| Tue 15 Mar 2011, 8:00 | | MTA - Metair Investments Limited - Abridged audited results for the year ended |
|
MTA
MTA
MTA - Metair Investments Limited - Abridged audited results for the year ended
31 December 2010
METAIR INVESTMENTS LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(Reg No. 1948/031013/06)
ISIN code: ZAE000090692
Share code: MTA
("Metair" or "the group")
ABRIDGED AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2010
HEPS increased 182% to 189 cps
EBITDA R501 million
Final ordinary dividend of 65 cps
ABRIDGED GROUP INCOME STATEMENTS
31 December 31 December
2010 2009
R`000 R`000
Revenue 3 753 236 3 342 053
Cost of sales (2 958 998) (2 807 100)
Gross profit 794 238 534 953
Other operating income 48 972 109 711
Impairment reversals/(charges) 19 687 (47 082)
Distribution, administrative and
other expenses (459 948) (455 665)
Operating profit 402 949 141 917
Interest income 18 913 13 243
Interest expense (14 075) (37 360)
Share of results of associates 16 759 419
Profit before tax 424 546 118 219
Taxation (121 009) (55 023)
Profit for the year 303 537 63 196
Attributable to:
Equity holders of the company 277 682 52 210
Non-controlling interests 25 855 10 986
303 537 63 196
Depreciation and amortisation (101 257) (108 468)
Basic earnings per share (cents) 198 37
Headline earnings per share (cents) 189 67
Ordinary dividend per share (cents) 15
Special dividend per share (cents) 60
Number of shares in issue (`000) 152 532 152 532
Number of shares in issue excluding
treasury shares (`000) 141 058 140 097
Weighted average number of shares in
issue (`000) 140 363 142 352
Calculation of headline earnings
per share (R`000)
Net profit attributable to ordinary
shareholders 277 682 52 210
Net impairments (reversals)/charges (19 687) 47 082
Tax effect of impairment reversals/(charges) 4 562 (5 620)
Impairment reversals/(charges) attributable
to non-controlling shareholders 2 945 (3 628)
Loss on disposal of property, plant
and equipment 101 5 342
Headline earnings 265 603 95 386
Diluted earnings per share
Basic earnings per share (cents) 195
Headline earnings per share (cents) 187
Weighted average number of shares in
issue (`000) 140 363
Adjustment for dilutive share
options (`000) 1 990
Number of shares used for diluted
earnings calculation (`000) 142 353
No diluted earnings per share is reflected for 2009 as the strike price of the
options was higher than the share price as at 31 December 2009.
ABRIDGED GROUP STATEMENTS OF COMPREHENSIVE INCOME
31 December 31 December
2010 2009
R`000 R`000
Profit for the year 303 537 63 196
Other comprehensive income:
Actuarial (losses)/gains recognised
directly in equity
- Gross (15 626) 21 118
- Deferred tax 3 990 (5 910)
Net other comprehensive income (11 636) 15 208
Total comprehensive income for the year 291 901 78 404
Attributable to:
Equity holders of the company 266 880 66 932
Non-controlling interests 25 021 11 472
291 901 78 404
ABRIDGED GROUP STATEMENTS OF CASH FLOWS
31 December 31 December
2010 2009
R`000 R`000
Operating activities
Profit before tax 424 546 118 219
Non-cash items 56 990 149 394
Working capital changes 3 085 145 642
Cash generated from operations 484 621 413 255
Finance charges (14 075) (37 360)
Taxation paid (112 123) (70 663)
Dividends paid (113 769) (8 441)
Dividend income from associate 3 920 20 695
Net cash inflow from operating activities 248 574 317 486
Investing activities
Investment income 18 913 13 243
Net cash used in other investing activities (121 232) (94 043)
Net cash outflow from investing activities (102 319) (80 800)
Net cash outflow from financing activities (88 974) (22 493)
Net increase in cash and cash equivalents 57 281 214 193
Cash and cash equivalents at beginning
of the year 232 543 18 350
Cash and cash equivalents at end of the year 289 824 232 543
ABRIDGED GROUP BALANCE SHEETS
31 December 31 December
2010 2009
R`000 R`000
ASSETS
Non-current assets
Property, plant and equipment 699 190 657 892
Intangible assets 26 367 29 514
Investment in associates 34 236 20 147
Defined benefit asset 6 504 19 962
Deferred taxation 34 970
766 297 762 485
Current assets
Inventory 606 547 518 091
Trade and other receivables 397 326 428 076
Derivative financial assets 23 160
Taxation 12 431 9 700
Cash and cash equivalents 305 572 282 205
1 321 899 1 238 232
Total assets 2 088 196 2 000 717
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 42 876 42 876
Treasury shares (116 084) (124 289)
Share-based payment reserve 2 813 3 389
Non-distributable reserves 29 148 16 309
Retained earnings 1 297 256 1 148 964
Ordinary shareholders` equity 1 256 009 1 087 249
Non-controlling interests 113 910 96 772
Total equity 1 369 919 1 184 021
Non-current liabilities
Borrowings 31 912 54 217
Post-employment medical benefits 21 329 19 246
Deferred taxation 52 959 83 778
106 200 157 241
Current liabilities
Trade and other payables 502 639 441 784
Borrowings 22 424 97 298
Taxation 3 476
Provisions for liabilities and charges 53 183 60 876
Derivative financial liabilities 14 607 9 835
Bank overdrafts 15 748 49 662
612 077 659 455
Total liabilities 718 277 816 696
Total equity and liabilities 2 088 196 2 000 717
Net asset value per share (cents)
attributable to ordinary shareholders 890 776
Capital expenditure 124 153 116 156
Capital commitments
- contracted 58 513 28 398
- authorised but not contracted 108 812 24 986
NOTES TO THE CONSOLIDATED ABRIDGED FINANCIAL STATEMENTS
Accounting policies
The condensed abridged financial information has been prepared in accordance
with the recognition and measurement criteria of all applicable statements and
interpretations of International Financial Reporting Standards ("IFRS") and is
presented in terms of the disclosure requirements set out in IAS 34 - Interim
Financial Reporting and the AC 500 standards as issued by the Accounting
Practices Board, or its successor. The accounting policies applied to the
condensed abridged financial information are consistent with those as set out in
the annual financial statements for the year ended 31 December 2009.
Contingencies
The bank and other guarantees given by the group to third parties amounted to
R6,1 million as at 31 December 2010 (R6,6 million as at 31 December 2009).
Borrowings 31 December 31 December
2010 2009
R`000 R`000
Current (22 424) (97 298)
Overdrafts (15 748) (49 662)
Non-current (31 912) (54 217)
(70 084) (201 177)
Cash 305 572 282 205
Total 235 488 81 028
During the year the group repaid borrowings of R97,2 million
2009: R22,7 million.
Fair value adjustments on financial
instruments 31 December 2010 31 December 2009
Assets Liabilities Assets Liabilities
Forward exchange
contracts - fair value
hedges 23 14 607 160 9 835
Total 23 14 607 160 9 835
ANNUAL GENERAL MEETING
The annual report will be mailed to shareholders by 31 March 2011 along with the
notice of the annual general meeting.
The annual general meeting will be held on 4 May 2011 at 14:00 at Metair
Investments Limited, 10 Anerley Road, Parktown, Johannesburg.
Declaration of Ordinary Dividend No. 60
Notice is hereby given that a final ordinary dividend of 65 cents per ordinary
share has been declared in respect of the year ended 31 December 2010. The last
date to trade cum dividend will be Friday 8 April 2011. Trading will commence ex
dividend from Monday, 11 April 2011 and the record date will be Friday, 15 April
2011. The date of payment will be Monday, 18 April 2011.
Share certificates may not be dematerialised or rematerialised between Monday,
11 April 2011, and Friday, 15 April 2011, both days inclusive.
AUDITORS` REPORT
The abridged results of the group as set out above have been audited by the
group`s auditors PricewaterhouseCoopers Inc. Their unqualified report is
available for inspection at the company`s registered office (address details
above).
ABRIDGED GROUP STATEMENTS OF CHANGES IN EQUITY
Share capital Share-based Non-distri-
and Treasury payment butable
R`000 premium shares reserve reserve
Year ended
31 December 2010
Balance as at
1 January 2010 42 876 (124 289) 3 389 16 309
Net profit for the year
Other comprehensive
income: Actuarial losses
Total comprehensive
income for the year
Employee share option
scheme:
Value of service
provided 3 098
- Loss on settlement (3 674)
Net movement in
treasury shares 8 205
Transfer of associate
profit and dividend 12 839
Dividends
Balance as at
31 December 2010 42 876 (116 084) 2 813 29 148
Year ended
31 December 2009
Balance as at
1 January 2009 42 876 (124 532) 3 389 36 585
Net profit for the year
Other comprehensive
income: Actuarial gains
Total comprehensive
income for the year
Net movement in
treasury shares 243
Transfer of associate
profit and dividend (20 276)
Dividend
Balance as at
31 December 2009 42 876 (124 289) 3 389 16 309
ABRIDGED GROUP STATEMENTS OF CHANGES IN EQUITY
Attributable
to equity
Retained holders of Minority Total
R`000 earnings the company interest equity
Year ended
31 December 2010
Balance as at
1 January 2010 1 148 964 1 087 249 96 772 1 184 021
Net profit for the year 277 682 277 682 25 855 303 537
Other comprehensive
income: Actuarial losses (10 802) (10 802) (834) (11 636)
Total comprehensive
income for the year 266 880 266 880 25 021 291 901
Employee share option
scheme:
- Value of service 3 098 137 3 235
- Loss on settlement (3 674) (3 674)
Net movement in
treasury shares 8 205 8 205
Transfer of associate
profit and dividend (12 839)
Dividends (105 749) (105 749) (8 020) (113 769)
Balance as at
31 December 2010 1 297 256 1 256 009 113 910 1 369 919
Year ended
31 December 2009
Balance as at
1 January 2009 1 061 756 1 020 074 93 590 1 113 664
Net profit for
the year 52 210 52 210 10 986 63 196
Other comprehensive
income: Actual gains 14 722 14 722 486 15 208
Total comprehensive
income for the year 66 932 66 932 11 472 78 404
Net movement in
treasury shares 243 243
Transfer of associate
profit and dividend 20 276
Dividend (8 290) (8 290)
Balance as at
31 December 2009 1 148 964 1 087 249 96 772 1 184 021
ABRIDGED SEGMENTAL REVIEW
Local Direct exports
Original after- Non- original
equipment market auto equipment
Revenue 2 273 233 895 384 353 710 84 560
Profit/(loss)
before interest
and tax 150 418 159 903 35 972 873
Net finance costs
Profit before tax
For the year ended
31 December 2009
Revenue 2 029 137 748 355 323 168 73 494
(Loss)/profit
before interest
and tax (92 848) 95 099 53 697 8 471
Net finance costs
Profit before tax
ABRIDGED SEGMENTAL REVIEW
Direct exports
Recon-
After- Non- Property ciling
R`000 Market auto rental items* Total
Revenue 111 223 35 126 58 650 (58 650) 3 753 236
Profit/(loss)
before interest
and tax 8 770 (8 012) 57 774 14 010 419 708
Net finance costs 4 838
Profit before tax 424 546
Included in the above is depreciation and amortisation of R101,3 million and
impairment reversals of R19,7 million.
For the year ended
31 December 2009
Revenue 111 833 56 066 54 447 (54 447) 3 342 053
Loss)/profit
before interest
and tax 4 807 (836) 54 447 19 499 142 336
Net finance costs (24 117)
Profit before tax 118 219
Included in the above is depreciation and amortisation of R108,5 million and
impairment charges of R47,1 million.
* The reconciling items relate to Metair head office companies and property
rental.
METAIR ABRIDGED RESULTS 2010 COMMENTARY
Metair has produced an excellent set of financial results for the year ended
December 2010. Headline earnings per share (HEPS) increased by 182% to 189 cents
per share and the group achieved a return on equity (ROE) of 23,8% (2009: 5,5%).
Earnings before interest, tax, depreciation and amortisation (EBITDA) of R501,3
million exceeded the R500 million mark for the first time in the group`s
history.
From a macroeconomic perspective, the 2008 financial crisis resulted in a
substantial decline in worldwide demand for motor vehicles. Against this
backdrop, in 2009 original equipment (OE) production in South Africa declined by
over 25%. Metair responded decisively to the downturn by, inter alia:
- Closing selected loss-making businesses;
- Consolidating businesses that were not viable on a stand-alone basis;
- Focusing intently on cash flow and working capital management; and
- Controlling costs and operating efficiencies.
When we released our 2009 results we stated that "Metair has emerged from the
crisis as a lean organisation with a robust balance sheet, is cash generative
and is well positioned to take advantage of the upturn in economic conditions".
The 2010 financial results bear testament to this statement and to the decisive
actions taken in 2009. Cash generated by operations was R484,6 million, we
achieved record earnings of R277,7 million, settled preference share debt of R75
million, paid a preference dividend of R26 million and returned R84,9 million to
shareholders as a special dividend.
DETAILED GROUP RESULTS
- Group turnover improved by 12,3% to R3 753 million from R3 342 million in
2009.
- EBITDA improved by 68% to R501,3 million compared to R297,9 million in the
previous period.
- Profit before tax improved by 259% to R424,5 million from R118,2 million in
the previous period.
- Net asset value increased from 776 cents per share to 890 cents per share.
Return on equity of 23,8% was achieved.
- Cash generated by operations for the year was R484,6 million. The net cash
position after borrowings at year-end was R235,5 million
(2009: R81 million).
REVIEW OF OPERATIONS
Original equipment
During the year the group continued to focus on cash management, cost
competitiveness and manufacturing and logistical excellence. In the SA industry
OE production totalled 449 167 vehicles compared to 354 158 in 2009. The
restructuring initiatives that were implemented during the 2009 financial year
enabled the group to benefit from improved OE volumes.
In August and September 2010 we experienced the effects of industrial action
but, despite this, the automobile industry was fortunately able to catch up on
the three weeks of production that were lost. A three-year wage agreement has
been reached which is positive for stability in the industry.
Aftermarket, non-automotive and export segments
The aftermarket and non-automotive business, and in particular First National
Batteries (FNB), continues to exceed expectations.
Our brake pad and brake systems business was re-engineered to mostly service the
aftermarket with limited retained OE business.
FNB, the largest lead-acid battery manufacturer in Africa, has world-class
proprietary technology and products and through its combination of retail parts
distribution customers and Battery Centre network, is able to service the whole
of southern Africa. Three years of intense design and testing culminated in the
recent launch of the "stop-start" battery. This product will be able to fulfil
future requirements in both the OE and aftermarket segments, with anticipated
increased demand for improved emission-efficient vehicles utilising "stop-start"
systems. Additionally, FNB is also exploring additional export markets in sub-
Saharan Africa. Export profitability has come under pressure due to the strong
Rand.
INDUSTRY REVIEW
Original equipment
Local vehicle production increased by 27% in 2010, from 354 158 vehicles to 449
167 vehicles. Exports increased by 37% to 239 465 vehicles from 174 947
vehicles. The National Association of Automobile Manufacturers of South Africa
(NAAMSA) is forecasting 2011 local vehicle production of 530 000 vehicles, which
represents growth of 15% over 2010.
The local OE industry is optimistic on the outlook for vehicle production for
2012 and beyond as the Government incentive programme transforms from the Motor
Industry Development Programme (MIDP) to the Automotive Production and
Development Programme (APDP) over the next two years. Total vehicle sales for
2010 was 470 934, with the imported market share being 62%. The APDP has
provided certainty to the industry until at least 2020 and in Metair`s view is
an improvement on the MIDP programme.
Metair`s plastics, lights, battery and springs business, will participate in
three new models from two new customers, by way of the successful launch of the
two new VWSA product offerings during the period under review, and the planned
launch of a new product offering from Ford during the next full year reporting
period.
Aftermarket and non-automotive
There is generally a time lag of between two and four years before new vehicle
sales vest in annuity income for our aftermarket product range. Therefore, the
group expects the high level of vehicle sales in 2007 and 2008 to support growth
in the aftermarket sector. Consequently, the group has expanded its product
offering in this segment. In addition, Metair is well positioned to benefit from
the increase in imported vehicles as it offers generic products in its battery,
brakes, filter, sparkplug and air-conditioning products that target both locally
produced and imported vehicle ranges.
Improved activity in the mining, utility, telecommunication and warehousing
industries should sustain growth in this sector.
PROSPECTS
There is an improved outlook in the short to medium term for the OE industry,
and the high vehicle sales in 2007 and 2008 have laid the platform for growth in
the aftermarket sector.
Through the focus on a balance between our OE and aftermarket businesses,
selective capacity expansion and new products, Metair is well positioned to
benefit from this improved industry outlook. Although much depends on OE
volumes, the Rand exchange rate and a sustained economic recovery, management is
cautiously optimistic that it can build on the performance achieved in 2010.
Management remains committed to a continued improvement in cost competitiveness
and manufacturing and logistical excellence including further rationalisation
and consolidation in our plastics business. Strategic acquisitions to expand the
group`s product offering, particularly in the aftermarket sector, will be
actively pursued where the group can take advantage of its technological
advantages and robust balance sheet.
We have returned balance to our businesses and we are now well positioned to
respond to market and customer requirements, with small effective and efficient
alignments rather than large interventions.
The information in the commentary above has not been reviewed or reported on by
the group`s auditors.
APPRECIATION
It is with great appreciation to all our stakeholders that we bring the 2010
results to you as all stakeholders had to make adjustments and sacrifices during
the last two years, especially in light of our cost-reduction activities.
Signed on behalf of the Board
O M E Pooe C T Loock
Chairman Managing Director
JOHANNESBURG, 10 March 2011
REGISTRARS
Computershare Investor Services (Pty) Limited
70 Marshall Street
JOHANNESBURG
2001
SPONSOR
Barnard Jacobs Mellet Corporate Finance (Pty) Limited
EXECUTIVE DIRECTORS: CT Loock (Managing); BM Jacobs (Finance)
NON-EXECUTIVE DIRECTORS: OME Pooe (Chairman); A Joffe; B Molotlegi
INDEPENDENT NON-EXECUTIVE DIRECTORS: RS Broadley; L Soanes*; A Galiel; JG Best
COMPANY SECRETARY: SM Vermaak
*British
Johannesburg
15 March 2011
Date: 15/03/2011 08:00:07 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
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
