| Tue 16 Feb 2010, 16:39 | | CAT / CATP - Caxton & CTP Limited - Unaudited Results For The Six Months Ended |
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CAT CATP
CAT
CAT / CATP - Caxton & CTP Limited - Unaudited Results For The Six Months Ended
31 December 2009
Caxton & CTP Limited
Publishers and Printers
Incorporated in the Republic of South Africa
Registration number 1947/026616/06
Share code: CAT ISIN code: ZAE000043345
Preference share code: CATP ISIN code: ZAE000043352
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2009
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
6 months to 6 months to for the year
31 December 31 December to 30 June
R`000 2009 2008 2009
Turnover 2 186 070 2 164 454 4 028 134
Other operating income 34 541 33 402 44 076
2 220 611 2 197 856 4 072 210
Changes in inventories of (14 471) 14 939 (17 739)
finished goods and work in
progress
Raw materials and 838 507 776 233 1 543 208
consumables used
Staff costs 402 131 404 251 804 996
Other operating expenses 655 469 653 994 1 170 223
Total operating expenses 1 881 636 1 849 417 3 500 687
PROFIT FROM OPERATING 338 976 348 439 571 522
ACTIVITIES
Depreciation 85 405 79 549 161 439
PROFIT FROM OPERATING 253 571 268 890 410 083
ACTIVITIES AFTER
DEPRECIATION
Impairment of plant 1 391 - 41 772
NET PROFIT FROM OPERATING 252 180 268 890 368 311
ACTIVITIES
Net finance income 70 965 56 434 107 117
- dividends 23 356 39 500 62 816
- interest 50 654 18 834 50 524
- net loss on realisation (3 045) (1 900) (6 223)
of investments
Income from associates 42 330 11 220 19 799
PROFIT BEFORE TAXATION 365 475 336 544 495 227
Income tax expense 108 164 88 585 119 142
PROFIT FOR THE PERIOD FROM 257 311 247 959 376 085
CONTINUING OPERATIONS
Profit from discontinued - 38 038 70 730
operations (Maskew Miller
Longman)
PROFIT FOR THE PERIOD 257 311 285 997 446 815
Surplus on disposal of - - 477 081
Maskew Miller Longman
PROFIT FOR THE PERIOD 257 311 285 997 923 896
Other comprehensive
income:
Foreign currency - 3 044 3 414
translation reserve
Fair value adjustment - (8 948) (4 222) 245 902
listed investments
Fair value adjustment - (1 178) 6 619 10 007
preference shares and
instruments
Other comprehensive (10 126) 5 441 259 323
income for the period
TOTAL COMPREHENSIVE 247 185 291 438 1 183 219
INCOME FOR THE PERIOD
PROFIT ATTRIBUTABLE TO:
Non-controlling interests 4 015 4 924 8 671
Owners of the Company 253 296 281 073 915 225
257 311 285 997 923 896
TOTAL COMPREHENSIVE INCOME
ATTRIBUTABLE TO:
Non-controlling interests 4 015 4 924 8 671
Owners of the Company 243 170 286 514 1 174 548
247 185 291 438 1 183 219
Earnings per share (cents) 54,4 60,3 196,4
Headline earnings per 55,0 60,6 102,6
share (cents)
Preference dividend paid 178 238 178
(cents)
Shares in issue 495 639 628 495 639 628 495 639 628
Treasury shares (29 644 397) (29 644 397) (29 644 397)
Earnings per share based 465 995 231 465 995 231 465 995 231
on
Reconciliation of headline
earnings:
Earnings attributable to 253 296 281 073 915 225
owners of company
Adjusted for non-trading 2 954 1 428 (437 015)
items
Net loss/(surplus) on 3 045 1 900 (516 248)
realisation of investments
Net impairment in value of 1 391 - 41 772
property and plant
Net (profit)/loss on (926) (286) 6 442
disposal of assets
Tax effect on above (557) (186) 31 019
adjustments
Headline earnings 256 249 282 501 478 210
Abridged % % %
segmental
analysis
Revenue:
Publishing, 2 086 195 96 2 085 060 96 3 921 207 97
printing and
distribution
Other 442 937 20 500 977 23 826 224 21
Inter-group (343 062) (16) (421 583) (19) (719 297) (18)
sales
2 186 070 100 2 164 454 100 4 028 134 100
Operating
Income:
Publishing, 192 538 76 203 912 76 303 687 82
printing and
distribution
Other 59 642 24 64 978 24 64 624 18
252 180 100 268 890 100 368 311 100
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Unaudited Unaudited Audited
31 December 31 December 30 June
R`000 2009 2008 2009
ASSETS
NON-CURRENT ASSETS
PROPERTY, PLANT AND 2 071 605 2 109 257 2 064 458
EQUIPMENT
ASSOCIATED COMPANIES 135 662 114 872 108 555
OTHER INVESTMENTS AT FAIR 754 236 468 621 755 821
VALUE
- LISTED 53 221 54 550 54 812
- UNLISTED 701 015 414 071 701 009
NON-CURRENT ASSETS HELD FOR - 231 058 -
SALE
CURRENT ASSETS
INVENTORIES 535 955 664 500 543 509
ACCOUNTS RECEIVABLE 894 309 898 983 709 066
TAXATION - 1 702 19 234
CASH 1 420 306 251 314 1 437 765
BANK PREFERENCE SHARES AND 85 532 236 143 94 684
OTHER INSTRUMENTS AT FAIR
VALUE - LISTED
TOTAL ASSETS 5 897 606 4 976 450 5 733 092
EQUITY AND LIABILITIES
EQUITY 4 854 333 3 909 490 4 795 841
EQUITY ATTRIBUTABLE TO 4 828 135 3 884 940 4 773 658
OWNERS OF COMPANY
PREFERENCE SHAREHOLDERS 100 100 100
NON-CONTROLLING INTEREST 26 098 24 450 22 083
NON-CURRENT LIABILITIES
DEFERRED TAXATION 346 506 267 293 326 080
NON-CURRENT LIABILITIES - 153 398 -
HELD FOR SALE
CURRENT LIABILITIES
TRADE AND OTHER PAYABLES 564 890 563 306 492 877
PROVISIONS 118 776 72 144 118 294
TAXATION 13 101 10 819 -
TOTAL EQUITY AND 5 897 606 4 976 450 5 733 092
LIABILITIES
Net asset value per share 1 042 839 1 029
(cents)
Directors` valuation of 836 677 528 943 809 564
unlisted investments and
associated companies
Capital expenditure 94 247 238 872 347 835
Capital expenditure 85 000 40 000 40 000
committed
STATEMENTS OF CHANGES IN EQUITY
Unaudited Unaudited Audited
31 December 31 December 30 June
R`000 2009 2008 2009
Balance at beginning of the 4 795 841 3 930 666 3 930 666
year
Total comprehensive income 247 185 291 438 1 183 219
for the period
Minority acquired - - (1 670)
Treasury shares - (66 526) (66 526)
Dividends paid - ordinary (187 042) (245 421) (245 581)
and preference shareholders
Dividends paid - minority (1 651) (667) (4 267)
shareholders
Balance at end of the 4 854 333 3 909 490 4 795 841
period
CONSOLIDATED CASH FLOW STATEMENTS
Unaudited Unaudited Audited
6 months to 6 months to for the year
31 December 31 December to 30 June
R`000 2009 2008 2009
CASH FLOW FROM OPERATING 74 105 (187 688) 369 952
ACTIVITIES
Cash generated by 338 806 401 317 685 645
operations
Changes in working (105 948) (260 495) 20 358
capital
Cash generated by 232 858 140 822 706 003
operating activities
Less: Taxation paid (44 070) (140 756) (199 543)
Net interest received 50 654 18 834 50 524
Dividends received 23 356 39 500 62 816
Net cash inflow from 262 798 58 400 619 800
operating activities
Dividends paid (188 693) (246 088) (249 848)
CASH FLOW FROM INVESTING (101 090) (259 663) 274 165
ACTIVITIES
Property, plant and
equipment
- additions to expand (94 247) (238 872) (347 835)
operations
- proceeds from 941 651 24 022
disposals
(93 306) (238 221) (323 813)
Investments
- (acquisitions of (7 784) (21 442) 597 978
investments)/proceeds
from disposals
CASH FLOWS FROM FINANCING - (66 526) (66 526)
ACTIVITIES
Own shares acquired - (66 526) (66 526)
Net (decrease)/increase (26 985) (513 877) 577 591
in cash and cash
equivalents
Cash and cash equivalents 1 541 702 1 062 508 964 111
at the beginning of the
year
Continuing operations 1 541 702 1 062 508 1 062 508
Proceeds on disposal of - - (98 397)
discontinued operations
Cash and cash equivalents 1 514 717 548 631 1 541 702
at the end of the period
Fair value adjustment of (8 879) (19 803) (9 253)
preference shares and
other investments
Fair value of cash and 1 505 838 528 828 1 532 449
cash equivalents at the
end of the period
Note:
Cash and cash equivalents - 41 371 98 398
of discontinued
operations (held for
sale)
Cash 1 420 306 251 314 1 339 367
Preference shares and 85 532 236 143 94 684
other investments at fair
value
Fair value of cash and 1 505 838 528 828 1 532 449
cash equivalents at the
end of the period
COMMENTARY
The accounting policies adopted in the preparation of the financial statements
for the six months under review are in accordance with the requirements of
International Financial Reporting Standards (IFRS), which are consistent with
the prior period and IAS 34 on interim reporting.
Comments
Recessionary trading conditions have prevailed over the last eighteen months and
the company`s revenues and accordingly its profitability have been affected.
During 2009 there was an estimated 10% decline in worldwide advertising
revenues, with print advertising having been reported to have declined in excess
of 20% both in newspapers and in magazines. Advertising revenues in South Africa
have shown a very similar pattern particularly insofar as newspapers are
concerned with daily and weekly newspapers bearing the brunt of the decline.
Furthermore newspapers have also been affected by the ongoing migration to the
Internet where content has, up to now, been provided for at no charge by the
majority of publishers.
Against this background it is gratifying to report that the company has produced
what it considers to be reasonable results.
Consumers are still coming to grips with high debt levels and the lack of jobs
remains a major problem. Retail and wholesale trade figures recently published
for the past few months confirm the fact that consumers are acting prudently and
are loath to acquire new debt.
Earnings
Whilst profits are down on the corresponding period they are only marginally
lower which given the prevailing economic circumstances is considered to be a
creditable achievement. The financial position of the company remains extremely
strong with cash and cash equivalents at 31 December 2009 having amounted to R1
505,8 million. This is substantially better than the cash position at the end of
December 2008 of R528,8 million and includes the proceeds of the sale of the
shares in Maskew Miller Longman (MML) which transaction has previously been
reported upon.
Turnover at R2 164,4 million in the previous period increased slightly to R2
186,1 million for the six months under review. Profit from operating activities
reduced from R348,4 million to R338,9 million.
Depreciation amounted to R85,4 million which compares to R79,5 million in the
comparable six months, and impairment during the period was R1,4 million.
Net Finance Income increased from R56,4 million to R71,0 million resulting from
the interest earned on the proceeds of the sale of the shares in MML. It must
also be borne in mind that in comparing the two periods, interest rates have
been adjusted downwards by the Reserve Bank by some 5%, and had rates not
fallen, finance income would have been higher.
Associated companies earnings have risen from R11,2 million to R42,3 million.
This large increase is due to the inclusion for the first time of the company`s
shareholding in Pearson Southern Africa, the company that was formed to hold
Pearsons` Southern African educational assets and in which company 15% of the
equity is held, as an associate.
Pearson, traded well during the period and other associates performed in line
with budgets.
Profit before taxation was R365,5 million and taxation at a higher rate of 29,6%
compared to 26,3%, due to a larger liability for Secondary Tax on Companies,
absorbed R108,2 million, resulting in profit after taxation amounting to R257,3
million. However to the comparative figure of R248,0 million in the prior period
has to be added "Profit from Discontinued Operations (held for sale)" of R38,0
million, which related to the profits of MML after tax for the six months to 31
December 2008, bringing total profit for that period to R286,0 million which was
R28,7 million higher than that being reported on.
Minority Shareholders absorbed R4,0 million leaving earnings attributable to
ordinary shareholders of R253,2 million.
No purchases of shares in the company occurred during the period and therefore
Treasury Shares remain unchanged at 29,644,397 shares.
Earnings per share amounted to 54,4 cents compared with 60,3 cents, a decline of
9,9% and Headline Earnings fell by 9,3% from 60,6 cents per share to 55,0 cents
per share.
Capital expenditure
No major capital projects were embarked upon during the six months. Capital
expenditure on the replacement of a number of presses in the printing and
packaging divisions, amounted to R94,2 million.
Dividends
The company`s policy of declaring only a final dividend has been maintained and
no interim dividend has been declared.
DIVISIONAL PERFORMANCE
PUBLISHING, PRINTING AND DISTRIBUTION
Newspaper Publishing and Printing
The situation that prevailed at the close of the previous financial year has not
changed although there are a number of indications which point to a level of
stability having been reached which by all accounts should at least be
maintained.
Over the past six months advertising revenues have continued to decrease in
every category with varying degrees. Papers have unfortunately suffered a
similar fate but less so in the country areas in which the newspaper division
operates.
Fortunately and in line with a pattern that has been evident over a number of
years, free community and regional newspapers have not been as badly affected as
the paid daily and weekly newspapers.
Certain categories of advertising have however fallen disproportionately and
these have been in the Property, Motoring and Recruitment sectors.
With the exception of a number of country towns, even the community papers have
experienced a similar pattern which has resulted in their profits being somewhat
lower.
This in turn has meant that with fewer copies having been printed and less pages
per publication having been published, the newspaper factory has been affected
by a fall-off in production. This has naturally, had a concomitant effect on
profits which are down on the previous period, but the new press commissioned
towards the end of the previous financial year has vastly improved efficiency.
The opportunity is being taken to modernise and refit a number of presses in
Industria and capital expenditure is expected to increase as a result thereof.
As part of this plan an existing press is to be reconfigured, refurbished and
installed in the Cape Town newspaper factory and should be operative in the
second half of the year. This will provide new capacity which will offer
potential customers the benefit of improved efficiencies and economies.
The free community monthly glossy magazine "Get It" continues to attract new
readers and advertisers and the consolidation of a number of titles has resulted
in improved viability, particularly towards the latter half of the period.
The daily and paid for newspaper, "The Citizen", has in spite of falling
circulations in line with other publishers, traded satisfactorily above budget
over the period. A number of options to improve its positioning and long term
profitability are presently being implemented.
It is clear that digital platforms to support newspaper publishing are becoming
an essential element and progress to achieve this objective continues to take
place with a number of new innovations being planned.
Magazine Publishing and Distribution
As is evident by the poor retail sales figures, consumer confidence has not
returned and this is evident in the circulation trends of magazines which
continue to track at a lower level. The market remains highly competitive but
this division has done well to maintain its positioning and market share and
results are very much in line with the previous period.
No changes in the operations of RNA, the highly efficient distribution facility
of the company, have taken place which continues to perform at a satisfactory
level.
Additional lines have been added to the range of products being distributed and
costs are closely monitored which has resulted in a good performance.
Commercial Printing
Web, Gravure and Book Printing
Whilst commercial printing remains highly competitive the benefits from the
major capital programme over the past few years are showing in the improved
level of efficiency in both the web offset and gravure printing factories.
Expenses, in spite of abnormal cost increases in areas such as electricity, have
been well controlled. With the improvement in the Rand raw material costs have
been lower which reduction has been passed onto customers.
Production volumes have decreased and no major change in volumes is anticipated
until the economy starts to recover which means that capacity utilisation is
low.
A decision was taken to combine the operations of the book printing facility and
the web offset factory in Parow in the Cape into one consolidated operation as
both divisions shared common premises. This rationalisation will result in a
lower overall cost base and will lead to improved efficiencies and versatility
of production through a wide array of equipment. This division now trades as
"CTP Printers - Cape Town".
OTHER
Packaging
Considerable progress has been made in the various operating components making
up this division which produces a number of niche packaging products. New
equipment which has recently been commissioned has made a major difference to
production efficiencies and allows for "value added" products to be produced. A
further press for the flexible packaging division in the Western Cape has been
purchased, which has upgraded technical components and high capacity, and will
be operative by the close of the financial year.
Notwithstanding the economic recession and difficult trading conditions, new
customers have been gained and market share increased. This has resulted in a
good result in excess of profits earned last period.
Stationery
Volumes in most factories have been maintained but due to aggressive
competition, margins have been eroded. The situation regarding provincial
tenders continues to be an area of concern and it is not possible to report any
improvement. Results are therefore somewhat down.
Directors
It is with regret that we have to announce Dr van Zyl Slabbert has stepped down
as a director and chairman of the company. Dr Slabbert has played an important
and pivotal role in the development of the company during the period that he has
been associated with us and we take this opportunity to acknowledge this
contribution and to wish him well - his immense knowledge and humour will be
sadly missed.
In view of this resignation the board of directors have resolved to appoint Mr
Paul Jenkins, a director of the company for many years and chairman of the Audit
Committee, to the position of chairman with immediate effect. We wish him
success in this new position.
Prospects
There appears to be an increasing number of pointers, both internationally and
locally, that would seem to indicate that the severity of the downturn is
reducing and that a number of countries are coming out of recession. South
Africa followed the world later into recession which could account for why it is
taking longer for economic conditions to improve. It is however difficult to
look forward with any certainty and a number of worrisome features continue to
exist even though Soccer World Cup "Fever" might have an influence on the
economy going forward.
It is therefore anticipated that the current lower level of profitability will
continue for the balance of the financial year with profitability only improving
when economic conditions return to normal.
P M Jenkins* (Chairman)
T D Moolman (Chief Executive Officer)
G M Utian (Managing Director)
A C G Molusi*
F T Gatefield*
P G Greyling
T J W Holden
P Vallet*
A N Nemukula*
(*Non-executive directors)
Registered office:
28 Wright Street, Industria West, Johannesburg, 2093
Sponsor
Arcay Moela Sponsors
16 February 2010
Date: 16/02/2010 16:39:02 Produced by the JSE SENS Department.
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