| Mon 5 Feb 2001, 0:00 | | Sentry - Interim Results |
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SENTRY GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1989/006287/06)
("Sentry")
Interim results for the six months ended 31 December 2000
Profit from operations +26%
Headline earnings per share +25%
Income statement
Unaudited Unaudited Audited
6 months 6 months 12 months
ended % ended ended
R000's 31 Dec 00 increase 31 Dec 99 30 Jun 00
Turnover - continuing 184 016 13,5 162 164 340 283
- discontinued (Note 1) - 6 722 6 722
Profit from operations 33 040 25,5 26 325 61 665
Interest received/(paid) 10 (471) (1 384)
Exceptional items (Note 2) (3 809) - (1 721)
Profit before taxation 29 241 13,1 25 854 58 560
Taxation (9 995) (7 274) (19 613)
Minority share of profits (116) (209) (376)
Net profit for the period 19 130 4,1 18 371 38 571
Dividend - - (11 645)
Retained income for
the period 19 130 18 371 26 926
Operating margin (%) 18,0 15,6 17,8
Shares in issue
(weighted average) (Note 3) 178 158 177 973 178 774
Earnings per share
- fully diluted (cents) 10,7 4,0 10,3 21,6
Headline earnings per share
fully diluted (cents) (Note 4) 12,9 25,2 10,3 22,5
Note 1. Discontinued operation
This represents turnover from OF&A sold last year. This business did not
materially affect reported profits in prior periods.
Note 2. Exceptional items
Provision against amount owing for
business sold in prior year 2 691 - 1 376
Loss incurred by Sentry
Group Share Scheme 1 118 - 345
3 809 - 1 721
Note 3. Shares in issue
The weighted average number of shares in issue reduced as a result of the
repurchase of 4 000 000 shares during the period under review.
Note 4. Headline earnings
Attributable earnings 19 130 18 371 38 571
Exceptional items 3 809 - 1 721
Headline earnings 22 939 18 371 40 292
Balance sheet
Unaudited Unaudited Audited
R000's 31 Dec 00 31 Dec 99 30 Jun 00
ASSETS
Non-current assets
Property, plant and equipment 25 086 30 546 24 891
Deferred tax 45 194 48 872 47 594
Other assets 36 424 3 835 19 493
Current assets 25 678 35 411 26 258
Inventories 2 278 1 774 1 532
Trade and other receivables 23 400 29 920 17 584
Cash - 3 717 7 142
Total assets 132 382 118 664 118 236
Equity and liabilities
Capital and reserves
Share capital and premium 1 613 1 792 1 792
Retained income 51 545 43 978 38 887
53 158 45 770 40 679
Non-current liabilities
Outside shareholders' interest 4 159 3 877 4 043
Non-current liabilities
- interest bearing 8 634 10 050 7 721
Amounts owing for acquisitions 202 1 100 759
Current liabilities 66 229 57 867 65 034
Trade and other payables 40 813 51 936 37 601
Bank overdraft 7 857 - 3 061
Taxation 17 559 5 931 12 727
Dividend - - 11 645
Total equity and liabilities 132 382 118 664 118 236
Shares in issue (000's) 178 158 179 158 179 158
Net asset value per share (cents) 29,8 25,5 22,7
Cash flow statement
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
R000's 31 Dec 00 31 Dec 99 30 Jun 00
Operating cash flow 37 906 31 429 71 671
Change in working capital (3 350) (8 328) (19 924)
Interest received/(paid) 10 (471) (1 384)
Taxation paid (2 763) (2 766) (4 728)
Dividend paid (11 645) (2 873) (2 873)
Cash generated by operations 20 158 16 991 42 762
Intangibles acquired - (7 449) (3 868)
Investment in property,
plant and equipment (5 061) (8 954) (9 813)
Investment in businesses (net) - - (8 742)
Share repurchase (6 651) - -
Investment in other assets (20 740) (3 835) (19 838)
Net cash outflow/(inflow) (12 294) (3 247) 501
Proceeds from issue of shares - 3 155 2 830
Long-term debt assumed 913 2 698 805
Short-term debt acquired - - 446
Amounts paid to vendors
for acquisitions (557) - (531)
Change in cash balances (11 938) 2 606 4 051
Statement of changes in equity
Share capital Retained
and premium income
Balance at 1 July 2000 1 792 38 887
Net profit for the period - 19 130
Share buyback (179) (6 472)
Balance at 31 December 2000 1 613 51 545
Additional information
1.Generally Accepted Accounting Practice
The above statements have been prepared in accordance with generally accepted
accounting practice.
2.Accounting policies
The accounting policies used in the preparation of these statements are
consistent with those used in the past.
3. Other 31 Dec 00 31 Dec 99 30 Jun 00
Capital expenditure 5 061 8 954 9 813
Depreciation 4 866 5 104 10 261
Commentary
Sentry is one of the leading security service-providers in South Africa,
offering a wide range of security and allied solutions to both its domestic and
corporate clients on a national basis.
Financial review
The results for the six month period to 31 December 2000 are very satisfactory
and ahead of budget.
Turnover at R184,0 million is 14% up on the prior comparable period, whilst
profit from operations rose 26% to R33,0 million. Headline earnings per share
increased by 25% from 10,3 cents to 12,9 cents.
These substantial increases are due to the growth experienced by the monitoring
and response division, and the continuing efficiencies being achieved as a
result of the integration of the Paramed business acquired last year.
During the review period an exceptional loss was incurred as a result of share
options being exercised, and the need to provide against the balance owing on
the sale of OF&A, the forensic business sold last year.
Operating cash flow amounted to R38 million of which working capital absorbed
R3 million. In view of the group's strong cash flow and the low trading price
of the shares during this period, a total of R27,4 million was used to acquire
the company's own shares. R20,7 million was spent on acquiring further shares
for the Group Share Scheme, in order to avoid having to issue new shares which
would result in future dilutions when options are exercised. The balance of
R6,7 million was spent acquiring 4 million shares in a general repurchase
programme.
Operating review
The monitoring and response businesses have enjoyed organic growth, and
continue to expand their operational areas. Increased efficiencies throughout
this division have continued to improve the operating margins. This process is
ongoing and is to a large extent technologically driven.
Although a relatively small contributor, the guarding division was successful
in securing a number of large contracts towards the end of this period. It is
felt that this trend, built on the back of the "Sentry Security" brand and its
position in the market, will continue.
Based on the group's electronic expertise and the installation capacity in its
five operating centres, integrated security solutions involving the
installation and monitoring of access control and CCTV surveillance systems are
now being strongly marketed.
To ensure continued growth, a number of new developments are being pursued in
our existing core businesses and areas allied to them. These initiatives
together with certain acquisitions will enhance this objective.
Prospects
The contractual recurring income generated by the group will continue to
provide strong cash flows and a base for further expansion. During the next six
months, certain strategic acquisitions will be made.
In line with previous years, earnings will be higher in the second six months.
It is anticipated that the group will achieve its target of increasing earnings
per share by 50% between 30 June 1999 and 30 June 2001.
Dividend
Sentry has a policy of paying a single dividend which is declared after the end
of the financial year.
On behalf of the Board
IN Matthews
Chairman
Johannesburg
6 February 2001
Registered office
12 Baker Street,
Rosebank, Johannesburg 2001
(PO Box 52460, Saxonwold 2132)
Transfer office
Computershare Services Ltd
40 Commissioner Street, Johannesburg 2196
(PO Box 61051, Marshalltown 2107)
For more information on Sentry, access our website at www.sentry.co.za
