| Fri 4 Mar 2011, 17:50 | | AMA - Amalgamated Appliance Holdings Limited - Unaudited interim results for the |
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AMA
AMA
AMA - Amalgamated Appliance Holdings Limited - Unaudited interim results for the
period ended 31 December 2010
Amalgamated Appliance Holdings Limited
(Registration number: 1997/004130/06
ISIN: ZAE000012647 Share code: AMA
("AMAP" or "the Group")
Unaudited interim results
for the period ended 31 December 2010
Highlights (continuing operations)
Interim distribution of 4 cents per share
Revenue increased by 12,9% to R451,4 million
Basic earnings per share increases by 9,6% to 12,6 cents
Cash on hand R163,7 million
Condensed group statement of comprehensive income
for the period ended 31 December 2010
Unaudited Unaudited Audited
six months six months 12 months
31 December 31 December 30 June
2010 2009 2010
% R`000 R`000 R`000
Continuing operations
Revenue 12,9 451 369 399 652 759 095
Operating profit 8,6 34 887 32 136 57 336
Restructuring costs - - (734) (926)
operations
Fair value adjustments on (4 488) (1 096) -
financial instruments
Net interest received 5 506 3 872 12 215
Profit before taxation 5,1 35 905 34 178 68 625
Taxation (10 804) (10 116) (19 730)
Profit for the period from 4,3 25 101 24 062 48 895
continuing operations
Discontinued
Profit/(loss) from 13 475 (10 420)
discontinuing operations
Profit for the period 25 114 24 537 38 475
Total comprehensive income 25 114 24 537 38 475
for the period
From continuing and
discontinuing operations
Basic earnings per share - 6,8 12,6 11,8 18,7
(cents)
Diluted basic earnings per 6,8 12,5 11,7 18,6
share - (cents)
From continuing operations
Basic earnings per share - 9,6 12,6 11,5 23,7
(cents)
Diluted basic earnings per 8,7 12,5 11,5 23,7
share - (cents)
From discontinuing operations
Basic earnings/(loss) per 0,0 0,2 (5,1)
share - (cents)
Diluted basic earnings/(loss) 0,0 0,2 (5,0)
per share - (cents)
Capital distribution per 4,0 - 8,0
share - (cents)
Condensed statement of financial position
as at 31 December 2010
Unaudited Unaudited Audited
31 December 31 December 30 June
2010 2009 2010
R`000 R`000 R`000
ASSETS
Non-current assets 57 299 76 339 66 886
Property, plant and equipment 9 516 10 892 8 585
Trademarks 1 644 1 645 1 645
Deferred taxation 46 139 63 802 56 656
Current assets 586 825 572 821 554 412
Inventories 172 063 132 208 145 958
Trade and other receivables 228 741 196 482 181 755
Taxation prepaid 10 618 6 652 10 615
Bank and cash on hand 163 696 195 711 204 377
575 118 531 053 542 705
Current assets classified as held 11 707 41 768 11 707
for sale
Total assets 644 124 649 160 621 298
EQUITY AND LIABILITIES
Total equity 475 392 459 877 465 135
Non-current liabilities 1 444 1 066 1 257
Long term borrowings - 319 101
Deferred taxation 1 444 747 1 156
Current liabilities 167 288 188 217 154 906
Trade and other payables 121 410 119 772 110 174
Derivative financial liability 6 733 2 797 439
Distributions payable 139 157 157
Bank overdraft - 24 -
Short term portion of long term 319 823 482
borrowings
Provisions 26 980 22 010 31 947
155 581 145 583 143 199
Liabilities directly associated with 11 707 42 634 11 707
assets classified as held for sale
Total equity and liabilities 644 124 649 160 621 298
Condensed group statement of cash flows
for the period ended 31 December 2010
Unaudited Unaudited Audited
six months six months 12 months
31 December 31 December 30 June
2010 2009 2010
R`000 R`000 R`000
Cash flow from operating activities (37 333) 90 561 103 186
Cash generated by trading 42 023 36 028 51 333
Working capital changes (68 913) 51 331 42 720
Cash (utilised)/generated by (26 890) 87 359 94 053
operations
Net interest received 5 506 3 872 12 145
Taxation paid (7) (670) (3 012)
Distributions paid (15 942) - -
Cash flow from investing activities (3 162) (1 171) 4 851
Additions to property, plant and (3 230) (1 809) (3 058)
equipment
Proceeds on disposal of property, 68 638 7 909
plant and equipment
Cash flow from financing activities (186) (5 870) (18 976)
Net movement in treasury shares 78 (4 143) (13 266)
Decrease in long term borrowings (264) (1 727) (5 710)
Net (decrease)/increase in cash and (40 681) 83 520 89 061
cash equivalents
Cash surplus at the beginning of the 204 377 115 316 115 316
year
Cash surplus at the end of the 163 696 198 836 204 377
period
Note to the condensed group statement of cash flows
for the period ended 31 December 2010
Unaudited Unaudited Audited
six months six months 12 months
31 December 31 December 30 June
2010 2009 2010
R`000 R`000 R`000
Cash flow from operating activities (37 333) 90 561 103 186
- Continuing operations (37 333) 77 549 96 725
- Discontinuing operations - 13 012 6 461
Cash flow from investing activities (3 162) (1 171) 4 851
- Continuing operations (3 162) (1 136) (1 940)
- Discontinuing operations - (35) 6 791
Cash flow from financing activities (186) (5 870) (18 976)
- Continuing operations (186) (4 801) (14 484)
- Discontinuing operations - (1 069) (4 492)
Cash surplus at the end of the 163 696 198 836 204 377
period
- Continuing operations 163 696 195 687 204 377
- Discontinuing operations - 3 149 -
Supplementary information
for the period ended 31 December 2010
Unaudited Unaudited Audited
six months six months 12 months
31 December 31 December 30 June
% 2010 2009 2010
Shares in issue (000`s) 212 190 212 190 212 190
Shares in issue - weighted 199 620 208 550 205 917
(000`s)
Diluted number of shares - 200 911 209 064 206 554
weighted (000`s)
Net asset value per share 224 217 219
(cents)
Cost of sales (R`000) - 310 640 278 239 517 867
continuing operations
Cost of sales (R`000) - - 71 153 98 820
discontinuing operations
Net inventory raised (R`000) - 8 296 3 402 8 562
continuing operations
Interest received (R`000) - (5 711) (4 606) (13 616)
continuing operations
Interest received (R`000) - - (5) (20)
discontinuing operations
Interest paid (R`000) - 205 734 1 401
continuing operations
Interest paid (R`000) - - 7 90
discontinuing operations
Capital expenditure (R`000) - 3 230 1 746 2 995
continuing operations
Capital expenditure (R`000) - - 63 63
discontinuing operations
Capital commitments (R`000) - 1 509 455 -
continuing operations
Depreciation, amortisation and 2 295 2 311 4 698
impairment charge (R`000) -
continuing operations
Depreciation, amortisation and - - 2 998
impairment charge (R`000) -
discontinuing operations
Operating lease commitments 22 799 16 367 29 583
(R`000) - continuing
operations
Profit (R`000) - continuing 25 101 24 062 48 895
operations
Profit/(loss) on disposal of (64) (174) 549
property, plant and equipment
(R`000) - continuing
operations
Total tax effects on 19 49 (154)
adjustments (R`000) -
continuing operations
Headline profit (R`000) - 25 056 23 937 49 290
continuing operations
Headline earnings per share - 8,7 12,6 11,5 23,9
(cents) - continuing
operations
Diluted headline earnings per 9,6 12,5 11,4 23,9
share - (cents) - continuing
operations
Profit/(loss) (R`000) - 13 475 (10 420)
discontinuing operations
Profit on disposal of - (1) 380
property, plant and equipment
(R`000) - discontinuing
operations
Total tax effects on - - (106)
adjustments (R`000) -
discontinuing operations
Headline profit/(loss) (R`000) 13 474 (10 146)
- discontinuing operations
Headline earnings/(loss) per 0,0 0,2 (4,9)
share - (cents) -
discontinuing operations
Diluted headline 0,0 0,2 (4,9)
earnings/(loss) per share -
(cents) - discontinuing
operations
Headline earnings per share - 7,7 12,6 11,7 19,0
(cents) - continuing and
discontinuing operations
Diluted headline earnings per 7,8 12,5 11,6 19,0
share - (cents) - continuing
and discontinuing operations
Condensed group statement of changes in equity
for the period ended 31 December 2010
Unaudited Unaudited Audited
six months six months 12 months
31 December 31 December 30 June
2010 2009 2010
R`000 R`000 R`000
Balance as at 1 July 465 135 438 672 438 672
Net profit for the period 25 114 24 537 38 475
Capital distribution (15 925) - -
Net treasury movement 78 (4 143) (13 266)
Share based payment 990 811 1 254
Balance at period end 475 392 459 877 465 135
Supplementary information
for the period ended 31 December 2010
Discontinued operations and assets classified as held for sale
Unaudited Unaudited Audited
six months six months 12 months
31 December 31 December 30 June
Statement of 2010 2009 2010
comprehensive income R`000 R`000 R`000
Revenue - 70 600 86 160
Operating profit/(loss) 18 667 (9 265)
Fair value adjustments on financial - - -
instruments
Restructuring costs - operations - - (4 960)
Net interest paid - (2) (70)
Profit/(loss) before tax 18 665 (14 295)
Taxation (5) (189) 3 875
Profit/(loss) from discontinuing 13 476 (10 420)
operations
The major classes of assets and
liabilities classified as held for
sale as follows:
Unaudited Unaudited Audited
31 December 31 December 30 June
Statement of 2010 2009 2010
financial position R`000 R`000 R`000
Assets classified as held for sale
Property, plant and equipment 11 707 21 912 11 707
Deferred taxtion - 360 -
Inventory - 2 506 -
Trade and other receivables - 13 841 -
Bank and cash on hand - 3 149 -
Assets classified as held for sale 11 707 41 768 11 707
Liabilities directly associated with
assets classified as held for sale
Long term borrowings - (2 174) -
Deferred taxation (2 024) (2 681) (2 024)
Trade, other payables and provisions (9 683) (36 441) (9 683)
Taxation - (89) -
Short term portion of long term - (1 249) -
liability
Liabilities directly associated with (11 707) (42 634) (11 707)
assets classified as held for sale
Net liabilities classified as held - (866) -
for sale
The discontinued operations and assets held for sale relate to Tedelex
Properties (Atlantis) (Pty) Limited (refer note 4).
Trading environment
Trading conditions for the six months were extremely competitive with
deflationary pricing occurring of between 3% and 5% in the product categories
where we compete. The consumers however decided to return to the stores over the
festive season and as a result we saw growth in our market segments of 6% to 8%
for the period under review.
Commentary
The Board is pleased to announce double digit revenue growth compared to the
prior period for the Group`s interim results for the six months ended 31
December 2010 (the period). As a sales and marketing entity, the Group continues
to focus and invest in its trusted brands through above and below the line
advertising. In line with this strategy the Wiltshire and Arti Farti brands were
introduced into the market place with resounding acceptance. The full impact of
these new brands is expected to flow through in future trading periods. Our
strategy of offering a boutique of brands "good, better, best" paid off in the
period under review with all brands achieving good growth.
In line with this strategy the houseware brands were launched into the market.
Initial indications make us cautiously optimistic going forward, however the
hard work is just starting with listings, promotions and brand building being
focused on by the team to achieve sustainable growth.
A conscious decision was made to be more aggressive in our stockholding to
ensure that we did not lose any opportunities in sales over the festive season.
Retailers have made a decision to delist suppliers who continuously go out of
stock. This decision achieved the desired effect with increased sales and a
marginal increase of our physical stock holding over our target.
Overdue debtors declined, however receivables increased due to a promotion with
extended terms. This money has subsequently been collected.
As discussed in our Annual Report for June 2010, the imminent introduction of
the Consumer Protection Act poses challenges for all participants in the
consumer markets and the Group has an action plan to meet the requirements of
the Act. We fully support the intention to provide consumers with relevant
information on which to base purchasing decisions, and we believe this Act will
be to the benefit of reputable brand distributors such as AMAP.
Our quality improvement programme is achieving benefits through a substantial
reduction in customer returns.
Financial performance
Statement of comprehensive income (continuing operations)
- Revenue increased by 12,9% to R451,4 million (2009: R399,7 million).
- Operating profit increased by 8,6% to R34,9 million (2009: R32,1 million).
- As a result of a strengthening Rand/USD exchange rate the fair value
adjustments on financial instruments reflected an increased cost of 409% to R4,5
million (2009: cost R1,1 million).
- Profit after tax increased by 4,3% to R25,1 million (2009: R24,1 million).
- Basic earnings per share increased by 9.6% to 12,6 cents (2009: 11,5 cents).
- Diluted HEPS increased by 9,6% to 12,5 cents (2009: 11,4 cents).
Statement of financial position (continuing operations)
- Inventory increased in line with the growth in revenue as well as the result
of the introduction of new brands to R172,1 million (2009: R132,2 million).
- Trade and other receivables increased in line with revenue growth to R228,7
million (2009: R196,5 million).
- Bank and cash on hand amounted to R163,7 million (2009: R195,7 million). A net
capital distribution of R15,9 million was paid in December 2010 thereby
decreasing the bank and cash on hand amount as at December 2010.
- Current assets exceed current liabilities by a factor of more than 3 times.
The statement of financial position is net ungeared.
Interim distribution to shareholders
Based on the current financial position, the Board has declared an interim
capital distribution of 4 cents per share for the six months ended 31 December
2010 (2009: NIL) out of share premium as approved by shareholders at the AGM
held on 5 November 2010.
Shareholders are advised that the last day to trade cum the distribution will be
Friday, 25 March 2011.
The shares commence trade ex the distribution as from Monday, 28 March 2011 and
the record date will be Friday, 1 April 2011.
Share certificates may not be dematerialised or rematerialised between Monday,
28 March 2011 and Friday, 1 April 2011, both days inclusive.
Changes to the Board
Bruce Garith Drummond was appointed as Chief Financial Officer and Executive
Financial Director in November 2010.
Segmental reporting
The Group predominantly markets and distributes consumer durables from a single
business unit. Information regarding aggregated customer and geographical
information is in line with that disclosed in the Annual Report for June 2010 as
required in line with the requirements for IFRS 8 Operating Segments.
Subsequent events
No events material to the understanding of the report have occurred during the
period between 31 December 2010 and the date of this report.
Prospects
We expect retail sales to grow marginally in the categories in which we trade
for the balance of the financial year. Bottom line profit improvement must
therefore come from capitalising on market growth with a focus on cost savings,
efficiency gains and excellent management of our brand portfolio. We will
continue to make inroads into new product categories.
Given the strong statement of our financial position we are currently
investigating a number of suitable acquisitions but only if they complement our
overall business vision to be Africa`s top distributor of branded consumer
merchandise. Our Africa growth strategy is on track and we are excited by
opportunities that await us to the north.
In light of the above, the Group expects to improve operational performance in
this financial year.
For and on behalf of the Board
Leon Campher Alan Coward
Non-Executive Chairman Chief Executive Officer
Johannesburg
4 March 2011
NOTES
1. Basis of preparation
These condensed financial statements have been prepared in accordance with the
framework concepts and the measurement and recognition requirements of
International Financial Reporting Standards (IFRS), Schedule 4 of the Companies
Act and the AC 500 standards as issued by the Accounting Practices Board or its
successor. The financial statements are in accordance with IAS 34 Interim
Financial Reporting, using accounting policies that have been consistently
applied to prior periods.
The above information has not been reviewed or reported on by AMAP`s auditors.
2. Diluted basic and diluted headline earnings per share
Diluted basic and diluted headline earnings per share are determined by
adjusting the weighted average number of ordinary shares outstanding to assume
conversion of all dilutive ordinary shares.
3. Contingent liability
As disclosed in the Group`s annual report for the year ended 30 June 2007 and
subsequent years, SARS issued a letter of intent in February 2007 to levy
customs and excise on a wholly owned subsidiary for R28,3 million. The
subsidiary has raised a formal objection in line with the professional advice of
its external legal customs duty advisers, and remains confident that its
objection will be upheld.
There is no obligation, current or pending, which is considered likely to have a
material adverse effect on the Group.
4. Assets classified as held for sale and discontinuing operations
During the year ended 2009, it was decided to transfer the assets of Tedelex
Manufacturing (Pty) Limited and the Atlantis property to assets "held for sale"
in line with the requirements of IFRS 5 Non-Current Assets Held for Sale and
Discontinued Operations.
As a result of the assets being disposed of in Tedelex Manufacturing (Pty)
Limited in June 2010, the assets are no longer held for sale. As it is still the
intention of the Group to dispose of the Atlantis property, Tedelex Properties
(Atlantis) (Pty) Limited is still classified as held for sale in line with the
requirements of IFRS 5.
Directors
*PL Campher (Chairman)
*MC Berzack
*DE Cleasby
AS Coward
MG Crow
BG Drummond
*SH Muller
DB Oliver
*DD Tabata
*CKL Scott
*Non-executive
Company Secretary
BG Drummond
Transfer secretaries
Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg 2001.
PO Box 61051, Marshalltown 2107
Registered office
29 Heronmere Road, Reuven 2091.
PO Box 39186, Booysens 2016
Telephone (011) 490 9000
Sponsor
Bridge Capital Advisors (Pty) Limited
2nd Floor, 27 Fricker Road, Illovo Boulevard, Illovo 2196
www.amap.co.za
Date: 04/03/2011 17:50:01 Produced by the JSE SENS Department.
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