directors consider to be prudent,
particularly in the prevailing economic climate.
Balance sheet
Total assets as at 30 September at R4,5 billion are in line with last year,
with the reduction in inventories compensating for higher property, plant and
equipment due to the capex programme, and higher trade and other receivables.
Interest bearing debt (net of cash) at R831 million has reduced by R42
million, and translates into a debt to equity ratio of 29%.
Cash flow and capital expenditure
Cash generated from operations amounted to R375 million with the cash inflow
from operating activities of R150 million being used to acquire property,
plant and equipment totalling R101 million and intangibles of R22 million,
the bulk of the latter being attributable to the Company exercising its
option to acquire the intellectual property rights of Napier Environmental
Technologies for North America to complement its existing rights for the rest
of the world.
Our R101 million investment in capital expenditure includes expenditure on
the new raw material warehouse and material handling equipment at Mogale
City, the finished goods warehouse in Mobeni, the Syspro ERP system for the
Automotive business and the usual phased replacement of outdated equipment.
Freeworld Coatings plans to continue the rejuvenation of its sites in South
Africa in the next few years.
SEGMENTAL COMMENT
Decorative Coatings
The Decorative Coatings segment had a challenging year given the tough
economic conditions. This impact was felt across all sectors including both
retail and trade. A significant part of the challenge related to adverse
movements in oil, exchange rates and commodity prices which were not
recoverable in the market place.
Building on a strong performance last year, the export and African operations
posted a solid result with turnover increasing by 8,3%. Operating profit was
impacted by some adverse currency exchange movements, particularly relating
to Zambia. The China project showed creditable growth in the circumstances.
Overall turnover for the Decorative Segment at R2 billion ended at similar
levels to last year with EBITDA excluding fair value adjustments at R296,3
million only being 3% down on last year`s record profit.
Performance Coatings
All businesses within the Performance Coatings segment have felt the effect
of the economic slowdown both locally and in the rest of the world. Turnover
increased slightly by 1% to R1 billion for the first time with EBITDA
excluding fair value adjustments, due to margin pressure, particularly with
customers abroad, reducing by 13% to R129,5 million.
The wholly owned automotive business, which primarily manufactures and
distributes automotive refinish products, did not entirely escape the general
economic downturn. Whilst sales were 3% higher than last year, price
recoveries were insufficient to offset input cost increases.
Our colourant business achieved a reasonable performance despite the
particularly tough trading environment, with turnover being slightly lower
than last year. With almost 50% of the sales in foreign countries and close
to 65% of input costs denominated in foreign currency, the business has
significant exposure to the Rand exchange rate. The strengthening of the Rand
against the US$ and the Euro had a negative impact on both turnover and
margins.
Complementary products had a mixed result with the Hamilton Brands business
achieving a solid result, whilst the Midas/Earthcote business, which is
largely exposed to the trade sector in the Western Cape, was affected by
economic conditions and inclement weather.
OUTLOOK
There are signs of a recovery in the global economy, however, conditions
remain delicately poised as there is still a degree of concern over global
financial markets and the pace of economic recovery.
Given this uncertainty it is important that the Group retains its firm focus
on limiting input costs and continues with productivity improvements in order
to reset aspects of our expense base and allow us a trading platform to add
volumes without losing margin.
Overall, we are well positioned to take advantage of any upturn when it
comes, as we have strong brands, a comprehensive product range and a wide
distribution both in South Africa and surrounding territories. We continually
evaluate the extension of our footprint, and a number of specific
opportunities are currently being evaluated, including some outside of South
Africa.
The business will continue to pursue suitable acquisition opportunities that
fit its strategic direction.
The year ahead will, like 2009, be challenging but we remain optimistic that
we will continue to perform competitively.
RM Godsell AJ Lamprecht
Chairman Chief Executive Officer
CASH DIVIDEND DECLARATION for the year ended 30 September
DIVIDEND NUMBER 4
Notice is hereby given that the following cash dividend has been declared for
the year ended 30 September 2009: Number 4 (final dividend) of 7 cents per
ordinary share.
In compliance with the requirements of the JSE Limited, the following dates
are applicable.
Last day to trade cum dividend Friday, 15 January 2010
Securities start trading ex-dividend Monday, 18 January 2010
Record date to determine who receives the Friday, 22 January 2010
dividend
Electronic transfer of funds or cheques Monday, 25 January 2010
posted/CSDPs and brokers credited
Share certificates may not be dematerialised Monday, 18 January 2010
or rematerialised between and Friday, 22 January 2010,
both days inclusive.
On behalf of the board
ELA Chamberlain
Group Company Secretary
Contact Number: (011) 549 8000
Contact College Hill
Nicholas Williams
(011) 447-3030
Sponsor: RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Transfer Secretaries: Link Market Services South Africa (Proprietary) Limited
CONSOLIDATED BALANCE SHEET at 30 September
Audited Audited
2009 2008
Assets Audited Audited
Notes R`000 R`000
Non-current assets 3 568 671 3 527 594
Property, plant and equipment 646 733 605 184
Goodwill 1 893 868 1 898 141
Intangible assets 6 794 847 795 194
Investment in associates 7 181 613 193 009
Finance lease receivables 98 315
Long term loans and receivables 9 558 9 906
Deferred taxation assets 41 954 25 845
Current assets 921 365 985 064
Inventories 398 725 460 129
Trade and other receivables 473 647 451 723
Taxation 10 538 2 030
Cash and cash equivalents 38 455 71 182
Total assets 4 490 036 4 512 658
Equity and liabilities
Capital and reserves
Share capital and premium 2 583 409 2 583 409
Other reserves (31 078) (20 579)
Retained income 301 593 190 119
Interest of shareholders of 2 853 924 2 752 949
Freeworld Coatings Limited
Minority interest 25 140 23 313
Total equity 2 879 064 2 776 262
Non-current liabilities 948 421 911 573
Interest-bearing liabilities 664 044 624 691
Deferred taxation liabilities 264 054 265 314
Provisions 16 237 21 568
Other non-interest-bearing 4 086 -
liabilities
Current liabilities 662 551 824 823
Trade and other payables 426 833 477 416
Provisions 17 008 7 800
Current tax payable 13 353 20 243
Short term loans and bank 205 357 319 364
overdrafts
Total equity and liabilities 4 490 036 4 512 658
CONSOLIDATED INCOME STATEMENT for the year ended 30 September
Audited Audited
2009 2008
Notes R`000 R`000
Revenue 2 703 164 2 696 744
Earnings before interest, tax, 424 583 449 148
depreciation, amortisation and fair
value
Fair value adjustments (26 248) 15 429
Earnings before interest, tax, 398 335 464 577
depreciation and amortisation
(EBITDA)
Depreciation and amortisation (76 685) (67 655)
Operating profit 321 650 396 922
Finance costs (125 259) (141 808)
Income from investments 10 358 21 381
Profit before taxation 206 749 276 495
Income tax expense (68 270) (81 944)
Profit after taxation 138 479 194 551
Income from associates 7 8 566 22 359
Profit for the year 147 045 216 910
Attributable to:
Minority shareholders 4 990 4 931
Freeworld Coatings Limited 142 055 211 979
shareholders
147 045 216 910
Earnings per share (Basic and 9 70 105
diluted in cents)
Dividends per share (cents) 15 10
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 30 September
Share Foreign Net Cash Equity
capital currency actuaria flow Compen-
and trans- l hedge sation
premium lation gains/ reserve reserves
R`000 reserves (losses) R`000 R`000
R`000 on post-
retire-
ment
benefits
R`000
Balance 2 418 796 - - - -
acquired at
corporatisa-
tion
Changes in
equity
recognised
during 2008
Movement on - 17 789 - - -
foreign
currency
translation
reserve
Net - - - - -
income/(loss)
recognised
directly in
equity
Net actuarial - - 843 - -
gains and
losses
Profit for the - - - - -
year
Total
recognised
income and
expense
for the year
- 17 789 843 - -
New shares 173 840 - - - -
issued during
the year
Costs written (9 227) - - - -
off against
share premium
Shareholder - - - - -
loans repaid
during the year
Increase in - - - 2 179 -
fair value of
hedging
instruments
Transfer to
initial
carrying amount
of
non-financial
hedged item on
cash flow hedge
- - - (2 179) -
Share Foreign Net Cash Equity
capital currency actuaria flow Compen-
and trans- l hedge sation
premium lation gains/ reserve reserves
R`000 reserves (losses) R`000 R`000
R`000 on post-
retire-
ment
benefits
R`000
Barloworld - - - - (44 999)
Share Option
reserve
Freeworld
Coatings
Limited SARs
expense
recognised in - - - - 2 784
equity
Barloworld
Limited Share
Options/Rights
expense - - - - 2 002
recognised in
equity
Transfer of - - - - 1 002
cash-settled
liability to
equity
Other reserve - - - - -
movements
Dividends on - - - - -
ordinary shares
Balance at 30 2 583 17 789 843 - (39 211)
September 2008 409
Changes in
equity
recognised
during 2009
Movement on - (18 399) - - -
foreign
currency
translation
reserve
Net actuarial - - 4 - -
gains and
losses
Profit for the - - - - -
year
Total
recognised
income and
expense
for the year - (18 399) 4 - -
Increase in - - - (9 618) -
fair value of
hedging
instruments
Share Foreign Net Cash Equity
capital currency actuaria flow Compen-
and trans- l hedge sation
premium lation gains/ reserve reserves
R`000 reserves (losses) R`000 R`000
R`000 on post-
retire-
ment
benefits
R`000
Freeworld
Coatings
Limited SARs
expense
recognised in - - - - 3 622
equity
Barloworld
Limited Share
Options/Rights
expense - - - - 1 426
recognised in
equity
Other reserve - - - - 12 467
movements
Dividends on - - - - -
ordinary shares
Balance at 30 2 583 409 (610) 847 (9 618) (21 696)
September 2009
Total Total Attribut- Minority Share- Total
other retained able to interest holder equity
reserves income Freeworld R`000 loans R`000
R`000 R`000 Coatings R`000
Limited
share-
holders
R`000
Balance - - 2 418 796 20 144 22 187 2 461 127
acquired at
corporati-
sation
Changes in
equity
recognised
during 2008
Movement on 17 789 - 17 789 - - 17 789
foreign
currency
translation
reserve
Net income/ - (1 473) (1 473) - - (1 473)
(loss)
recognised
directly in
equity
Net 843 - 843 - - 843
actuarial
gains and
losses
Profit for - 211 979 211 979 4 931 - 216 910
the year
Total
recognised
income and
expense
for the 18 632 210 506 229 138 4 931 - 234 069
year
New shares - - 173 840 - - 173 840
issued
during the
year
Costs - - (9 227) - - (9 227)
written off
against
share
premium
Shareholder - - - - (22 187) (22 187)
loans
repaid
during the
year
Total Total Attribut- Minority Share- Total
other retained able to interest holder equity
reserves income Free- R`000 loans R`000
R`000 R`000 world R`000
Coatings
Limited
share-
holders
R`000
Increase in 2 179 - 2 179 - - 2 179
fair value
of hedging
instruments
Transfer to
initial
carrying
amount of
non- (2 179) - (2 179) - - (2 179)
financial
hedged item
on cash flow
hedge
Barloworld (44 999) - (44 999) - - (44 999)
Share Option
reserve
Freeworld
Coatings
Limited SARs
expense
recognised 2 784 - 2 784 - - 2 784
in equity
Barloworld
Limited
Share
Options/Righ
ts
expense 2 002 - 2 002 - - 2 002
recognised
in equity
Transfer of 1 002 - 1 002 - - 1 002
cash-settled
liability to
equity
Other - - - (234) - (234)
reserve
movements
Total Total Attribut- Minorit Share- Total
other retained able to y holde equity
reserves income Free- interes r R`000
R`000 R`000 world t loans
Coatings R`000 R`000
Limited
share-
holders
R`000
Dividends on - (20 387) (20 387) (1 528) - (21 915)
ordinary shares
Balance at 30 (20 579) 190 119 2 752 949 23 313 - 2 776 262
September 2008
Changes in
equity
recognised
during 2009
Movement on (18 399) - (18 399) - - (18 399)
foreign currency
translation
reserve
Net actuarial 4 - 4 - - 4
gains and losses
Profit for the - 142 055 142 055 4 990 - 147 045
year
Total recognised
income and
expense
for the year (18 395) 142 055 123 660 4 990 - 128 650
Increase in fair (9 618) - (9 618) - - (9 618)
value of hedging
instruments
Freeworld
Coatings Limited
SARs expense
recognised in 3 622 - 3 622 - - 3 622
equity
Barloworld
Limited Share
Options/Rights
expense 1 426 - 1 426 - - 1 426
recognised in
equity
Other reserve 12 467 - 12 467 - - 12 467
movements
Dividends on - (30 581) (30 581) (3 163) - (33 744)
ordinary shares
Balance at 30 (31 078) 301 593 2 853 924 25 140 - 2 879 064
September 2009
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 30 September
Audited Audited
2009 2008
R`000 R`000
Cash flows from operating activities
Cash receipts from customers 2 681 790 2 684 779
Cash paid to employees and suppliers (2 307 328) (2 309 005)
Cash generated from operations 374 462 375 774
Finance costs (136 289) (107 180)
Dividends received from associates 19 962 6 215
Interest received 10 358 21 381
Income tax paid (84 811) (82 136)
Cash flow from operations 183 682 214 054
Dividends paid (including minority (33 744) (21 915)
shareholders)
Cash inflow from operating activities 149 938 192 139
Cash flow from investing activities
Proceeds on decrease in long-term financial - 3 614
assets
Acquisition of long-term financial assets 565 -
Acquisition of property, plant and equipment (100 950) (125 997)
Replacement capital expenditure (68 082) (80 130)
Expansion capital expenditure (32 868) (45 867)
Acquisition of intangible assets (21 979) (48 027)
Proceeds on disposal of property, plant and 3 323 4 507
equipment
Net cash used in investing activities (119 041) (165 903)
Net cash inflow before financing activities 30 897 26 236
Cash flows from financing activities
Share issue costs - (9 227)
Repayment of amount due to Barloworld Capital - (868 769)
(Pty) Limited
Increase in long term interest bearing 85 042 563 880
borrowings
(Decrease)/Increase in short term interest- (148 666) 312 390
bearing liabilities
Net cash used in financing activities (63 624) (1 726)
Net increase in cash and cash equivalents (32 727) 24 510
Cash and cash equivalents at beginning of 71 182 46 672
year
Cash and cash equivalents at end of year 38 455 71 182
SEGMENT REPORTING for the year ended 30 September
For management purposes, the group is organised into two major operating
divisions, namely Decorative and Performance Coatings. These divisions are
the basis on which the group reports its primary segmental information. This
is consistent with prior periods.
SEGMENT REVENUES AND RESULTS
R`000 Decorative Performance Eliminations Group
Audited
2009
Consolidated 1 973 993 1 004 330 (275 159) 2 703 164
segment
revenue
Segment result
EBITDA before 296 263 129 486 (1 166) 424 583
fair value
adjustments
Fair value (23 963) (2 285) (26 248)
adjustments
EBITDA 272 300 127 201 (1 166) 398 335
Depreciation (55 138) (21 547) (76 685)
and
amortisation
Segmental 217 162 105 654 (1 166) 321 650
operating
profit
Finance costs (125 259)
Income from 10 358
investments
Income tax (68 270)
expense
Profit after 138 479
tax
Income from 8 566
associates
Profit for the 147 045
year
Attributable 4 990
to minority
shareholders
Attributable
to Freeworld
Coatings
Limited 142 055
shareholders
R`000 Decorative Performance Eliminations Group
Audited
2008
Consolidated 1 967 704 994 796 (265 756) 2 696 744
segment
revenue
Segment result
EBITDA before 306 755 148 293 (5 900) 449 148
fair value
adjustments
Fair value 14 988 441 15 429
adjustments
EBITDA 321 743 148 734 (5 900) 464 577
Depreciation (48 065) (19 590) (67 655)
and
amortisation
Segmental 273 678 129 144 (5 900) 396 922
operating
profit
Finance costs (141 808)
Income from 21 381
investments
Income tax (81 944)
expense
Profit after 194 551
tax
Income from 22 359
associates
Profit for the 216 910
year
Attributable 4 931
to minority
shareholders
Attributable
to Freeworld
Coatings
Limited 211 979
shareholders
SEGMENT BALANCE SHEET
Decorative Performance Eliminations Total
Coatings Coatings R`000 Group
R`000 R`000 R`000
Audited
2009
Segmental 3 436 608 833 360 4 269 968
total assets
Segmental non (470 915) (270 656) (741 571)
interest
bearing
liabilities
Segmental net 2 965 693 562 704 3 528 397
operating
assets
Segmental (847 186) (22 215) (869 401)
interest
bearing
liabilities
Segmental cash 32 121 6 334 38 455
and cash
equivalents
Segmental net 2 150 628 546 823 2 697 451
assets
Investment in 181 613
associates
Net assets 2 879 064
Audited
2008
Segmental 3 403 254 845 212 4 248 466
total assets
Segmental non (540 804) (251 536) (792 340)
interest
bearing
liabilities
Segmental net 2 862 450 593 676 3 456 126
operating
assets
Segmental (919 340) (24 715) (944 055)
interest
bearing
liabilities
Segmental cash 54 081 17 101 71 182
and cash
equivalents
Segmental net 1 997 191 586 062 2 583 253
assets
Investment in 193 009
associates
Net assets 2 776 262
For the purposes of monitoring segment performance and allocating resources
between segments, the chief operating decision maker monitors the tangible,
intangible and financial assets attributable to each segment. All assets are
allocated to reportable segments.
Decorative Performanc Total
e
Coatings Coatings Group
R`000 R`000 R`000
Capital expenditure
Audited
2009
Property, plant and 76 074 24 876 100 950
equipment
Audited
2008
Property, plant and 104 936 21 060 125 996
equipment
GEOGRAPHICAL SEGMENTS
Freeworld Coatings Limited`s two segments operate mainly in Southern Africa,
with a limited presence in Australia and China, and therefore a geographical
split is not meaningful.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30
September
1 Statement of compliance
The abridged report has been prepared in accordance with IAS 34, Interim
Financial Reporting, Schedule 4 of the Companies Act 61 of 1973, as amended,
and the JSE Limited`s Listing disclosure requirements.
2 Accounting policies
The abridged report has been prepared using accounting policies that comply
with International Financial Reporting Standards. The accounting policies are
consistent with those applied in the annual financial statements for the year
ended September 2009.
The group is in the process of evaluating standards that are currently in
issue but not yet effective and whilst they are not expected to have a
significant impact on the group`s results, additional disclosures may be
required.
3 Related party transactions
There has been no significant changes in related party relationships since
the previous year.
Other than in the normal course of business, there have been no significant
transactions during the year, except for a settlement that has been reached
with Akzo Nobel (R29,2 million) in respect of compensation for the loss of
income and stranded costs arising from the early termination of the
protective coatings license agreement with International Paint Limited and
the termination of the marine coatings toll manufacturing agreement with
International Paint (Pty) Limited and our share of profit on sale of a
portion of an associate`s asset (R4 million).
4 Supplementary balance sheet and income statement information
2009 2008
Net asset value per share (cents) 1 412 1 362
Weighted average number of shares in 203 872 201 136
issue (000`s)
Headline earnings per share (basic and 69 106
diluted in cents)
5 Audit of financial statements
The financial statements for the year ended 30 September 2009
were audited by Deloitte & Touche and their unmodified audit
opinion is available for inspection at Freeworld Coatings
Limited`s registered office.
Accumulated
depreciation Net
and book
Cost impairments value
R`000 R`000 R`000
6 Intangible assets
2009
Capitalised software 29 668 (17 206) 12 462
Brands 728 891 (28 865) 700 026
Trademarks 67 988 (3 337) 64 651
Distribution channels 30 277 (12 569) 17 708
856 824 (61 977) 794 847
2008
Capitalised software 17 961 (14 829) 3 132
Brands 686 100 (13 722) 672 378
Trademarks 57 222 (392) 56 830
Distribution channels 73 068 (10 214) 62 854
834 351 (39 157) 795 194
Capital- Brands Trade- Distri- Net
ised R`000 marks bution book
software R`000 channels value
R`000 R`000 R`000
Movement of
intangible assets
2009
Opening balance 3 132 714 032 56 830 21 200 795 194
Additions 11 763 - 10 216 - 21 979
Other movements/
reclassifications 263 - - - 263
15 158 714 032 67 046 21 200 817 436
Disposals (4) - - - (4)
Amortisation (2 692) (14 006) (2 395) (3 492) (22 585)
Net balance at
30 September 2009 12 462 700 026 64 651 17 708 794 847
Capital- Brands Trade- Distri- Net
ised R`000 marks bution book
software R`000 channels value
R`000 R`000 R`000
6 Intangible assets
continued
2008
Movement of
intangible assets
Balance acquired
at corporatisation 4 740 686 100 10 000 66 631 767 471
Additions 805 - 47 222 - 48 027
5 545 686 100 57 222 66 631 815 498
Amortisation (2 413) (13 722) (392) (3 777) (20 304)
Net balance at 30
September 2008
as previously 3 132 672 378 56 830 62 854 795 194
stated
Reclassification 41 654 (41 654) -
Adjusted balance
at
30 September 2008 3 132 714 032 56 830 21 200 795 194
Intangible assets were acquired at corporatisation as well as during the
year.
Capitalised software has a finite life of two years and is amortised on a
straight-line basis.
Brands consist of the various trade names the group is supplying consumers
and commercial enterprises and include the following: Plascon, Plascon
Professional, Crown, Polycell, Midas and Midas Earthcote. Brands are
amortised over 50 years. Brands have a remaining useful life of 48 years
(2008: 49 years).
Trademarks are amortised over 20 years. At 30 September 2009, significant
trademarks include Napier and Weathermaster.
Distribution channels have been in place for a number of years prior to the
corporatisation and is maintained to attract and keep a loyal customer base.
Distribution channels are amortised over periods between 10 - 15 years.
There has been a reclassification between distribution channels and brands as
a result of the Hamilton Brands and Midas Earthcote brands being incorrectly
included under distribution channels in 2008. This is purely a disclosure
issue and has no financial impact.
Audited Audited
2009 2008
R`000 R`000
7 Investment in associates
Investment
Cost of investment 138 278 138 278
Share of associates reserves 43 335 54 731
Beginning of year 54 731 38 587
Movement in retained earnings for
the year:
Profit for the year 8 566 22 359
Dividends paid (19 962) (6 215)
Carrying value excluding amounts 181 613 193 009
owing
Carrying value at 30 September 181 613 193 009
Carrying value by category
Unlisted associates - shares at 181 613 193 009
carrying value
Valuation of shares
Directors` valuation of unlisted 199 851 212 980
associate companies
Aggregate of group associate
companies net assets, revenue and
profit
Property, plant and equipment and 113 879 124 567
other non current assets
Current assets 288 476 466 585
Long term liabilities (12 687) (1 349)
Current liabilities (57 402) (130 394)
Revenue 668 766 777 285
Profit after taxation 28 148 60 212
*2008 Aggregate of group associate companies net assets,
revenue and profit has been grossed up to 100% in terms of
IAS 28 requirements.
Audited Audited
2009 2008
R`000 R`000
8 Commitments
Capital expenditure commitments to
be incurred:
Contracted 25 628 51 913
Approved but not yet contracted 7 304 24 503
32 932 76 416
Commitments will be spent substantially during 2010.
Capital expenditure will be financed by funds generated by
the business, existing cash resources and borrowing
facilities available to the group.
Long term Medium Short 2009
term term
> 5 years 2 - 5 <1 year Total
years
R`000 R`000 R`000 R`000
2009
Lease commitments:
Operating lease
commitments
Land and buildings 50 13 680 10 183 23 913
Motor vehicles - 303 691 994
Other - 2 841 2 687 5 528
50 16 824 13 561 30 435
2008
Lease commitments:
Operating lease
commitments
Land and buildings 93 7 860 6 128 14 081
Land and buildings 9 384 2 046 11 430
correction*
Motor vehicles - 1 049 816 1 865
Other - 3 872 2 528 6 400
Other correction* - 396 216 612
93 22 561 11 734 34 388
*A correction of R12 042 has been processed covering all
the lease terms as a result of a consolidation error in the
operating lease commitments as stated in the September 2008
financial report.
Audited Audited
2009 2008
R`000 R`000
9 Earnings per share
9.1 Fully converted weighted average number
of shares
Weighted average number of ordinary 203 872 201 136
shares
Fully converted weighted average number 203 872 201 136
of shares
9.2 Earnings
Profit for the year from continued
operations attributable to equity
holders of Freeworld Coatings Limited 142 055 211 979
Total earnings 142 055 211 979
Earnings per share (cents) 70 105
Basic
Weighted average number of ordinary 203 872 201 136
shares
Earnings per share (cents) 70 105
Diluted
Weighted average number of ordinary 203 872 201 136
shares
Earnings per share (cents) 70 105
9.3 Headline earnings per share
Profit for the year from continued
operations attributable to
Freeworld Coatings Limited shareholders 142 055 211 979
Adjusted for the following
- Share of profit on sale of (4 000) -
associate`s assets
- Impairment of investments - 83
- Impairment of property, plant and 222 -
equipment
- Loss on disposal of plant and 465 1 204
equipment and intangible assets
- Other 7 -
Tax effect of above 926 (360)
Headline earnings 139 675 212 906
Weighted average number of shares in 203 872 201 136
issue for the year
Headline earnings per share - basic 69 106
(cents)
Headline earnings per share - diluted 69 106
(cents)
Audited Audited
2009 2008
R`000 R`000
10 Contingent liabilities
Guarantees to third parties 11 536 6 255
Freeworld Coatings Limited has bank guarantees totalling
R5,5 million with Nedbank. (R4 million guarantee for the
JBCC nominated principle building and various other small
guarantees relating to SARS Customs Departments, Landlords
and Suppliers).
Freeworld Plascon Namibia (Pty) Limited has agreed to
provide surety of R2 million to FNB?Namibia for overdraft
facilities with a cession over the debtors` book.
Barloworld Plascon Swaziland (Pty) Limited has a bank
guarantee in place for Customs and Excise duties for
R25 000.
Freeworld Coatings Limited guarantees its 20% portion of
the Valspar corporation bank overdraft. This totals
R4 million.
In terms of the Unbundling Agreement, Freeworld Coatings
Limited has guaranteed the first A$5 million of any
environmental claim made on Barloworld Limited by the
purchaser of the Australian business for a maximum period
of 8 years. An environmental insurance policy is in place
in this regards.
Freeworld Coatings Limited
16 November 2009
The registered office of Freeworld Coatings Limited
Balvenie Building, Kildrummy Office Park,
Umhlanga Drive, Paulshof, 2056
Postal address:
Postnet 263, Private Suite X85, Bryanston, 2021
www.freeworldcoatings.com
Date: 17/11/2009 07:36:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
| Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information. | |||||||||||||
| Other Profile Group sites: FundsData Online (unit trust data) | Profile Group corporate site | |||||||||||||
| [ Terms of Use | Privacy Policy | PAIA manual | FAQs/Help | Site Map | © Copyright Reserved 2026 ] | |||||||||||||
|
|||||||||||||
