| Mon 12 Feb 2001, 0:00 | | Nei Afr - Audited Group Results For The Year Ended |
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Northern Engineering Industries Africa Limited
Registration number: 1978/001240/06
Audited Group Results for the year ended 31 December 2000
Income statement
R million %
2000 1999 Change
Revenue 555,8 526,1 6
Operating profit 25,0 35,0 (29)
Restructuring costs - (5,9)
Net financing (charge)/income (1,5) 1,9
Profit before taxation 23,5 31,0 (24)
Taxation (7,5) (9,8)
Profit attributable to
ordinary shareholders 16,0 21,2 (24)
Headline Earnings
Profit attributable to
ordinary shareholders 16,0 21,2 (24)
Restructuring costs - 4,1
16,0 25,3 (37)
Statistics
R million %
2000 1999 Change
Returns
Operating profit to revenue % 4,5 6,6
Return on shareholders' funds % 8,1 11,5
Per ordinary share
Earnings per share cents 119 158 (24)
Headline earnings per share cents 119 188 (37)
Dividend cents 30 45 (33)
Net worth per share cents 1 464 1 374 7
Dividend cover times 4,0 3,5
Number of ordinary
shares issued (000) 13 443 13 443
Balance Sheet
R million
2000 1999
Assets
Property, plant and equipment 67,1 67,9
Retirement fund surplus 38,0 31,2
Current assets 235,3 194,6
Inventories and accounts receivable 213,9 169,3
Cash and bank balances 21,4 25,3
Total assets 340,4 293,7
Equity and liabilities
Ordinary shareholders' interest 196,8 184,8
Deferred tax 12,2 9,5
Current liabilities 131,4 99,4
Accounts payable 108,4 87,8
Progress claims in advance 23,0 11,6
Total equity and liabilities 340,4 293,7
Cash Flow
R million
2000 1999
Cash generated by operations
before working capital changes 24,7 30,5
Working capital changes (9,9) (15,0)
Tax paid and net financing charge (8,5) (8,9)
Ordinary dividend (6,0) (5,4)
Net cash inflow from
operating activities 0,3 1,2
Expenditure on property, plant and equipment (7,5) (7,1)
Proceeds from disposal of property,
plant and equipment 2,4 1,1
Net cash outflow from investing activities (5,1) (6,0)
Finance lease liability and changes in equity 0,9 -
Net cash inflow from financing activities 0,9 -
Net decrease in cash (3,9) (4,8)
Comments
Results
As indicated in August 2000, the group experienced poor market conditions from
the second half of 1999 through most of 2000, but with some positive signs of
improvement towards the end of the year. The tempo of incoming business
continued to accelerate and order books at the end of December were 46 percent
higher than those at the beginning of the year.
Revenue improved by 6 percent to R555,8 million, with a 35 percent export
content. Margins came under severe competitive pressure and, at 4,5 percent,
yielded an operating profit of R25,0 million (1999: R35,0 million). The
specific problems highlighted in the June interim report have been
satisfactorily addressed. Deliveries to Iraq have now been completed, and
distribution transformers made a profit in the six months to December. In
addition, prospects for at least one large watertube project look promising for
2001.
The acceleration of activity towards the year-end put some pressure on the
balance sheet, with a marked increase in inventories and accounts receivable,
although this was largely financed through creditors. Major receipts since the
year-end have seen working capital return to more normal levels. Despite being
ungeared at the beginning and end of the year, on average the group operated in
a borrowed position and thus incurred a net financing cost of R1,5 million
(1999: R1,9 million income).
The net worth per share increased by 7 percent to 1 464 cents.
Dividend
It remains group policy to pay a single dividend and the directors have
resolved to pay a cash dividend of 30 cents per share to shareholders who are
registered in the books of the company on Friday, 2nd March 2001. Payment of
the dividend will take place on or about 12th April 2001.
Prospects
Although the economic signs are more favourable, the long-term nature of the
group's business means that the expected improvement in results becomes
apparent only over a period of time and no material change is foreseen for the
first half of 2001. However, the group is encouraged by developments in the
second half, and, also intends building on the export successes noted above.
On behalf of the board
P G Joubert T W Rensen
Chairman Director
Johannesburg 13 February 2001
Power Delivery to Strategic Markets
Registered office - 2nd Floor, Ristone Office Park, 15 Sherborne Road,
Parktown, 2193
Transfer secretaries - Mercantile Registrars Limited, 11 Diagonal Street,
Johannesburg, 2001
