| Tue 27 Feb 2001, 0:00 | | Africa Glass Unaudited Interim Results For 6 Month |
|
AFRICA GLASS INDUSTRIES LIMITED
(Registration number 1980/004051/06)
("Africa Glass" or "the company")
Sustainable Growth
Unaudited interim results for the six months ended 31 December 2000
Headline EPS up 34%
Revenue up 37%
Headline earnings up 38%
Hard currency earnings up 69%
CONSOLIDATED INCOME STATEMENT
Unaudited Audited
six months ended year ended
31 December 30 June
Note 2000 1999 2000 Change
R'000 R'000 R'000 %
Revenue 260 185 190 094 441 778 37
Operating income before
depreciation 37 010 28 434 65 057 30
Depreciation (4 312) (3 431) (8 801)
Operating income 32 698 25 003 56 256 31
Net financing costs (374) (1 368) (2 165)
Income from associated
companies 2 013 1 163 2 276
Income before taxation 34 337 24 798 56 367 38
Taxation (10 106) (7 262) (12 980)
Income after taxation 24 231 17 536 43 387 38
Attributable to outside
shareholders in subsidiary (157) (131) (267)
Preference dividend (56) (57) (112)
Headline earnings 24 018 17 348 43 008 38
Headline earnings
adjustment 1 (2 496) 2 564 (1 049)
Attributable income 21 522 19 912 41 959 8
Note 1
Headline earnings
adjustment (2 496) 2 564 (1 049)
Surplus on sale of
assets - 6 019 4 815
Cost of investment written
down - (1 047) (1 047)
Goodwill amortised (2 496) (2 408) (4 817)
Statistics
Number of ordinary shares
in issue ('000) 192 553 190 378 191 490
Weighted average number
of ordinary shares
in issue ('000) 194 978 189 274 193 628
Basic earnings per ordinary
share (cents) 11,0 10,5 21,7
- as previously stated 11,0 11,8 24,2
- change in accounting
policy - (1,3) (2,5)
Headline earnings per ordinary
share (cents) 12,3 9,2 22,2
Dividend per ordinary
share (cents) *5,5 2,4 2,4
*Dividend declared in respect of
year ended 30 June 2000.
CONSOLIDATED BALANCE SHEET
Unaudited Audited
six months ended year ended
31 December 30 June
2000 1999 2000
R'000 R'000 R'000
ASSETS
Property, plant and equipment 37 021 22 824 34 052
Intangible assets 102 916 66 540 96 591
Investments and loans 13 381 9 910 12 026
Deferred taxation assets 4 113 - 1 997
Bank balances and cash 17 931 437 17 580
Other current assets 201 960 171 468 179 239
Total assets 377 322 271 179 341 485
EQUITY AND LIABILITIES
Ordinary shareholders' equity 216 298 162 937 200 889
Shareholders' loans 1 147 792 1 012
Amounts due to vendors 11 465 - 22 000
Outside shareholders' interest 725 432 568
Preference share capital and premium 700 700 700
Deferred taxation liabilities 5 146 2 478 3 443
Long-term interest bearing debt 6 905 8 757 6 983
Short-term interest bearing debt 17 991 1 882 7 449
Other current liabilities 116 945 93 201 98 441
Total equity and liabilities 377 322 271 179 341 485
Net asset value per
ordinary share (cents) 112 86 105
- as previously reported 112 90 110
- change in accounting policy - (4) (5)
ADDITIONAL INFORMATION
Capital expenditure for the period 7 454 6 398 26 612
Capital expenditure committed
or authorised 1 609 137 144
Directors' valuation of
investments and loans 13 381 9 910 12 026
Finance and operating
lease commitments 130 385 41 663 132 570
Interest capitalised - - 504
Contingent liabilities 5 428 1 623 5 242
ABRIDGED CONSOLIDATED CASH FLOW STATEMENT
Unaudited Audited
six months ended year ended
31 December 30 June
2000 1999 2000
R'000 R'000 R'000
Cash flows from operations 37 691 26 888 64 393
Working capital changes (12 963) (22 863) (25 646)
Net financing costs, dividends and
taxation paid (14 230) (7 031) (9 752)
Net cash inflow/(outflow) from
operating activities 10 498 (3 006) 28 995
Net capital (expenditure)/income (6 608) 2 422 (13 473)
Decrease in investment in subsidiaries - - 185
Acquisition of subsidiaries (2 872) (2 300) (36 325)
Net cash (outflow)/inflow
from investing
activities (9 480) 122 (49 613)
Net cash (outflow)/inflow
from financing
activities (11 376) 39 800 71 283
Net (decrease)/increase
in cash equivalents (10 358) 36 916 50 665
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Non- Group Total Share-
Capital and Distributable Retained holders'
Premium Reserves Earnings Interest
R'000 R'000 R'000 R'000
Balance at 31 December
1999 95 034 3 348 64 555 162 937
- as previously
reported 95 034 3 348 72 312 170 694
- change in accounting
policy - - (7 757) (7 757)
Ordinary and contingency
shares issued 12 176 - - 12 176
Listing expenses 11 - - 11
Movements in
reserves - 3 196 521 3 717
Attributable income - - 22 048 22 048
Balance at 30 June
2000 107 221 6 544 87 124 200 889
Movements in
reserves - 5 830 (1 409) 4 421
Attributable
income - - 21 522 21 522
Dividend - - (10 534) (10 534)
Balance at 31
December 2000 107 221 12 374 96 703 216 298
COMMENTARY
HIGHLIGHTS
* Sustainable growth strategy * Exceptional growth in
delivers results; Aluminium division;
* Management delivers * Significant new contracts;
projections; * Continued focus on expansion
* Record earnings; of value added manufacturing;
* Record organic growth; * Geographic growth and improved
* High hard currency margins in International
earnings growth; division.
STRUCTURE
Africa Glass is a fabricator of value added glass products in high growth, high
margin segments of the global glass market. It is also an international
distributor of these and unbeneficiated glass products. Africa Glass operates
from more than 50 sites internationally and has two operating divisions,
"Africa Glass South Africa" and "Africa Glass International". Africa Glass
South Africa includes the "Value Added Product" (manufacturing) division and
the "Unbeneficiated Product" (distribution) division. Global distribution
occurs through the Unbeneficiated Product division and Africa Glass
International. Finance, treasury, credit control, IT, property services and
procurement functions are centred in the "Group Services" division of Africa
Glass South Africa.
SUSTAINABLE GROWTH STRATEGY
Africa Glass' key goals remain:
- sustained global growth;
- value added product growth; and
- margin growth.
Both organic and acquisitive means are used to achieve these goals.
Acquisitions must deliver significant synergistic benefits over and above the
profit which the acquired companies themselves generate. Only acquisitions
which represent fair value to shareholders will be pursued. Organic growth is
sustained by constant product range development, market share growth and by
"trapping" margin through vertical integration.
OPERATING AND FINANCIAL PERFORMANCE
During the period under review, satisfactory organic growth was achieved
primarily by expansion of the value added product divisions, success of the
dedicated project marketing division and international growth from geographic
and margin expansion. Africa Glass' international development programme is now
well under way and progress has been made in the restructuring of foreign
associates.
South African Operations
Operating profit in the Value Added Product division grew substantially on the
back of doubled revenue and improved margins. This performance is attributable
partly to Africa Glass' increased share of the South African value added
product market through innovative and improved product ranges, a well defined
and focused marketing strategy and the efforts of a highly motivated management
team. The success of the strategy of trapping margin by expansion of the
aluminium and glass fabrication division over the past two years added to this
performance. Bespoke customer solutions, provided by a dedicated project
marketing division, led to success in large building project participation,
adding further to performance.
The Unbeneficiated Product division, which has steadily increased its share of
the processed glass market, generated an improved performance. Increased
volumes, particularly of value added products, augmented improved margins to
achieve increased revenue and operating profit which significantly outstripped
market growth.
International Operations
The geographic reach of business both north and south of the German hub of the
Group's international business operations increased Africa Glass' share of the
European market. This, combined with improved margins from a focus in the
United Kingdom on the expansion of lower volume higher margin business,
contributed to hard currency attributable earnings rising by almost 70%.
Financial Performance
The success of both the South African and International operating divisions led
to a 37% increase in revenue. This and a consistent tax charge led to a 38%
increase in Headline Earnings and a 34% increase in Headline Earnings per
share. Maintained gearing and asset turnover generated a consistent Return on
Equity of more than 20%.
PROSPECTS
The transformation of the international business from a pure distributor to a
value added manufacturer is ongoing and is projected to contribute considerably
to growth. This transformation entails the expansion of value added product
ranges and the acquisition of value added glass fabricators. The innovative
strategies followed by the Aluminium division are expected to manifest in
substantially higher revenues and profit in the future. The value added glass
usage arising from this growth will add still further to profitability.
Africa Glass will be embarking on a marketing campaign to reinforce its
corporate identity and to further raise product awareness. This is expected to
add greater momentum to its market penetration.
In all, continued real growth is projected for the remainder of the 2001
financial year in all the markets in which Africa Glass operates.
ACCOUNTING POLICIES
The accounting policies have been consistently applied and comply with the
South African Statements of Generally Accepted Accounting Practice. In the
current period, Statement AC 129 - Intangible Assets, was adopted for the first
time. The appropriate adjustments have been made to comparative amounts.
STRATE
In accordance with the requirements of the JSE Securities Exchange South Africa
("JSE"), Africa Glass will commence the transfer of its share capital to the
electronic STRATE environment with effect from 5 March 2001. This is an
obligatory move mandated by the JSE and will ensure participation by Africa
Glass' shareholders in a sophisticated settlement process in line with
international best practice. Dematerialisation of physical share certificates
and their replacement with electronic records will occur between 5 March 2001
and 26 March 2001, after which date trade in Africa Glass shares will only be
possible if shares have first been dematerialised. After 2 April 2001 physical
Africa Glass share certificates will no longer be good for delivery.
Shareholders were circularised in this regard during January 2001. Shareholders
are urged to follow the dematerialisation process in their own interests.
For and on behalf of the Board
A A Barrell J B Rosenberg
Executive Chairman Group Financial Director
26 February 2001
J Martingano
Group Commercial Director
DIRECTORS: A A Barrell (Executive Chairman), J B Rosenberg (Financial),
J Martingano, M J E Geldenhuys, J C Saville, T Y Worthington, H R Levin*, B E
Danoher*.
(*Non-Executive)
REGISTERED Corner Kruger Street and Mimetes Road
OFFICE: Denver, Extension 11
Johannesburg 2094
(PO Box 40443, Cleveland 2022)
TRANSFER Mercantile Registrars Limited
SECRETARIES: 11 Diagonal Street, Johannesburg 2001
(PO Box 1053, Johannesburg 2000)
For further information visit our website: www.afglass.co.za
