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BAW BAWP
BAW
BAW/BAWP - Barloworld Limited - Results for the six month period to 31 March
2010
Barloworld Limited
(Registration number 1918/000095/06)
JSE codes: BAW and BAWP
ISIN codes: ZAE000026639 and ZAE000026647
Results for the six month period to 31 March 2010
Salient features
Revenue down 16% to R20.2 billion
EBITDA decreased 27% to R1 517 million
Cash flow from operations R743 million (1H`09: R291 million)
Strong trading performance from Automotive
Mining order books starting to rebuild in Equipment southern Africa
R557 million reduction in net borrowings
HEPS from continuing operations 40.7 cents (1H`09:199.6 cents)
Interim dividend of 20 cents per share
Clive Thomson, CEO of Barloworld, said:
"The past six months have been challenging due to difficult trading conditions
for most of our businesses. However, we have maintained tight control over our
expense base and cash generation has remained strong. A number of positive
signs are emerging in the global and southern African economies and we are well
placed to benefit from these trends. While we expect some improvement in the
second half of the year, a number of significant new opportunities will only
positively impact in our 2011 financial year."
10 May 2010
Chairman and Chief Executive`s Report
Operating overview
The trading environment for the first six months in most of our businesses has
been difficult. Revenue from continuing operations decreased by 16% to R20.2
billion, while EBITDA declined 27% to
R1 517 million. Headline earnings per share from continuing operations was 40.7
cents compared to 199.6 cents in the prior period. An interim dividend of 20
cents per share was declared.
Equipment southern Africa
Equipment southern Africa generated revenue of R3.7 billion which was R2.4
billion (39%) below the record performance in the prior period. In South
Africa, some decline in activity occurred in mining but to a greater extent in
the construction segment. The slowdown in Angola has continued with revenue and
operating profit substantially down on the prior period as a consequence of
infrastructure project deferrals. This trend should reverse once the Angolan
government releases payments to large contractors as underlying economic
fundamentals and strong oil revenues are positive for future growth.
The division generated strong cash flows largely due to a working capital
reduction of R839 million in the first six months as inventories declined.
Further cash is expected to be released in the second half, however we have now
started to increase our orders on Caterpillar as factory lead times,
particularly for mining equipment, have increased materially as global demand
picks up.
Equipment Europe
The Equipment Iberia business extended its market leadership position in a
challenging economic environment. The continuing weakness of the Spanish
economy, together with the austerity measures of the Spanish government to
address the worsening fiscal deficit, has meant severe cuts in government
spending. The knock on effect of this on the public works segment resulted in a
further decline in activity levels. Revenue in euro terms dropped by 33% and in
rand terms by 42% to R2 billion. Iberia generated an operating loss of R74
million which included additional redundancy costs of R29 million (Euro2.7
million) as part of re-aligning the cost base with reduced activity levels.
Despite the tough trading conditions Iberia managed to generate positive cash
flows by further reducing working capital by R234 million in the period.
Equipment Siberia
In Siberia revenue in dollar terms was 26% below the prior period while
operating profit was 33% down. Mining activity was weaker but the after sales
business showed a strong improvement in the period.
Automotive
The automotive division delivered a good performance generating revenue of R10.5
billion which was R1 249 million (13%) above the previous period. Operating
profit of R394 million was 23% up on the R320 million in 2009.
Revenue from car rental southern Africa was 4% up on the prior period. Rental
days were in line with the prior period although there was a 1% decline in rate
per day during the first half. While the fleet size has recently been increased
in anticipation of the 2010 FIFA World Cup, we were able to maintain the
utilisation rate in line with the high levels achieved in 2009. Operating
profit was R171 million which was 10% above the prior period.
The car rental business in Scandinavia, which is disclosed as discontinued,
generated revenue 9% below the prior period but reduced its loss after tax by
37% due to operating efficiencies, higher fleet utilisation and lower finance
costs. The disposal process is progressing and we are targeting to conclude a
transaction prior to financial year end.
The motor retail businesses in southern Africa delivered a good result in a
tough market supported by the used vehicles segment and after sales
profitability. The Australian operations grew market share in an improving
market. Total trading revenue of R8.1 billion was well ahead of the prior period
and operating profit of R157 million is 39% up.
The leasing business of Avis Fleet Services continues to perform well and
generated an operating profit of R66 million (R126 million before interest paid)
which was 27% up on the prior period.
Handling
The handling division experienced continued declines in the lift truck industry
resulting in a reduction in revenue from R2.9 billion to R2.1 billion. These
declines occurred in all 3 major geographical regions. An operating loss of R19
million was incurred compared to a R44 million operating profit in the prior
period. The southern African operating profit was impacted by reduced profits
in agriculture due to purchasing delays following adverse weather conditions, as
well as the lower prevailing maize price. The prior year result was also
favourably impacted by larger currency gains.
Logistics
Logistics generated revenue to March of R1.8 billion compared to R2.4 billion in
the prior year. In southern Africa results were affected by lower volumes in the
construction and automotive segments and in the freight forwarding business.
Europe, Middle East and Asia produced a sharp decline in revenue mainly due to
reduced volumes. Recently we have seen an improvement in sea-air volumes but
margins remain under pressure. The decline in profitability in the Middle East
and Asia gave rise to a goodwill impairment charge of R152 million in the
period.
Black Economic Empowerment (BEE)
During the period Barloworld achieved a consolidated Level 3 rating on the
Department of Trade and Industry`s broad based economic empowerment scorecard.
Our South African subsidiaries were independently rated and Avis Rent a Car and
NMI-DSM excelled by achieving a Level 2 rating while Barloworld Equipment,
Barloworld Motor Retail, Barloworld Handling and Agriculture all achieved a
commendable Level 3.
As at end March we have a R78.9 million interest bearing deposit in place with
one of the financial institutions to secure the loan funding for our BEE
transaction.
Outlook
The global economy has started to recover from the deep recession of 2009 and
the majority of the major economies are now posting small positive GDP growth
rates. The South African economy is also now emerging from recession and the
IMF is forecasting real growth of 2.6% for the country for 2010.
The increased global demand for commodities has resulted in strong increases in
prices of oil, copper, iron ore and coal and this augurs well for mining
activity, particularly in emerging markets.
Given these trends, certain positive signs are evident for Equipment southern
Africa. The current order book, while substantially below the record level
reported at September 2008, is trending upwards for the first time in 18 months.
There are also significant mining tenders awaiting adjudication which could
materially impact the order book should we be successful. We believe that
mining companies that withheld their replacement capital expenditure during 2009
will likely start to normalise this situation in late 2010 and 2011.
Construction activity levels are expected to remain sluggish in the short term
but the medium term outlook is more positive based on the government
infrastructure build programme.
In Angola we expect construction industry activity levels to improve into 2011
and the impact of the second phase of the country`s infrastructure
rehabilitation programme should be positive for our business. The Angolan
government remains committed to the liquefied natural gas project (SonaRef) in
Lobito and while it has been delayed, we believe it will generate significant
opportunities in the future.
In Iberia the Spanish economy is expected to remain in recession for the balance
of 2010 and we do not expect any material recovery in our business until well
into 2011. The government has presented a Euro17 billion plan for
infrastructure development which requires initial funding from the private
sector. The rail network will absorb 70% of the proposed investment and roads
the remaining 30%. We will monitor progress of this plan closely. In the
meantime, our results will benefit from the restructuring undertaken to further
reduce the cost base.
In Siberia the order book has increased strongly, particularly from mining. We
will also continue to benefit from expanding after sales business generated by
the machine population that we have established over recent years.
Our automotive division remains strategically well positioned. The car rental
operations will benefit from increased activity during the 2010 FIFA World Cup.
The motor retail businesses will continue to benefit from increasing consumer
confidence and improving credit availability in both southern Africa and
Australia. The fleet services business will continue to perform well.
In the handling division we are seeing tentative signs of market improvements.
In particular demand for short term rental, a historical lead indicator of
demand recovery, has improved in the UK, US and South Africa.
The southern African logistics business is in the process of finalising certain
supply chain management contracts which should favourably impact the medium term
performance of the division. In the Middle East and Asia a number of key
initiatives are being undertaken to improve profitability.
The past six months have been challenging due to difficult trading conditions
for most of our businesses. However, we have maintained tight control over our
expense base and cash generation has remained strong. A number of positive
signs are emerging in the global and southern African economies and we are well
placed to benefit from these trends. While we expect some improvement in the
second half of the year, a number of the significant new opportunities will only
positively impact in our 2011 financial year.
DB Ntsebeza CB Thomson
Chairman Chief Executive Officer
Group Financial Review
Revenue from continuing operations decreased by 16% to R20.2 billion. The
decline was largely attributable to a 40% drop in revenue in the equipment
division. Following record sales in the first half of last year, reduced demand
in the construction and mining sectors in southern Africa contributed to the
lower revenue. Equipment sales in Iberia remained weak. Automotive continued to
perform well, increasing divisional revenue by 13% in the period.
Earnings before interest, taxation, depreciation and amortisation (EBITDA)
decreased by 27% to R1 517 million.
Operating profit declined by 49% to R528 million. The decrease in revenue in
equipment southern Africa and continued depressed trading conditions in most of
our offshore markets resulted in lower operating margins. In Iberia, further
restructuring costs of Euro2.7 million (R29 million) were incurred in the period
to realign the cost base with reduced activity levels.
The negative fair value adjustments of R21 million (1H`09: R74 million) arose
mainly from marking to market foreign exchange contracts in equipment southern
Africa.
Net finance costs decreased by R96 million (23%) to R314 million, due to lower
borrowings and interest rates.
Exceptional charges of R150 million mainly comprise the impairment of goodwill
in the logistics Middle East and Asia operations
(R152 million).
Taxation, before Secondary Tax on Companies (STC), declined by 64% to R58
million. The average effective tax rate, excluding STC, prior year taxation and
taxation on exceptional items was 35% (1H`09: 28%). The increased rate was
largely attributable to withholding taxes, losses incurred in low-tax
jurisdictions and unrelieved tax losses.
Net losses from associates and joint ventures of R10 million declined from net
income earned last period of R76 million mainly due to substantially lower
trading activity in the equipment joint venture in Katanga. The loss of R71
million from discontinued operations is attributable to Avis Scandinavia (1H`09:
R112 million). In 2009 a gain of R60 million was realised on the reversal of
costs associated with the disposal of the laboratory business.
Headline earnings per share (HEPS) from continuing operations declined by 80% to
40.7 cents (1H`09: 199.6 cents). The decrease is largely attributable to reduced
profits in equipment southern Africa, partially offset by lower net finance
costs.
Cashflow and borrowings
The continued focus on cashflow resulted in a net inflow for the period of R473
million (1H`09: R535 million outflow). Working capital decreased by R679
million during the first six months (1H`09: R819 million increase). The reduced
activity in equipment southern Africa and tight inventory management resulted in
the release of R839 million in working capital. The South African short-term
vehicle rental fleet was increased by approximately
2 000 additional vehicles (R270 million), relative to March 2009, in
anticipation of increased demand during the 2010 FIFA World Cup in June and July
2010.
Total interest-bearing borrowings of R9 255 million (September 2009: R9 813
million) represent a group debt to equity ratio of 82% (September 2009: 81%).
Net debt to equity of 67% is in line with the ratio at September 2009. Net
borrowings declined by R557 million in the period to R7 484 million.
Short-term borrowings of R3 437 million which includes commercial paper of
approximately R1 800 million raised in the local market, represents 37% of total
borrowings.
Borrowings in the three segments utilised in the group for gearing purposes are
as follows:
Total debt to Trading Leasing Car rental Total group
equity (%)
Target range 30 -50 600 - 800 200 -300
Ratio at 31 50 531 182 82
March 2010
Ratio at 30 49 567 205 81
September 2009
At March the group had unutilised bank facilities of R9 139 million of which R3
108 million are committed for at least twelve months. Cash and cash equivalents
totalled R1 771 million remaining constant at the level reported at the prior
year end (September 2009: R1 772 million). The company`s credit rating of A+ was
re-affirmed by Fitch Ratings in March 2010.
Total assets employed in the group decreased by R1 627 million to R28 468
million (September 2009: R30 095 million) of which R881 million was due to a
stronger rand.
Going forward
Our strategy of further strengthening our balance sheet by focusing on cashflow
and debt reduction has yielded good results and we plan to continue this
emphasis into the future. Since its peak net borrowings have declined by almost
R4.9 billion. Further reductions in working capital in the equipment southern
Africa operations and some defleeting of the short-term car rental fleet after
the 2010 FIFA World Cup are expected in the second half of this year.
In terms of Section 3.4 (b) (iii) (3) of the JSE Listings Requirements, we
highlight that while some improvement in profitability is expected in the second
half, full year HEPS and basic earnings per share will remain more than 20%
below last year for the full year ended 30 September 2010. The information on
which this trading statement is based has not been reviewed or reported on by
the Company`s auditors.
DG Wilson
Finance Director
Operational Reviews
In the case of the leasing businesses, the operating profit is net of interest
paid. Income from associates, which includes our share of earnings from joint
ventures, is shown at the profit after taxation level.
Net operating assets comprise total assets less non-interest bearing
liabilities. Cash is excluded as well as current and deferred taxation assets
and liabilities. In the case of the leasing businesses, net assets are reduced
by interest-bearing liabilities.
Comparative numbers have been restated as per note 19.
EQUIPMENT
Revenue
Six months Year
ended ended
31 Mar 31 Mar 30 Sep
2010 2009 2009
R million Restated Restated
- Southern Africa 3 687 6 046 11 187
- Europe 1 999 3 432 5 892
5 686 9 478 17 079
Share of associate income
Operating
profit/(loss)
Six months Year
ended ended
31 Mar 31 Mar 30 Sep
R million 2010 2009 2009
- Southern Africa 278 731 1 282
- Europe (74) (45) 11
204 686 1293
Share of associate income (12) 77 51
Net
operating assets
31 Mar 30 Sep
R million 2010 09
- Southern Africa 3 762 4 703
- Europe 2 747 3 462
6 509 8 165
Share of associate income
Despite very difficult trading conditions, borne out by a significant decline in
the construction market, Equipment southern Africa remained solidly profitable
to mid-year based mainly on after-sales business for the large established
Caterpillar machine population. Cash generation was strong resulting from a
reduction in working capital as well as tight control of capital expenditure and
expenses.
As expected, signs of a commodities-led recovery were evident in the first half.
Most commodity prices increased and copper has returned to levels experienced
prior to the downturn. We have received several substantial mining orders, which
will positively impact our South African and Mozambican operations in
particular, while Zambia and Namibia continue to perform at similar levels to
last year.
Angola is experiencing low activity levels as a consequence of infrastructure
project deferrals. However this trend should reverse once the government
releases payments to large contractors, which will result in increased
construction activity.
Our Power business continues to transform from a supplier of low value projects
to high value turnkey solutions. Work has commenced on the R250 million power
station for Nampower in Namibia and we are tendering on additional projects of
similar magnitude.
Our significant investment in skills development during the downturn will
position us favourably for the expected recovery in the year ahead.
The Iberian market remains depressed with new machine deliveries down
approximately 80% from peak levels necessitating further cost reductions to
realign the cost base. Restructuring costs of Euro2.7 million (R29 million)
together with pressure on rental profitability due to overcapacity in the sector
were the main drivers of the operating loss for the period. While order books
have trended lower over the period, the order intake and deliveries have
stabilised over recent months and we believe that the worst of the market
decline is now behind us.
The Spanish government have announced plans for Euro17 billion of infrastructure
spend on roads and railways over the next two years which if implemented will
provide an underpin to business activity levels.
The Siberian business is trending positively with recovering commodity prices
benefiting mining equipment orders and after sales revenues. A significant
improvement in the order book points to an improved result in the second half.
Weak activity levels in Katanga and the Energyst engine rental businesses led to
equity accounted losses from these investments.
AUTOMOTIVE
Revenue
Six months Year
ended ended
31 Mar 31 Mar 30 Sep
2010 2009 2009
R million Restated Restated
Car rental
Southern Africa 1 645 1 578 3 059
- Southern Africa 6 211 5 744 11 525
- Australia 1 890 1 260 2 937
Trading 8 101 7 004 14 462
Leasing Southern Africa* 789 704 1 552
10 535 9 286 19 073
Share of associate loss
Operating profit
Six months Year
ended ended
31 Mar 31 Mar 30 Sep
2010 2009 2009
R million
Car rental
Southern Africa 171 155 254
- Southern Africa 126 101 232
- Australia 31 12 59
Trading 157 113 291
Leasing Southern Africa* 66 52 158
394 320 703
Share of associate loss (3) (11)
Net operating
assets
31 Mar 30 Sep
2010 2009
R million
Car rental
Southern Africa 2 599 2 266
- Southern Africa 1 869 1 682
- Australia 1 021 946
Trading 2 890 2 628
Leasing Southern Africa* 417 387
5 906 5 281
Share of associate loss
*For Leasing Southern Africa, operating profit before interest paid is R126
million (1H`09: R119 million; FY`09: R293 million) resulting in total divisional
operating profit before interest of R454 million (1H`09: R387 million; FY`09:
R838 million). Net operating assets after deducting interest-bearing borrowings.
Our integrated motor vehicle usage solutions strategy remains effective and the
division further improved results in the period. Overall operating margin, after
adjusting for leasing interest, increased to 4.3% against the prior year`s 4.2%.
The division generated strong operating cash flow, which was used to increase
investment into rental and leasing fleets.
Avis Rent a Car southern Africa produced a credible result in a static rental
day market by achieving high fleet utilisation and a very good used vehicle
profit contribution.
The southern African motor retail operations delivered a good result in a tough
market. This was supported by used vehicle and after sales profitability. The
Australian operations reported a much improved result by growing market share.
Our fleet services business produced a solid result, underpinned by quality
fleet growth and an improved used vehicle profit contribution.
Associates include our Phakisaworld and Sizwe BEE joint ventures, as well as our
Subaru importation and distribution joint venture.
HANDLING
Revenue
Six months Year
ended ended
31 Mar 31 Mar 30 Sep
2010 2009 2009
R million Restated Restated
- Southern Africa 509 643 1 156
- Europe 885 1 251 2 127
- North America 753 1 023 1 725
2 147 2 917 5 008
Share of associate income
Operating profit/
(loss)
Six months Year
ended ended
31 Mar 31 Mar 30 Sep
2010 2009 2009
R million
- Southern Africa 19 87 80
- Europe (24) (23) (53)
- North America (14) (20) (54)
(19) 44 (27)
Share of associate income 2 2 4
Net operating
assets
31 Mar 30 Sep
2010 2009
R million
- Southern Africa 486 518
- Europe 617 662
- North America 401 499
1 504 1 679
Share of associate income
The division again faced difficult trading conditions, with weak demand across
all territories. New truck markets have nearly halved against 2008 levels, and
only used sales in the UK and Belgium have shown significant improvement against
last year. The UK and US operations reduced the level of losses, due mainly to a
lowered cost base and improved efficiencies. The Netherlands remained marginally
profitable but Belgium swung from profit to loss; market shares improved in both
territories.
Profits in the South African operations were significantly below prior year,
reflecting market declines and the impact of the stronger rand on margins. There
was an exchange gain of R43 million in the prior period compared to R6 million
in the current period. Market shares have nonetheless grown in balers and
remained stable in the handling operation.
The division reduced its asset base by a creditable 10%, with improved
receivable collections and pleasing inventory reductions, notably in the
Agriculture business.
The global project to upgrade and install best practice business systems and
procedures has gone live in the US and UK, with other countries to follow. This
will underwrite improved service to our customers and higher profits due to
improved efficiency and effectiveness.
The half year ended on a more positive note, with higher quotation activity and
renewed short-term hire interest signposting an improvement in market
conditions, but this has yet to translate into increased orders.
LOGISTICS
Revenue
Six months Year
ended ended
31 Mar 31 Mar 30 Sep
R million 2010 2009 2009
- Southern Africa 1 122 1 119 2 257
- Europe,
Middle East and Asia 719 1 243 1 830
1 841 2 362 4 087
Operating profit/
(loss)
Six months Year
ended ended
31 Mar 31 Mar 30 Sep
R million 2010 2009 2009
- Southern Africa 24 34 92
- Europe,
Middle East and Asia (27) (1) (15)
(3) 33 77
Net operating
assets
31 Mar 30 Sep
R million 2010 2009
- Southern Africa 440 342
- Europe,
Middle East and Asia 502 707
942 1 049
Southern African results were affected by lower volumes in the construction and
automotive segments and in the freight forwarding business. The strength of the
rand continues to impact the profitability of the freight forwarding business.
These factors were however partly offset by a strong performance in the FMCG and
retail segments where the business model is largely fixed fee based mitigating
the effect of volume declines. The dedicated transport segment continued to
perform well.
Despite further cost saving and rationalisation initiatives within the
international businesses, the sea-air business within Middle East and Asia was
affected by the lower realisation of margins due to an inability to pass on the
effect of rising input costs to customers. While volumes to corporate customers
are increasing, volumes to trader customers between Asia and Africa continue to
be significantly impacted and further operational restructuring is expected in
the second half.
Europe`s results were again affected by lower volumes in Spain, but the
initiatives implemented earlier on in the financial year are starting to improve
performance.
CORPORATE
Revenue
Six months Year
ended ended
31 Mar 31 Mar 30 Sep
R million 2010 2009 2009
- Southern Africa 13 28 22
- Europe
13 28 22
Share of associate loss
Operating
loss
Six months Year
ended ended
31 Mar 31 Mar 30 Sep
R million 2010 2009 2009
- Southern Africa (36) (25) (42)
- Europe (12) (13) (10)
(48) (38) (52)
Share of associate loss (1)
Net operating
assets/(liabilities)
31 Mar 30 Sep
R million 2010 2009
- Southern Africa 534 372
- Europe (403) (475)
131 (103)
Share of associate loss
Corporate comprises mainly the activities of the corporate offices, including
the treasuries, in South Africa and the United Kingdom. In southern Africa the
operating loss has risen largely due to increased funding facility commitment
fees and the timing of costs recovered from group companies. Net operating
assets in southern Africa have increased due to the purchase of property for the
equipment and handling businesses in South Africa.
Dividend declaration
Dividend declaration for the six months ended 30 March 2010
Dividend Number 163
Notice is hereby given that the following dividend has been declared in respect
of the six months ended 31 March 2010.
Number 163 (interim dividend) of 20 cents per ordinary share.
In compliance with the requirements of Strate and the JSE Limited, the following
dates are applicable.
Dividend declared Monday 10 May 2010
Last day to trade cum dividend Friday 28 May 2010
Shares trade ex dividend Monday 31 May 2010
Record date Friday 4 June 2010
Payment date Monday 7 June 2010
Share certificates may not be dematerialised or rematerialised between Monday,
31 May 2010 and Friday, 4 June 2010, both days inclusive.
On behalf of the board
S Mngomezulu
Secretary
About Barloworld
Barloworld is a distributor of leading international brands providing integrated
rental, fleet management, product support and logistics solutions. The core
divisions of the group comprise Equipment (earthmoving and power systems),
Automotive (car rental, motor trading and fleet services), Handling (forklift
truck distribution and fleet management) and Logistics (logistics management and
supply chain optimisation). We offer flexible, value adding, integrated business
solutions to our customers backed by leading global brands. The brands we
represent on behalf of our principals include Caterpillar, Hyster, Avis, Audi,
BMW, Ford, General Motors, Mercedes-Benz, Toyota, Volkswagen and others.
Barloworld has a proven track record of effectively managing long-term
relationships with global principals and customers. We have an ability to
develop and grow businesses in multiple geographies including challenging
territories with high growth prospects. One of our core competencies is an
ability to leverage systems and best practices across our chosen business
segments. As an organisation we are committed to play a leading role in
empowerment, transformation and sustainable development.
The company was founded in 1902 and currently has operations in 41 countries
around the world with approximately 60% of our nineteen thousand employees in
South Africa.
Corporate information
Registered office and business address
Barloworld Limited, 180 Katherine Street
PO Box 782248, Sandton, 2146, South Africa
Tel: +27 11 445 1000
Email: invest@barloworld.com
Transfer secretaries - South Africa
Link Market Services South Africa (Proprietary) Limited
(Registration number 2000/007239/07)
11 Diagonal Street, Johannesburg, 2001
(PO Box 4844, Johannesburg)
Tel: +27 11 630 0000
Registrars - United Kingdom
Equiniti Limited, Aspect House, Spencer Road
Lancing, West Sussex, BN99 6DA, England
Tel: +44 190 383 3381
Transfer secretaries - Namibia
Transfer Secretaries (Proprietary) Limited
(Registration number 93/713)
Shop 8, Kaiser Krone Centre, Post Street Mall
Windhoek, Namibia
(PO Box 2401, Windhoek, Namibia)
Tel: +264 61 227 647
Directors
Non-executive: DB Ntsebeza (Chairman), SAM Baqwa, AGK Hamilton*,
S Mkhabela, MJN Njeke, SS Ntsaluba, TH Nyasulu,
G Rodriguez de Castro de los Rios+, SB Pfeiffer
Executive: CB Thomson (Chief Executive), PJ Blackbeard,
PJ Bulterman, M Laubscher, OI Shongwe, DG Wilson
*British American +Spanish
Enquiries: Barloworld Limited: Sibani Mngomezulu,
Tel +27 11 445 1000
E-mail invest@barloworld.com
College Hill: Jacques de Bie, Tel +27 11 447 3030
E-mail Jacques.deBie@collegehill.co.za
For background information visit www.barloworld.com
Condensed consolidated income statement
Six months ended Year ended
31 Mar 31 Mar 30 Sep
2010 2009 2009
Reviewed Reviewed Audited
R million Notes Restated* Restated*
Continuing operations
Revenue 20 222 24 071 45 269
Operating profit before 1 517 2 081 4 081
items listed below (EBITDA)
Depreciation (889) (916) (1 854)
Amortisation of intangible (33) (30) (61)
assets
Leasing interest classified (67) (90) (172)
as cost of sales
Operating profit 3 528 1 045 1 994
Fair value adjustments on 4 (21) (74) (201)
financial instruments
Net finance costs and 5 (309) (401) (789)
dividends received
Profit before exceptional 198 570 1 004
items
Exceptional items 6 (150) 17 22
Profit before taxation 48 587 1 026
Taxation 7 (58) (161) (207)
Secondary taxation on 7 (18) (30) (41)
companies
(Loss)/profit after taxation (28) 396 778
(Loss)/income from (10) 76 43
associates and joint
ventures
Net (loss)/profit from (38) 472 821
continuing operations
Discontinued operations
Loss from discontinued 10 (71) (52) (82)
operations
Net (loss)/profit for the (109) 420 739
period
Net (loss)/profit
attributable to:
Non-controlling interests in 26 38 68
subsidiaries
Owners of Barloworld Limited (135) 382 671
(109) 420 739
(Loss)/earnings per share
(cents)
- basic (64,6) 183,3 321,8
- diluted (64,2) 182,0 319,6
(Loss)/earnings per share
from continuing operations
(cents)
- basic (30,6) 208,3 361,1
- diluted (30,4) 206,8 358,5
Loss per share from
discontinued operations
(cents)
- basic (34,0) (25,0) (39,3)
- diluted (33,8) (24,8) (39,0)
*Restated for the treatment of IAS 7 and IAS 16 - refer note 19
Refer note 2 for details of headline earnings per share calculation
Condensed consolidated statement of comprehensive income
Six months ended Year ended
31 Mar 31 Mar 30 Sep
2010 2009 2009
R million Reviewed Reviewed Audited
(Loss)/profit for the period (109) 420 739
Other comprehensive income
Exchange (loss)/gains on (579) 453 (926)
translation of foreign operations
Gain/(loss) on cash flow hedges 11 (110) (105)
Loss on revaluation of available (1)
for sale investments
Net actuarial losses on post- (321)
retirement benefit obligations
Taxation on other comprehensive 20 114
income
Other comprehensive income for the (568) 363 (1 239)
period, net of taxation
Total comprehensive income for the (677) 783 (500)
period
Total comprehensive income
attributable to:
Non-controlling interests in 26 38 68
subsidiaries
Owners of Barloworld Limited (703) 745 (568)
(677) 783 (500)
Condensed consolidated statement of financial position
31 Mar 31 Mar 30 Sep
2010 2009 2009
Reviewed Reviewed Audited
R million Notes Restated* Restated*
ASSETS
Non-current assets 11 637 13 870 12 582
Property, plant and 7 581 8 417 7 854
equipment
Goodwill 2 114 2 476 2 319
Intangible assets 283 215 280
Investment in associates and 8 568 1 274 731
joint ventures
Finance lease receivables 233 409 463
Long-term financial assets 9 221 482 279
Deferred taxation assets 637 597 656
Current assets 14 935 18 287 15 155
Vehicle rental fleet 2 169 1 735 1 692
Inventories 5 832 9 150 7 036
Trade and other receivables 5 173 6 178 4 747
Taxation 50 92 53
Cash and cash equivalents 14 1 711 1 132 1 627
Assets classified as held 10 1 896 2 457 2 358
for sale
Total assets 28 468 34 614 30 095
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 260 250 252
Other reserves 2 113 4 123 2 688
Retained income 8 628 8 887 8 913
Interest of shareholders of 11 001 13 260 11 853
Barloworld Limited
Non-controlling interest 219 190 217
Interest of all shareholders 11 220 13 450 12 070
Non-current liabilities 6 280 7 007 6 486
Interest-bearing 5 161 6 001 5 278
Deferred taxation 275 271 249
liabilities
Provisions 184 200 185
Other non-interest bearing 660 535 774
Current liabilities 9 771 12 392 10 030
Trade and other payables 5 798 7 107 5 775
Provisions 574 745 580
Taxation 77 418 108
Amounts due to bankers and 3 322 4 122 3 567
short-term loans
Liabilities directly 10 1 197 1 765 1 509
associated with assets
classified as held for sale
Total equity and liabilities 28 468 34 614 30 095
*Restated for the treatment of IAS 7 and IAS 16 - refer note 19
Condensed consolidated statement of changes in equity
Share
capital
and Other Retained
R million premium reserves income
Balance at 1 October 2008 242 3 745 8 861
Total comprehensive income for the 363 382
period
Transactions with owners, recorded
directly in equity
Other reserve movements 12 (11)
Dividends (345)
BEE charge in terms of IFRS 2 3
Shares issued in current period 8
Balance at 31 March 2009 250 4 123 8 887
Total comprehensive income for the (1 370) 57
period
Transactions with owners, recorded
directly in equity
Other reserve movements (2) (68) 20
Dividends (51)
BEE charge in terms of IFRS 2 3
Shares issued in current period 4
Balance at 30 September 2009 252 2 688 8 913
Total comprehensive income for the (568) (135)
period
Transactions with owners, recorded
directly in equity
Other reserve movements (10) (3)
Dividends (147)
BEE charge in terms of IFRS 2 3
Shares issued in current period 8
Balance at 31 March 2010 260 2 113 8 628
Attri-
butable
to Barlo-
world Interest
Limited Non- of all
share- controllin share-
g
R million holders interest holders
Balance at 1 October 2008 12 848 185 13 033
Total comprehensive income for the 745 38 783
period
Transactions with owners, recorded
directly in equity
Other reserve movements 1 (22) (21)
Dividends (345) (11) (356)
BEE charge in terms of IFRS 2 3 3
Shares issued in current period 8 8
Balance at 31 March 2009 13 260 190 13 450
Total comprehensive income for the (1 313) 30 (1 283)
period
Transactions with owners, recorded
directly in equity
Other reserve movements (50) 24 (26)
Dividends (51) (27) (78)
BEE charge in terms of IFRS 2 3 3
Shares issued in current period 4 4
Balance at 30 September 2009 11 853 217 12 070
Total comprehensive income for the (703) 26 (677)
period
Transactions with owners, recorded
directly in equity
Other reserve movements (13) (1) (14)
Dividends (147) (23) (170)
BEE charge in terms of IFRS 2 3 3
Shares issued in current period 8 8
Balance at 31 March 2010 11 001 219 11 220
Condensed consolidated statement of cash flows
Six months ended Year ended
31 Mar 31 Mar 30 Sep
2010 2009 2009
Reviewed Reviewed Audited
R million Notes Restated* Restated*
Cash flow from operating
activities
Operating cash flows before 1 511 1 978 3 845
movements in working
capital
Decrease/(increase) in 679 (819) 885
working capital
Cash generated from 2 190 1 159 4 730
operations before
investment in rental assets
Net investment in fleet 11 (348) (212) (760)
leasing assets
Net investment in vehicle 11 (664) 134 (69)
rental fleet
Cash generated from 1 178 1 081 3 901
operations
Realised fair value (21) (74) (180)
adjustments on financial
instruments
Finance costs and (321) (432) (834)
investment income
Taxation paid (93) (284) (603)
Cash flow from operations 743 291 2 284
Dividends paid (including 12 (165) (345) (434)
minority shareholders)
Net cash from/(applied to) 578 (54) 1 850
from operating activities
Net cash applied to (105) (481) (643)
investing activities
Acquisition of property, (322) (591) (910)
plant and equipment
Net investment in leasing 72 25 (139)
receivables
Proceeds on disposal of 13 120 15 226
subsidiaries, investments,
intangibles and loans
repaid
Proceeds on disposal of 25 70 180
property, plant and
equipment
Net cash inflow/(outflow) 473 (535) 1 207
before financing activities
Net cash (used in)/from (400) 357 (647)
financing activities
Ordinary shares issued 8 8 12
(Decrease)/increase in (408) 349 (659)
interest-bearing
liabilities
Net increase/(decrease) in 73 (178) 560
cash and cash equivalents
Cash and cash equivalents 1 627 1 238 1 238
at beginning of period
Cash and cash equivalents 145 31 31
held for sale at beginning
of period
Effect of foreign exchange (74) 57 (57)
rate movements
Effect of cash balances (60) (16) (145)
classified as held for sale
Cash and cash equivalents 1 711 1 132 1 627
at end of period
*Restated for the treatment of IAS 7 and IAS 16 - refer note 19
Notes to the condensed consolidated financial statements
1. Basis of preparation
The condensed interim consolidated financial statements have been
prepared in accordance with International Accounting Standard (IAS)
34 Interim Financial Reporting. The accounting policies and methods
of computation used are consistent with those used for the group`s
2009 annual financial statements (which were prepared in accordance
with International Financial Reporting Standards), except for the
adoption of the following amended or new standards and
interpretations:
- IAS 1 Presentation of Financial Statements (Revised)
- IAS 7 Statement of cash flows: Refer to note 19
- IAS 16 Property, plant and equipment: Refer to note 19
- IAS 32 Financial instruments: Classification of Rights Issues
(Revised)
- IFRS 2 Share based payment (Revised)
- IFRS 2 Group cash-settled share-based payment transactions
(Revised)
- IFRS 3 Business Combinations (Revised)
- IFRS 8 Operating Segments: Refer to Operating segments schedule
- IFRIC 14 Prepayments of a minimum funding requirement (Revised)
- IFRIC 17 Distributions of Non-cash Assets to Owners
- IFRIC 19 Extinguishing financial liabilities with equity
instruments
Comparative numbers have been reclassified as per note 19.
Six months ended Year ended
31 Mar 31 Mar 30 Sep
2010 2009 2009
R million Reviewed Reviewed Audited
2. Reconciliation of net
(loss)/profit to headline
earnings
Group
Net (loss)/profit attributable (135) 382 671
to Barloworld shareholders
Adjusted for the following:
Profit on disposal of (60) (60)
discontinued operations (IFRS 5)
Costs associated with disposal 1
of subsidiaries (IAS 27)
Profit on disposal of (35) (10) (14)
properties, investments and
subsidiaries
Profit on sale of intangible (1)
assets (IAS 38)
Impairment of goodwill (IFRS 3) 152
Impairment/(reversal) of 33 (7) (12)
investments in associates (IAS
28) and joint ventures (IAS 31)
Profit on sale of plant and (1) (4)
equipment excluding rental
assets (IAS 16) and intangible
assets (IAS 38)
Gross remeasurements excluded 149 (80) (87)
from headline earnings
Total taxation effects of 3 5
remeasurements
Net remeasurements excluded from 149 (77) (82)
headline earnings
Headline earnings 14 305 589
Continuing operations
(Loss)/profit from continuing (38) 472 821
operations
Minority shareholders` interest (26) (38) (68)
in net profit from continuing
operations
(Loss)/profit from continuing (64) 434 753
operations attributable to
Barloworld Limited
Adjusted for the following items
in continuing operations:
Profit on disposal of (35) (10) (15)
properties, investments and
subsidiaries
Profit on sale of intangible (1)
assets (IAS 38)
Impairment of goodwill (IFRS 3) 152
Impairment/(reversal) of 33 (7) (12)
investments in associates (IAS
28) and joint ventures (IAS 31)
Profit on sale of plant and (1) (4)
equipment excluding rental
assets (IAS 16) and intangible
assets (IAS 38)
Gross remeasurements excluded 149 (21) (28)
from headline earnings from
continuing operations
Total taxation effects of 3 6
remeasurements
Net remeasurements excluded from 149 (18) (22)
headline earnings from
continuing operations
Headline earnings from 85 416 731
continuing operations
Discontinued operations
Loss from discontinued (71) (52) (82)
operations
Minority shareholders interest
in net profit from discontinued
operations
Loss from discontinued (71) (52) (82)
operations attributable to
Barloworld Limited
Adjusted for the following items
in discontinued operations:
Profit on disposal of (60) (60)
discontinued operations (IFRS 5)
Costs associated with disposal 1
of subsidiaries (IAS 27)
Profit on disposal of properties 1
(IAS 16)
Gross remeasurements excluded - (59) (59)
from headline earnings from
discontinued operations
Total taxation effects of (1)
remeasurements
Net remeasurements excluded from (59) (60)
headline earnings from
discontinued operations
Headline earnings from (71) (111) (142)
discontinued operations
Six months ended Year ended
31 Mar 31 Mar 30 Sep
2010 2009 2009
Reviewed Reviewed Audited
R million Restated* Restated*
Weighted average number of
ordinary shares in issue during
the period (000)
- basic 208 862 208 400 208 518
- diluted 210 252 209 883 209 967
Headline earnings per share
(cents)
- basic 6,7 146,4 282,5
- diluted 6,6 145,3 280,5
Headline earnings per share from
continuing operations (cents)
- basic 40,7 199,6 350,6
- diluted 40,4 198,2 348,1
Headline loss per share from
discontinued operations (cents)
- basic (34,0) (53,2) (68,1)
- diluted (33,8) (52,9) (67,6)
3. Operating profit
Included in operating profit
from continuing operations are:
Cost of sales (including 16 028 19 197 35 296
allocation of depreciation)
Profit on sale of other plant (2) (4)
and equipment
4. Fair value adjustments on
financial instruments
Gains/(losses) arising from:
Investment in Pretoria Portland (4) (1)
Cement Limited
Forward exchange contracts and (19) (76) (176)
other financial instruments
Translation of foreign currency (2) 6 (24)
monetary items
(21) (74) (201)
5. Net finance costs and dividends
received
Total finance costs (425) (591) (1 110)
Leasing interest classified as 67 90 172
cost of sales
Interest received 44 91 135
Net finance costs (314) (410) (803)
Dividends - listed and unlisted 5 9 14
investments
(309) (401) (789)
6. Exceptional items
Profit on disposal of 35 10 18
properties, investments and
subsidiaries
Impairment of goodwill (152)
(Impairment)/reversal of (33) 7 4
investments
Gross exceptional (loss)/profit (150) 17 22
Taxation on exceptional items (3) (5)
Net exceptional (loss)/profit - (150) 14 17
continuing operations
- discontinued operations (net (1) (1)
of taxation)
Net exceptional (loss)/profit (150) 13 16
*Restated for the treatment of IAS 16 - refer note 19
Six months ended Year ended
31 Mar 31 Mar 30 Sep
2010 2009 2009
R million Reviewed Reviewed Audited
7. Taxation
Taxation per income statement (58) (161) (207)
Prior year taxation 11 4 21
Taxation on exceptional items (3) (5)
Taxation on profit before STC, (69) (162) (223)
prior year taxation and
exceptional items for continuing
operations
STC on normal dividends paid (18) (30) (41)
Secondary taxation on companies (18) (30) (41)
for continuing operations
Profit before exceptional items 198 570 1 004
for continuing operations
Effective taxation rate
excluding exceptional items and
prior year taxation for
continuing operations (%)
- excluding STC 34,8% 28,4% 22,2%
- including STC 43,9% 33,7% 26,3%
Six months ended Six months ended Year ended
31 Mar 31 Mar 30 Sep
2010 2009 2009
Market Book Market Book Market Book
value/ value value/ value value/ value
Directors Directors Directors
` ` `
valuation valuation valuation
R million Reviewed Reviewed Audited
8. Investment in
associates and
joint ventures
Joint ventures 500 437 719 547 554 444
Unlisted 129 129 247 242 196 196
associates
629 566 966 789 750 640
Loans and 2 485 91
advances
568 1 731
274
9. Long-term
financial
assets
Listed 57 57 100 100 100 100
investments*
Unlisted 25 25 46 46 46 46
investments
82 82 146 146 146 146
Other long-term 139 336 133
financial
assets
221 482 279
*Includes PPC shares held amounting to R57 million (March 2009: R100
million and September 2009: R100 million) for the commitment to deliver
PPC shares to option holders following the unbundling of PPC.
Six months ended Year ended
31 Mar 31 Mar 30 Sep
2010 2009 2009
Reviewed Reviewed Audited
R million Restated* Restated*
10 Discontinued operations and assets classified as held for sale
.
Following the decision to dispose of the car rental Scandinavia
business it has been classified as a discontinued operation.
Results from discontinued operations are as follows:
Revenue 663 731 1 451
Operating profit before items 37 40 162
listed below (EBITDA)
Depreciation (118) (144) (294)
Amortisation of intangible assets (2) (1) (3)
Operating loss (83) (105) (135)
Fair value adjustments on (1)
financial instruments
Net finance costs (12) (31) (45)
Loss before exceptional items (95) (136) (181)
Exceptional items (1) (1)
Loss before taxation (95) (137) (182)
Taxation 24 25 39
Loss after taxation (71) (112) (143)
Net loss of discontinued (71) (112) (143)
operation before profit on
disposal
Release of contingency provision 60 61
on prior year disposal
Net profit on disposal of 60 61
discontinued operations after
taxation
Loss from discontinued operations (71) (52) (82)
per income statement
The cash flows from the
discontinued operations are as
follows:
Cash flows from operating 76 203 172
activities
Cash flows from investing (6) (13) (17)
activities
Cash flows from financing (152) (206) (40)
activities
The major classes of assets and liabilities comprising the disposal
group and other assets classified as held for sale are as follows:
Property, plant and equipment, 1 480 1 889 1 704
intangibles and vehicle rental
fleet
Inventories 37 113 51
Trade and other current 319 439 453
receivables
Cash and cash equivalents 60 16 145
Finance lease receivables 5
Assets of disposal group held for 1 896 2 457 2 358
sale
Interest-bearing liabilities (772) (1 132) (968)
Other non-interest-bearing (83) (146) (117)
liabilities
Trade and other payables (342) (487) (424)
Total liabilities associated with (1 197) (1 765) (1 509)
assets classified as held for
sale
Net assets classified as held for 699 692 849
sale
Per business segment:
Continuing operations
Equipment 1
Automotive 8
Handling 5
Logistics 2
Total continuing operations 1 2 13
Discontinued operations
Car rental Scandinavia 1 698 690 836
Total group 699 692 849
1. A decision has been taken to sell the car rental Scandinavian
business. A plan has been formulated and an agreement has been signed
between Barloworld and merchant bankers authorising the latter to seek
buyers for the business.
*Restated for the treatment of IAS 7 and IAS 16 - refer note 19
Six months ended Year ended
31 Mar 31 Mar 30 Sep
2010 2009 2009
Reviewed Reviewed Audited
R million Restated* Restated*
11 Net investment in rental assets
. and car hire vehicles
Rental assets (348) (212) (760)
Additions (822) (1 239) (2 213)
Proceeds on disposals 474 1 027 1 453
Car hire vehicles (664) 134 (69)
Additions (2 187) (1 503) (3 387)
Proceeds on disposals 1 523 1 637 3 318
12 Dividends paid
.
Ordinary shares
Final dividend No 162 paid on 18 (142) (312) (312)
January 2010: 70 cents per share
(2009: No 160 - 150 cents per
share)
Interim dividend No 161 paid on 8 (84)
June 2009: 40 cents per share
Paid to Barloworld Limited (142) (312) (396)
shareholders
Paid to non-controlling interest (23) (33) (38)
(165) (345) (434)
6% cumulative non-redeemable
preference shares
Preference dividends totalling
R22 500 were declared and paid on
each of the following dates:
- 5 November 2009 (paid on 30
November 2009)
- 28 April 2009 (paid on 25 May
2009)
- 14 November 2008 (paid on 24
November 2008)
13 Proceeds on disposal of
. subsidiaries, investments,
intangibles and loans repaid:
Inventories disposed 96 96
Receivables disposed 52 52
Payables, taxation and deferred (31) (31)
taxation balances disposed
Borrowings net of cash (117) (117)
Property, plant and equipment, 4 4
non-current assets, goodwill and
intangibles
Net assets disposed 4 4
Less: Non-cash consideration of (2) (2)
deconsolidation of subsidiary
Total net assets disposed 2 2
Net cash proceeds on disposal of 2 2
subsidiaries
Proceeds on disposal of 73 2 5
investments and intangibles
Investment in associates and 47 11 219
joint ventures, intangibles and
loans repaid
Cash proceeds on disposal of 120 15 226
subsidiaries, investments,
intangibles and loans repaid
*Restated for the treatment of IAS 7 and IAS 16 - refer note 19
Six months ended Year ended
31 Mar 31 Mar 30 Sep
2010 2009 2009
R million Reviewed Reviewed Audited
14 Cash and cash equivalents
.
Cash balances not available for 341 407 360
use due to reserving and other
restrictions
15 Commitments
.
Capital commitments to be 836 928 1 423
incurred
Contracted 658 735 920
Approved but not yet contracted 178 193 503
Operating lease commitments 1 935 2 077 2 151
Capital expenditure will be
financed by funds generated by
the business, existing cash
resources and borrowing
facilities available to the
group.
16 Contingent liabilities
.
Bills, lease and hire-purchase 1 271 1 134 1 212
agreements discounted with
recourse, other guarantees and
claims
Litigation, current or pending,
is not considered likely to have
a material adverse effect on the
group.
Buy-back and repurchase 284 303 294
commitments*
*The related assets are estimated to have a value of at least equal
to the commitment.
The group has given guarantees to the purchaser of the coatings
Australian business relating to environmental claims. The guarantees
will expire in 2016 and are limited to the sales price received for
the business. Freeworld Coatings Limited is responsible for the
first A$5 million of any claims arising in terms of the unbundling
agreement.
There are no material contingent liabilities in joint venture
companies.
17 Related party transaction
.
There have 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 six months with associate companies, joint ventures and
other related parties.
18 Events after the reporting period
.
No material events have occurred between the end of the reporting
period and the date of the release of these financial statements.
19 Comparative information
.
IAS 16 was amended whereby an entity in the course of its ordinary
activities, routinely sells items that it has held for rental to
others, it transfers those assets to inventories at their carrying
amount when they cease to be rented and become held for sale. Sale
proceeds from such assets are recognised as revenue in accordance
with IAS 18.
IAS 7 was amended that the cash payments to acquire rental assets,
the cash receipts from rents and subsequent sale of such assets are
all classified as operating activities.
The March 2009 and September 2009 comparative information has been
restated for the adoption of IAS 7 and IAS 16.
Previously IAS 16/IAS 7
R million stated Restatement Restated
The aggregate effect of the above changes on the interim financial
statements for the period ended 31 March 2009:
Income statement
Continuing operations
Revenue 22 514 1 557 24 071
Per business segment:
Continuing operations
Equipment 9 095 383 9 478
Automotive 8 297 989 9 286
Handling 2 732 185 2 917
Logistics 2 362 2 362
Corporate 28 28
Revenue - continuing 22 514 1 557 24 071
operations
Discontinued operations
Car rental Scandinavia 529 202 731
Revenue - group operations 23 043 1 759 24 802
Cost of sales - continuing 17 296 1 901 19 197
operations
Balance sheet
reclassification
Inventory 8 807 343 9 150
Assets classified as held 2 800 (343) 2 457
for sale
Cash flow reclassification
Cash flow from operating
activities
Operating cash flows before 1 972 6 1 978
movements in working capital
Increase in working capital (777) (42) (819)
Cash generated from 1 195 (36) 1 159
operations before investment
in rental assets
Net investment in fleet (212) (212)
leasing assets
Net investment in vehicle 134 134
rental fleet
Cash generated from 1 195 (114) 1 081
operations
Realised fair value (74) (74)
adjustments on financial
instruments
Finance costs and investment (432) (432)
income
Taxation paid (284) (284)
Cash flow from operations 405 (114) 291
Dividends paid (including (345) (345)
minority shareholders)
Net cash from/(applied to) 60 (114) (54)
operating activities
Net cash applied to (595) 114 (481)
investing activities
Acquisition of property, (591) (591)
plant and equipment
Net investment in fleet (248) 248 -
leasing and equipment rental
assets
Net investment in car rental 134 (134) -
vehicles
Net investment in leasing 25 25
receivables
Proceeds on disposal of 15 15
subsidiaries, investments,
intangibles and loans repaid
Proceeds on disposal of 70 70
property, plant and
equipment
Net cash outflow before (535) (535)
financing activities
Net cash from financing 357 357
activities
Ordinary shares issued 8 8
Increase in interest-bearing 349 349
liabilities
Net decrease in cash and (178) (178)
cash equivalents
Cash and cash equivalents at 1 238 1 238
beginning of period
Cash and cash equivalents 31 31
held for sale at beginning
of period
Effect of foreign exchange 57 57
rate movements
Effect of cash balances (16) (16)
classified as held for sale
Cash and cash equivalents at 1 132 1 132
end of period
The aggregate effect of the above changes on the annual financial
statements for the period ended 30 September 2009:
Income statement
Continuing operations
Revenue 42 232 3 037 45 269
Per business segment:
Continuing operations
Equipment 16 461 618 17 079
Automotive 16 945 2 128 19 073
Handling 4 717 291 5 008
Logistics 4 087 4 087
Corporate 22 22
Revenue - continuing 42 232 3 037 45 269
operations
Discontinued operations
Car rental Scandinavia 1 121 330 1 451
Revenue - group operations 43 353 3 367 46 720
Cost of sales - continuing 32 528 2 768 35 296
operations
Balance sheet
reclassification
Inventory 6 737 299 7 036
Assets classified as held 2 657 (299) 2 358
for sale
Cash flow reclassification
Cash flow from operating
activities
Operating cash flows before 3 587 258 3 845
movements in working capital
Increase in working capital 882 3 885
Cash generated from 4 469 261 4 730
operations before investment
in rental assets
Net investment in fleet (760) (760)
leasing assets
Net investment in vehicle (69) (69)
rental fleet
Cash generated from 4 469 (568) 3 901
operations
Realised fair value (180) (180)
adjustments on financial
instruments
Finance costs and investment (834) (834)
income
Taxation paid (603) (603)
Cash flow from operations 2 852 (568) 2 284
Dividends paid (including (434) (434)
minority shareholders)
Net cash from operating 2 418 (568) 1 850
activities
Net cash applied to (1 211) 568 (643)
investing activities
Acquisition of property, (910) (910)
plant and equipment
Net investment in fleet (642) 642
leasing and equipment rental
assets
Net investment in car rental 74 (74)
vehicles
Net investment in leasing (139) (139)
receivables
Proceeds on disposal of 226 226
subsidiaries, investments,
intangibles and loans repaid
Proceeds on disposal of 180 180
property, plant and
equipment
Net cash inflow before 1 207 1 207
financing activities
Net cash from financing (647) (647)
activities
Ordinary shares issued 12 12
Increase in interest-bearing (659) (659)
liabilities
Net increase in cash and 560 560
cash equivalents
Cash and cash equivalents at 1 238 1 238
beginning of period
Cash and cash equivalents 31 31
held for sale at beginning
of period
Effect of foreign exchange (57) (57)
rate movements
Effect of cash balances (145) (145)
classified as held for sale
Cash and cash equivalents at 1 627 1 627
end of period
20 Auditor`s review
.
Deloitte & Touche has reviewed these interim results. The unmodified
review opinion is available for inspection at the company`s
registered office.
Salient features
31 Mar 31 Mar 30 Sep
2010 2009 2009
R million Reviewed Reviewed Audited
Number of ordinary shares in 209 063 208 687 208 733
issue, net of BEE and treasury
shares (000)
Net asset value per share 5 292 6 439 5 731
including investments at fair
value (cents)
Operating segments
The group has adopted IFRS 8 Operating Segments with effect from 1 October 2009.
IFRS 8 requires an entity to report financial and descriptive information about
its reportable segments. Operating segments are identified on the basis of
management reports of the group that are regularly reviewed by the chief
operating decision maker in deciding how to allocate resources and in assessing
performance. The executive committee of Barloworld Limited have been identified
as the chief operating decision maker. Management has determined the operating
segments based on the management reports to be consistent with the segmental
reporting that applied in IAS 14 and report on the operating segments as
follows:
- The equipment segment provides customers with integrated solutions that
include Caterpillar earthmoving equipment, engines and other complementary
brands.
- The automotive segment provides customers with integrated motor vehicle usage
solutions through the operation of car rental, motor retail and fleet service
business units.
- The handling segment provides customers with innovative solutions for material
handling needs including lift trucks, warehouse handling equipment and
distribution of agricultural equipment.
- The logistics segment provides customers with traditional logistics services
and supply chain management solutions.
- The corporate segment comprises all the other group activities including the
operations of the corporate office in Johannesburg and treasury in the United
Kingdom.
The executive committee evaluates the segment performance based on the operating
results plus any other items that are directly attributable to segments
including fair value adjustments on financial instruments. Interest costs are
excluded due to the centralised nature of the group`s treasury operations.
Revenue
Six months ended Year ended
31 Mar 31 Mar 30 Sep
2010 2009 2009
Reviewed Reviewed Audited
R million Restated* Restated*
Equipment 5 686 9 478 17 079
Automotive 10 535 9 286 19 073
Handling 2 147 2 917 5 008
Logistics 1 841 2 362 4 087
Corporate 13 28 22
Total continuing operations 20 222 24 071 45 269
Southern Africa 13 976 15 862 30 758
Europe 3 603 5 926 9 849
United States 753 1 023 1 725
Australia & Asia 1 890 1 260 2 937
Total continuing operations 20 222 24 071 45 269
*Restated for the treatment of IAS 16 - refer note 19
Operating profit/(loss)
Six months ended Year ended
31 Mar 31 Mar 30 Sep
2010 2009 2009
R million Reviewed Reviewed Audited
Equipment 204 686 1 293
Automotive 394 320 703
Handling (19) 44 (27)
Logistics (3) 33 77
Corporate (48) (38) (52)
Total continuing operations 528 1 045 1 994
Southern Africa 648 1 135 2 056
Europe (137) (82) (67)
United States (14) (20) (54)
Australia & Asia 31 12 59
Total continuing operations 528 1 045 1 994
Fair value adjustments
on financial instruments
Six months ended Year ended
31 Mar 31 Mar 30 Sep
2010 2009 2009
R million Reviewed Reviewed Audited
Equipment (20) (40) (151)
Automotive 1 2 (2)
Handling (5) (32) (29)
Logistics (2) (6)
Corporate 5 (4) (13)
Total continuing operations (21) (74) (201)
Southern Africa (20) (78) (200)
Europe (1) 4 (1)
United States
Australia & Asia
Total continuing operations (21) (74) (201)
Segment result: Operating
profit/(loss) including
fair value adjustments
Six months ended Year ended
31 Mar 31 Mar 30 Sep
2010 2009 2009
R million Reviewed Reviewed Audited
Equipment 184 646 1 142
Automotive 395 322 701
Handling (24) 12 (56)
Logistics (5) 33 71
Corporate (43) (42) (65)
Total continuing operations 507 971 1 793
Southern Africa 628 1 057 1 856
Europe (138) (78) (68)
United States (14) (20) (54)
Australia & Asia 31 12 59
Total continuing operations 507 971 1 793
Operating margin (%)
31 Mar 31 Mar 30 Sep
2010 2009 2009
Reviewed Reviewed Audited
R million Restated* Restated*
Equipment 3,6 7,2 7,6
Automotive 3,7 3,4 3,7
Handling (0,9) 1,5 (0,5)
Logistics (0,2) 1,4 1,9
Corporate
Total continuing operations 2,6 4,3 4,4
Southern Africa 4,6 7,2 6,7
Europe (3,8) (1,4) (0,7)
United States (1,9) (2,0) (3,1)
Australia & Asia 1,6 1,0 2,0
Total continuing operations 2,6 4,3 4,4
*Restated for the treatment of IAS 16 - refer note 19
Net operating assets/
(liabilities)
31 Mar 30 Sep
2010 2009
R million Reviewed Audited
Equipment 6 509 8 165
Automotive 5 906 5 281
Handling 1 504 1 679
Logistics 942 1 049
Corporate 131 (103)
Total continuing operations 14 992 16 071
Southern Africa 10 107 10 270
Europe 3 463 4 356
United States 401 499
Australia & Asia 1 021 946
Total continuing operations 14 992 16 071
Date: 10/05/2010 08:00:13 Produced by the JSE SENS Department.
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