| Wed 28 Feb 2001, 0:00 | | Rebhold - Interim Results |
|
REBHOLD LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 1995/004153/06)
("REBHOLD")
Interim report for the six months ended 31 December 2000
HIGHLIGHTS
* Turnover Up 29%
* Profit from operations Up 33%
* Diluted headline earnings per share Up 15%
* Awarded R15bn Telkom facilities management contract
* Strong growth in services businesses
* Appointment of Rebserve chief executive
The following are the unaudited results of Rebhold and its subsidiaries ("the
group") for the six months ended 31 December 2000 with comparative figures:
Summarised Group Income Statement
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
31 December 31 December 30 June
2000 % 1999 2000
R000 increase R000 R000
Turnover 2 932 070 29 2 266 684 4 496 959
Cost of sales 2 375 235 1 797 523 3 655 417
Profit from
operations 191 687 33 144 534 307 241
Net investment
income 23 707 32 784 53 360
Net income
before taxation 215 394 177 318 360 601
Goodwill
amortised (344) - -
Net income
before taxation 215 050 21 177 318 360 601
Taxation (56 608) (44 619) (86 333)
Net income
after taxation 158 442 132 699 274 268
Net income
attributable to
outside
shareholders (22 108) (14 740) (26 801)
Net income
attributable to
ordinary
shareholders 136 334 16 117 959 247 467
Number of shares
in issue (000) 187 116 180 630 180 630
Weighted average
number of shares
in issue (000) 187 116 180 630 180 630
Earnings per
share (cents) 72,9 65,3 137,0
Headline earnings
per share (cents) 73,0 12 65,3 137,0
Diluted headline
earnings per
share (cents) 70,5 15 61,4 133,0
Dividend per
share (cents) - - 20,0
Summarised Group Balance Sheet
Unaudited Unaudited Audited
31 December 31 December 30 June
2000 1999 2000
R000 R000 R000
Assets
Non-current assets 616 803 562 952 572 557
Fixed assets 353 472 291 302 282 290
Investments and loans 141 220 127 118 154 703
Deferred taxation 122 111 144 532 135 564
Current assets 1 573 217 1 427 713 1 259 008
Liquid funds 700 626 588 802 571 040
Other current assets 872 591 838 911 687 968
Total assets 2 190 020 1 990 665 1 831 565
Equity and liabilities
Capital and reserves 803 246 649 753 685 228
Share capital and reserves 511 442 189 285 335 656
Amounts due to vendors 171 346 361 585 237 821
Outside shareholders'
interest 120 458 98 883 111 751
Non-current liabilities 222 556 352 056 25 617
Interest bearing liabilities 213 572 46 337 22 187
Non-interest bearing
liabilities 8 984 305 719 3 430
Current liabilities 1 164 218 988 856 1 120 720
Interest bearing liabilities 85 221 33 554 54 272
Non-interest bearing
liabilities 1 078 997 955 302 1 066 448
Total equity and liabilities 2 190 020 1 990 665 1 831 565
Net tangible asset value
per share (cents) 317,3 267,7 269,4
Net tangible asset value per share is
calculated on the basis that amounts
due to vendors are expected to be
converted into fully paid Rebhold shares
in terms of existing acquisition agreements.
Summarised Group Cash Flow Statement
Unaudited Unaudited Audited
31 December 31 December 30 June
2000 1999 2000
R000 R000 R000
Cash generated from operations 143 625 105 795 240 118
Net investment income 23 707 32 784 53 360
Taxation paid (52 200) (38 493) (72 878)
Dividends paid (14 890) (5 867) (5 867)
Cash available from
operating activities 100 242 94 219 214 733
Cash effects of investing
and financing activities 29 344 (148 374) (280 366)
Net movement in liquid
funds 129 586 (54 155) (65 633)
Liquid funds at the
beginning of the period
and on acquisition
of businesses and
subsidiaries 571 040 642 957 636 673
Liquid funds at the end
of the period 700 626 588 802 571 040
Statement of changes in equity
Unaudited Unaudited Audited
31 December 31 December 30 June
2000 1999 2000
R000 R000 R000
Balance at the beginning
of the period 573 477 744 728 744 728
New shares issued 15 029 (139) (139)
Amounts (paid)/due to vendors (41 612) 171 940 48 036
Net income attributable to
ordinary shareholders 136 334 117 959 247 467
Dividends (440) - (5 543)
Goodwill and trade marks
written off - (483 618) (461 072)
Balance at the end of the
period 682 788 550 870 573 477
Divisional information
31 December 31 December 30 June
2000 % 1999 2000
R000 increase R000 R000
Turnover
Services 1 076 202 110 512 257 1 108 870
Wholesale 1 855 868 6 1 754 427 3 388 089
2 932 070 29 2 266 684 4 496 959
Profit from
operations
Services 109 754 74 63 058 151 802
Wholesale 81 933 1 81 476 155 439
191 687 33 144 534 307 241
Operating margin
Services 10,2% - 12,3% 13,7%
Wholesale 4,4% - 4,6% 4,6%
Group operating
margin 6,5% - 6,4% 6,8%
Commentary
Results
Rebhold reports satisfactory overall results for the six month period ended 31
December 2000, against the background of continued harsh trading and economic
conditions. Good growth in the dominant services division enabled the group to
overcome ongoing negative factors, especially the further deterioration in
wholesale/retail trading conditions and depressed consumer demand.
Turnover increased by 29% to R2 932m, partly as a result of the inclusion of
the Telecommunications Facilities Management Company ("TFMC") for the first
time. Profit from operations increased by 33% to R191,7m. Investment income
declined by 28% to R23,7m as a result of lower interest rates than for the
comparable period and reduced cash balances arising from further cash payments
to vendors. The effective tax rate of 26% results mainly from the change in the
deferred tax accounting policy as detailed below. Diluted headline earnings per
share increased by 15 % to 70,5 cents, notwithstanding the higher number of
shares in issue.
The results for the period reflect good organic growth in the services division
combined with a flat performance in the wholesale division. No acquisitions
were concluded during the period.
Services operations
The group continued to focus on growing and integrating the higher margin
services operations under Rebserve, which now contributes 57% of the group's
operating profit, and which will drive the future growth and direction of the
group. New opportunities in the facilities management as well as the
professional and support services markets continue to be developed and
exploited. Stamford Sales and Bakers World have been included under services
for the first time for the reason that they have been operationally merged into
the food services division. The operating margin in services decreased from
12,3% to 10,2% as a result of the inclusion of TFMC.
Industrial and commercial facilities management
The integration of the operations outsourced by Telkom SA Limited into a
cohesive business unit under TFMC is progressing well. TFMC has achieved all
targets set during the initial phase of the contract including the integration
of all staff transferred without any disruptions to the Telkom operations,
vindicating Telkom's decision to outsource the management of its
infrastructure. New facilities management contracts are under discussion with
other interested parties.
Mining facilities management
JIC Mining Services performed well and continued to profitably expand its
services, achieving notable successes, particularly in the platinum and gold
industries. Trollope Mining Services performed well and successfully
diversified its client base across all mining resource sectors.
Food services
Royal Food Services and MRS performed in line with expectations. Stamford Sales
achieved good growth as a result of improved market share, productivity and
efficiencies. Bakers World's results reflected the weak market conditions in
the independent baking industry.
Support services
Rebserve has further consolidated its position as a major provider of security
and other support services to the outsourced market and increased its offering
in these areas.
The freight forwarding business has performed in line with expectations and is
benefiting from the increased Rand value of imports in its chosen niche areas.
Wholesale operations
Trading conditions at the lower end of the consumer market were particularly
difficult and the anticipated economic recovery did not materialise during the
period. This was exacerbated by rising unemployment and the change in consumer
discretionary spending away from consumables towards services and gaming.
Jumbo Cash & Carry
Despite the poor market conditions Jumbo produced sound results, achieving
double-digit growth in turnover. Notwithstanding the continued pressure on
margins, profit from operations on a like-for-like basis exceeded that
achieved in the comparable period. The new store at Isipingo is performing in
line with expectations.
Browns and Weirs Cash and Carry
Browns and Weirs once again bore the brunt of the poor economic conditions.
Turnover growth was minimal and profit from operations was below that achieved
in the comparable period. Progress is however being made in restructuring or
closing several stores, with the aim of reducing the group's exposure to the
depressed Eastern Cape and Kwa-Zulu Natal rural regions.
There is currently no Value Added Tax investigation of the group by the South
African Revenue Service and the directors are not aware of any non-compliance
by the group or any of its suppliers.
Beverages
The beverages and liquor operations have struggled in a particularly
challenging environment given the changes in personal consumption patterns and
the continued uncertainty surrounding liquor legislation.
Rebhold strategic developments
The board is pleased to announce the appointment of Will Paskins as the chief
executive of Rebserve effective 1 March 2001. He is presently a member of the
management board of WS Atkins Facilities Management in the United Kingdom and
presently serves as the CEO of TFMC. He brings to Rebserve extensive global
experience in the areas of facilities management, professional and support
services. His focus will be on the further integration of Rebserve's existing
businesses and on exploiting the many opportunities that exist across Rebserve
companies, while building on Rebserve's established culture of quality service.
In line with the group's strategy of establishing and maintaining Rebserve's
position as the leading provider of integrated facilities management and
outsourcing solutions in Southern Africa, it remains the intention of the board
to separate the services and wholesale divisions at the appropriate time.
Changes in accounting policies
This interim report has been prepared in accordance with South African
Statements of Generally Accepted Accounting Practice. The accounting policies
are consistent in all respects with the accounting policies applied in previous
periods, save as noted below.
Deferred Tax
The accounting policy with regard to deferred tax has been changed to recognise
deferred tax assets in accordance with the new accounting standard AC102. The
change would have resulted in a reduction in headline earnings per share for
the six months ended 31 December 1999 from 69,1 cents to 65,3 cents.
Comparative amounts have been restated accordingly.
Intangible Assets
In accordance with the new accounting standards, the group's accounting policy
for intangible assets has been changed for the current financial year to
amortise goodwill and intangibles over their estimated useful lives. Intangible
assets were previously written off against share premium and reserves.
Turnover
Under certain service contracts the group manages customer expenditure and is
obliged to purchase goods and services from third party contractors and
recharge them on to the customer at cost. These "flow through" amounts charged
by contractors and recharged to customers at cost are now excluded from
turnover and cost of sales. Debtor and creditor balances relating to these
transactions are recorded in the balance sheet. Comparative amounts have been
restated accordingly.
Dividend
It is the group's policy to declare a single annual dividend based on the full
year's results.
Prospects
Rebserve is expected to capitalise on the good organic growth prospects arising
from the increasing trend of parastatal organisations and companies towards
outsourcing non-core services and activities. Selected acquisitions will also
be pursued by Rebserve to enhance its strategic position. The wholesale/retail
environment is expected to remain difficult for at least the remainder of this
financial year.
In the absence of unforeseen circumstances Rebhold expects to deliver real
earnings growth for the current financial year, led by strong growth in
Rebserve.
For and on behalf of the Board
S M Levenberg
Executive Chairman
J G Kempen
Chief Executive
28 February 2001
These interim results, together with a presentation given to institutional
investors and equity analysts after the close of trading on 28 February 2001,
are available on the Rebhold website at:
www.rebhold.com
Transfer secretaries:
Computershare Services Limited, 2nd Floor Edura House 41 Fox Street,
Johannesburg 2001
Registered office:
3rd Floor, 3 Merchant Place, 1 Fredman Drive, Sandton
Directors:
SM Levenberg (Executive Chairman),
MC Ramaphosa (Executive Chairman Rebserve Limited), JG Kempen (Chief
Executive), JE Bishop, MH Brodie, F Cohen, AS Haggie, BD McIntyre, AP Nkuna, PL
Schlebusch, D Seetha, CD Stein, BC Till
