| Tue 29 Jun 2010, 14:30 | | AER - Amalgamated Electronic Corporation Limited - Group condensed consolidated |
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AER
AER
AER - Amalgamated Electronic Corporation Limited - Group condensed consolidated
reviewed results for the year ended 31 March 2010 and dividend declaration
AMALGAMATED ELECTRONIC CORPORATION LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1997/010036/06)
Share code: AER ISIN: ZAE 000070587
("Amecor") or ("the Group")
GROUP CONDENSED CONSOLIDATED REVIEWED RESULTS FOR THE YEAR ENDED 31 MARCH 2010
AND DIVIDEND DECLARATION
GROUP CONDENSED STATEMENT OF COMPREHENSIVE INCOME
Year ended Year ended
31 March 2010 31 March 2009
(Reviewed) (Audited)
Notes R`000 R`000
Revenue 139 906 140 459
Turnover 138 136 138 100
Cost of sales (69 696) (67 522)
Gross profit 68 440 70 578
Operating cost excluding (28 862) (28 241)
depreciation and amortisation
EBITDA 39 578 42 337
Depreciation and amortisation (2 397) (2 351)
Operating profit 37 181 39 986
Finance income 1 396 1 653
Finance expenses (1 431) (1 282)
Profit before taxation 37 146 40 357
Taxation (10 329) (10 700)
Profit 26 817 29 657
Other comprehensive income - -
Total comprehensive income 26 817 29 657
Attributable to:
Ordinary shareholders of Amecor 23 266 23 762
Non-controlling interest 3 551 5 895
Total comprehensive income 26 817 29 657
Earnings per share (cents) 3 30,8 33,7
Diluted earnings per share (cents) 3 30,8 31,9
GROUP CONDENSED STATEMENT OF FINANCIAL POSITION
31 March 2010 31 March 2009
(Reviewed) (Audited)
Notes R`000 R`000
ASSETS
Non-current assets 79 796 69 941
Property, plant and equipment 6 13 972 7 183
Intangible assets 11 521 7 725
Goodwill 54 034 54 034
Deferred tax asset 269 999
Current assets 88 540 88 152
Inventories 19 624 22 952
Trade and other receivables 39 072 46 030
Taxation 2 951 2 459
Cash and cash equivalents 26 893 16 711
Total assets 168 336 158 093
EQUITY AND LIABILITIES
Issued capital 72 610 71 904
Retained earnings 47 576 30 550
Non-controlling interest 15 097 13 020
Total equity 135 283 115 474
Non-current liabilities 9 942 12 051
Interest bearing borrowings 7 114 10 601
Deferred tax liabilities 2 828 1 450
Current liabilities 23 111 30 568
Trade and other payables 18 060 26 938
Bank overdraft 48 -
Short-term portion of interest 3 266 2 432
bearing borrowings
Taxation 1 737 1 198
Total equity and liabilities 168 336 158 093
Net asset value per share (cents) 4 179,0 160,6
Net number of shares in issue 75 565 71 921
(000`s)
GROUP CONDENSED STATEMENT OF CASH FLOWS
Year ended Year ended
31 March 2010 31 March 2009
(Reviewed) (Audited)
R`000 R`000
Net inflow from operating activities 25 061 11 585
Cash generated from operations 40 984 22 573
Net finance (expense)/income (35) 371
Taxation paid (8 174) (11 359)
Dividends paid (7 714) -
Net outflow from investing activities (11 994) (21 426)
Net (outflow)/inflow from financing (2 933) 10 506
activities
Net movement in cash balances 10 134 665
Cash and cash equivalents at beginning of 16 711 15 343
the year
Cash and cash equivalents acquired - 703
Cash and cash equivalents at the end of 26 845 16 711
the period
GROUP CONDENSED STATEMENT OF CHANGES IN EQUITY
Attribtable
to ordinary Non-
Issued shareholders of controlling Total
capital Amecor interest equity
R`000 R`000 R`000 R`000
Balance at 1 April 69 193 6 788 - 75 981
2008
Minorities acquired - - 7 125 7 125
Total comprehensive - 23 762 5 895 29 657
income
Treasury shares 2 711 - - 2 711
movement
Total changes 2 711 23 762 13 020 39 493
Balance at 1 April 71 904 30 550 13 020 115 474
2009
Issue of shares in 986 - - 986
respect of share
option
Dividends paid - (6 240) (1 474) (7 714)
Total comprehensive - 23 266 3 551 26 817
income
Treasury share (280) - - (280)
movement
Total changes 706 17 026 2 077 19 809
Balance at 31 March 72 610 47 576 15 097 135 283
2010
Issued capital includes share capital and share premium.
MANAGEMENT COMMENTARY
Financial review
Despite the tough trading conditions experienced throughout the period under
review, headline earnings achieved for the 12 months ended 31 March 2010 was
30,8 cents per share (2009: 33,7 cents). Turnover and profit before tax for the
period under review was reported as:
- R138,1 million (F2009: R138,1 million); and
- R37,1 million (F2009: R40,3 million) respectively.
The analysis of turnover and total comprehensive income on a segmental basis is
detailed herein. Cash generated from operations was R40,9 million (F2009: R22,5
million). Net inflow from operations contributed R25,1 million (F2009: R11,6
million) to total cash and cash equivalents recorded at R26,8 million (F2009:
R16,7 million) after capital and development of R12,9 million (F2009: R7,6
million) was incurred in the period under review as follows:
- New product development - R4,6 million;
- FSK new building completion costs - R7,5 million;
- Motor vehicles - R0,3 million; and
- Property, plant and equipment - R0,6 million.
Inventories on hand reduced by R3,3 million to R19,6 million (F2009: R22,9
million) through more efficient stock management systems. This also contributed
to the reduction in Trade and other payables from R26,9 million (F2009) to R18,1
million in the period under review.
Trade and other receivables were reduced from R46,0 million in F2009 to R39,1
million in F2010 due to reduction in debtors days and VAT recoveries.
Borrowings were reduced by the instalments paid on the ABSA Bank loan previously
procured to acquire the 50,1% shareholding in the PDS Group in F2009.
Net asset value per share increased by 11,5% to 179,0 cents (F2009: 160,6 cents)
and tangible net asset value per share increased by 23,6% to 92,3 cents (F2009:
74,7 cents).
Operational overview
Security and related production and sales
FSK Electronics ("FSK")
FSK Electronics is Amecor`s electronic security division, specialising in the
research, development and manufacturing of electronic security equipment.
Security companies throughout Africa use FSK technology to enable various alarm
systems` functionality. FSK products are primarily used to relay alarm signals
from a monitored site to a security control room where a response team is then
notified and dispatched. In addition, FSK manufactures and distributes products
essential for monitoring and tracking of security guards and response vehicles.
FSK`s advanced transmission technology consists of reliable communication
systems which are used for signal transfer. Data signals are transmitted
simultaneously via multiple mediums including GSM, RF, and internet protocols.
The dual transmission of GSM and RF ensures signal integrity, affording security
companies and alarm users complete peace of mind. FSK`s long history of
expertise and professionalism has enabled us to stay ahead of market demands,
and exceed client expectations in the security industry.
Network and annuity income
Sabre Radio Networks ("Sabre")
Sabre Radio Networks is a radio frequency, GSM and internet protocol based
network. Sabre networks utilise GRPS, SMS and radio signals to enable the
transmission/communication of data between monitored sites, control rooms, and
individual network users. Sabre Radio Networks relays a broad range of wireless
signals to transfer data. Data includes various alarm indicators, equipment
status reports and environmental monitoring. These signals range from panic
alarm call outs, to low fuel warnings on generators, or power savings achieved
from PowerStar voltage optimisation units.
All services offered by Sabre are tailored to meet each customer`s individual
requirements, allocating a specific amount of network bandwidth, for which a
subscription fee is charged. Sabre makes a valued contribution to Amecor`s
growing pool of annuity income, and proceeds to expand with the large number of
added service offerings and enhancements.
Supply and maintenance of alternative power sources
PDS Group
The PDS Group specialises in power generating machinery (generators, invertors,
UPS`s), covering a range of market sectors including commercial, corporate,
industrial and mining. PDS is a reputable group within the power generating
industry, and proudly upholds an uncontested industry reputation of professional
product quality, service and after sales support.
Product development
The Group continues to invest in research and development resulting in further
high quality products being launched into local and international markets.
Capital commitment
The Group has committed to ongoing product development costs in the next
financial year.
NOTES TO THE CONDENSED CONSOLIDATED REVIEWED FINANCIAL STATEMENTS
1. Significant accounting policies
Amecor is a company domiciled in South Africa. These condensed consolidated
reviewed annual financial statements of Amecor for the year ended 31 March 2010
comprise the Company and its subsidiaries (together referred to as the "Group").
These condensed consolidated reviewed annual financial statements were
authorised for issue by the board of directors on 29 June 2010.
Basis of preparation
These condensed consolidated reviewed results have been prepared in accordance
with the framework concepts and the measurement and recognition requirements of
the International Financial Reporting Standards ("IFRS") and containing
information required by the International Accounting Standards 34 - Interim
Financial Reporting ("IAS 34"), AC 500 standards, the Listings Requirements of
the JSE Limited and in the manner required by the Companies Act. IAS 1(R)
Presentation of Financial Statements was applied to the current financial
statements, whilst having no effect on the reported numbers. The names of the
statements have been changed in accordance with the naming conventions contained
within the revised standard. These condensed consolidated reviewed financial
statements do not include all of the information required for full financial
statements and should be read in conjunction with the consolidated annual
financial statements for the year ended 31 March 2010. The Group envisages
posting the annual reports towards the end of August 2010.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period or in the period of
the revision and future periods if the revision affects both current and future
periods.
The accounting policies have been applied consistently by Group companies and
have been applied consistently to all periods presented in these condensed
consolidated reviewed financial statements.
2. Review of results
Mazars has signed an unqualified review opinion on these condensed consolidated
financial statements, as required by the JSE Limited. These financial statements
have been approved by the board and condensed for the purposes of this report.
The auditors` review opinion is available for inspection at Amecor`s registered
office.
3. Earnings per share ("EPS")
EPS is based on the Group`s profit for the year ended 31 March 2010, divided by
the weighted average number of shares in issue during the 12 month period.
Comprehensive Weighted
income average number
attributable to of shares in
Amecor issue (net of
shareholders treasury shares Earnings
(Reviewed) of 2,4 million) per share
F2010 R`000 000`s Cents
Earnings 23 266 75 565 30,8
Diluted earnings 23 266 75 565 30,8
Headline earnings
reconciliation
Headline earnings 23 266 75 565 30,8
Diluted headline earnings 23 266 75 565 30,8
Comprehensive Weighted
income average number
attributable to of shares in
Amecor issue (net of
shareholders treasury shares Earnings
(Audited) of 2,1 million) per share
F2009 R`000 000`s Cents
Earnings 23 762 70 602 33,7
Diluted earnings 23 762 74 542 31,9
Headline earnings
reconciliation
Headline earnings 23 762 70 602 33,7
Diluted headline earnings 23 762 74 542 31,9
4. Net asset value ("NAV") per share
The net asset value per share is the value of the Group`s assets, less the sum
of the value of its liabilities, divided by the number of shares in issue at 31
March 2010.
Year ended Year ended
31 March 2010 31 March 2009
(Reviewed) (Audited)
Ordinary share capital and reserves (R`000) 135 283 115 474
Total number of shares in issue (000`s) (net 75 565 71 921
of treasury shares of 2,4 million, F2009:
2,1 million)
NAV per share (cents) 179,0 160,6
Ordinary share capital and reserves (R`000) 135 283 115 474
Goodwill (R`000) (54 034) (54 034)
Intangible assets (R`000) (11 521) (7 725)
Tangible NAV (R`000) 69 728 53 715
Total number of shares in issue (000`s) (net 75 565 71 921
of treasury shares of 2,4 million, F2009:
2,1 million)
Tangible NAV per share (cents) 92,3 74,7
5. Segmental analysis
The Group`s operating segments and segmental information presented in the
condensed consolidated reviewed results for the year ended 31 March 2010
represents the basis for segmental reporting. The business segment reporting
format reflects the Group`s management and internal reporting structure. Inter
segment transactions are concluded at arm`s length terms and conditions.
Year ended Year ended
31 March 2010 31 March 2009
(Reviewed) (Audited)
R`000 R`000
Segment turnover
Security and related production and sales 41 983 42 380
Network and annuity income 15 513 13 235
Supply and maintenance of alternative power 83 159 80 338
sources
Holding and management subsidiary companies 20 912 19 270
Reconciliation (23 431) (17 123)
Total turnover 138 136 138 100
Comprehensive income
Security and related production and sales 9 305 8 634
Network and annuity income 8 418 7 043
Supply and maintenance of alternative power 7 128 11 827
sources
Holding and management subsidiary companies 3 039 329
Reconciliation (1 073) 1 824
Total comprehensive income 26 817 29 657
Comprehensive income attributable to non-
controlling shareholders
Supply and maintenance of alternative power 3 551 5 895
sources
Assets
Security and related production and sales 53 847 44 568
Network and annuity income 22 914 16 657
Supply and maintenance of alternative power 47 129 48 573
sources
Holding and management subsidiary companies 107 050 96 974
Reconciliation (62 604) (48 679)
Total assets 168 336 158 093
With the change to IAS 1(R) the segments total comprehensive income is now
reported to the chief operating decision maker. The segment disclosures have
been restated to reflect this change.
6. Property, plant and equipment
The Group invested R7,5 million in the renovation of Amecor House, the end
result being a specifically designed manufacturing plant for the FSK and Sabre
subsidiary companies. Vehicles to the value of R0,3 million were acquired and a
further R0,6 million was spent on property, plant and equipment within the
Group.
7. Other related party transactions
Year ended Year ended
31 March 2010 31 March 2009
(Reviewed) (Audited)
R`000 R`000
Rental contracts with related parties 838 628
The rentals are charged at arms` length
and market related rates, as determined
by an independent third party.
Sales to other related parties - 9 771
The sales were transacted at arm`s length
and at market related prices
8. Post balance sheet events
Formerly contingently issuable shares which are no longer contingently issuable
Amecor lodged an application in the South Gauteng High Court, Johannesburg,
under case number 2010/8607 against Mr Rabie van der Merwe ("RDVM") and others
to have the arbitration proceedings, initially commenced with by RVDM, set
aside. The matter came before the High Court on 9 June 2010, and an order was
granted in the following terms:
1. It is declared that reference to arbitration of a dispute between RVDM (First
Respondent) and Acquired Finance (Proprietary) Limited, which dispute was
pending is of no force and effect in terms of section 3(2)(c) of the Arbitration
Act 42 of 1965;
2. RVDM is interdicted and restrained from proceedings with, or taking any steps
to give effect to the referral; and
3. RVDM is ordered to pay the costs of this application.
The effect of the order is that the arbritration proceedings are at an end and
RVDM cannot proceed therewith and must pay the cost of the application.
Amecor PowerStar
Amecor PowerStar is a recent addition to Amecor`s group of subsidiary companies.
In early 2010, Amecor concluded an agreement with UK engineering company EMSc,
granting Amecor PowerStar the sole distribution right to supply exclusive power
optimising equipment throughout South Africa. Amecor PowerStar`s primary
objective is to enhance Africa`s energy supply by helping businesses and the
national community to achieve cost savings and extensive power conservation on
electricity consumed.
9. Dividends
The Directors have declared a single annual dividend in the amount of 8 cents
per ordinary share (F2009: 8 cents). Accordingly the Group`s annual dividend,
payable on Monday, 26 July 2010, for the year ended 31 March 2010, will be
calculated as follows:
Distributable dividend (R`000) 6 238
Total number of shares in issue (000`s) 77 985
Dividend payable per share (cents) 8 cents
Dividend payment details
Last day to trade cum dividend Friday, 16 July 2010
Trading ex dividend commences Monday, 19 July 2010
Record date Friday, 23 July 2010
Payment date Monday, 26 July 2010
Share certificates may not be dematerialised or rematerialised between Monday,
19 July 2010 and Friday, 23 July 2010, both dates inclusive. The certificated
register will be closed for this period.
10. Directors
HS Courtney (Non-executive chairman)
M Noge (Non-executive director)
DH Alexander (Chief executive officer)
KA Colley (Financial director and company secretary)
KA Vieira (Operational director)
All of the above directors are South African and are resident in South Africa.
11. Outlook
We remain optimistic that our focused strategy and operational efficiency will
enable us to deliver positive returns for our shareholders.
We believe that the Group`s market position, low-cost, high quality products,
and commitment to organic and acquisitional growth by expanding our product
range will ensure our ongoing success.
On behalf of the board
HS Courtney DH Alexander
Chairman* Chief Executive
Rivonia
29 June 2010
Directors
HS Courtney (Chairman)*
M Noge*, DH Alexander
KA Colley, KA Vieira(* non-executive)
Auditors
Mazars, 2nd Floor Mazars House5 St Davids` Place, Parktown, 2193
(PO Box 6697, Johannesburg, 2000)
Transfer Secretaries
Link Market Services (Proprietary) Limited11 Diagonal Street, Johannesburg, 2001
(PO Box 4844, Johannesburg, 2000)
Registered Office
Resource House
7 Spring Street, Rivonia, 2196
(PO Box 1962, Rivonia, 2128)
Sponsor
Sasfin Capital
(A division of Sasfin Limited)
29 Scott Street, Waverly 2090
(PO Box 95104, Grant Park, 2051)
Visit us at www.amecor.com
INNOVATION
THROUGH
TECHNOLOGY
Date: 29/06/2010 14:30:01 Produced by the JSE SENS Department.
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