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FWD
FWD
FWD - Freeworld Coatings Limited - Unaudited interim results for the six
months ended 31 March 2010
Freeworld Coatings Limited
(Incorporated in the Republic of South Africa)
Registration number 2007/021624/06
Share code: FWD & ISIN: ZAE000109450
("Freeworld Coatings")
Unaudited interim results for the six months ended 31 March 2010
- Revenues of R1 380 million maintained
- EBITDA, excluding fair value adjustments on financial
instruments, at R216 million was 4% down on the comparative
period`s record result, if the R29 million compensation payment
in that period is excluded
- Cashflows from operations at R128 million remains strong and are
equal to the comparative period
- Interest bearing debt is R45 million lower than March 2009
- "Product of the Year" awards for Cashmere and RemovAll
COMMENTARY
Freeworld Coatings CEO, Andre Lamprecht said:
"In the light of continuing weak economic conditions, similar to those
experienced in the second half of our last financial year, we consider our
half year results to be robust when compared to last year`s first half,
which represented an all time record. Revenue levels were maintained whilst
our earnings were impacted by higher depreciation and tax charges as well as
the stronger rand. Our comparable operating performance was therefore
relatively stable with similar pleasing cash flows. We continue to focus on
controlling costs and investing in our strong brands and appropriate aspects
of our business. This will assist in ensuring that we remain resilient in
these tough times."
Freeworld Coatings is a leader in the marketing and manufacture of
Decorative and Performance coatings in all southern African territories,
with some presence and export sales in other regions.
FINANCIAL REVIEW
Revenue from operations increased by 1% to R1 380 million, notwithstanding
the tough economic conditions which have continued to impact on the overall
demand for coatings. EBITDA, excluding fair value adjustments on financial
instruments, was 15% lower than the comparative period at R216 million. Last
year`s comparative period was an all time record and included a
R29 million compensation payment for the early termination of certain
agreements. If this payment is excluded, then the current period`s result is
4% lower.
The continued strength of the Rand has resulted in the Group recording
negative mark to market fair value adjustments of
R10 million on forward cover for raw material purchases, as against the
comparative period`s favourable adjustments of
R4 million. This coupled with a 9% higher depreciation and amortisation
charge resulted in operating profit of R166 million being down 20%. After
adjusting for the comparative period`s
R29 million compensation payment, this is 10% lower.
Net finance costs for the period amounted to R47 million and were 30% lower
than the comparative period, due to lower interest rates coupled with a
lower level of average borrowings.
The taxation charge of R44 million translates into an effective tax rate of
36.7%, which compares adversely against the comparative period`s 29.8%, as
assessed losses have been fully utilised.
Income from associates of R7 million is 7% higher than the comparative
period with an improved result from the DuPont Freeworld business.
Earnings per share at 39 cents were 29% lower than the comparative period
for the reasons stated above.
Cash generated from operations at R128 million was in line with that
achieved in the comparative period. Net cash used in investing activities
totalled R48 million, which was expended on the capital expenditure upgrade
programme.
Net interest bearing debt at R863 million represented a debt to equity ratio
of 29.4%, which is similar to 30 September 2009 and an improvement of 3.8%
points on 31 March 2009.
DECORATIVE COATINGS SEGMENT
The Decorative Coatings segment recorded stable revenue. EBITDA, excluding
fair value adjustments on financial instruments, declined by 19% to R157
million. As mentioned, the comparative period included the R29 million
compensation payment and taking this into account, the current period is 4%
lower. The retail channel had some improvement in sell-through due to new
initiatives, with the first three months reflecting a higher than normal
replenishment of stock. The trade and industrial channels had to contend
with the reduction in new work and tight credit conditions. A continued
delay remains in the flow through of South Africa`s R800 billion
infrastructural program. The African territories continued to perform well
and together with good export volumes benefited the first half`s trading
results.
PERFORMANCE COATINGS SEGMENT
The Performance Coatings segment`s revenues increased by 3%. EBITDA,
excluding fair value adjustments on financial instruments, declined by 5% to
R65 million due to mix changes and a lower contribution from the Colourant
Systems business. This business is experiencing a challenging year with the
tough industry conditions of its customers in Australia and more
particularly Europe, which is further compounded by Euro weakness.
Respectable sales levels were recorded in southern Africa whilst Malaysia
showed good growth. The Automotive Refinish business showed improved
performance with some product mix changes that resulted in volume increases,
mainly in the value line arena. We have expanded our distribution footprint
in specifically targeted areas and have also had a pleasing response to the
introduction of the Duxone refinish value line brand in the market place.
DIVIDEND AND SCHEME OF ARRANGEMENT
Shareholders of Freeworld Coatings are referred to SENS announcements made
on 31 March 2010 and 23 April 2010 regarding a proposed scheme of
arrangement in terms of section 311 of the Companies Act, details of which
have been disclosed to shareholders in a circular of 30 April 2010. In terms
of this scheme, shareholders are being offered R10.45 per share. The scheme
meeting of shareholders is set to take place on 14 June 2010 and the results
of the meeting are expected to be announced on 15 June 2010.
In view of this offer, which carries the board`s recommendation, the board
has decided not to declare an interim dividend, as payment thereof would
result in a corresponding reduction in the offer price.
In the event that the proposed scheme of arrangement is not approved by the
requisite majority of shareholders, this factor will be taken into account
in deliberations on a final dividend at year end.
OUTLOOK
Current economic circumstances will be affected by rising concern in
international markets over the crisis in Greece, and related concerns over
some other countries in the Euro zone, which inevitably will flow through to
the local environment, the impact and extent of which is very difficult to
determine at this stage. The board is confident that Freeworld Coatings`
management will continue to achieve competitive performance in challenging
and uncertain economic circumstances.
RM Godsell AJ Lamprecht
Chairman Chief Executive Officer
Directors: RM Godsell (Chairman), AJ Lamprecht (Chief Executive Officer), E
Links, MM Ngoasheng, B Ngonyama, DB Ntsebeza, NDB Orleyn, PM Surgey, DA
Thomas* (Australian)
Company Secretary: ELA Chamberlain
Transfer secretaries: Link Market Services South Africa (Proprietary)
Limited
CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months ended 31 March
Note Unaudited Unaudited Audited
6 months 6 months 12 months
March March September
2010 2009 2009
R`000 R`000 R`000
Restated Restated
Revenue 1 380 333 1 367 374 2 703 164
Earnings before interest, 216 348 254 909 424 884
tax, depreciation,
amortisation and fair value
adjustments
Fair value adjustments (9 939) 3 949 (26 248)
Earnings before interest, 206 409 258 858 398 636
tax, depreciation and
amortisation (EBITDA)
Depreciation and (40 675) (37 195) (76 685)
amortisation
Operating profit 165 734 221 663 321 951
Finance costs (52 735) (78 164) (125 259)
Income from investments 6 174 12 100 10 358
Profit before taxation 119 173 155 599 207 050
Income tax expense (43 696) (46 419) (68 354)
Profit after taxation 75 477 109 180 138 696
Income from associates 6 872 6 425 8 566
Profit for the period 82 349 115 605 147 262
Attributable to:
Non controlling interest 2 280 2 794 4 990
Equity holders of Freeworld 80 069 112 811 142 272
Coatings Limited
82 349 115 605 147 262
Earnings per share (basic 8 39 55 70
and diluted
in cents)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 31 March
Share Total Non-con- Interest
capital retained trolling of all
and income interest share-
premium and other R`000 holders
R`000 reserves R`000
R`000
Balance at 1 October 2008 2 583 409 169 540 23 313 2 776 262
Restatement - (9 518) - (9 518)
(refer note 6)
Restated balance at 2 583 409 160 022 23 313 2 766 744
1 October 2008
Total comprehensive income - 103 526 2 794 106 320
for the period
Barloworld Limited Share - 1 111 - 1 111
Option/Rights expense
recognised in equity
Freeworld Coatings Limited - 1 684 - 1 684
SARs expense recognised in
equity
Dividends on ordinary - (20 387) (3 164) (23 551)
shares
Restated balance at 2 583 409 245 956 22 943 2 852 308
31 March 2009
Balance at 2 583 409 169 540 23 313 2 776 262
1 October 2008
Restatement - (9 518) - (9 518)
(refer note 6)
Restated balance at 2 583 409 160 022 23 313 2 766 744
1 October 2008
Total comprehensive income - 126 725 4 990 131 716
for the period
Barloworld Limited Share - 1 426 - 1 426
Option/Rights expense
recognised in equity
Freeworld Coatings Limited - 3 622 - 3 622
SARs expense recognised in
equity
Dividends on ordinary - (30 581) (3 163) (33 744)
shares
Restated balance at 2 583 409 261 214 25 140 2 869 763
30 September 2009
Balance at 2 583 409 261 214 25 140 2 869 763
1 October 2009
Total comprehensive income - 77 094 2 280 79 374
for the period
Freeworld Coatings Limited - 1 029 - 1 029
SARs expense recognised in
equity
VAT recovered on 1 101 - - 1 101
incorporation costs
originally utilised against
share premium
Dividends on ordinary - (14 271) (3 359) (17 630)
shares
Balance at 2 584 510 325 066 24 061 2 933 637
31 March 2010
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 March
Unaudited Unaudited Audited
March March September
2010 2009 2009
R`000 R`000 R`000
Restated Restated
ASSETS
Non current assets 3 568 418 3 550 270 3 568 671
Property, plant and equipment 665 261 626 963 646 733
Goodwill 1 892 460 1 905 610 1 893 868
Intangible assets 785 174 789 726 794 847
Investment in associates 188 206 198 993 181 613
Finance lease receivables 33 772 98
Long term loans and receivables 7 421 10 384 9 558
Deferred taxation assets 29 863 17 822 41 954
Current assets 984 856 931 729 908 446
Inventories 428 974 455 274 385 807
Trade and other receivables 487 084 451 484 473 647
Taxation 7 447 2 724 10 538
Cash and cash equivalents 61 351 22 247 38 455
Total assets 4 553 274 4 481 999 4 477 118
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 2 584 510 2 583 409 2 583 409
Other reserves (33 024) (27 069) (31 078)
Retained income 358 090 273 025 292 292
Equity attributable to 2 909 576 2 829 365 2 844 623
shareholders of Freeworld
Coatings Limited
Non controlling interest 24 061 22 943 25 140
Total equity 2 933 637 2 852 308 2 869 763
Non current liabilities 908 207 881 128 944 804
Interest bearing liabilities 632 729 596 093 664 044
Deferred taxation liabilities 250 192 253 017 260 437
Provisions 25 286 23 424 16 237
Other non interest bearing - 8 594 4 086
liabilities
Current liabilities 711 430 748 563 662 551
Trade and other payables 407 767 358 442 426 833
Provisions 2 705 844 17 008
Current tax payable 8 851 15 010 13 353
Short term loans and bank 292 107 374 267 205 357
overdrafts
Total equity and liabilities 4 553 274 4 481 999 4 477 118
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 31 March
Unaudited Unaudited Audited
6 months 6 months 12 months
March March September
2010 2009 2009
R`000 R`000 R`000
Restated Restated
CASH FLOWS FROM OPERATING
ACTIVITIES
Cash receipts from customers 1 366 896 1 367 134 2 681 790
Cash paid to employees and (1 238 894) (1 240 608) (2 307 328)
suppliers
Cash generated from 128 002 126 526 374 462
operations
Finance costs (54 179) (80 005) (136 289)
Dividends received from 279 442 19 962
associates
Interest received 6 174 12 100 10 358
Income tax paid (44 281) (51 061) (84 811)
Cash flow from operations 35 995 8 002 183 682
Dividends paid (including (17 630) (23 550) (33 744)
non controlling interest
shareholders)
Cash inflow/(outflow) from 18 365 (15 548) 149 938
operating activities
CASH FLOW FROM INVESTING
ACTIVITIES
Decrease/(Increase) in long 2 201 (1 698) 565
term financial assets
Acquisition of property, (51 300) (49 794) (100 950)
plant and equipment
Replacement capital (38 051) (45 916) (68 082)
expenditure
Expansion capital (13 249) (3 878) (32 868)
expenditure
Acquisition of intangible (1 987) (5 437) (21 979)
assets
Proceeds on disposal of 2 892 1 749 3 323
property, plant and
equipment
Net cash used in investing (48 195) (55 180) (119 041)
activities
Net cash (outflow)/inflow (29 830) (70 728) 30 897
before financing activities
CASH FLOWS FROM FINANCING
ACTIVITIES
Additional equity funding 1 101 - -
arising from VAT recovered
on incorporation costs
originally utilised against
share premium
(Decrease)/Increase (35 124) (8 934) 85 042
in long term interest
bearing borrowings
Increase/(Decrease) 86 750 30 727 (148 666)
in short term interest
bearing liabilities
Net cash inflow/(outflow) 52 726 21 793 (63 624)
from financing activities
Net increase/(decrease) in 22 896 (48 935) (32 727)
cash and cash equivalents
Cash and cash equivalents at 38 455 71 182 71 182
beginning of period
Cash and cash equivalents at 61 351 22 247 38 455
end of period
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 31 March
Unaudited Unaudited Audited
6 months 6 months 12 months
March March September
2010 2009 2009
R`000 R`000 R`000
Restated Restated
Profit for the period 82 349 115 605 147 262
Other comprehensive income
(net of tax)
Movement on foreign currency translation (5 547) 1 375 (18 399)
reserve
Net actuarial gains and losses - 130 4
Increase in fair value of hedging 2 572 (10 796) (9 618)
instruments
Other reserve movements - 6 12 467
Other comprehensive income for (2 975) (9 285) (15 546)
the period
Total comprehensive income for 79 374 106 320 131 716
the period
Attributable to:
Non controlling interest 2 280 2 794 4 990
Equity holders of Freeworld Coatings 77 094 103 526 126 726
Limited
Total comprehensive income for 79 374 106 320 131 716
the period
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
for the six months ended 31 March
1 STATEMENT OF COMPLIANCE
The abridged report has been prepared in accordance with IAS 34, Interim
Financial Reporting, Schedule 4 of the Companies Act 61 of 1973, as amended,
and the JSE Limited`s Listing disclosure requirements.
2 ACCOUNTING POLICIES
The abridged report has been prepared using accounting policies that comply
with International Financial Reporting Standards.
The accounting policies are consistent with those applied in the annual
financial statements for the year ended September 2009, with the exception
of the implementation of the following new accounting standards, amendments
and circulars.
- IFRS 8: Operating Segments (effective 1 January 2009)
- IAS 1 (revised): Presentation of Financial Statements
(effective 1 January 2009)
- IAS 23 (revised): Borrowing Costs (effective 1 January 2009)
- IAS 38 (amended): Intangible assets (effective 1 January 2009)
The application of IFRS 8 and IAS 1 (revised) has introduced certain changes
to the presentation of the financial statements and segment information. No
adjustments were necessary on the adoption of IFRS 8.
The application of IAS 23 has removed the policy election to either
capitalise or expense borrowing costs that are directly attributable to the
acquisition, construction or production of a qualifying asset. All such
borrowing costs are now required to be capitalised. This application is
prospective.
Comparative financial statements have been restated to account for the
amendment to IAS 38: Intangible assets. Previously, merchandising and
promotional stock items were included in inventory and expensed to the
income statement when utilised.
In accordance with the amendment in IAS 38, the Group must expense all
merchandising and promotional items, when having access to such items,
regardless of when these items are utilised by the Group. The effect of the
restatement can be found in note 6.
3 RELATED PARTY TRANSACTIONS
There has been no significant change in related party relationships since
the previous periods.
Other than in the normal course of business there have been no significant
transactions during the period.
4 SUPPLEMENTARY BALANCE SHEET AND INCOME STATEMENT INFORMATION
Unaudited Unaudited Audited
March March September
2010 2009 2009
Restated Restated
Net asset value per share (cents) 1 439 1 399 1 408
Weighted average number of shares in 203 872 203 872 203 872
issue (000`s)
Headline earnings per share (basic 39 54 69
and diluted in cents)
5 INTERIM FINANCIAL STATEMENTS
The interim financial statements for the six months ended
31 March 2010 are unaudited.
6 RESTATEMENTS
The effect of the IAS 38 restatements (refer to note 2 for further
background) on the comparative financial statements is summarised
below.
Previously Currently Difference
reported reported R`000
R`000 R`000
Income statement
31 March 2009
EBITDA 258 158 258 858 700
Taxation (46 223) (46 419) (196)
Profit for the period 115 101 115 605 504
Earnings 112 307 112 811 504
Headline earnings 108 845 109 349 504
30 September 2009
EBITDA 398 335 398 636 301
Taxation (68 270) (68 354) (84)
Profit for the period 147 045 147 262 217
Earnings 142 055 142 272 217
Headline earnings 139 675 139 892 217
Statement of financial position
31 March 2009
Inventories 467 793 455 274 (12 519)
Interest of shareholders of 2 838 379 2 829 365 (9 014)
Freeworld Coatings Limited
Non controlling interest 22 943 22 943 -
Deferred taxations assets 17 822 17 822 -
Deferred taxations liabilities 256 522 253 017 (3 505)
30 September 2009
Inventories 398 725 385 807 (12 918)
Interest of shareholders of 2 853 924 2 844 623 (9 301)
Freeworld Coatings Limited
Non controlling interest 25 140 25 140 -
Deferred taxations assets 41 954 41 954 -
Deferred taxations liabilities 264 054 260 437 (3 617)
7 OTHER IAS34 DISCLOSABLE ITEMS
R`000 Unaudited Unaudited Audited
6 months 6 months 12 months
March March September
2010 2009 2009
R`000 R`000 R`000
Restated Restated
Inventory written down to net 938 2 868 3 142
realisable value during the
period
Impairment losses recognised on - - 222
items of property plant and
equipment
Acquisitions of items of 51 300 49 794 100 950
property, plant and equipment
Disposals of items of property, (3 026) (4 595) (3 788)
plant and equipment
8 EARNINGS PER SHARE
8.1 FULLY CONVERTED WEIGHTED AVERAGE
NUMBER OF SHARES
Weighted average number of 203 872 203 872 203 872
ordinary shares
Fully converted weighted average 203 872 203 872 203 872
number of shares
8.2 EARNINGS
Profit for the period from 80 069 112 811 142 272
continued operations attributable
to equity holders of Freeworld
Coatings Limited
Total earnings 80 069 112 811 142 272
Earnings per share (cents) 39 55 70
Basic and diluted
Weighted average number of 203 872 203 872 203 872
ordinary shares
Earnings per share (cents) 39 55 70
8 EARNINGS PER SHARE (continued)
R`000 Unaudited Unaudited Audited
6 months 6 months 12 months
March March September
2010 2009 2009
R`000 R`000 R`000
Restated Restated
8.3 HEADLINE EARNINGS PER SHARE
Profit for the period from 80 069 112 811 142 272
continued operations attributable
to equity holders of Freeworld
Coatings Limited
Adjusted for the following
- Share of profit on sale - (4 000) (4 000)
of associate`s assets
Impairment of property, - - 222
plant and equipment
Loss/(Profit) on disposal 166 (31) 465
of plant and equipment
- Other - - 7
Tax effect of above (35) 569 926
Headline earnings 80 199 109 349 139 892
Weighted average number of shares 203 872 203 872 203 872
in issue for the period
Headline earnings per share - 39 54 69
basic (cents)
Headline earnings per share - 39 54 69
diluted (cents)
9 COMMITMENTS
Capital expenditure commitments
to be incurred:
Contracted 23 799 37 698 25 628
Approved but not 11 441 8 147 7 304
Yet contracted
35 240 45 845 32 932
Operating lease commitments 44 716 35 741 30 435
Finance lease commitments 455 176 597
10 CONTINGENT LIABILITIES
Guarantees to third parties 21 524 7 511 11 536
Freeworld Coatings Limited has
and its subsidiaries have the
following
guarantees in place:
Customs and services 1 536 1 511 1 536
Bank overdrafts 6 000 6 000 6 000
Payment guarantees 13 988 - 4 000
21 524 7 511 11 536
In terms of the Unbundling Agreement, Freeworld Coatings Limited has
guaranteed the first A$5 million of any environmental claim made on
Barloworld Limited by the purchaser of the Australian business for a
maximum period
of 8 years. An environmental insurance policy is in place
in this regards.
11 POST BALANCE SHEET EVENTS
There are no post balance sheet events in terms of IAS 10.
SEGMENTAL REPORTING
For management purposes, the Group is organised into two major operating
divisions, namely Decorative and Performance Coatings. These divisions are
the basis on which the Group reports its primary segmental information.This
is consistent with prior periods.
Half year ended 31 March 2010
R`000 Decorative Performance Elimina- Total Group
Coatings Coatings tions
Consolidated segment 965 055 457 334 (42 056) 1 380 333
revenue
Segment result
*EBITDA before fair 157 224 64 508 (5 384) 216 348
value adjustments
Fair value (8 119) (1 820) - (9 939)
adjustments
*EBITDA after fair 149 105 62 688 (5 384) 206 409
value adjustments
Depreciation and (29 302) (11 373) - (40 675)
amortisation
Segmental operating 119 803 51 315 (5 384) 165 734
profit
Finance costs (52 735)
Income from 6 174
investments
Income tax expense (43 696)
Profit after tax 75 477
Income from 6 872
associates
Attributable to (2 280)
minority shareholders
Attributable to 80 069
Freeworld Coatings
Limited shareholders
*EBITDA - Earnings before interest, tax, depreciation and amortisation.
Segment balance sheet
Segmental total 3 700 197 828 393 (224 873) 4 303 717
assets
Segmental non (616 449) (227 780) 149 428 (694 801)
interest bearing
liabilities
Segmental net 3 083 748 600 613 (75 445) 3 608 916
operating assets
Segmental interest (967 089) (33 192) 75 445 (924 836)
bearing liabilities
Segmental cash and 59 048 2 303 - 61 351
cash equivalents
Segmental net assets 2 175 707 569 724 - 2 745 431
Investment in 188 206
associates
Net assets 2 933 637
Half year ended 31 March 2009
R`000 Decorative Performance Elimina- Total Group
Coatings Coatings tions
Consolidated segment 962 698 443 222 (38 546) 1 367 374
revenue
Segment result
*EBITDA before fair 193 574 68 155 (6 820) 254 909
value adjustments
Fair value 1 983 1 966 - 3 949
adjustments
*EBITDA after fair 195 557 70 121 (6 820) 258 858
value adjustments
Depreciation and (26 823) (10 372) - (37 195)
amortisation
Segmental operating 168 734 59 749 (6 820) 221 663
profit
Finance costs (78 164)
Income from 12 100
investments
Income tax expense (46 419)
Profit after tax 109 180
Income from 6 425
associates
Attributable to (2 794)
minority shareholders
Attributable to 112 811
Freeworld Coatings
Limited shareholders
*EBITDA - Earnings before interest, tax, depreciation and
amortisation.
Segment balance sheet
Segmental total 3 709 631 848 887 (297 759) 4 260 759
assets
Segmental non (530 623) (286 664) 157 956 (659 331)
interest bearing
liabilities
Segmental net 3 179 008 562 223 (139 803) 3 601 428
operating assets
Segmental interest (1 086 516) (23 647) 139 803 (970 360)
bearing liabilities
Segmental cash and 2 878 19 369 - 22 247
cash equivalents
Segmental net 2 095 370 557 945 - 2 653 315
assets
Investment in 198 993
associates
Net assets 2 852 308
Half year ended 31 September 2009
R`000 Decorative Performance Elimina- Total Group
Coatings Coatings tions
Consolidated segment 1 797 257 984 083 (78 176) 2 703 164
revenue
Segment result
*EBITDA before fair 302 676 129 405 (7 197) 424 884
value adjustments
Fair value (23 963) (2 285) - (26 248)
adjustments
*EBITDA after fair 278 713 127 120 (7 197) 398 636
value adjustments
Depreciation and (55 138) (21 547) - (76 685)
amortisation
Segmental operating 223 575 105 573 (7 197) 321 951
profit
Finance costs (125 259)
Income from 10 358
investments
Income tax expense (68 354)
Profit after tax 138 696
Income from 8 566
associates
Attributable to (4 990)
minority shareholders
Attributable to 142 272
Freeworld Coatings
Limited shareholders
*EBITDA - Earnings before interest, tax, depreciation and
amortisation.
Segment balance sheet
Segmental total 3 679 682 878 544 (301 176) 4 257 050
assets
Segmental non (622 564) (315 840) 200 450 (737 954)
interest bearing
liabilities
Segmental net 3 057 118 562 704 (100 726) 3 519 096
operating assets
Segmental interest (947 912) (22 215) 100 726 (869 401)
bearing liabilities
Segmental cash and 32 121 6 334 - 38 455
cash equivalents
Segmental net assets 2 141 327 546 823 - 2 688 150
Investment in 181 613
associates
Net assets 2 869 763
Freeworld Coatings Limited`s two segments operate mainly in southern Africa
at present and therefore a geographical split is not meaningful.
Prior period figures have been restated for the following items:
- Segment revenue and results: The eliminations column only
relates to intercompany transactions between companies from
different segments. Previously all intercompany sales between
companies within the group were shown in the eliminations
column.
- Segment balance sheet: Eliminations for balances between
segments are shown seperately in the eliminations column.
Previously balances were eliminated within the segment.
Half year ended 31 March 2009
R`000 Decora-tive Perfor- Elimina- Total
Coatings mance tions Group
Coatings
Consolidated segment (38 761) (55 013) 93 774 -
revenue
Segment result
*EBITDA before fair 7 158 (1 683) (5 475) -
value adjustments
Fair value adjustments - - - -
*EBITDA after fair 7 158 (1 683) (5 475) -
value adjustments
Depreciation and - - - -
amortisation
Segmental operating 7 158 (1 683) (5 475) -
profit
Segment balance sheet
Segmental total assets 286 148 11 611 (297 759) -
Segmental non interest (146 345) (11 611) 157 956 -
bearing liabilities
Segmental net 139 803 - (139 803) -
operating assets
Segmental interest (139 803) - 139 803 -
bearing liabilities
Segmental cash and - - - -
cash equivalents
Segmental net assets - - - -
For the year ended 30 September 2009
R`000 Decora- Perfor- Elimina- Total
tive mance tions Group
Coatings Coatings
Consolidated segment (176 736) (20 247) 196 983 -
revenue
Segment result
*EBITDA before fair 6 112 (81) (6 031) -
value adjustments
Fair value adjustments - - - -
*EBITDA after fair 6 112 (81) (6 031) -
value adjustments
Depreciation and - - - -
amortisation
Segmental operating 6 112 (81) (6 031) -
profit
Segment balance sheet
Segmental total assets 255 992 45 184 (301 176) -
Segmental non interest (155 266) (45 184) 200 450 -
bearing liabilities
Segmental net 100 726 - (100 726) -
operating assets
Segmental interest (100 726) - 100 726 -
bearing liabilities
Segmental cash and - - - -
cash equivalents
Segmental net assets - - - -
Date: 26/05/2010 07:05:32 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
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FWD
FWD - Freeworld Coatings Limited - Unaudited interim results for the six
months ended 31 March 2010
Freeworld Coatings Limited
(Incorporated in the Republic of South Africa)
Registration number 2007/021624/06
Share code: FWD & ISIN: ZAE000109450
("Freeworld Coatings")
Unaudited interim results for the six months ended 31 March 2010
- Revenues of R1 380 million maintained
- EBITDA, excluding fair value adjustments on financial
instruments, at R216 million was 4% down on the comparative
period`s record result, if the R29 million compensation payment
in that period is excluded
- Cashflows from operations at R128 million remains strong and are
equal to the comparative period
- Interest bearing debt is R45 million lower than March 2009
- "Product of the Year" awards for Cashmere and RemovAll
COMMENTARY
Freeworld Coatings CEO, Andre Lamprecht said:
"In the light of continuing weak economic conditions, similar to those
experienced in the second half of our last financial year, we consider our
half year results to be robust when compared to last year`s first half,
which represented an all time record. Revenue levels were maintained whilst
our earnings were impacted by higher depreciation and tax charges as well as
the stronger rand. Our comparable operating performance was therefore
relatively stable with similar pleasing cash flows. We continue to focus on
controlling costs and investing in our strong brands and appropriate aspects
of our business. This will assist in ensuring that we remain resilient in
these tough times."
Freeworld Coatings is a leader in the marketing and manufacture of
Decorative and Performance coatings in all southern African territories,
with some presence and export sales in other regions.
FINANCIAL REVIEW
Revenue from operations increased by 1% to R1 380 million, notwithstanding
the tough economic conditions which have continued to impact on the overall
demand for coatings. EBITDA, excluding fair value adjustments on financial
instruments, was 15% lower than the comparative period at R216 million. Last
year`s comparative period was an all time record and included a
R29 million compensation payment for the early termination of certain
agreements. If this payment is excluded, then the current period`s result is
4% lower.
The continued strength of the Rand has resulted in the Group recording
negative mark to market fair value adjustments of
R10 million on forward cover for raw material purchases, as against the
comparative period`s favourable adjustments of
R4 million. This coupled with a 9% higher depreciation and amortisation
charge resulted in operating profit of R166 million being down 20%. After
adjusting for the comparative period`s
R29 million compensation payment, this is 10% lower.
Net finance costs for the period amounted to R47 million and were 30% lower
than the comparative period, due to lower interest rates coupled with a
lower level of average borrowings.
The taxation charge of R44 million translates into an effective tax rate of
36.7%, which compares adversely against the comparative period`s 29.8%, as
assessed losses have been fully utilised.
Income from associates of R7 million is 7% higher than the comparative
period with an improved result from the DuPont Freeworld business.
Earnings per share at 39 cents were 29% lower than the comparative period
for the reasons stated above.
Cash generated from operations at R128 million was in line with that
achieved in the comparative period. Net cash used in investing activities
totalled R48 million, which was expended on the capital expenditure upgrade
programme.
Net interest bearing debt at R863 million represented a debt to equity ratio
of 29.4%, which is similar to 30 September 2009 and an improvement of 3.8%
points on 31 March 2009.
DECORATIVE COATINGS SEGMENT
The Decorative Coatings segment recorded stable revenue. EBITDA, excluding
fair value adjustments on financial instruments, declined by 19% to R157
million. As mentioned, the comparative period included the R29 million
compensation payment and taking this into account, the current period is 4%
lower. The retail channel had some improvement in sell-through due to new
initiatives, with the first three months reflecting a higher than normal
replenishment of stock. The trade and industrial channels had to contend
with the reduction in new work and tight credit conditions. A continued
delay remains in the flow through of South Africa`s R800 billion
infrastructural program. The African territories continued to perform well
and together with good export volumes benefited the first half`s trading
results.
PERFORMANCE COATINGS SEGMENT
The Performance Coatings segment`s revenues increased by 3%. EBITDA,
excluding fair value adjustments on financial instruments, declined by 5% to
R65 million due to mix changes and a lower contribution from the Colourant
Systems business. This business is experiencing a challenging year with the
tough industry conditions of its customers in Australia and more
particularly Europe, which is further compounded by Euro weakness.
Respectable sales levels were recorded in southern Africa whilst Malaysia
showed good growth. The Automotive Refinish business showed improved
performance with some product mix changes that resulted in volume increases,
mainly in the value line arena. We have expanded our distribution footprint
in specifically targeted areas and have also had a pleasing response to the
introduction of the Duxone refinish value line brand in the market place.
DIVIDEND AND SCHEME OF ARRANGEMENT
Shareholders of Freeworld Coatings are referred to SENS announcements made
on 31 March 2010 and 23 April 2010 regarding a proposed scheme of
arrangement in terms of section 311 of the Companies Act, details of which
have been disclosed to shareholders in a circular of 30 April 2010. In terms
of this scheme, shareholders are being offered R10.45 per share. The scheme
meeting of shareholders is set to take place on 14 June 2010 and the results
of the meeting are expected to be announced on 15 June 2010.
In view of this offer, which carries the board`s recommendation, the board
has decided not to declare an interim dividend, as payment thereof would
result in a corresponding reduction in the offer price.
In the event that the proposed scheme of arrangement is not approved by the
requisite majority of shareholders, this factor will be taken into account
in deliberations on a final dividend at year end.
OUTLOOK
Current economic circumstances will be affected by rising concern in
international markets over the crisis in Greece, and related concerns over
some other countries in the Euro zone, which inevitably will flow through to
the local environment, the impact and extent of which is very difficult to
determine at this stage. The board is confident that Freeworld Coatings`
management will continue to achieve competitive performance in challenging
and uncertain economic circumstances.
RM Godsell AJ Lamprecht
Chairman Chief Executive Officer
Directors: RM Godsell (Chairman), AJ Lamprecht (Chief Executive Officer), E
Links, MM Ngoasheng, B Ngonyama, DB Ntsebeza, NDB Orleyn, PM Surgey, DA
Thomas* (Australian)
Company Secretary: ELA Chamberlain
Transfer secretaries: Link Market Services South Africa (Proprietary)
Limited
CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months ended 31 March
Note Unaudited Unaudited Audited
6 months 6 months 12 months
March March September
2010 2009 2009
R`000 R`000 R`000
Restated Restated
Revenue 1 380 333 1 367 374 2 703 164
Earnings before interest, 216 348 254 909 424 884
tax, depreciation,
amortisation and fair value
adjustments
Fair value adjustments (9 939) 3 949 (26 248)
Earnings before interest, 206 409 258 858 398 636
tax, depreciation and
amortisation (EBITDA)
Depreciation and (40 675) (37 195) (76 685)
amortisation
Operating profit 165 734 221 663 321 951
Finance costs (52 735) (78 164) (125 259)
Income from investments 6 174 12 100 10 358
Profit before taxation 119 173 155 599 207 050
Income tax expense (43 696) (46 419) (68 354)
Profit after taxation 75 477 109 180 138 696
Income from associates 6 872 6 425 8 566
Profit for the period 82 349 115 605 147 262
Attributable to:
Non controlling interest 2 280 2 794 4 990
Equity holders of Freeworld 80 069 112 811 142 272
Coatings Limited
82 349 115 605 147 262
Earnings per share (basic 8 39 55 70
and diluted
in cents)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 31 March
Share Total Non-con- Interest
capital retained trolling of all
and income interest share-
premium and other R`000 holders
R`000 reserves R`000
R`000
Balance at 1 October 2008 2 583 409 169 540 23 313 2 776 262
Restatement - (9 518) - (9 518)
(refer note 6)
Restated balance at 2 583 409 160 022 23 313 2 766 744
1 October 2008
Total comprehensive income - 103 526 2 794 106 320
for the period
Barloworld Limited Share - 1 111 - 1 111
Option/Rights expense
recognised in equity
Freeworld Coatings Limited - 1 684 - 1 684
SARs expense recognised in
equity
Dividends on ordinary - (20 387) (3 164) (23 551)
shares
Restated balance at 2 583 409 245 956 22 943 2 852 308
31 March 2009
Balance at 2 583 409 169 540 23 313 2 776 262
1 October 2008
Restatement - (9 518) - (9 518)
(refer note 6)
Restated balance at 2 583 409 160 022 23 313 2 766 744
1 October 2008
Total comprehensive income - 126 725 4 990 131 716
for the period
Barloworld Limited Share - 1 426 - 1 426
Option/Rights expense
recognised in equity
Freeworld Coatings Limited - 3 622 - 3 622
SARs expense recognised in
equity
Dividends on ordinary - (30 581) (3 163) (33 744)
shares
Restated balance at 2 583 409 261 214 25 140 2 869 763
30 September 2009
Balance at 2 583 409 261 214 25 140 2 869 763
1 October 2009
Total comprehensive income - 77 094 2 280 79 374
for the period
Freeworld Coatings Limited - 1 029 - 1 029
SARs expense recognised in
equity
VAT recovered on 1 101 - - 1 101
incorporation costs
originally utilised against
share premium
Dividends on ordinary - (14 271) (3 359) (17 630)
shares
Balance at 2 584 510 325 066 24 061 2 933 637
31 March 2010
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 March
Unaudited Unaudited Audited
March March September
2010 2009 2009
R`000 R`000 R`000
Restated Restated
ASSETS
Non current assets 3 568 418 3 550 270 3 568 671
Property, plant and equipment 665 261 626 963 646 733
Goodwill 1 892 460 1 905 610 1 893 868
Intangible assets 785 174 789 726 794 847
Investment in associates 188 206 198 993 181 613
Finance lease receivables 33 772 98
Long term loans and receivables 7 421 10 384 9 558
Deferred taxation assets 29 863 17 822 41 954
Current assets 984 856 931 729 908 446
Inventories 428 974 455 274 385 807
Trade and other receivables 487 084 451 484 473 647
Taxation 7 447 2 724 10 538
Cash and cash equivalents 61 351 22 247 38 455
Total assets 4 553 274 4 481 999 4 477 118
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 2 584 510 2 583 409 2 583 409
Other reserves (33 024) (27 069) (31 078)
Retained income 358 090 273 025 292 292
Equity attributable to 2 909 576 2 829 365 2 844 623
shareholders of Freeworld
Coatings Limited
Non controlling interest 24 061 22 943 25 140
Total equity 2 933 637 2 852 308 2 869 763
Non current liabilities 908 207 881 128 944 804
Interest bearing liabilities 632 729 596 093 664 044
Deferred taxation liabilities 250 192 253 017 260 437
Provisions 25 286 23 424 16 237
Other non interest bearing - 8 594 4 086
liabilities
Current liabilities 711 430 748 563 662 551
Trade and other payables 407 767 358 442 426 833
Provisions 2 705 844 17 008
Current tax payable 8 851 15 010 13 353
Short term loans and bank 292 107 374 267 205 357
overdrafts
Total equity and liabilities 4 553 274 4 481 999 4 477 118
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 31 March
Unaudited Unaudited Audited
6 months 6 months 12 months
March March September
2010 2009 2009
R`000 R`000 R`000
Restated Restated
CASH FLOWS FROM OPERATING
ACTIVITIES
Cash receipts from customers 1 366 896 1 367 134 2 681 790
Cash paid to employees and (1 238 894) (1 240 608) (2 307 328)
suppliers
Cash generated from 128 002 126 526 374 462
operations
Finance costs (54 179) (80 005) (136 289)
Dividends received from 279 442 19 962
associates
Interest received 6 174 12 100 10 358
Income tax paid (44 281) (51 061) (84 811)
Cash flow from operations 35 995 8 002 183 682
Dividends paid (including (17 630) (23 550) (33 744)
non controlling interest
shareholders)
Cash inflow/(outflow) from 18 365 (15 548) 149 938
operating activities
CASH FLOW FROM INVESTING
ACTIVITIES
Decrease/(Increase) in long 2 201 (1 698) 565
term financial assets
Acquisition of property, (51 300) (49 794) (100 950)
plant and equipment
Replacement capital (38 051) (45 916) (68 082)
expenditure
Expansion capital (13 249) (3 878) (32 868)
expenditure
Acquisition of intangible (1 987) (5 437) (21 979)
assets
Proceeds on disposal of 2 892 1 749 3 323
property, plant and
equipment
Net cash used in investing (48 195) (55 180) (119 041)
activities
Net cash (outflow)/inflow (29 830) (70 728) 30 897
before financing activities
CASH FLOWS FROM FINANCING
ACTIVITIES
Additional equity funding 1 101 - -
arising from VAT recovered
on incorporation costs
originally utilised against
share premium
(Decrease)/Increase (35 124) (8 934) 85 042
in long term interest
bearing borrowings
Increase/(Decrease) 86 750 30 727 (148 666)
in short term interest
bearing liabilities
Net cash inflow/(outflow) 52 726 21 793 (63 624)
from financing activities
Net increase/(decrease) in 22 896 (48 935) (32 727)
cash and cash equivalents
Cash and cash equivalents at 38 455 71 182 71 182
beginning of period
Cash and cash equivalents at 61 351 22 247 38 455
end of period
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 31 March
Unaudited Unaudited Audited
6 months 6 months 12 months
March March September
2010 2009 2009
R`000 R`000 R`000
Restated Restated
Profit for the period 82 349 115 605 147 262
Other comprehensive income
(net of tax)
Movement on foreign currency translation (5 547) 1 375 (18 399)
reserve
Net actuarial gains and losses - 130 4
Increase in fair value of hedging 2 572 (10 796) (9 618)
instruments
Other reserve movements - 6 12 467
Other comprehensive income for (2 975) (9 285) (15 546)
the period
Total comprehensive income for 79 374 106 320 131 716
the period
Attributable to:
Non controlling interest 2 280 2 794 4 990
Equity holders of Freeworld Coatings 77 094 103 526 126 726
Limited
Total comprehensive income for 79 374 106 320 131 716
the period
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
for the six months ended 31 March
1 STATEMENT OF COMPLIANCE
The abridged report has been prepared in accordance with IAS 34, Interim
Financial Reporting, Schedule 4 of the Companies Act 61 of 1973, as amended,
and the JSE Limited`s Listing disclosure requirements.
2 ACCOUNTING POLICIES
The abridged report has been prepared using accounting policies that comply
with International Financial Reporting Standards.
The accounting policies are consistent with those applied in the annual
financial statements for the year ended September 2009, with the exception
of the implementation of the following new accounting standards, amendments
and circulars.
- IFRS 8: Operating Segments (effective 1 January 2009)
- IAS 1 (revised): Presentation of Financial Statements
(effective 1 January 2009)
- IAS 23 (revised): Borrowing Costs (effective 1 January 2009)
- IAS 38 (amended): Intangible assets (effective 1 January 2009)
The application of IFRS 8 and IAS 1 (revised) has introduced certain changes
to the presentation of the financial statements and segment information. No
adjustments were necessary on the adoption of IFRS 8.
The application of IAS 23 has removed the policy election to either
capitalise or expense borrowing costs that are directly attributable to the
acquisition, construction or production of a qualifying asset. All such
borrowing costs are now required to be capitalised. This application is
prospective.
Comparative financial statements have been restated to account for the
amendment to IAS 38: Intangible assets. Previously, merchandising and
promotional stock items were included in inventory and expensed to the
income statement when utilised.
In accordance with the amendment in IAS 38, the Group must expense all
merchandising and promotional items, when having access to such items,
regardless of when these items are utilised by the Group. The effect of the
restatement can be found in note 6.
3 RELATED PARTY TRANSACTIONS
There has been no significant change in related party relationships since
the previous periods.
Other than in the normal course of business there have been no significant
transactions during the period.
4 SUPPLEMENTARY BALANCE SHEET AND INCOME STATEMENT INFORMATION
Unaudited Unaudited Audited
March March September
2010 2009 2009
Restated Restated
Net asset value per share (cents) 1 439 1 399 1 408
Weighted average number of shares in 203 872 203 872 203 872
issue (000`s)
Headline earnings per share (basic 39 54 69
and diluted in cents)
5 INTERIM FINANCIAL STATEMENTS
The interim financial statements for the six months ended
31 March 2010 are unaudited.
6 RESTATEMENTS
The effect of the IAS 38 restatements (refer to note 2 for further
background) on the comparative financial statements is summarised
below.
Previously Currently Difference
reported reported R`000
R`000 R`000
Income statement
31 March 2009
EBITDA 258 158 258 858 700
Taxation (46 223) (46 419) (196)
Profit for the period 115 101 115 605 504
Earnings 112 307 112 811 504
Headline earnings 108 845 109 349 504
30 September 2009
EBITDA 398 335 398 636 301
Taxation (68 270) (68 354) (84)
Profit for the period 147 045 147 262 217
Earnings 142 055 142 272 217
Headline earnings 139 675 139 892 217
Statement of financial position
31 March 2009
Inventories 467 793 455 274 (12 519)
Interest of shareholders of 2 838 379 2 829 365 (9 014)
Freeworld Coatings Limited
Non controlling interest 22 943 22 943 -
Deferred taxations assets 17 822 17 822 -
Deferred taxations liabilities 256 522 253 017 (3 505)
30 September 2009
Inventories 398 725 385 807 (12 918)
Interest of shareholders of 2 853 924 2 844 623 (9 301)
Freeworld Coatings Limited
Non controlling interest 25 140 25 140 -
Deferred taxations assets 41 954 41 954 -
Deferred taxations liabilities 264 054 260 437 (3 617)
7 OTHER IAS34 DISCLOSABLE ITEMS
R`000 Unaudited Unaudited Audited
6 months 6 months 12 months
March March September
2010 2009 2009
R`000 R`000 R`000
Restated Restated
Inventory written down to net 938 2 868 3 142
realisable value during the
period
Impairment losses recognised on - - 222
items of property plant and
equipment
Acquisitions of items of 51 300 49 794 100 950
property, plant and equipment
Disposals of items of property, (3 026) (4 595) (3 788)
plant and equipment
8 EARNINGS PER SHARE
8.1 FULLY CONVERTED WEIGHTED AVERAGE
NUMBER OF SHARES
Weighted average number of 203 872 203 872 203 872
ordinary shares
Fully converted weighted average 203 872 203 872 203 872
number of shares
8.2 EARNINGS
Profit for the period from 80 069 112 811 142 272
continued operations attributable
to equity holders of Freeworld
Coatings Limited
Total earnings 80 069 112 811 142 272
Earnings per share (cents) 39 55 70
Basic and diluted
Weighted average number of 203 872 203 872 203 872
ordinary shares
Earnings per share (cents) 39 55 70
8 EARNINGS PER SHARE (continued)
R`000 Unaudited Unaudited Audited
6 months 6 months 12 months
March March September
2010 2009 2009
R`000 R`000 R`000
Restated Restated
8.3 HEADLINE EARNINGS PER SHARE
Profit for the period from 80 069 112 811 142 272
continued operations attributable
to equity holders of Freeworld
Coatings Limited
Adjusted for the following
- Share of profit on sale - (4 000) (4 000)
of associate`s assets
Impairment of property, - - 222
plant and equipment
Loss/(Profit) on disposal 166 (31) 465
of plant and equipment
- Other - - 7
Tax effect of above (35) 569 926
Headline earnings 80 199 109 349 139 892
Weighted average number of shares 203 872 203 872 203 872
in issue for the period
Headline earnings per share - 39 54 69
basic (cents)
Headline earnings per share - 39 54 69
diluted (cents)
9 COMMITMENTS
Capital expenditure commitments
to be incurred:
Contracted 23 799 37 698 25 628
Approved but not 11 441 8 147 7 304
Yet contracted
35 240 45 845 32 932
Operating lease commitments 44 716 35 741 30 435
Finance lease commitments 455 176 597
10 CONTINGENT LIABILITIES
Guarantees to third parties 21 524 7 511 11 536
Freeworld Coatings Limited has
and its subsidiaries have the
following
guarantees in place:
Customs and services 1 536 1 511 1 536
Bank overdrafts 6 000 6 000 6 000
Payment guarantees 13 988 - 4 000
21 524 7 511 11 536
In terms of the Unbundling Agreement, Freeworld Coatings Limited has
guaranteed the first A$5 million of any environmental claim made on
Barloworld Limited by the purchaser of the Australian business for a
maximum period
of 8 years. An environmental insurance policy is in place
in this regards.
11 POST BALANCE SHEET EVENTS
There are no post balance sheet events in terms of IAS 10.
SEGMENTAL REPORTING
For management purposes, the Group is organised into two major operating
divisions, namely Decorative and Performance Coatings. These divisions are
the basis on which the Group reports its primary segmental information.This
is consistent with prior periods.
Half year ended 31 March 2010
R`000 Decorative Performance Elimina- Total Group
Coatings Coatings tions
Consolidated segment 965 055 457 334 (42 056) 1 380 333
revenue
Segment result
*EBITDA before fair 157 224 64 508 (5 384) 216 348
value adjustments
Fair value (8 119) (1 820) - (9 939)
adjustments
*EBITDA after fair 149 105 62 688 (5 384) 206 409
value adjustments
Depreciation and (29 302) (11 373) - (40 675)
amortisation
Segmental operating 119 803 51 315 (5 384) 165 734
profit
Finance costs (52 735)
Income from 6 174
investments
Income tax expense (43 696)
Profit after tax 75 477
Income from 6 872
associates
Attributable to (2 280)
minority shareholders
Attributable to 80 069
Freeworld Coatings
Limited shareholders
*EBITDA - Earnings before interest, tax, depreciation and amortisation.
Segment balance sheet
Segmental total 3 700 197 828 393 (224 873) 4 303 717
assets
Segmental non (616 449) (227 780) 149 428 (694 801)
interest bearing
liabilities
Segmental net 3 083 748 600 613 (75 445) 3 608 916
operating assets
Segmental interest (967 089) (33 192) 75 445 (924 836)
bearing liabilities
Segmental cash and 59 048 2 303 - 61 351
cash equivalents
Segmental net assets 2 175 707 569 724 - 2 745 431
Investment in 188 206
associates
Net assets 2 933 637
Half year ended 31 March 2009
R`000 Decorative Performance Elimina- Total Group
Coatings Coatings tions
Consolidated segment 962 698 443 222 (38 546) 1 367 374
revenue
Segment result
*EBITDA before fair 193 574 68 155 (6 820) 254 909
value adjustments
Fair value 1 983 1 966 - 3 949
adjustments
*EBITDA after fair 195 557 70 121 (6 820) 258 858
value adjustments
Depreciation and (26 823) (10 372) - (37 195)
amortisation
Segmental operating 168 734 59 749 (6 820) 221 663
profit
Finance costs (78 164)
Income from 12 100
investments
Income tax expense (46 419)
Profit after tax 109 180
Income from 6 425
associates
Attributable to (2 794)
minority shareholders
Attributable to 112 811
Freeworld Coatings
Limited shareholders
*EBITDA - Earnings before interest, tax, depreciation and
amortisation.
Segment balance sheet
Segmental total 3 709 631 848 887 (297 759) 4 260 759
assets
Segmental non (530 623) (286 664) 157 956 (659 331)
interest bearing
liabilities
Segmental net 3 179 008 562 223 (139 803) 3 601 428
operating assets
Segmental interest (1 086 516) (23 647) 139 803 (970 360)
bearing liabilities
Segmental cash and 2 878 19 369 - 22 247
cash equivalents
Segmental net 2 095 370 557 945 - 2 653 315
assets
Investment in 198 993
associates
Net assets 2 852 308
Half year ended 31 September 2009
R`000 Decorative Performance Elimina- Total Group
Coatings Coatings tions
Consolidated segment 1 797 257 984 083 (78 176) 2 703 164
revenue
Segment result
*EBITDA before fair 302 676 129 405 (7 197) 424 884
value adjustments
Fair value (23 963) (2 285) - (26 248)
adjustments
*EBITDA after fair 278 713 127 120 (7 197) 398 636
value adjustments
Depreciation and (55 138) (21 547) - (76 685)
amortisation
Segmental operating 223 575 105 573 (7 197) 321 951
profit
Finance costs (125 259)
Income from 10 358
investments
Income tax expense (68 354)
Profit after tax 138 696
Income from 8 566
associates
Attributable to (4 990)
minority shareholders
Attributable to 142 272
Freeworld Coatings
Limited shareholders
*EBITDA - Earnings before interest, tax, depreciation and
amortisation.
Segment balance sheet
Segmental total 3 679 682 878 544 (301 176) 4 257 050
assets
Segmental non (622 564) (315 840) 200 450 (737 954)
interest bearing
liabilities
Segmental net 3 057 118 562 704 (100 726) 3 519 096
operating assets
Segmental interest (947 912) (22 215) 100 726 (869 401)
bearing liabilities
Segmental cash and 32 121 6 334 - 38 455
cash equivalents
Segmental net assets 2 141 327 546 823 - 2 688 150
Investment in 181 613
associates
Net assets 2 869 763
Freeworld Coatings Limited`s two segments operate mainly in southern Africa
at present and therefore a geographical split is not meaningful.
Prior period figures have been restated for the following items:
- Segment revenue and results: The eliminations column only
relates to intercompany transactions between companies from
different segments. Previously all intercompany sales between
companies within the group were shown in the eliminations
column.
- Segment balance sheet: Eliminations for balances between
segments are shown seperately in the eliminations column.
Previously balances were eliminated within the segment.
Half year ended 31 March 2009
R`000 Decora-tive Perfor- Elimina- Total
Coatings mance tions Group
Coatings
Consolidated segment (38 761) (55 013) 93 774 -
revenue
Segment result
*EBITDA before fair 7 158 (1 683) (5 475) -
value adjustments
Fair value adjustments - - - -
*EBITDA after fair 7 158 (1 683) (5 475) -
value adjustments
Depreciation and - - - -
amortisation
Segmental operating 7 158 (1 683) (5 475) -
profit
Segment balance sheet
Segmental total assets 286 148 11 611 (297 759) -
Segmental non interest (146 345) (11 611) 157 956 -
bearing liabilities
Segmental net 139 803 - (139 803) -
operating assets
Segmental interest (139 803) - 139 803 -
bearing liabilities
Segmental cash and - - - -
cash equivalents
Segmental net assets - - - -
For the year ended 30 September 2009
R`000 Decora- Perfor- Elimina- Total
tive mance tions Group
Coatings Coatings
Consolidated segment (176 736) (20 247) 196 983 -
revenue
Segment result
*EBITDA before fair 6 112 (81) (6 031) -
value adjustments
Fair value adjustments - - - -
*EBITDA after fair 6 112 (81) (6 031) -
value adjustments
Depreciation and - - - -
amortisation
Segmental operating 6 112 (81) (6 031) -
profit
Segment balance sheet
Segmental total assets 255 992 45 184 (301 176) -
Segmental non interest (155 266) (45 184) 200 450 -
bearing liabilities
Segmental net 100 726 - (100 726) -
operating assets
Segmental interest (100 726) - 100 726 -
bearing liabilities
Segmental cash and - - - -
cash equivalents
Segmental net assets - - - -
Date: 26/05/2010 07:05:32 Produced by the JSE SENS Department.
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