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UNI
UNI
UNI - Universal Industries Corporation Limited - Unaudited interim results for
the six months ended 30 June 2011
Universal Industries Corporation Limited
(Incorporated in the Republic of South Africa)
(Registration number 1996/004343/06)
JSE code: UNI ISIN:ZAE000110664
("Universal" or "the Company" or "the Group")
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2011
- Revenue increased by 87%; and
- Headline earnings per share increased by 133%.
Consolidated Statement of Comprehensive Income
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 Jun 2011 30 Jun 2010 31 Dec 2010
R`000 R`000 R`000
Revenue 455 658 244 066 702 318
Cost of goods sold (320 927) (186 105) (496 482)
Gross profit 134 731 57 961 205 836
Other income 1 121 1 718 1 776
Operating expenses (75 021) (35 932) (117 651)
Profit from operations 60 831 23 747 89 961
Interest received 1 505 3 407 9 677
Interest paid (9 688) (4 492) (10 750)
Profit before taxation 52 648 22 662 88 888
Taxation (14 058) (6 365) (27 265)
Profit for the period 38 590 16 297 61 623
Other comprehensive income - - -
Total comprehensive income for the 38 590 16 297 61 623
period
Attributable to:
Equity holders of the parent 38 280 16 155 60 921
Minority interest 310 142 702
38 590 16 297 61 623
Number of shares in issue (`000) 457 919 448 419 457 919
Weighted average number of shares 457 919 448 419 449 198
in issue (`000)
Weighted average number of shares 459 412 448 419 449 225
in issue used to calculate diluted
earnings (`000)
Earnings per share (cents) 8,4 3,6 13,6
Headline earnings per share 8,4 3,6 13,6
(cents)
Diluted earnings and headline 8,3 3,6 13,6
earnings per share (cents)
Consolidated Statement of Financial Position
Unaudited Unaudited Audited
As at As at As at
30 Jun 2011 30 Jun 2010 31 Dec 2010
R`000 R`000 R`000
Assets
Non-current assets 360 313 230 308 361 312
Property, plant and equipment 61 610 26 215 57 593
Intangible assets 282 372 202 862 285 771
Restraint of trade pre-payment 7 800 - 8 700
Deferred taxation 842 1 231 1 475
Loans receivable 7 689 - 7 773
Current assets 440 878 315 792 423 489
Inventories 208 620 97 414 169 340
Trade and other receivables 203 904 123 142 207 299
Taxation pre-paid 6 751 2 150 2 609
Bank and call deposits 21 603 93 086 44 241
Total assets 801 191 546 100 784 801
Equity and liabilities
Capital and reserves 436 426 356 233 413 609
Share capital and share premium 135 930 139 987 151 957
Accumulated profit 299 484 216 104 260 950
Equity attributable to the equity 435 414 356 091 412 907
holders of the parent
Minority interests 1 012 142 702
Non-current liabilities 166 118 79 599 187 063
Interest bearing liabilities 140 751 61 776 159 669
Deferred taxation 6 924 984 9 536
Other financial liabilities 18 443 16 839 17 858
Current liabilities 198 647 110 268 184 129
Trade and other payables 144 389 85 539 124 686
Current portion of:
- interest bearing liabilities 43 423 19 757 43 753
- other financial liabilities 9 763 57 9 977
Taxation payable 1 072 801 5 713
Bank overdrafts - 4 114 -
Total equity and liabilities 801 191 546 100 784 801
Number of shares in issue (`000) 457 919 448 419 457 919
Net asset value per share (cents) 95,3 79,4 90,2
Tangible net asset value per share 36,2 34,1 30,3
(cents)
Consolidated Cash Flow Statement
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 Jun 2011 30 Jun 2010 31 Dec 2010
R`000 R`000 R`000
Cash flows from operating 21 768 9 106 36 989
activities
Cash generated by operations 54 772 21 294 79 448
Interest received 1 505 3 407 9 677
Interest paid (9 688) (4 492) (10 626)
Taxation paid (24 821) (11 103) (41 510)
Cash flows from investing (8 993) (10 898) (84 937)
activities
Additions to property, plant and (8 993) (4 586) (14 932)
equipment
Acquisition of subsidiary and - (6 312) (59 205)
business
Restraint of trade payment - - (10 800)
Cash flows from financing (35 413) (19 585) (18 160)
activities
Net interest bearing liabilities (19 249) (7 186) (10 297)
repaid
Net other financial liabilities (223) 1 053 1 392
raised/(repaid)
Capital distribution to (16 027) (13 452) (13 453)
shareholders
Proceeds from issue of shares net 86 - 4 244
of loans advanced to executives
under the assisted share purchase
scheme
Share buy back and expenses - - (46)
Decrease in cash resources (22 638) (21 377) (66 108)
Cash resources at beginning of 44 241 110 349 110 349
period
Cash resources at end of period 21 603 88 972 44 241
Segment Reporting
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 Jun 2011 30 Jun 2010 31 Dec 2010
R`000 R`000 R`000
Revenue 455 658 244 066 702 318
- Baking Systems 136 331 115 624 308 012
- Catering and kitchen equipment 155 211 - 58 502
- Refrigeration 164 116 128 442 335 804
Segment profit from operations 60 831 23 747 89 961
- Baking Systems 20 142 14 487 48 132
- Catering and kitchen equipment 25 307 - 3 446
- Refrigeration 16 012 9 492 42 422
- Unallocated corporate expenses (630) (232) (4 039)
Net interest paid (8 183) (1 085) (1 073)
Profit before taxation 52 648 22 662 88 888
Consolidated Statement of Changes in Equity
Share Share Accumulated
capital premium profit
R`000 R`000 R`000
Balances as at 31 4 153 435 199 949
December 2009
Capital distribution - (13 452) -
to shareholders
Total comprehensive - - 16 155
income for the six-
month period to 30
June 2010
Balances as at 30 4 139 983 216 104
June 2010
Share issues net of 1 11 969 -
share buy back
Share-based payments - - 80
Total comprehensive - - 44 766
income for the six-
month period to 31
December 2010
Balances as at 31 5 151 952 260 950
December 2010
Capital distribution - (16 027) -
to shareholders
Share-based payments - - 254
Total comprehensive - - 38 280
income for the six-
month period to 30
June 2011
Balances as at 30 5 135 925 299 484
June 2011
Total equity Total equity
attributable to attributable to
the equity holders Minority the equity holders
of the parent interests of the parent
R`000 R`000 R`000
Balances as at 31 353 388 - 353 388
December 2009
Capital distribution (13 452) - (13 452)
to shareholders
Total comprehensive 16 155 142 16 297
income for the six-
month period to 30
June 2010
Balances as at 30 356 091 142 356 233
June 2010
Share issues net of 11 970 - 11 970
share buy back
Share-based payments 80 - 80
Total comprehensive 44 766 560 45 326
income for the six-
month period to 31
December 2010
Balances as at 31 412 907 702 413 609
December 2010
Capital distribution (16 027) - (16 027)
to shareholders
Share-based payments 254 - 254
Total comprehensive 38 280 310 38 590
income for the six-
month period to 30
June 2011
Balances as at 30 435 414 1 012 436 426
June 2011
COMMENTARY
TRADING ENVIRONMENT
The group operates as a significant supplier of commercial refrigeration,
baking, catering and kitchen equipment and utensils to the food industry
encompassing the retail, wholesale, hospitality (i.e. hotels, restaurants, fast
food and other commercial kitchens) and manufacturing segments.
Universal traded exceptionally well during the period considering the prevailing
challenging economic conditions, locally and internationally. It is however
anticipated that the continued uncertainty prevailing in the business community
and the slow recovery of the global economy will impact on the group`s
performance over the short term.
FINANCIAL RESULTS
In comparing the group`s financial results for the six months to 30 June 2011
("current period") with the results for the six months to 30 June 2010 ("prior
period") it should be noted that the prior period did not include the results of
BCE Foodservice Equipment (Pty) Limited ("BCE") as the acquisition of BCE only
became effective in November 2010.
Including the results of BCE group revenue and headline earnings per share
increased by 87% and 133%, respectively, compared to the prior period. On a like
for like basis (excluding BCE), revenue and operating income increased by 23%
and 50%, respectively.
Operating profit margins increased compared to the prior period in line with
increased sales volumes. Exports, primarily into Africa, comprised approximately
19% of revenue; marginally below the 20% reported in the prior period as BCE`s
exports were only 13% of revenue.
Cash on hand decreased from R44 million as at 31 December 2010 to R22 million,
mainly due to the capital distribution to shareholders on 11 April 2011 and
additional funds being absorbed into working capital as a result of the increase
in trading levels.
REVIEW OF OPERATIONS
Refrigeration businesses
The refrigeration businesses increased revenue by 28% compared to the prior
period. The improvement in operating margins resulted from the increased
manufactured sales volumes.
To ensure continued improvement in capacity, efficiency and quality an
investment in plant and equipment of R7 million was made during the current
period and the group has committed to a further investment of R8 million in
plant and equipment for the remainder of the year.
Baking business
The baking business increased revenue by 18% compared to the prior period.
Operating margins improved as the business continues to benefit from the
relative strength of the exchange rate and from increased manufactured sales
volumes.
Catering and kitchen equipment business
Trading conditions in the hospitality market segment remain weak. Revenue for
the current period decreased by 3% compared to the prior period. Operating
margins were maintained as the business continues to benefit from the relative
strength of the exchange rate.
PROSPECTS
Notwithstanding the global uncertainty and unpredictable future throughout the
world, the group`s operations traded well during the current period with most of
the business units reporting encouraging enquiry and order intake levels. The
inclusion of BCE for a full year will continue to impact significantly on
earnings in the second half of the financial year, despite tough trading
conditions in the catering and kitchen equipment industry. Although the second
half of the year`s order in-take looks promising, the future is very
unpredictable and the gloomy economic outlook makes it difficult to foresee
future performance.
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
Universal has adopted an annual distribution policy, thus no interim
distribution has been declared.
CAPITAL COMMITMENTS
The group has capital commitments of some R8 million for plant and equipment,
which will be financed from banking facilities and internal cash flow.
PROPOSED SCHEME OF ARRANGEMENT AND DELISTING
Shareholders are referred to the announcement released on SENS on 29 July 2011
and published in the press on 1 August 2011, advising of a firm intention
received from Ethos and certain existing shareholders ("the Offeror") to propose
a scheme of arrangement that will result in the Offeror acquiring the entire
shareholding of Universal and the subsequent delisting of the Company.
Further details will be included in a circular to be sent to Universal
shareholders, to be posted on or about 30 August 2011.
BASIS OF PREPARATION
The unaudited interim results have been prepared in accordance with
International Financial Reporting Standards ("IFRS") and comply with IAS 34 -
Interim Financial Reporting, the AC 500 series of interpretations, the Listings
Requirements of the JSE Limited and the requirements of the Companies Act of
South Africa. The accounting policies used are consistent with those applied to
the audited financial statements for the year ended 31 December 2010. The
group`s interim results have not been reviewed or reported on by the group`s
auditors.
APPRECIATION
The Board extends its thanks to management, employees and the non-executive
directors for their ongoing efforts.
By order of the Board
G Khan D Paynter
Chairman Chief Executive Officer
17 August 2011
CORPORATE INFORMATION
Executive directors:
D Paynter (CEO)
I Morgan (CFO)
J Martin
Non-executive directors:
G Kahn (Chairman)
C Brayshaw
W Brett
I Essa (alternate to G Khan)
A Levy
D Vlok
Registered address:
16 Precision Street, Kya Sand, Randburg, 2194
Postal address:
PO Box 3667, Randburg, 2125
Telephone: 011 462 2130
Facsimile: 011 704 3257
Company Secretary:
Probity Business Services (Pty) Limited
Transfer Secretaries:
Link Market Services South Africa (Pty) Limited
Auditors: PKF (Jhb) Inc
Sponsor: Java Capital
Date: 17/08/2011 14:12:02 Produced by the JSE SENS Department.
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