| Thu 18 Mar 2010, 10:43 | | MTA - Metair - Abridged audited results for the year ended 31 December 2009 |
|
MTA
MTA
MTA - Metair - Abridged audited results for the year ended 31 December 2009
METAIR INVESTMENTS LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
("Metair" or "the group")
(Reg No. 1948/031013/06)
Share code: MTA ISIN code: ZAE000090692
ABRIDGED AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2009
ABRIDGED GROUP INCOME STATEMENTS
31 December 31 December
2009 2008
R`000 R`000
Revenue 3 342 053 4 180 398
Cost of sales (2 807 100) (3 496 203)
Gross profit 534 953 684 195
Other operating income 109 711 45 139
Impairment of assets (47 082) (122 590)
Distribution, administrative and
other expenses (455 665) (512 405)
Operating profit 141 917 94 339
Interest income 13 243 14 767
Interest expense (37 360) (51 385)
Share of results of associates 419 17 056
Profit before tax 118 219 74 777
Taxation (55 023) (71 859)
Profit for the year 63 196 2 918
Attributable to:
Equity holders of the company 52 210 (13 080)
Minority interest 10 986 15 998
63 196 2 918
Depreciation and amortisation (108 468) (109 557)
Basic earnings/(loss) per share (cents) 37 (9)
Headline earnings per share (cents) 67 74
Dividend per share (cents)
in respect of 2007 40
Number of shares in issue (`000) 152 532 152 532
Calculation of headline (loss)/earnings
per share (R`000)
Net profit/(loss) attributable to
ordinary shareholders 52 210 (13 080)
Impairment charges 47 082 122 590
Tax effect (5 620) (2 051)
Impairment charge attributable to
minority shareholders (3 628)
Loss/(profit) on disposal of property,
plant & equipment 5 342 (2 329)
Headline earnings 95 386 105 130
Weighted average number of shares
in issue (`000) 142 352 141 707
Diluted earnings per share
No diluted earnings per share is reflected for 2008 and 2009. Share options in
terms of the Metair Share Trust are anti-dilutive.
ABRIDGED GROUP STATEMENTS OF CASH FLOWS
31 December 31 December
2009 2008
R`000 R`000
Operating activities
Profit before tax 118 219 74 777
Non-cash items 149 394 251 762
Working capital changes 145 642 42 267
Cash generated from operations 413 255 368 806
Finance charges (37 360) (51 385)
Taxation paid (70 663) (96 970)
Dividends paid (8 441) (65 089)
Dividend income from associate 20 695
Net cash inflow from operating activities 317 486 155 362
Investing activities
Investment income 13 243 14 767
Net cash used in other investing activities (94 043) (265 742)
Net cash outflow from investing activities (80 800) (250 975)
Net cash (outflow)/inflow from financing
activities (22 493) 72 642
Net increase/(decrease) in cash
and cash equivalents 214 193 (22 971)
Cash and cash equivalents at
beginning of year 18 350 41 321
Cash and cash equivalents at end of year 232 543 18 350
ABRIDGED GROUP STATEMENT
OF COMPREHENSIVE INCOME
Profit for the year 63 196 2 918
Other comprehensive income:
Actuarial gains/(losses) recognised
directly in equity
Gross 21 118 (30 308)
Deferred tax (5 910) 8 486
Net other comprehensive income 15 208 (21 822)
Total comprehensive income for the year 78 404 (18 904)
Attributable to:
Equity holders of the company 66 932 (32 566)
Minority interest 11 472 13 662
78 404 (18 904)
NOTES TO THE CONSOLIDATED ABRIDGED FINANCIAL STATEMENTS
Accounting policies
The condensed abridged financial information has been prepared in accordance
with the recognition and measurement criteria of all applicable statements and
interpretations of International Financial Reporting Standards ("IFRS") and is
presented in terms of the disclosure requirements set out in IAS34 - Interim
Financial Reporting. The accounting policies applied to the condensed abridged
financial information are consistent with those as set out in the annual
financial statements for the year ended 31 December 2008.
Contingencies
The bank and other guarantees given by the group to third parties amounted to
R6,6 million as at 31 December 2009 (R5,4 million as at 31 December 2008).
Financing provided to The Metair Share Incentive Trust was guaranteed by Metair
at R75 million. This liability has been included in the consolidated balance
sheet.
Borrowings 31 December 31 December
2009 2008
R`000 R`000
Current 97 298 20 817
Overdrafts 49 662 104 975
Non-current 54 217 178 434
201 177 304 226
Cash (282 205) (123 325)
Total (81 028) 180 901
The movement in the borrowings
can be analysed as follows:
Year ended December
Opening amount 180 901 85 805
Repayments (263 606) (22 296)
Amounts raised 1 677 117 392
Closing amount (81 028) 180 901
Fair value adjustments on
financial instruments 31 December 2009
Assets Liabilities Assets
Forward exchange contracts -
Fair value hedges 160 9,835 274
Total 160 9,835 274
Annual General Meeting
The annual report will be mailed to shareholders by 31 March 2010 along with the
notice of Annual General Meeting. The Annual General Meeting will be held on 5
May 2010 at 14:00 at Metair Investments Limited, 10 Anerley Road, Parktown,
Johannesburg.
Declaration of Ordinary Dividend No 59
Notice is hereby given that a final ordinary dividend of 15 cents per ordinary
share has been declared in respect of the year ended 31 December 2009. The last
date to trade cum dividend will be Friday, 9 April 2010. Trading will commence
ex dividend from Monday, 12 April 2010 and the record date will be Friday, 16
April 2010. The date of payment will be Monday, 19 April 2010.
Share certificates may not be dematerialised or rematerialised between Monday,
12 April 2010, and Friday, 16 April 2010, both days inclusive.
Auditors` report
The abridged results of the group as set out above have been audited by the
group`s auditors PricewaterhouseCoopers Inc. Their report is available for
inspection at Metair`s registered office (address details above).
ABRIDGED GROUP BALANCE SHEETS
31 December 31 December
2009 2008
R`000 R`000
ASSETS
Non-current asset
Property, plant and equipment 657 892 714 001
Intangible assets 29 514 40 254
Investment in associates 20 147 40 423
Defined benefit asset 19 962
Deferred taxation 34 970 47 930
762 485 842 608
Current assets
Inventories 518 091 769 013
Trade and other receivables 428 076 398 181
Derivative financial assets 160 274
Taxation 9 700
Cash and cash equivalents 282 205 123 325
1 238 232 1 290 793
Total assets 2 000 717 2 133 401
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 42 876 42 876
Treasury shares (124 289) (124 532)
Share-based payment reserve 3 389 3 389
Non-distributable reserves 16 309 36 585
Retained earnings 1 148 964 1 061 756
Ordinary shareholders` equity 1 087 249 1 020 074
Minority interest 96 772 93 590
Total equity 1 184 021 1 113 664
Non-current liabilities
Interest-bearing borrowings 54 217 78 434
Cumulative redeemable preference shares in
respect of The Metair Share Incentive Trust 100 000
Post-employment medical benefits 19 246 17 810
Defined benefit liability 11 085
Deferred taxation 83 778 91 216
157 241 298 545
Current liabilities
Trade and other payables 441 784 538 279
Borrowings 97 298 20 817
Taxation 5 552
Provisions for liabilities and charges 60 876 51 418
Dividends payable 151
Derivative financial liabilities 9 835
Bank overdrafts 49 662 104 975
659 455 721 192
Total liabilities 816 696 1 019 737
Total equity and liabilities 2 000 717 2 133 401
Net asset value per share (cents)
attributable to ordinary shareholders 776 729
Capital expenditure 116 156 179 619
Capital commitments
- contracted 28 398 62 283
- authorised but not contracted 24 986 49 683
ABRIDGED GROUP STATEMENT OF CHANGES IN EQUITY
Share capital Share-based Non-distri-
and Treasury payment butable
R`000 premium shares reserve reserve
Year ended
31 December 2009
Balance at
1 January 2009 42 876 (124 532) 3 389 36 585
Net profit for the year
Other comprehensive
income: Actuarial gains
Total comprehensive
income for the year
Net movement in
treasury shares 243
Transfer of associate
profit and dividend (20 276)
Balance at
31 December 2009 42 876 (124 289) 3 389 16 309
Year ended
31 December 2008
Balance at
1 January 2008 42 876 (131 813) 3 074 25 139
Net (loss)/profit
for the year
Other comprehensive
income: Actuarial losses
Total comprehensive
income for the year
Employee share
option scheme:
- Value of services
provided 315
Net movement in
treasury shares 7 281
Transfer of associate
profit and dividend 11 446
Dividend
Balance at
31 December 2008 42 876 (124 532) 3 389 36 585
ABRIDGED GROUP STATEMENT OF CHANGES IN EQUITY
Attributable
to equity
Retained holders of Minority Total
R`000 earnings the company interest equity
Year ended
31 December 2009
Balance at 1 January 2009 1 061 756 1 020 074 93 5901 113 664
Net profit for the year 52 210 52 210 10 986 63 196
Other comprehensive income:
Actuarial gains 14 722 14 722 486 15 208
Total comprehensive income
for the year 66 932 66 932 11 472 78 404
Net movement in treasury shares 243 243
Transfer of associate profit
and dividend 20 276
Dividend (8 290) (8 290)
Balance at
31 December 2009 1 148 964 1 087 249 967 721 184 021
Year ended 31 December 2008
Balance at
1 January 1 161 561 1 100 837 89 295 1 190 132
Net (loss)/profit
for the year (13 080) (13 080) 15 998 2 918
Other comprehensive income:
Actuarial losses (19 486) (19 486) (2 336) (21 822)
Total comprehensive
income for the year (32 566) (32 566) 13 662 (18 904)
Employee share option scheme:
- Value of services provided 315 80 395
Net movement in treasury shares 7 281 281 281
Transfer of associate
profit and dividend (11 446)
Dividend (55 793) (55 793) (9 447) (65 240)
Balance at 31 December 1 061 756 1 020 074 93 590 1 113 664
ABRIDGED SEGMENTAL REVIEW
for the year ended 31 December 2009
Local Direct exports
Original After- Non- Original
equipment market auto equipment
Revenue 2 029 137 748 355 323 168 73 494
Loss)/profit before
interest and tax (59 438) 105 267 61 918 9 352
Net finance costs
Profit before tax
Included in the above:
- Depreciation and
amortisation
- Impairment charges
for the year ended
31 December 2008
Revenue 2 763 236 639 668 484 434 99 996
Profit/(loss) before
interest and tax 12 889 27 825 60 373 (8 762)
Net finance costs
Profit before tax
Included in the above:
- Depreciation and amortisation
- Impairment charges
* The reconciling items relate to head office companies.
ABRIDGED SEGMENTAL REVIEW
for the year ended 31 December 2009
Direct exports
After- Non- Recon-
Market auto ciling Total
Revenue 111 833 56 066 (3 342 053)
(Loss)/profit before
interest and tax 6 035 (297) 19 499 142 336
Net finance costs (24 117)
Profit before tax 118 219
Included in the above:
- Depreciation and
amortisation (108 468)
- Impairment charges (47 082)
for the year ended
31 December 2008
Revenue 141 031 52 033 4 180 398
Profit/(loss)
before interest and tax 18 730 5 243 (4 903) 111 395
Net finance costs (36 618)
Profit before tax 74 777
Included in the above:
- Depreciation and amortisation (109 557)
- Impairment charges (122 590)
* The reconciling items relate to head office companies.
MANAGING DIRECTOR`S REPORT
Review of operations
The period under review was particularly difficult as Metair came to grips with
the economic fallout brought on by the financial crisis of October 2008. The
substantial decline in demand for vehicles worldwide resulted in a more than 38%
decline in the export of vehicles from South Africa to 174 947. Total vehicles
produced in South Africa in 2009 declined to 354 158 from 471 030 in 2008, a
decline of 25%. Metair was particularly hard hit by the decline in production
from its largest customer Toyota South Africa. Actual production during 2009 by
Toyota was less than 50% of the planned level of 220 000 vehicles per annum.
During the year Metair closed down its Eastern Cape plastics business, Kimitar
(Pty) Ltd (Kimitar). Kimitar`s operations were discontinued in the middle of
December 2009. Kimitar`s losses and the cost of closure was R40 million. This
operation was negatively impacted by the decline in business in the Eastern
Cape, and the inability to adequately recover material price increases from
customers. Future turnover secured by Kimitar relating to a new model launch has
been transferred to other group subsidiaries.
Metair responded early in the financial year to the new economic reality by:
- Dramatically reducing its forecast of 2009 production volumes;
- Aggressively managing working capital using the revised volume forecast;
- Re-engineering the group`s subsidiaries to ensure that all subsidiaries were
at least cash flow-neutral on a sustainable basis on the lower forecast volumes;
and
- Consolidating businesses that were not viable.
Notwithstanding margin pressure in the original equipment (OE) segment, the
above actions resulted in the protection of gross margins in the aftermarket,
non-automotive and export segments.
Metair has emerged from the crisis as a lean organisation with a robust balance
sheet. The group is cash-generative and positioned to take advantage of the
upturn in economic conditions. Metair will continue to utilise its technology,
lean manufacturing expertise and distribution infrastructure to grow its
aftermarket and non-auto business. Value-accretive acquisitions that focus on
the aftermarket and non-auto sectors will be considered.
Over the past 18 months providers of capital to the automotive industry
significantly cut back on facilities. During the year Metair remained focused on
improved cash management, and is in a positive net cash position after taking
into account debt. The movement from net gearing of R181 million in December
2008 to net cash of R81m at December 2009 is a significant achievement in the
context of conditions prevailing in the automotive industry.
Results
Headline earnings per share for the full year were 67 cents compared to 74 cents
achieved in 2008, reflecting a 9% decrease. Earnings per share after impairments
were 37 cents compared to a loss of 9 cents in the previous period.
Turnover for the period declined by 20% to R3 342 million compared to R4 180
million in 2008. Gross margin declined to 16% from 16,4% in 2008.
Turnover in the OE sector declined by 27% to R2 029 million (R2 763 million in
2008). Margins in this sector were under severe pressure as volume throughput
was lost. This was compounded by worldwide spare capacity which enabled
customers to exert considerable pricing pressure on subsidiaries. A loss of R59
million was incurred in the OE sector.
Local aftermarket turnover increased by 17% to R748 million as the capital
investments incurred in 2008 and 2009 were put into production. Operating profit
in the aftermarket sector grew to R105 million as costs were kept under strict
control in order to take advantage of increased volumes. A pleasing operating
margin of 14% was achieved.
Non-automotive turnover declined to R323 million (33%), but operating profit was
maintained at R62 million as cost controls were put in place which resulted in
the operating margin improving from 12% to 19%.
Total direct exports amounted to R241million, a decline of 18%. Non-auto exports
were marginally up while OE and aftermarket exports declined. Operating profit
from this segment remained at R15 million.
Impairment of assets relating to property, plant and equipment and goodwill for
the OE sector was R47 million. The total amount impaired since the onset of the
downturn amounts to R170 million.
Included in other income was a bad debt recovery of R20 million and the gain on
the derecognition of a financial liability of R25 million as well as a
curtailment benefit on the Metair Defined Benefit Pension Fund of R9 million.
The tax rate for the year was 46,5% as assessed losses in certain loss making
subsidiaries were not recognised as deferred tax assets.
Prospects
Metair`s prospects are dependent upon OE production volumes, the rand exchange
rate and general economic growth.
The aftermarket and non-auto segments, which are dependent on general economic
growth, have planned for improved performances in 2010. The export market will
remain under pressure.
Metair`s current view is that 400 804 vehicles will be produced in South Africa
in 2010, an increase of 13%, compared to 2009. If these production volumes are
achieved and the group can maintain its gross margin percentage the group should
show meaningful growth during 2010.
A competitive exchange rate is important if the South African component industry
is to remain globally competitive.
Shareholders are advised that a conference call will be held on Thursday 25
March 2010. Details of the conference call will be sent via SENS and posted on
our website.
REGISTRARS
Computershare Investor Services (Pty) Limited
70 Marshall Street
JOHANNESBURG
2001
SPONSOR
Barnard Jacobs Mellet Corporate Finance (Pty) Limited
Signed on behalf of the Board
O M E Pooe C T Loock
Chairman Managing Director
JOHANNESBURG, 17 March 2010
EXECUTIVE DIRECTORS: CT Loock (Managing); BM Jacobs (Finance)
NON-EXECUTIVE DIRECTORS: OME Pooe (Chairman); A Joffe; B Molotlegi
INDEPENDENT NON-EXECUTIVE DIRECTORS: RS Broadley; L Soanes*; A Galiel; JG Best
COMPANY SECRETARY: SM Vermaak *British
Date: 18/03/2010 10:43:14 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.
