| Tue 25 May 2010, 17:15 | | IVT - Invicta - Audited group results for the year ended 31 March 2010 |
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IVT
IVT
IVT - Invicta - Audited group results for the year ended 31 March 2010
INVICTA HOLDINGS LIMITED
Registration number: 1966/002182/06
(Incorporated in the Republic of South Africa)
Share code: IVT
ISIN: ZAE000029773
("Invicta" or "the Group")
AUDITED GROUP RESULTS for the year ended 31 MARCH 2010
Revenue decreased by 12,3%
Profit before taxation decreased by 9,5%
Earnings per share increased by 3,7%
Annual dividend increased by 9,4%
Consolidated condensed STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 March
% 2010 2009
Change R`000 R`000
Revenue (12,3) 3 968 872 4 523 535
Operating income (8,9) 453 293 497 356
Interest and dividends received 408 498 360 115
Finance costs 432 886 382 719
Share of associate 639 -
Profit before taxation (9,5) 429 544 474 752
Taxation 64 155 111 940
Profit for the year 0,7 365 389 362 812
Minority interest 44 493 50 000
Attributable to ordinary
shareholders 2,6 320 896 312 812
Earnings per share (cents) 3,7 453 437
Diluted earnings per share (cents) 0,9 441 437
Determination of headline earnings
Attributable earnings 320 896 312 812
Adjustments
- Negative goodwill on business
combination (7 952) -
- Impairment of property, plant
and equipment 190 4 000
- Goodwill impairment 3 442 638
- Release of deferred profit on
issue of shares by subsidiaries (3 870) (3 870)
- Profit on disposal of
investment - (232)
- Profit on disposal of property,
plant and equipment (3 732) (3 232)
Total before taxation and minority
interest (11 922) (2 696)
Taxation 1 616 1 001
Minority interest 1 412 (311)
Total adjustments (8 894) (2006)
Headline earnings 0,4 312 002 310 806
Shares in issue
Weighted average (000`s) 70 779 71 536
At the end of the year (000`s) 70 712 70 801
Number of shares used for diluted
earnings per share (000`s) 72 767 71 536
Headline earnings per share (cents) 1,6 441 434
Diluted headline earnings
per share (cents) (1,2) 429 434
Dividends per share* (cents) 9,4 151 138
- Interim (7,5) 49 53
- Final 20,0 102 85
* In accordance with IAS 10 the final dividend of 102 cents per share proposed
by the directors has not been reflected in the year-end results.
Consolidated condensed STATEMENT OF CASH FLOWS
for the year ended 31 March
2010 2009
R`000 R`000
Cash flows from operating activities
Cash generated from operations 590 226 87 972
Finance costs (432 886) (382 719)
Dividends paid (96 389) (112 626)
Taxation paid (25 329) (194 445)
Interest and dividends received 404 498 360 115
Net cash inflow (outflow) from
operating activities 444 120 (241 703)
Cash flows from investing activities
Net cash effects of asset acquisitions (74 458) (82 816)
Net cash effects of other investing
activities (191 556) (266 763)
Increase in long-term loans (6 721) -
Net cash effects of treasury share
investments (2 323) (44 854)
Net cash outflow from investing activities (275 058) (394 433)
Cash flows from financing activities
Net cash effects of borrowings raised 177 104 294 806
Net cash inflow from financing activities 177 104 294 806
Net increase (decrease) in
cash and cash equivalents 346 166 (341 330)
Cash and cash equivalents at the
beginning of the year (131 459) 209 871
Cash and cash equivalents at the
end of the year 214 707 (131 459)
SEGMENT INFORMATION
for the year ended 31 March
Group,
Capital financing
Engineering equipment and other
consumables and spares operations Total
R`000 R`000 R`000 R`000
2010
Revenue 2 018 304 1 749 538 201 030 3 968 872
Operating income 292 673 123 441 37 179 453 293
Total assets 1 233 928 884 232 3 818 954 5 937 114
Total liabilities 300 217 631 884 3 391 750 4 323 851
2009
Revenue 2 136 572 2 254 606 132 357 4 523 535
Operating income 325 567 141 510 30 279 497 356
Total assets 1 258 015 1 165 673 3 581 042 6 004 730
Total liabilities 521 607 967 168 3 179 704 4 668 479
Compliance with IFRS 8 in the current year has required certain comparatives in
the segment information to be restated.
Consolidated condensed STATEMENT OF FINANCIAL POSITION
as at 31 March
2010 2009
R`000 R`000
Assets
Non-current assets 3 706 514 3 495 310
Property, plant and equipment 312 860 228 997
Financial investments 2 882 206 1 195 100
Goodwill and other intangible assets 255 326 253 649
Long-term loans and financial asset 186 270 1 760 387
Deferred taxation 69 852 57 177
Current assets 2 230 600 2 509 420
Inventories 1 298 795 1 645 913
Trade and other receivables 670 979 688 106
Tax prepaid 273 50 340
Bank balances and cash 260 553 125 061
Total assets 5 937 114 6 004 730
Equity and liabilities
Capital and reserves 1 613 263 1 336 251
Attributable to ordinary shareholders 1 442 966 1 206 055
Minority interest 170 297 130 196
Non-current liabilities 3 223 347 3 096 348
Long-term borrowings and financial
liabilities 3 209 058 3 083 072
Deferred taxation 14 289 13 276
Current liabilities 1 100 504 1 572 131
Short-term borrowings 18 056 5 546
Trade, other payables and provisions 1 023 315 1 295 130
Tax liabilities 13 287 14 935
Bank overdrafts and bankers` acceptances 45 846 256 520
Total equity and liabilities 5 937 114 6 004 730
Consolidated condensed STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March
2010 2009
R`000 R`000
Share capital
Balance at beginning and end of the year 3 724 3 724
Share premium
Balance at beginning and end of the year 282 715 282 715
Treasury shares
Balance at beginning of the year (94 247) (49 393)
Treasury shares acquired (2 323) (44 854)
Balance at end of the year (96 570) (94 247)
Retained earnings
Balance at beginning of the year 972 824 763 697
Earnings attributable to ordinary
shareholders 320 896 312 812
Dividends paid (94 838) (103 685)
Balance at end of the year 1 198 882 972 824
Other reserves
Balance at beginning of the year 41 039 24 848
Arising from the issue of share
appreciation rights 22 045 19 270
Revaluation reserve written off on
liquidation of Group company (3 169) -
Arising on translation of
foreign operations (5 700) (3 079)
Balance at end of the year 54 215 41 039
Attributable to equity shareholders 1 442 966 1 206 055
Minority interest
Balance at beginning of the year 130 196 92 147
Earnings attributable to outside
shareholders 42 544 50 000
Net investment in subsidiaries 1 510 (2 952)
Dividends paid (3 953) (8 999)
Balance at end of the year 170 297 130 196
OTHER INFORMATION
2010 2009
Net interest-bearing debt:equity
(excluding long-term funding debt
secured by investments and loans) (%) - 19
Depreciation and amortisation (R`000) 32 356 28 612
Net asset value per share (cents) 2 040,6 1 703,4
Tangible net asset value per share (cents) 1 679,5 1 345,2
Capital expenditure (R`000) 83 424 91 984
Contingent liabilities (R`000) 313 1 428
Capital commitments (R`000) 988 7 026
NOTES TO THE FINANCIAL INFORMATION
Basis of Preparation
The consolidated financial statements have been prepared in accordance with IAS
34 Interim Financial Reporting, International Financial Reporting Standards, the
JSE Limited`s Listings Requirements and in the manner required by the Companies
Act of South Africa. The principal accounting policies as set out in the Group`s
2009 annual report have been consistently applied through the year ended 31
March 2010 and includes the adoption of IAS 1 (Revised) and IFRS 8.
FINANCIAL OVERVIEW
The Group has again produced outstanding results in a very challenging economic
environment. The market was characterised by weak demand for product, a global
liquidity crisis, a strong Rand and generally tough economic conditions.
Notwithstanding, turnover declined by only 12,3% to R3 969 million. Good margin
management and tight cost controls resulted in operating income declining by a
modest 8,9% to R453 million. Improved financing costs and dividends received,
led to profit for the year increasing by 0,7% to R365 million. A reduction in
the weighted average number of shares in issue resulted in earnings per share
increasing by 3,7% to 453 cents per share.
Particular emphasis was placed on working capital management, resulting in cash
generated from operations of R590 million being achieved, the highest ever.
The Group took advantage of weak market conditions and made a number of
strategic acquisitions. The more significant of these was the acquisition of
100% of Criterion Equipment (Pty) Limited effective 1 June 2009 and 70% of
Wegezi Power Holdings (Pty) Limited effective 1 April 2010. Criterion Equipment
operates in the materials handling sector with TCM forklifts being its primary
product. Wegezi Power Holdings manufactures and repairs transformers, electric
switch gears, panels and pumps.
BEARING MAN GROUP (BMG)
BMG continues to be the core profit base of the Group. Trading conditions in the
industrial consumable sector were particularly challenging. Commodity prices
were under pressure due to the global recession. Key market segments of mining
and manufacturing also showed substantial declines. Margins were under pressure
as the Rand strengthened. The competitive market environment, the strengthening
of the Rand and the clearing of higher price stock received at weaker exchange
rates contributed to lower margins. In spite of these adverse conditions, BMG
achieved turnover for the year of R2 018 million, a decline of only 5,5% and
operating profit declined by 10,1% to R293 million. The operating margin was a
pleasing 14,5%.
BMG continued to invest in staff training and education and in strategic
acquisitions, the most important of which was Wegezi Power Holdings.
CAPITAL EQUIPMENT DIVISION (CED)
The CED, being the more cyclical of the Group operations, showed a 22,4% decline
in revenue to R1 750 million. Acquisitions during the year accounted for 8,2% of
turnover. Exceptional margin management and cost control resulted in segment
profit declining by only 12,8% to R123 million. Good control of working capital
resulted in segment profit return on working capital of 48,9%.
The construction equipment divisions suffered the most in the CED. Demand for
product in this sector has declined dramatically in the face of the recent
recession and has been compounded by the completion of Soccer World Cup and
government infrastructure projects.
Criterion Equipment, which was acquired on 1 June 2009, has been restructured
and is operating profitably. It did not contribute meaningfully to segment
profits in the CED, but helped to absorb some of the overheads in the
construction equipment divisions. It is expected to make a significant
contribution to the CED in the coming year.
The agricultural equipment divisions experienced challenging conditions, with
total market sales of tractors for the period under review declining by 33% from
8 045 units to 5 406 units. Despite the decline in the market, the agricultural
machinery divisions improved market shares in key sectors and through tight
margin and cost management, produced the bulk of the CED`s segment profits.
OTHER OPERATIONS
The Group continued to strengthen its distribution base and structures in all of
its smaller operations, as well as completing some strategic property
transactions during the year.
PROSPECTS
Trading conditions in the sectors in which the Group operates appear to have
stabilised. The current strength of the Rand is however a source for concern as
it could lead to a reduction in the price of Group products and reduce the
income of key customers which operate in export orientated sectors.
Volumes in BMG appear to have stabilised, but trading is still volatile and
patchy. The macro global environment indicates a return to normal trading in the
medium term.
This should, in turn, result in increased demand for BMG products and services.
In the CED, agricultural machinery conditions are expected to continue to be
challenging. Low grain prices are expected to keep the demand for agricultural
machinery at current muted levels. Conditions in the construction equipment
market are still depressed and management does not expect this to improve in the
next 12 months. The division has successfully reduced its costs to ensure
profitable trading and working capital is carefully managed. The acquisition of
Criterion Equipment has been bedded down and the company is now profitable.
Criterion Equipment should make a meaningful contribution to the CED in the
coming year and will help to spread the construction equipment section`s
overheads.
In light of the more stable trading conditions and better economic expectations,
the Board has declared a final dividend of 102 cents per share resulting in
total dividends for the year of 151 cents per share, up 9,4% on last year. This
is a 3,0 times dividend cover ratio, which the Board intends to maintain until
market conditions have returned to normal.
The Board remains confident of the continued success of the Group and will
continue to seek out opportunities to grow its product base and penetrate new
markets.
AUDIT OPINION
The auditors, Deloitte & Touche, have issued an unmodified opinion on the Group
consolidated financial statements for the year ended 31 March 2010. A copy of
the audit report is available for inspection at the Company`s registered office.
DIVIDENDS
The Board has declared a final dividend of 102 cents per share.
The following dates are applicable:
Last date to trade "CUM" dividend Friday, 2 July 2010
First date to trade "EX" dividend Monday, 5 July 2010
Record date Friday, 9 July 2010
Payment date Monday, 12 July 2010
Share certificates may not be dematerialised or rematerialised between Monday, 5
July 2010 and Friday, 9 July 2010, both days inclusive.
By order of the Board
C Barnard
Secretary
Cape Town
25 May 2010
Registered office: Invicta Holdings Limited, 3rd Floor, Pepkor House, 36
Stellenberg Road, Parow Industria, 7493
PO Box 6077, Parow East, 7501
Transfer secretaries: Computershare Investor Services (Pty) Limited, Ground
Floor, 70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107
Directors: Dr CH Wiese*, C Barnard, A Goldstone, AK Masuku*#,
J Mthimunye*, DI Samuels*, LR Sherrell*#, RE Sherrell*,
AM Sinclair, CE Walters
* Non-executive
# Alternate
Sponsor: Deloitte & Touche Sponsor Services (Pty) Limited
www.invictaholdings.co.za
Date: 25/05/2010 17:15:15 Produced by the JSE SENS Department.
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