| Fri 5 Nov 2010, 14:17 | | IVT - Invicta - Unaudited Interim Results for the six months ended 30 September |
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IVT
IVT
IVT - Invicta - Unaudited Interim Results for the six months ended 30 September
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")
UNAUDITED INTERIM RESULTS for the six months ended 30 September 2010
Revenue increased by 9%
Profit for the period increased by 21%
Earnings per share increased by 17%
Dividend increased by 16%
CONSOLIDATED CONDENSED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept 30 Sept 31 Mar
Change 2010 2009 2010
% R`000 R`000 R`000
Revenue 9 2 172 773 1 985 960 3 968 872
Operating income 23 214 155 174 134 453 293
Interest and dividends
received 296 195 182 171 408 498
Finance costs (333 136) (175 093) (432 886)
Share of associate 527 594 639
Profit before taxation (2) 177 741 181 806 429 544
Taxation (9 152) (42 184) (64 155)
Profit for the period 21 168 589 139 622 365 389
Other comprehensive
income:
Exchange differences on
translating foreign
operations (1 351) (7 103) (5 700)
Total comprehensive
income for the period 167 238 132 519 359 689
Profit attributable to:
Owners of the company 140 862 121 754 320 896
Non-controlling interest 27 727 17 868 44 493
168 589 139 622 365 389
Total comprehensive income
attributable to:
Owners of the company 139 965 114 651 317 145
Non-controlling interest 27 273 17 868 42 544
167 238 132 519 359 689
Earnings per
share (cents) 17 201 172 453
Diluted earnings
per share (cents) 13 195 172 441
Determination of
headline earnings
Attributable earnings 140 862 121 754 320 896
Adjustments
- Negative goodwill on
business combinations - (7 602) (7 952)
- Impairment of property,
plant and equipment
and goodwill - - 3 632
- Release of deferred
profit on issue of
shares by subsidiaries - - (3 870)
- Profit on disposal of
property, plant
and equipment (1 192) (574) (3 732)
Total before taxation and
non-controlling interest (1 192) (8 176) (11 922)
Taxation 334 2 289 1 616
Non-controlling interest 172 1 177 1 412
Total adjustments (686) (4 710) (8 894)
Headline earnings 140 176 117 044 312 002
Shares in issue
Weighted average (000`s) 70 174 70 780 70 779
At the end of the
period (000`s) 69 911 70 774 70 712
Number of shares used for
diluted earnings
per share (000`s) 72 335 70 780 72 767
Headline earnings
per share (cents) 21 200 165 441
Diluted headline
earnings per
share (cents) 18 194 165 429
Dividends per
share* (cents) 57 49 151
- Interim 16 57 49 49
- Final - - 102
*In accordance with IAS 10, the interim dividend of 57 cents per share proposed
by the directors has not been reflected in the interim results.
CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept 30 Sept 31 Mar
2010 2009 2010
R`000 R`000 R`000
Share capital
Balance at beginning and
end of period 3 724 3 724 3 724
Share premium
Balance at beginning and
end of period 282 715 282 715 282 715
Treasury shares
Balance at beginning
of period (96 570) (94 247) (94 247)
Treasury shares acquired (24 770) (596) (2 323)
Balance at end of period (121 340) (94 843) (96 570)
Retained earnings
Balance at beginning
of period 1 198 882 972 824 972 824
Profit for the period 140 862 121 754 320 896
Dividends paid (71 896) (61 805) (94 838)
Balance at end of period 1 267 848 1 032 773 1 198 882
Other reserves
Balance at beginning
of period 54 215 41 039 41 039
Arising from the (exercising)
issue of share
appreciation rights (13 588) 11 910 22 045
Revaluation reserve written
off on liquidation
of Group company - - (3 169)
Other comprehensive income (1 351) (7 103) (5 700)
Balance at end of period 39 276 45 846 54 215
Attributable to equity
shareholders 1 472 223 1 270 215 1 442 966
Non-controlling interest
R`000 R`000 R`000
Balance at beginning of period 170 297 130 196 130 196
Total comprehensive income 27 273 17 868 42 544
Net investment in subsidiaries 7 619 2 112 1 510
Dividends paid (3 388) (462) (3 953)
Balance at end of period 201 801 149 714 170 297
CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
30 Sept 30 Sept 31 Mar
2010 2009 2010
R`000 R`000 R`000
ASSETS
Non-current assets 4 107 941 3 611 694 3 784 619
Property, plant and equipment 347 684 255 828 312 860
Financial investments 2 973 587 1 197 608 2 882 206
Goodwill and other intangible
assets 317 743 253 043 255 326
Long-term loans and financial
asset 405 170 1 843 122 264 375
Deferred taxation 63 757 62 093 69 852
Current assets 2 049 633 2 048 192 2 152 495
Inventories 1 185 391 1 305 475 1 298 795
Trade and other receivables 650 327 665 819 592 874
Tax prepaid 3 611 6 776 273
Bank balances and cash 210 304 70 122 260 553
Total assets 6 157 574 5 659 886 5 937 114
EQUITY AND LIABILITIES
Capital and reserves 1 674 024 1 419 929 1 613 263
Attributable to equity
Shareholders 1 472 223 1 270 215 1 442 966
Non-controlling interest 201 801 149 714 170 297
Non-current liabilities 3 604 730 3 181 184 3 301 452
Long-term borrowings and
financial liabilities 3 559 820 3 152 333 3 274 179
Deferred income 41 357 16 230 12 984
Deferred taxation 3 553 12 621 14 289
Current liabilities 878 820 1 058 773 1 022 399
Short-term borrowings 19 476 9 645 18 056
Trade, other payables and
Provisions 856 469 756 458 945 210
Tax liabilities 1 365 9 348 13 287
Bank overdrafts and bankers`
acceptances 1 510 283 322 45 846
Total equity and liabilities 6 157 574 5 659 886 5 937 114
SEGMENT INFORMATION
Group,
financing
Engineering Capital and other
Consumables equipment operations Total
R`000 R`000 R`000 R`000
Unaudited six
months ended
30 September 2010
Revenue 1 163 572 877 940 131 261 2 172 773
Operating income 142 090 54 380 17 685 214 155
Total assets 1 209 443 785 502 4 162 629 6 157 574
Total liabilities 287 538 566 206 3 629 806 4 483 550
Unaudited six
months ended
30 September 2009
Revenue 998 153 884 494 103 313 1 985 960
Operating income 115 400 39 712 19 022 174 134
Total assets 1 045 626 986 464 3 627 796 5 659 886
Total liabilities 241 241 730 804 3 267 912 4 239 957
Audited year ended
31 March 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
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept 30 Sept 31 Mar
2010 2009 2010
R`000 R`000 R`000
Cash flows from operating
activities
Cash generated from
operations 167 774 38 751 590 226
Finance costs (333 136) (175 093) (432 886)
Dividends paid (74 423) (62 267) (96 389)
Taxation paid (26 100) (9 004) (25 329)
R`000 R`000 R`000
Interest and dividends
received 296 195 182 171 408 498
Net cash inflow (outflow)
from operating activities 30 310 (25 442) 444 120
Cash flows from investing
activities
Net cash effects of asset
Acquisitions (6 525) (3 078) (74 458)
Net cash effects of other
investing activities (161 308) (108 559) (191 556)
Increase in long-term loans (168 507) - (84 826)
Net cash effects of treasury
share investments (24 770) (596) (2 323)
Net cash outflow from
investing activities (361 110) (112 233) (353 163)
Cash flows from financing
activities
Net cash effects of borrowings
raised 324 887 55 934 255 209
Net cash inflow from
financing activities 324 887 55 934 255 209
Net (decrease) increase in
cash and cash equivalents (5 913) (81 741) 346 166
Cash and cash equivalents at
the beginning of the period 214 707 (131 459) (131 459)
Cash and cash equivalents at
the end of the period 208 794 (213 200) 214 707
OTHER INFORMATION
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept 30 Sept 31 Mar
2010 2009 2010
R`000 R`000 R`000
Net interest-bearing
debt:equity ratio
(excluding long-term
funding debt secured
by investments
and loans) (%) - 27 -
R`000 R`000 R`000
R`000 R`000 R`000
Depreciation and
amortisation (R`000) 28 547 16 601 32 356
Net asset value per
share (cents) 2 105,9 1 794,7 2 040,6
Tangible net asset value
per share (cents) 1 651,4 1 437,1 1 679,5
Capital expenditure (R`000) 9 342 10 972 83 424
Contingent liabilities (R`000) 257 1 428 313
Capital commitments (R`000) - 1 000 988
NOTES TO THE FINANCIAL INFORMATION
Basis of Preparation
The consolidated condensed results for the period ended 30 September 2010 have
been prepared in accordance with the framework concepts and the measurement and
recognition requirements of International Financial Reporting Standards and the
AC500 standards as issued by the Accounting Standards Board, IAS 34 : Interim
Financial Reporting, the JSE Limited 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 2010 annual report have been consistently
applied throughout the six-month period under review.
The 31 March 2010 results include a reallocation of R78 million from Trade and
other receivables to Long-term loans and R78 million from Trade and other
payables to Long-term borrowings and the current results are treated on a
consistent basis.
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.
COMMENTS
GROUP ACTIVITIES
The Invicta Group is a major regional player in the importation and distribution
of:
- Bearings, belts, seals, power transmission products, geared
motors, fasteners, hydraulics, transformers and niche
automotive spares ("BMG");
- Agricultural machinery and equipment ("Northmec" and "New
Holland");
- Construction and earthmoving equipment, turf grooming
equipment and golf utility cars ("CSE and Doosan SA");
- Forklifts and materials handling equipment ("Criterion
Equipment"); and
- Floor tiles, wall tiles, laminated flooring, taps and sanitary ware
("Tiletoria").
FINANCIAL OVERVIEW
The Group has again delivered excellent results under conditions which were, as
anticipated, challenging. Global and regional economic recoveries have proven to
be slow. Demand for
product supplied by the Group has, in general, been muted and margins remained
under pressure due mainly to the strong Rand. Notwithstanding, Group turnover
increased by 9% to R2,173 billion of which R91 million (5%) was from
acquisitions. Good margin management, tight cost controls and contributions from
acquisitions resulted in operating income increasing by 23% to R214 million.
As reported in the FY 2010 annual results, changes in market circumstances
required the Group to change certain loan term investments in the second half of
FY 2010. In the result, interest and dividend income have increased by R114
million compared with the first half of last year and finance charges increased
by R158 million. Included in these figures is a reduction of R13 million in net
working capital finance costs.
Profit for the period increased by 21% to R169 million, which resulted in a
corresponding increase of 21% in headline earnings per share to 200 cents per
share.
The Group`s continued focus on working capital management, including a reduction
in inventory of R113 million since March 2010, resulted in cash generated from
operations being a healthy R168 million.
The Group continued to take advantage of growth opportunities and made a number
of strategic acquisitions, totalling R73 million. The most significant of these
was the acquisition of 70% of Wegezi Power Holdings (Pty) Limited (effective 1
April 2010) and the acquisition of a majority interest in three of BMG`s larger
franchised agencies. 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. It contributed 66% of
operating income for the period under review. Trading conditions in the
industrial consumables sector continued to be challenging. Although volumes
increased, the strong Rand resulted in a decline in gross margins. Turnover
increased by 17%, of which 9% was due to acquisitions. Tight cost control and
good contributions from the acquisitions resulted in operating income increasing
by 23%.
CAPITAL EQUIPMENT DIVISION (CED)
The CED continued to face challenging conditions and experienced a decline in
the sales of new units in almost all its operations. Total revenue declined by
only 1% to R878 million as a result of increased spares and service revenue,
which combined with good cost control, resulted in operating profit increasing
by 37% to R54 million. The segment`s annualised profit return on capital
employed was 50%, a very pleasing result.
OTHER OPERATIONS
Tiletoria expanded its distribution network by moving to new premises in Durban
and opening a branch in Johannesburg. The Group has continued to invest in the
infrastructure of Tiletoria and, whilst not contributing in any significant way
at present, Tiletoria should grow substantially in the next few years.
PROSPECTS
Trading conditions in the sectors in which the Group operates appear, at best,
to be stable. The current strength of the Rand continues to be a source of
concern as it is likely to maintain
pressure on margins and reduce the income of key customers which operate in
export orientated sectors. The Group will continue to focus on improving
operational efficiencies to counter the negative effects of the strong Rand.
BMG has grown its base by making strategic acquisitions and will continue to do
so as and when opportunities arise.
In the CED, agricultural equipment conditions are expected to continue to be
challenging. Low grain prices and a strong Rand are expected to keep the demand
for agricultural equipment at current muted levels.
Conditions in the construction equipment market are still depressed.
The Board has maintained an interim dividend cover ratio of 3,5 times with an
interim dividend of 57 cents per share, up 16% from the comparative period. The
annual dividend cover ratio policy currently is 3,0 times.
The Board is pleased with the results for the period under review, but expects
trading conditions to continue to be challenging in the second half of the
financial year.
Board of directors
The following changes in directorships were made in the period under review:
LR Sherrell - appointed non-executive director on 29 July 2010
JD Wiese - appointed non-executive director on 29 July 2010
RE Sherrell - retired as non-executive director on 29 July 2010
Dividend
The Board has declared an interim dividend of 57 cents per share.
In compliance with the requirements of Strate the following dates are
applicable:
Last date to trade "cum" dividend Friday, 26 November 2010
First date of trading "ex" dividend Monday, 29 November 2010
Record date Friday, 3 December 2010
Payment date Monday, 6 December 2010
Share certificates may not be dematerialised or rematerialised between Monday,
29 November 2010 and Friday, 3 December 2010, both days inclusive.
By order of the Board
C Barnard
Secretary
Cape Town
5 November 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*, AM Sinclair, CE Walters, Adv JD Wiese*
* Non-executive # Alternate Independent non-executive
Sponsor: Deloitte & Touche Sponsor Services (Pty) Limited
www.invictaholdings.co.za
Date: 05/11/2010 14:17:01 Produced by the JSE SENS Department.
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