| Mon 7 Nov 2011, 7:05 | | IVT - Invicta Holdings Limited - Unaudited interim results for the six months |
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IVT
IVT
IVT - Invicta Holdings Limited - Unaudited interim results for the six months
ended 30 September 2011
INVICTA HOLDINGS LIMITED
Registration number: 1966/002182/06
(Incorporated in the Republic of South Africa)
Share code: IVT
ISIN: ZAE000029773
("Invicta" or "the Group")
UNAUDITED INTERIM RESULTS for the six months ended 30 September 2011
Revenue increased by 18%
Profit for the period increased by 21%
Earnings per share increased by 34%
Dividend increased by 35%
CONSOLIDATED CONDENSED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept 30 Sept 31 March
Change 2011 2010 2011
% R`000 R`000 R`000
Revenue 18 2 563 000 2 172 773 4 533 801
Operating income 22 260 915 214 155 505 493
Interest and dividends received 319 698 296 195 490 132
Finance costs (351 324) (333 136) (545 242)
Share of associate 587 527 871
Profit before taxation 29 229 876 177 741 451 254
Taxation (26 204) (9 152) (25 032)
Profit for the period 21 203 672 168 589 426 222
Other comprehensive income:
Profit on issue of treasury shares 19 567 - -
Gain on change in degree of 15 452 - -
control in subsidiary
Exchange differences on 3 624 (1 351) (833)
translating foreign operations
Total comprehensive income for the 242 315 167 238 425 389
period
Profit attributable to:
Owners of the company 189 286 140 862 354 155
Non-controlling interest 14 386 27 727 72 067
203 672 168 589 426 222
Total comprehensive income
attributable to:
Owners of the company 227 412 139 965 353 630
Non-controlling interest 14 903 27 273 71 759
242 315 167 238 425 389
Earnings per share (cents) 34 269 201 504
Diluted earnings per share (cents) 29 252 195 480
Determination of headline earnings
Attributable earnings 189 286 140 862 354 155
Adjustments
- Net impairment of property, - - (4 271)
plant and equipment and goodwill
- Release of deferred profit on (11 610) - (3 870)
issue of shares by subsidiaries
- Net profit on disposal of (1 456) (1 192) (117)
property, plant and equipment
Total adjustments before taxation (13 066) (1 192) (8 258)
and non-controlling interest
Taxation 2 280 334 1 853
Non-controlling interest - 172 632
Total adjustments (10 786) (686) (5 773)
Headline earnings 178 500 140 176 348 382
Shares in issue
Weighted average (000`s) 70 356 70 174 70 211
At the end of the period (000`s) 71 916 69 911 69 954
Number of shares used for diluted 74 993 72 335 73 720
earnings per share (000`s)
Headline earnings per share 27 254 200 496
(cents)
Diluted headline earnings per 23 238 194 473
share (cents)
Dividends per share* (cents) 77 57 183
- Interim 35 77 57 57
- Final - - 126
* In accordance with IAS 10, the interim dividend of 77 cents per share proposed
by the directors has not been reflected in the interim results.
CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept 30 Sept 31 March
2011 2010 2011
R`000 R`000 R`000
Share capital
Balance at beginning and end of period 3 724 3 724 3 724
Share premium
Balance at beginning and end of period 282 715 282 715 282 715
Treasury shares
Balance at beginning of period (119 809) (96 570) (96 570)
Net treasury shares disposed (acquired) 9 599 (24 770) (23 239)
Balance at the end of the period (110 210) (121 340) (119 809)
Retained earnings
Balance at beginning of period 1 391 305 1 198 882 1 198 882
Earnings attributable to ordinary 189 286 140 862 354 155
shareholders
Share appreciation rights exercised (4 901) - (50 920)
Profit on issue of treasury shares 19 567 - -
Gain on change in degree of in 15 452 - 961
subsidiaries control
Dividends paid (90 234) (71 896) (111 773)
Balance at the end of the period 1 520 475 1 267 848 1 391 305
Other reserves
Balance at beginning of period 53 330 54 215 54 215
Arising from the issue of share 4 511 (13 588) 19 226
appreciation rights
Arising from share appreciation rights (14 685) - (19 586)
exercised
Arising on the issue of put option on 4 600 - -
ordinary shares acquired as part of the
directors` loan scheme
Arising on translation of foreign 5 919 (1 351) (525)
operations
Balance at the end of the period 53 675 39 276 53 330
Attributable to equity shareholders 1 750 379 1 472 223 1 611 265
Non-controlling interest
Balance at beginning of period 243 584 170 297 170 297
Earnings attributable to outside 14 386 27 273 72 067
shareholders
Share of foreign currency translation 1 170 - (308)
reserve
Non-controlling interest acquired during (202 617) - -
the period
Net investment in subsidiaries - 7 619 8 435
Dividends paid (1 724) (3 388) (6 907)
Balance at the end of the period 54 799 201 801 243 584
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept 30 Sept 31 March
2011 2010 2011
R`000 R`000 R`000
Cash flows from operating
activities
Cash generated from operations 99 273 167 774 626 547
Finance costs (351 324) (333 136) (545 242)
Dividends paid to Group (94 580) (74 423) (114 586)
shareholders and non-controlling
interest
Taxation paid (11 877) (26 100) (48 377)
Interest and dividends received 319 698 296 195 490 132
Net cash (outflow) inflow from (38 810) 30 310 408 474
operating activities
Cash flows from investing
activities
Net cash effects of asset (28 754) (6 525) (95 038)
acquisitions
Net cash effects of other (290 336) (161 308) (316 741)
investing activities
Increase in long-term receivables (75 005) (168 507) (254 553)
including current portion
Net cash effects of treasury share 29 166 (24 770) (23 239)
investments
Net cash outflow from investing (364 929) (361 110) (689 571)
activities
Cash flows from financing
activities
Net cash effects of liabilities 333 057 324 887 475 046
raised
Net cash inflow from financing 333 057 324 887 475 046
activities
Net (decrease) increase in cash (70 682) (5 913) 193 949
and cash equivalents
Cash and cash equivalents at the 408 656 214 707 214 707
beginning of the period
Cash and cash equivalents at the 337 974 208 794 408 656
end of the period
CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
30 Sept 30 Sept 31 March
2011 2010 2011
R`000 R`000 R`000
ASSETS
Non-current assets 4 554 795 4 107 941 4 262 675
Property, plant and equipment 367 427 347 684 353 953
Financial investments 3 064 579 2 973 587 2 965 674
Goodwill and other intangible 355 628 317 743 362 453
assets
Financial asset, finance lease and 693 520 405 170 510 655
long-term receivable
Deferred taxation 73 641 63 757 69 940
Current assets 2 611 883 2 049 633 2 626 192
Inventories 1 304 191 1 185 391 1 381 615
Trade and other receivables 896 519 650 327 698 526
Current portion of financial 48 999 - 99 498
investments, finance lease and
long-term receivable
Tax prepaid - 3 611 14 150
Bank balances and cash 362 174 210 304 432 403
Total assets 7 166 678 6 157 574 6 888 867
EQUITY AND LIABILITIES
Capital and reserves 1 805 178 1 674 024 1 854 849
Attributable to equity 1 750 379 1 472 223 1 611 265
shareholders
Non-controlling interest 54 799 201 801 243 584
Non-current liabilities 4 126 541 3 604 730 3 659 362
Long-term borrowings, guaranteed 4 120 805 3 601 177 3 653 114
repurchase liability and financial
liabilities
Deferred taxation 5 736 3 553 6 248
Current liabilities 1 234 959 878 820 1 374 656
Current portion of long-term 48 999 19 476 126 071
borrowings and guaranteed
repurchase liability
Trade, other payables and 1 144 318 856 469 1 211 786
provisions
Tax liabilities 17 442 1 365 13 052
Bank overdrafts 24 200 1 510 23 747
Total equity and liabilities 7 166 678 6 157 574 6 888 867
SEGMENT INFORMATION
Engineering Capital Group, Total
consumables equipment financing
and other
operations
R`000 R`000 R`000
Unaudited six
months ended 30
September 2011
Revenue 1 301 801 1 119 116 142 083 2 563 000
Operating income 159 393 93 904 7 618 260 915
Total assets 1 479 687 1 071 338 4 615 653 7 166 678
Total liabilities 374 870 706 977 4 279 653 5 361 500
Unaudited six
months ended 30
September 2010
Revenue 1 163 572 877 940 131 261 2 172 773
Operating income 142 090 54 380 17 685 214 155
Total assets 1 209 443 785 502 4 162 629 6 157 574
Total liabilities 287 538 566 206 3 629 806 4 483 550
Audited year
ended 31 March
2011
Revenue 2 387 363 1 876 542 269 896 4 533 801
Operating income 319 665 157 525 28 303 505 493
Total assets 1 450 792 1 081 667 4 356 408 6 888 867
Total liabilities 414 378 778 091 3 841 549 5 034 018
OTHER INFORMATION
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept 30 Sept 31 March
2011 2010 2011
R`000 R`000 R`000
Net interest-bearing debt:equity 3 - 3
ratio (excluding long-term funding
debt secured by investments and
loans) (%)
Depreciation and amortisation 27 938 28 547 81 289
(R`000)
Net asset value per share (cents) 2 433,9 2 105,9 2 303,3
Tangible net asset value per share 1 939,4 1 651,4 1 785,2
(cents)
Capital expenditure (R`000) 34 829 9 342 114 374
Contingent liabilities (R`000) 252 257 252
Capital commitments (R`000) 22 700 - 7 121
NOTES TO THE FINANCIAL INFORMATION
Basis of Preparation
The condensed financial information has been prepared in accordance with the
framework concepts and the measurement and recognition requirements of
International Financial Reporting Standards (IFRS), the AC500 standards as
issued by the Accounting Practices Board, the information as required by IAS 34:
Interim Financial Reporting, the JSE Limited`s Listings Requirements and in the
manner required by the Companies Act of South Africa. The report has been
prepared using accounting policies that comply with IFRS which are consistent
with those applied in the financial statements for the year ended 31 March 2011,
except for the adoption of IAS2, IFRS5, IAS7, IAS28, IAS31, IAS38 and IAS39 and
has been prepared under the supervision of Craig Barnard, the Group Financial
Director.
Acquisitions
The following acquisitions were made during the period ended 30 September 2011:
- Humulani Marketing (Pty) Limited`s acquisitions for the current period
amounted to R8 million.
FINANCIAL AND GROUP OVERVIEW
The Group has produced excellent results, once again confirming the quality of
its underlying operations. During the period under review, global demand for
resources continued to be firm, which underpinned demand for products supplied
by BMG, the Group`s industrial consumables business. Demand for agricultural
machinery was substantially higher than last year, driven largely by good grain
prices both locally and abroad. The construction machinery sector has continued
to recover, resulting in this division improving its contribution to the profits
of the Group.
Revenue for the 6 months under review exceeded R2,5 billion, an 18% increase
over the comparative period last year. Most pleasing was the 22% increase in
operating income to R261 million, which translates into a 10,2% return on sales,
up from 9,8% for the comparative period last year.
Profit before taxation grew by 29% to R230 million, earnings per share by 34% to
269 cents per share and headline earnings per share by 27% to 254 cents per
share.
During the year the Group facilitated and funded a change in BEE shareholders at
its operational holding company level (Humulani Investments (Pty) Limited). The
Group is pleased to now have as a 20% shareholder, the Humulani Empowerment
Trust, a broad-based trust, together with the Humulani Employee Trust which was
already a 5% shareholder in Humulani Investments (Pty) Limited. Both trusts are
consolidated in terms of IFRS SIC12 Consolidation - Special Purpose Entities.
In August 2011, shareholders approved an executive loan scheme for Invicta Group
executive directors, which, together with the issue of shares under the Group
Long-Term Bonus Share Appreciation Scheme, resulted in the issue of 2 113 632
ordinary shares from treasury stock, which realised a profit of R19,6 million
reflected in other comprehensive income.
The Group continued to invest in working capital, which resulted in cash
generated from operations declining from R168 million to R99 million. During the
period, the Group acquired 151 940 treasury shares and made a number of small
acquisitions totalling R8 million. Preference share funding of R178 million was
raised during the period and the Group ended the period with cash and cash
equivalents of R338 million, a very healthy position.
BMG (BEARING MAN GROUP)
The sustained global demand for mineral resources has given rise to improved
demand for industrial consumables in South Africa, the bulk of which are
supplied into the mineral resources industry. Countering this, manufacturing
activity in South Africa has fallen and is a source of concern to the Group.
BMG has continued to trade strongly, with the majority of its divisions showing
growth over the prior period. Revenue and operating profit increased by 12%,
with concomitant good cash generation. While overall trading has been good,
margins remain under pressure, as does the business environment, as concerns
about the sustainability of the global resources boom grow.
BMG has increased inventory by approximately R100 million, to over R800 million,
in the current period as a result of a strategic decision taken in 2010 to
increase the inventory of key product lines. This should prove to be key to good
performance in the second half of the year, as supplier lead times remain
challenging.
CEG (CAPITAL EQUIPMENT GROUP)
High maize and wheat prices have resulted in a surge in demand for agricultural
equipment in the period under review. Tractor sales volumes in the industry as a
whole have grown by over 50% year-on-year and combine harvesters by 30%. CEG
capitalised on this demand, which resulted in its revenue increasing by 27% to
over R1,1 billion for the period.
The construction machinery sector has started growing again after declining by
more than 50% over the past two years, resulting in this division making a
meaningful contribution to the CEG`s results during the period.
Criterion Equipment is growing steadily and is also making a good contribution
to CEG profits. Continued strong working capital management and the increased
sales have resulted in good cash generation in CEG.
OTHER OPERATIONS
The Group has now bedded down its distribution outlet network for Tiletoria, and
although it did not make a material contribution to the Group during the period,
it is profitable and is projected to continue growing steadily.
PROSPECTS
If the current trading conditions persist, the Board remains confident of the
continued success of the Group for the remainder of the year. Rand volatility
may create some instability as it may render pricing of goods difficult.
Currency management and cash generation will therefore remain a key management
focus. The Group has identified a number of acquisitions which it is currently
considering and hopes to conclude by year-end.
The Group continues with its dividend policy of 3,5 times dividend cover at
interim stage. Accordingly the Board is pleased to announce a dividend of 77
cents per ordinary share, up 35% from last year.
DIVIDEND
The board has declared an interim dividend of 77 cents per share.
In compliance with the requirements of Strate the following dates are
applicable:
Last date to trade "cum" dividend Friday, 25 November 2011
First date of trading "ex" dividend Monday, 28 November 2011
Record date Friday, 2 December 2011
Payment date Monday, 5 December 2011
Share certificates may not be dematerialised or rematerialised between Monday,
28 November 2011 and Friday, 2 December 2011, both days inclusive.
By order of the Board
C Barnard Cape Town
Secretary 7 November 2011
Registered office: Invicta Holdings Limited, 3rd Floor, Pepkor House, 36
Stellenberg Road, Parow Industria, 7493
PO Box 6077, Parow East, 7501
Transfer secretaries: Computershare Investor Services (Pty) Limited, Ground
Floor, 70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107
Directors: Dr CH Wiese* (Chairman), A Goldstone (Managing), C Barnard, AK
Masuku#, J Mthimunye, DI Samuels, LR Sherrell*, AM Sinclair, CE Walters, Adv JD
Wiese*
* Non-executive
# Alternate
Independent non-executive
Sponsor: Deloitte & Touche Sponsor Services (Pty) Limited
www.invictaholdings.co.za
Date: 07/11/2011 07:05:44 Produced by the JSE SENS Department.
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