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WNH
WNH
WNH - Winhold Limited - The reviewed abridged consolidated results of the
Group for the year ended 30 September 2010
WINHOLD LIMITED
(Registration number 1945/019679/06)
(Incorporated in the Republic of South Africa)
(Share code: WNH) (ISIN number: ZAE000033916)
Statement of results
The reviewed abridged consolidated results of the Group for the year ended 30
September 2010
Highlights
Revenue exceeds R1 billion for the first time
Dividend per share maintained at 10 cps.
WINHOLD LIMITED GROUP
SUMMARISED REVIEWED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME
YEAR ENDED
30 SEPTEMBER
2010 2009
R`000 R`000
REVENUE
- CONTINUING OPERATIONS 1,022,205 990,710
- DISCONTINUED OPERATIONS 8,713 4,237
- TOTAL REVENUE 1,030,918 994,947
OPERATING PROFIT
- CONTINUING OPERATIONS 55,029 56,410
- DISCONTINUED OPERATIONS (3,802) (5,940) 50,470
INVESTMENT INCOME 15,556 15,536
(IMPAIRMENTS) / PROFIT ON SALE (1,573) 3,948 427
OF INVESTMENT PROPERTY
NET FINANCE COSTS
- CONTINUING OPERATIONS (26,695) 28,943)
- DISCONTINUED OPERATIONS (2,606) (2,223) (31,166)
PROFIT BEFORE TAXATION
- CONTINUING OPERATIONS 44,317 46,951
- DISCONTINUED OPERATIONS (8,408) (8,163) 38,788
TAXATION
- CONTINUING OPERATIONS (6,874) (9,041)
- DISCONTINUED OPERATIONS (1,359) -
SHARE OF AFTER TAX PROFITS OF 757 941
ASSOCIATED COMPANIES
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR
- CONTINUING OPERATIONS 38,200 38,851
- DISCONTINUED OPERATIONS (9,767) (8,163)
ATTRIBUTABLE TO NON CONTROLING (3,608) (3,754)
INTERESTS
ATTRIBUTABLE TO EQUITY HOLDERS 24,825 26,934
OF THE PARENT
EARNINGS AND DILUTED EARNINGS 19.8 21.5
PER ORDINARY SHARE (CENTS)
- CONTINUING OPERATIONS 27.6 28.0
- DISCONTINUED OPERATIONS (7.8) (6.5)
HEADLINE AND DILUTED HEADLINE
EARNINGS PER ORDINARY
SHARE (CENTS) 20.7 19.4
WEIGHTED AVERAGE ORDINARY SHARES
IN ISSUE,
ADJUSTED FOR TREASURY STOCK 125,506 125,506
(000`S)
ORDINARY SHARES IN ISSUE (000`S) 126,215 126,215
DIVIDEND PER ORDINARY SHARE 10.0 10.0
RECONCILIATION OF HEADLINE
EARNINGS
COMPREHENSIVE INCOME FOR THE 24,825 26,934
PERIOD
AMORTISATION OF DEVELOPMENT - 1,576
COSTS
(IMPAIRMENTS) /PROFIT ON 1,573 (3,948)
DISPOSAL OF INVESTMENT PROPERTY
NET PROFIT ON DISPOSAL OF FIXED (498) (1,311)
ASSETS
TAXATION EFFECT ON DISPOSALS 139 1,090
26,039 24,341
RECONCILIATION OF EARNINGS
BEFORE INTEREST, TAX,
DEPRECIATION AND
AMORTISATION ("EBITDA")
OPERATING PROFIT (CONTINUING & 51,227 50,470
DISCONTINUED)
DEPRECIATION 13,638 14,817
EBITDA 64,865 65,287
SUMMARISED REVIEWED CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
YEAR ENDED
30 SEPTEMBER
2010 2009
R`000 R`000
ASSETS
PROPERTY PLANT AND EQUIPMENT 149,441 135,897
TRADE MARKS AND PATENTS 29 153
LOANS AND RECEIVABLES 168,103 160,788
INVESTMENTS IN ASSOCIATES 2,265 1,979
GOODWILL 26,541 26,541
DEFERRED TAXATION 1,882 1,835
CURRENT ASSETS
- INVENTORY 148,247 147,714
- RECEIVABLES 186,256 163,349
- BANK AND CASH 12,815 10,424
- NON CURRENT ASSETS HELD FOR 5,701 -
SALE
TOTAL ASSETS 701,280 648,680
EQUITY AND LIABILITIES
ORDINARY SHARE CAPITAL AND 122,793 122,793
PREMIUM
RETAINED EARNINGS 126,979 114,910
SHAREHOLDERS` INTEREST 249,772 237,703
ATTRIBUTABLE TO NON CONTROLING 17,620 13,951
INTERESTS
ATTRIBUTABLE TO EQUITY HOLDERS 267,392 251,654
OF THE GROUP
NON-CURRENT LIABILITIES
- INTEREST BEARING 190,080 179,563
- INTEREST FREE 15,907 10,686
- DEFERRED TAXATION 6,895 7,789
CURRENT LIABILITIES - INTEREST
BEARING
- BANK OVERDRAFT 18,477 34,765 34,765
- SHORT TERM BORROWINGS 16,918 20,850
CURRENT LIABILITIES - INTEREST
FREE
- PAYABLES 187,036 140,174
- TAXATION (1,425) 3,199
TOTAL EQUITY AND LIABILITIES 701,280 648,680
SUPPLEMENTARY INFORMATION
CAPITAL COMMITMENTS 4,700 8,644
CAPITAL EXPENDITURE 36,326 29,199
TOTAL INTEREST BEARING 225,474 235,178
BORROWINGS
INTEREST EARNING DEPOSITS 12,625 10,299
NET ASSET VALUE PER ORDINARY 199.0 189.4
SHARE (CENTS)
NET TANGIBLE ASSET VALUE PER 177.8 168.1
ORDINARY SHARE (CENTS)
SUMMARISED REVIEWED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
YEAR ENDED
30 SEPTEMBER
2010 2009
R`000 R`000
ATTRIBUTABLE TO EQUITY HOLDERS
OF THE PARENT
OPENING BALANCE 237,703 221,871
WRITE BACK OUTSTANDING - 396
DIVIDENDS
TOTAL COMPREHENSIVE INCOME FOR 24,825 26,934
THE YEAR
DIVIDEND PAID (12,756) (11,498)
CLOSING BALANCE 249,772 237,703
SUMMARISED REVIEWED CONSOLIDATED STATEMENTS OF CASH
FLOWS
CASH FLOW FROM OPERATING 47,912 7,498
ACTIVITIES
PROFIT BEFORE INTEREST, TAX AND
NON-CASH ITEMS
- CONTINUING OPERATIONS 79,682 82,280
- DISCONTINUED OPERATIONS 192 (2,658)
CHANGES IN WORKING CAPITAL
- CONTINUING OPERATIONS 24,214 (20,182)
- DISCONTINUED OPERATIONS (341) (1,023)
CASH FLOW FROM OPERATIONS 103,747 58,417
NET FINANCE COSTS (29,752) (31,687)
SHARE OF RESULTS FROM 471 402
ASSOCIATES
TAXATION PAID (13,798) (8,136)
DIVIDENDS PAID (12,756) (11,498)
CASH FLOW USED IN INVESTING (41,149) (14,847)
ACTIVITIES
INVESTMENT IN FIXED ASSETS (36,326) (29,199)
INVESTMENT IN LOANS RECEIVABLE (7,315) -
PROCEEDS FROM DISPOSAL OF FIXED 2,492 14,352
ASSETS
CASH FLOW USED IN FINANCING 11,916 (1,021)
ACTIVITIES
INTEREST BEARING BORROWINGS 26,545 15,161
RAISED
INTEREST BEARING BORROWINGS (19,960) (22,126)
REPAID
INTEREST FREE BORROWINGS RAISED 5,331 5,944
NET INCREASE / (DECREASE) IN 18,679 (8,370)
CASH AND CASH EQUIVALENTS
CASH & CASH EQUIVALENTS AT (24,341) (15,971)
BEGINNING OF YEAR
CASH & CASH EQUIVALENTS AT END (5,662) (24,341)
OF YEAR
RECONCILIATION OF NET TANGIBLE
ASSETS
SHAREHOLDERS` INTEREST 249,772 237,703
ADD BACK: TANGIBLE ASSETS (29) (153)
DEDUCT: GOODWILL (26,541) (26,541)
NET TANGIBLE ASSETS 223,202 211,009
Winhold Limited Group
MINING INDUSTRIAL
BUSINESS SEGMENTS CONSUMABLES CONSUMABLES
(INMINS) (INMINS)
2010 2009 2010 2009
TURNOVER (R` 000) 327835 338249 140167 152129
OPERATING PROFIT (R` 12197 13384 4813 4346
000)
INVESTMENT INCOME 0 0 0 0
DEPRECIATION ( R` 919 1103 686 770
000)
CAPITAL EXPENDITURE ( 800 477 449 291
R` 000)
TOTAL ASSETS ( R` 125471 125356 45047 48840
000)
TOTAL LIABILITIES ( 54251 60864 17174 19081
R`000)
Table continues:...
FLEXIBLE PROPERTY AND TOTALS
PLASTICS OTHER
(GUNDLE) -
2010 2009 2010 2009 2010 2009
554203 500332 8 713 4 237 1030918 994947
34427 36636 -210 -3896 51227 50470
0 0 15 556 15 536 15 556 15 536
10641 9481 1 392 3 463 13 638 14 817
34783 28318 294 113 36 326 29 199
312306 250660 218 456 223824 701 280 648680
201007 146685 161 456 170396 433 888 397026
GROUP PROFILE
Winhold Limited ("Winhold") is a holding company with its main investments
being wholly owned subsidiaries Gundle Limited ("Gundle") and Inmins Limited
("Inmins"). Gundle comprises of two manufacturing / distribution operations
in Gauteng and one in Swaziland, as well as a further four distribution
centres in the main coastal cities and Bloemfontein. Gundle manufactures
polyethylene and polypropylene bags, construction sheeting, consumer and
industrial packaging, agricultural film and dam linings and distributes to
the agricultural, chemical, construction, food processing, industrial and
consumer markets. Inmins comprises 19 strategically located operations
servicing the mining and industrial sectors with a wide range of consumable
and maintenance products, and includes divisions specialising in hose, high
pressure mining backfill systems, chain and sprocket systems and conveyor
belting.
REVIEW OF RESULTS
The Group achieved a record R1 billion turnover and produced satisfactory
results in a year where industry had to deal with the effects of the
recession, during which mining companies ran down stocks, reclaimed
consumables out of mined-out areas and the domestic building industry was at
very low levels. In addition, there were significant reductions in the prices
of the Groups` key inputs (steel and plastic polymers) resulting in reduced
revenue.
The Novara division could not reach the volumes required to justify the
infrastructure investment, is disclosed as a "discontinued operation" and the
fixed assets have been impaired by R2 million.
Cash flows improved considerably due to tightening of management controls.
The Group`s diversified business strategy once again protected it against the
recession
OPERATIONAL REVIEWS
Gundle
The South African Gundle Plastics divisions performed better than last year
as careful pricing strategies ensured that we didn`t chase diminishing
volumes as a result of the recession and diminishing prices due to reduced
raw materials prices. Costs were carefully controlled. The investment in
modernised plant and equipment showed benefits in raw material utilisation
and power savings but capacity was underutilised due to the recession. The
Swaziland operation produced disappointing results. Two of the four branches
returned record improved results with improved volumes. The Geosynthetics dam
lining installation business did particularly well by gaining work in Africa
to offset lower levels of work in South Africa.
Inmins
Turnover declined by 4.6% but the division`s operating profit increased as a
result of the strategic change in the product offering.
The industrial consumables segment was adversely affected by the recession in
the retail light industrial market but the operating income increased. The
reduction in Mining Consumables turnover resulted in the reduced operating
profit in this segment
It is encouraging to note that seven of the thirteen business units in the
Group improved their profitability over the previous year.
PROSPECTS
Management has taken corrective actions in both Novara and Swazi Plastics
which should result in a significant profit improvement.
The share traded under cautionary during September and October as an
interested party considered a large investment in the company. This
transaction did not proceed and the Group intends to utilise its balance
sheet and listing to grow the Group both organically and through strategic
acquisitions in the years to come.
Gundle
The modernisation program is now largely complete and the Group is well
positioned with additional cost efficient capacity to benefit from increases
in volumes as the recession recedes.
Inmins
New product ranges and new service areas are being explored to capitalise on
the existing brand name and strategically located network close to where
major mines and industry are based. Growth will come from cross selling
products to existing customers and introducing new specialised products to
the more profitable industrial customer base.
CAPITAL COMMITMENTS
The amount of R4.7 million (2009: R8,6 million) reflected in the
supplementary information, relates to building upgrades and vehicles (2009:
plant and equipment) for existing operations
BASIS OF PREPARATION
These summarised consolidated preliminary Group results have been prepared in
accordance with the recognition and measurement criteria of International
Financial Reporting Standards ("IFRS") and the AC500 standards required by
International Accounting Standard 34 (" IAS 34"), and in compliance with the
Companies Act, as amended, and the Listings Requirements of the JSE Limited (
"the Listings Requirements" ). The accounting policies are consistent with
those used in the prior year other than the adoption of revised IAS 1
(presentation of financial statements) IFRS 3 (Business combinations) and
IFRS 8 (Operating segments) which only impacted disclosure.
REVIEW REPORT
The financial information set out in these abridged consolidated Group
results has been reviewed by BDO South Africa Inc. Their unqualified review
report is available for inspection at the registered office of the company.
The annual report will be posted to shareholders in February 2011.
CORPORATE GOVERNANCE
The Group subscribes to the value of good corporate governance and is
committed to continued implementation of the recommendations of the King III
Report and the Listings Requirements. The Group continues to endeavour to
conduct its business in accordance with the principles of accountability,
transparency and integrity.
CONTINGENT LIABILITY AND SUBSEQUENT EVENTS
The Group has provided for all taxes actually owing in Swaziland and although
the Swaziland Commissioner of taxes has issued "estimated assessments" of
R8.2 million against one of the subsidiaries and is charging interest at 18%,
management is negotiating with the Commissioner to have these estimated
assessments reversed.
The directors are not aware any material post balance sheet events between
the balance sheet date and the date of this report.
DIRECTORATE
Mr WAR Wenteler and Mr P Kruger retired as executive directors on 31 March
2010, but remain on the board as non executive directors. Mr W Fourie was
appointed CEO from 1 April but continued to fulfil the role of Financial
Director until 1 September 2010 when Mr G Scrutton was appointed to this
position
DECLARATION OF DIVIDEND
Notice is hereby given that an ordinary dividend of 10.0 cents (2009: 10.0
cents ) per share for the year ended 30 September 2010 has been declared to
holders of ordinary shares recorded in the share register of the company at
the close of business on 18 February 2011.
In compliance with the requirements of STRATE, the following dates are
applicable:
Last day to trade "cum" dividend is : Friday 11 February 2011
Commence trading "ex" dividend from : Monday 14 February 2011
Record date is : Friday 18 February 2011
Payment date is : Monday 21 February 2011
Share certificates may not be de-materialised / re-materialised between
Monday 14 February 2011 and Friday 18 February 2011, both dates inclusive.
Ordinary individual shareholders to whom a dividend of less than R10,00 ( ten
rand ) has been declared, are reminded that in terms of a special resolution
registered on 26 March 2003, such amounts shall not be paid to the individual
shareholders concerned but shall be donated to an independent charity chosen
by the directors. On behalf of the board
On behalf of the board
WAR WENTELER D B MOSTERT W FOURIE
Chairman Deputy Chairman Chief Executive Officer
Date: 29 November 2010
Directors:
W A R Wenteler (Chairman) , D B Mostert (Deputy Chairman) +,
W Fourie, P J Kruger , N P Mnxasana +, P. Nash, G M Scrutton (Financial) (non-
executive), (+ independent)
Company Secretary:
G J O`Connor johnoc@inmins.co.za / telephone: +2711 345 9819 / fax : +2711
345 9823
Registered Office :
884 Linton Jones Street, Industries East, Germiston ( PO Box 5324
Johannesburg 2000 ) - telephone: +2711 345 9800 / fax : +2711 345 9881
Transfer Secretaries:
Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg. ( PO Box 61051, Marshalltown 2107 ) email
: registrar@computershare.co.za / - telephone: +2711 688 5248 / fax : +2711
370 5000
Auditors:
BDO South Africa Inc.
13 Wellington Road, Parktown 2193 ( Private Bag X60500, Houghton 2041 ) -
email : bdojhb@bdo.co.za / telephone: +2711 488 1700 /
fax : +2711 488 1701
Sponsor :
Arcay Moela Sponsors ( Pty) Limited
Arcay House, 3 Anerley Road, Parktown - e-mail : dougg@arcaymoela.co.za /
telephone: +2711 480 5800 / fax : +2711 480 8556
Website : www.winhold.co.za
Date: 29/11/2010 13:06:01 Produced by the JSE SENS Department.
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