| Tue 20 Feb 2001, 0:00 | | Voltex - Interim Profit Announcement & Press |
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Voltex holdings limited
("Voltex")
(Registration number 1981/006220/06)
INTERIM PROFIT ANNOUNCEMENT AND DIVIDEND DECLARATION
for the six months ended 31 December 2000
Group income statement
Unaudited Unaudited Audited
December December June
2000 1999 2000
R000's R000's R000's
Revenue 766 663 688 675 1 352 507
Operating income 34 866 38 384 72 643
Income from finance activities 4 794 7 679 13 056
Net income before taxation 39 660 46 063 85 699
Taxation 11 250 13 811 25 283
28 410 32 252 60 416
Attributable to outside shareholders (10) (1 380) (2 302)
Attributable income 28 400 30 872 58 114
Headline earnings per share (cents) 21,80 24,05 44,65
Basic earnings per share (cents) 21,80 24,05 45,03
Diluted earnings per share (cents) 20,88 23,08 43,17
Weighted average number of shares
in issue adjusted for own shares
held (000) 130 271 128 349 129 047
Dividends per share (cents)
- interim 7 7 7
- final 13
7 7 20
Notes
1. Diluted earnings per share is based on the weighted average number of
ordinary shares in issue during the period adjusted for the unexercised options
under the Executive Share Incentive Scheme which will be issued at less than
current market value.
2. The accounting policies and methods of computation followed in this interim
report are consistent with the annual financial statements for the year ended
30 June 2000.
Abridged group balance sheet
Unaudited Unaudited Audited
December December June
2000 1999 2000
R000's R000's R000's
ASSETS
Non-current assets 79 697 77 962 77 481
Property, plant and equipment 62 970 56 414 60 010
Investments 4 089 4 386 4 011
Deferred taxation 12 638 17 162 13 460
Current assets 689 963 683 901 709 337
Operating assets 595 507 531 608 545 328
Cash and cash equivalents 94 456 152 293 164 009
Total assets 769 660 761 863 786 818
EQUITY AND LIABILITIES
Capital and reserves
Ordinary shareholders' equity 513 287 480 667 491 452
Outside shareholders' interest 30 742 28 707 26 584
Total shareholders' equity 544 029 509 374 518 036
Current liabilities
Operating liabilities 216 490 243 505 251 850
Dividends payable 9 141 8 984 16 932
Total liabilities 255 631 252 489 268 782
Total equity and liabilities 769 660 761 863 786 818
Tangible NAV per share (cents) 385,81 360,85 367,20
Shares in issue at end of
period (000's) 130 583 128 447 130 243
Own shares held by group (000's) (816)
Net shares in issue at end of
period (000's) 129 767 128 447 130 243
Abridged group cash flow statement
Unaudited Unaudited Audited
December December June
2000 1999 2000
R000's R000's R000's
Cash (utilised)/generated by
operations (38 212) 21 686 86 249
Net finance income received 4 794 7 679 13 056
Taxation paid (9 465) (6 103) (43 829)
Dividends paid (16 932) (16 679) (25 747
Cash (utilised by)/retained
from operations (59 815) 6 583 29 729
Investment activities
Ongoing operations (6 143) (4 429) (8 892)
Expansion of operations (2 022) (1 316) (4 560)
Businesses acquired (5 000)
Financing activities
Own shares acquired (2 154)
Net proceeds on new share issues 581 192 1 132
Net (decrease)/increase in cash and
cash equivalents (69 553) 1 030 12 409
Statement of changes in equity
Unaudited Unaudited Audited
December December June
2000 1999 2000
R000's R000's R000's
Balance as previously stated 491 452 440 025 440 025
Prior year adjustment 17 529 17 529
491 452 457 554 457 554
Attributable earnings 28 400 30 872 58 114
Own shares acquired (2 154)
Net proceeds on issue of shares 581 192 4 757
Dividends (9 141) (9 068) (26 000)
Items not recognised in the
income statement 4 149 1 117 (2 973)
Goodwill on acquisitions (5 050)
Exchange difference on translation
of foreign entity 4 149 1 117 2 077
Balance at end of period 513 287 480 667 491 452
COMMENTARY
During the period under review the building and construction sectors continued
to remain under extreme pressure with an increase in insolvencies of some 43%
over the corresponding period. The group increased its turnover by 11,3%, but
due to continued pressure on margins, headline earnings per share decreased by
9,3%. This result is satisfactory given the downturn in building and industrial
activities during the past 18 months when significant expansionary projects
were replaced by bare minimum maintenance requirements needed to enable
production facilities to continue at their present lower levels.
Whilst commitment appears to have been made to the provision of low cost
housing, the delivery thereof has not as yet materialised to the extent as
originally expected. The situation has been further aggravated by the fact that
many municipalities and local government bodies were unable to meet their
financial obligations and, as such, the electrification process, particularly
in rural areas, has not progressed at acceptable levels.
Trading conditions in the group's sewing machine businesses, both locally and
internationally, were affected by the global economic slowdown which has had a
negative impact on trading in the clothing industry. However, this has to some
extent been offset by the improvement in the group's small appliance division
due largely to the inroads made in the marketing and distribution by the group
of the world-renowned Moulinex and Krups brands of product.
A weak rand coupled with the impacts of diversionary attractions on consumer
spending have also affected the group's results.
The increase in the group's inventory and the corresponding decrease in cash
resources was due to a planned strategic investment in specific specialised and
general products which, for sound commercial reasons, needed to be procured so
as to maintain the group's competitive edge. It is anticipated that this
position should be normalised by financial year end.
OUTLOOK
The group remains confident that the building and construction sectors will, in
the short to medium term, emerge from their recessionary phase. This belief is
evidenced by an increase in building plans both proposed and passed. It is,
however, unclear whether these projects will commence by the end of the group's
financial year. Although perceived low business confidence levels are of
concern, we believe that the inherent stability and opportunities available in
the South African economy should lead to an increase in foreign capital
investment. The group continually evaluates its current businesses and will
take the necessary measures to increase market share and return on
shareholders' funds. The avenues opened by the "African renaissance" are also
expected to bear fruit during 2001 as the group's trade volume increases to the
rest of Africa. The group remains well positioned to capitalise on
opportunities as it continues to search for suitable acquisitions to complement
core operations.
Dividends
Notice is hereby given that an interim dividend of 7 cents per share has been
declared payable on or about 17 April 2001 to shareholders registered at the
close of business on 23 March 2001.
By order of the board
Myron Berzack (Chairman)
20 February 2001
Transfer secretaries
Mercantile Registrars Limited
11 Diagonal Street
Johannesburg, 2001
Directors: MC Berzack (Chairman), RM Berzack, FH Geyser, S Green, S HIllman, EG
Immermann, B Joffe, WS McCarroll (British),JL Pamensky, DK Rosevear, GM
Scrutton, Dr T Sexwale, MJ Steele, RE Venter, Dr WP Venter, G M Rochussen
(Alternate)
VOLTEX COPES WITH TOUGH CONDITIONS
Electrical contracting supplier Voltex has done well to hold interim headline
earnings to a 9,3% lower 21,8 cents a share in the face of multi-faceted
problems in the economy.
Management's confidence in the performance is emphasised by maintaining the
interim dividend at a 3 times covered 7 cents a share and chairman Myron
Berzack notes that "an increase in building plans proposed and passed augurs
well for the future."
The group is significantly reliant upon the building and construction sectors
which have experienced a torrid year, characterised by a 43% increase in
insolvencies. Expansion projects which featured 18 months ago largely have been
replaced by "bare minimum maintenance needed to enable production facilities to
continue at their present lower levels."
Furthermore, low cost housing development, anticipated to boost the sector, has
yet to respond adequately and the situation is aggravated by the failure by
many municipalities and local government bodies to meet their debts, hampering
the electrification process, particularly in the rural areas.
Locally and internationally, the clothing sector has felt the effects of global
slowdown and this has impacted on the group's sewing machine division. The weak
rand and the counter-attractions of gaming and cellular telephones on consumer
spending have also affected results.
On the positive side, the small appliance division has benefited from
successful marketing of the Moulinex and Krups brands products.
Against this background, group turnover rose by 11,3% to R766,66 million but
margins were strained with operating profit 9,2% down at R34,87 million. Income
from financing activities was also down, by 37,6% at R4,79 million, and pre-tax
income declined by 13,9% to R36,66 million.
A slightly lower effective tax rate saw taxed profit down by 11,9% to R28,4
million which, on the increased weighted shares in issue, amounted to a 9,3%
decline in earnings per share.
The balance sheet remains healthy with tangible net asset value per share
improving by 7% to 385,8 cents against a current share price of about 286
cents. Cash resources declined and stocks increased in response to a planned
strategic investment in specific products judged as necessary to afford the
group a competitive edge. This is seen as a short term phenomenon which should
be resolved by year-end.
Looking ahead, Myron Berzack emphasises management's confidence that "the
building and constructions sectors will recover from their current recessionary
phase.
"A stimulant to achieving that recovery is the attraction to foreign investors
posed by the inherent stability and opportunities available in the South
African economy. I am confident that Voltex is well positioned to take full
advantage of any recovery. We continue to monitor our existing businesses and
to seek suitable acquisitions to enhance our market share and return on
shareholders' funds."
Voltex shares are currently trading at around 285 cents at which level,
historical earnings give a P/E multiple of 6,4 compared with the Electrical &
Electronic sector average of 11.0.
ends.
FOR FURTHER INFORMATION, PLEASE CONTACT:
SETON THOMPSON (031)2097622 / 0828979365
