| Mon 12 Mar 2001, 0:00 | | Dunlop Africa Limited - Preliminary Results |
|
DUNLOP AFRICA LIMITED
(Incorporated in the Republic of South Africa)
(Reg. No. 1939/012141/06)
- ATTRIBUTABLE PROFIT INCREASES 17.3%
- REVENUE INCREASES 8.5%
CONSOLIDATED AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2000
INCOME STATEMENT
Year ended Year ended Pro forma*
31 Dec 31 Dec 31 Dec
1999 2000 Change 1999
Rm Rm % Rm
1 144.5 Revenue 1 004.7 8.5 925.8
102.7 Net operating profit 75.8 75.8
Continuing operations
82.3 - Tyres and Industrial Products 70.9 20.6 58.8
10.7 - LTG Contract (China) 3.8 10.7
6.5 Investment income 0.5 6.9
5.1 Profit on sale of assets 0.6 1.3
(1.9) Discontinued operations - (1.9)
(15.3) Net financing costs (6.7) (12.2)
87.4 Profit before exceptional items 69.1 8.6 63.6
(10.7) Exceptional items 0.5 (8.7)
(10.7) Loss on sale of discontinued
operations - (8.7)
- Investments - fair value
adjustment 2.2 -
- Impairment losses (1.7) -
76.7 Profit before taxation 69.6 54.9
(19.3) Taxation (15.3) (8.6)
57.4 Net profit after taxation 54.3 17.3 46.3
(3.5) Minority interest and preference
dividends (0.1) (0.1)
Net profit attributable to ordinary
53.9 shareholders 54.2 17.3 46.2
* restated on deconsolidated basis
FINANCIAL RATIOS AND STATISTICS
135.5 Number of ordinary shares
in issue (millions) 135.5 135.5
39.8 Basic earnings per ordinary
share (cents) 40.0 17.3 34.1
42.5 Headline earnings per ordinary
share (cents) 39.0 3.7 37.6
20.0 Dividends per ordinary
share (cents) 20.0 20.0
12.0 Dividends per preference
share (cents) 12.0 12.0
2.0 Dividend cover (times) 2.0 1.7
DETERMINATION OF HEADLINE EARNINGS
53.9 Net profit attributable to
ordinary shareholders 54.2 46.2
7.1 Loss on sale of discontinued
operations - 6.0
- Impairment losses 1.2 -
(3.4) Profit on sale of assets (0.4) (1.2)
- Investments - fair value adjustment (2.2) -
57.6 Headline earnings 52.8 51.0
SEGMENTAL REPORTING
Revenue by product type
Dec 2000
Tyres 76%
Industrial Products 24%
Dec 1999
Tyres 77%
Industrial Products 22%
Discontinued operations 1%
Revenue by geographical destination
Dec 2000
South Africa 69.9%
Rest of Africa 11.9%
Europe 5.8%
The Americas 10.4%
Asia 2.0%
Dec 1999
South Africa 54.7%
Rest of Africa 31.3%
Europe 4.4%
The Americas 6.4%
Asia 3.2%
BALANCE SHEET
Year ended Year ended
31 Dec 31 Dec
2000 1999
Rm Rm
ASSETS
Property, plant and equipment 303.1 376.8
Investments 89.1 -
Inventories 199.2 243.3
Trade and other receivables 220.4 238.2
Taxation paid in advance 6.7 1.1
Cash at bank 39.2 62.6
Total current assets 465.5 545.2
857.7 922.0
EQUITY AND LIABILITIES
Shareholders' equity 497.3 489.7
Minority interest - 31.4
Deferred taxation 44.8 41.7
Interest bearing borrowings 78.9 61.6
Current interest free liabilities 236.7 297.6
857.7 922.0
OTHER SALIENT FEATURES
Net asset value per share (cents) 367.0 361.4
Average gearing (%) 3.9 1.8
Capital expenditure (Rm) 51.2 51.8
Capital commitments (Rm)
- approved and contracted 8.1 14.6
- approved not contracted 141.8 12.7
Depreciation (Rm) 42.0 44.3
CASH FLOW STATEMENT
Cash flow from operating activities
Cash available from operating
activities 47.5 73.4
Dividends paid (27.2) (25.9)
20.3 47.5
Cash flows from investing activities
Investment in plant and equipment (51.2) (51.8)
Net proceeds on disposal of operations - 12.3
Proceeds on disposal of assets 1.6 9.6
Intercompany indebtedness (26.3) -
(75.9) (29.9)
Cash effects of financing activities
Net loans repaid (7.3) (5.7)
Net cash (outflow) / inflow (62.9) 11.9
STATEMENT OF CHANGES IN EQUITY
Share capital and premium 138.3 138.3
Non distributable reserves - opening 92.1 88.7
Property devaluation to cost (33.9) -
Deconsolidation of subsidiaries (53.0) -
Other 5.7 3.4
Non distributable reserves - closing 10.9 92.1
Distributable reserves - opening 259.3 241.9
Prior year adjustment - (11.2)
Net profit 54.2 53.9
Ordinary dividend (27.1) (27.1)
Deconsolidation of subsidiaries 68.1 -
Other (6.4) 1.8
Distributable reserves - closing 348.1 259.3
Shareholders' equity 497.3 489.7
REVIEW OF GROUP RESULTS
The Group continued to make progress in 2000 under difficult trading
conditions, increasing revenue by 8.5% to R1004.7m (pro forma 1999: R925.8m)
and profit attributable to ordinary shareholders by 17.3% to R54.2m (pro forma
1999: R46.2m). The second half of the year produced earnings per share of 21.1
cents compared to the 18.9 cents reported at interim. Net financing costs were
reduced due to lower finance charges and improved working capital management.
The Group's effective tax rate increased year on year.
The pro forma income statement reverses the results of the Zimbabwean and
Zambian companies in the prior year comparatives as these companies were
de-consolidated in 2000, and will in future be brought to account on a
dividends received basis only. Exceptional items of R0.5m (pro forma 1999:
R8.7m loss) arise from adjustments to the market value of investments, less
provision for the impairment of certain fixed assets.
Capital expenditure at 1.2 times depreciation remained consistent at R51.2m in
2000. The investment was directed mainly at Dunlop Tyres South Africa.
Uncontracted capital commitments include R131m, approved in November 2000, for
the expansion of the steel truck radial production facility in Durban. This is
necessary to service increased local and export demand.
Property is now recorded at cost as opposed to valuation. This has reduced net
asset value per share by 25 cents. In accordance with AC 123, buildings are now
depreciated. This has resulted in a prior year adjustment as at 1 January 1999
of R11.2m. Comparatives have been restated for this change in accounting policy
Review Of Trading Performance
Tyres Division
Dunlop Tyres (Pty) Limited (South Africa) performed well, increasing both its
domestic and export turnover. Operating profit increased materially over the
prior year due to increased volumes, reduced costs and improved operational
efficiencies in the face of escalating raw material costs. Output from the
Durban and Ladysmith plants increased during 2000, with the latter plant now
operating 7 days a week and 24 hours a day.
Revenue generated from the trade mark territories, including South and Central
America, Malaysia and Singapore, increased over the previous year. The Group's
UK based trading and technical operations performed in line with expectations.
Although the LTG project (China) was completed in 1999, a portion of the
warranty provision, namely R3.8m, was released to profit in 2000 following the
signing of the final acceptance certificate in December 2000.
Industrial Products Division
This division performed poorly in a weak market. Internal restructuring and a
move into global markets (from which orders have already been received), should
yield an improved performance in 2001.
Investments
Investment income amounted to R0.5m (pro forma 1999: R6.9m). Dividends were not
received from Dunlop Zimbabwe Ltd, Dunlop Zambia Ltd or Dunlop Nigeria PLC
during the period under review.
- National Tyre Services Limited (Zimbabwe) (38% shareholding). This operation
performed satisfactorily despite difficult trading circumstances. A dividend in
respect of the year 2000 is expected in 2001.
- Dunlop Zimbabwe Limited (75% shareholding). A shortage of foreign currency,
spiraling import costs and continued import duties on raw materials, despite
tariff reductions on imported finished goods, resulted in an unsatisfactory
performance for the year. The political and economic position in Zimbabwe
remains distressing and unpredictable. No dividend will be declared for 2000.
Subsequent to the year end, agreement in principle has been reached to sell
Dunlop Zimbabwe's Industrial Products Division, which represents 13% of
turnover. A condition precedent is the sourcing of funds by the acquiring party
- Dunlop Nigeria PLC (25% shareholding). Earnings have improved since the poor
result of 1999. No dividends were received in the current period after both the
1997 and 1998 dividends, amounting to R6.5m, were received in the prior year. A
dividend is expected in 2001 in respect of 2000.
- Dunlop Zambia Limited (57% shareholding). This small operation improved its
general trading performance. Subsequent to year end, agreement in principle has
been reached to purchase the shares of the minorities. This will enable
restructuring of the operation to meet the market demand in Zambia, including
the growing requirements of the now privatised copper mines.
Prospects
During the past 3 years changes have been made to the Group which have now
begun to show permanent benefits. The Group is budgeting for an increase in
earnings.
Dividend
The board has declared a dividend of 10.5 cents per ordinary share (1999:
10.5c), bringing the total for the year to 20 cents (1999: 20c).
On behalf of the board
M.E. King M.J. Hankinson
Chairman Chief Executive
Johannesburg
NOTICE TO ORDINARY SHAREHOLDERS
Notice is hereby given that a final ordinary dividend (No. 99) of 10.5 cents
per ordinary share has been declared payable on 30 March 2001 to ordinary
shareholders registered in the books of the company at the close of business on
23 March 2001.
By order of the board
A.D. Baxter
Secretary 9 March 2001
Directors: M.E. King*(Chairman), M.J. Hankinson (Chief Executive), R.K.
Braithwaite, M.J. Cvitanich, P.J. Dreyer, E.Ellerine*, J.E. Newbury*, R.H.
Pender*, E. Stals*, D.S. Mathews**(Zimbabwean).
*Non-Executive **Alternate
Registered Office Postal Address
265 Sydney Road, Durban, 4001 PO Box 925, Durban, 4000
E-mail: abaxter@dunlop.co.za
Website: www.dunloptyres.co.za
Transfer Secretaries
Mercantile Registrars Limited, 11 Diagonal Street, Johannesburg, 2001
PO Box 1053, Johannesburg, 2000
DUNLOP AFRICA POSTS POSITIVE RESULTS
PRESS RELEASE
12 March 2001
DUNLOP AFRICA YEAR END RESULTS - HIGHLIGHTS
* Revenue up 8,5% to R1 004,7-million
* Attributable earnings up 17,3% to R54,2-million
* Operating profit on tyres and industrial products up 20,6%
* Earnings per share up 17,3% to 40c
* Strong growth prospects for the coming fiscal year
Dunlop Africa Limited, the tyre and industrial rubber manufacturer, today
announced that it has achieved an 8,5% growth in revenue to R1 004,7-million
from R925,8-million for the year ended 31 December 2000.
This translated into a 17,3% increase in attributable profit to R54,2-million.
Mike Hankinson, CEO, Dunlop Africa says: "I am pleased, that despite difficult
circumstances in 2000, the Group has once again achieved a strong set of
results. The market continued to be affected by obstacles such as competitive
trading conditions and political unrest in Zimbabwe, which resulted in the
Group de-consolidating the Zimbabwean and Zambian operations."
Operating profits from the Group's core divisions, tyres and industrial
products, increased by 20,6%.
"This past year saw our largest subsidiary company, Dunlop Tyres South Africa,
increase its profits by 39% following an increase of 53% the previous year. The
brand has also experienced a rise in consumer demand, both locally and
globally, and is now competing favourably with the major global tyre brands.
Export performance is strengthening and demand for the product in the early
part of 2001 has been exceptional. The ownership of the Dunlop brand in South
and Central America, excluding Mexico, continues to be the Group's largest
growth opportunity and progress in respect of this opportunity is positive."
Dunlop Africa Industrial Products, the Group's manufacturer of conveyor belting
and hose products, was adversely affected by difficult market conditions, both
locally and internationally. It is expected that increased orders from global
markets combined with internal structural changes, which are in the process of
being implemented, will help restore profitability to this company," commented
Hankinson.
With regards to Dunlop Africa's investments, no dividends have been received
from the Group's investments. "We expect dividends from National Tyre Services
Limited (Zimbabwe) and Dunlop Nigeria PLC in 2001 in respect of FY2000. Dunlop
Zimbabwe Limited, however, will not declare dividends for FY2000."
"All in all, we are pleased with the Group's results this year. From a
financial perspective, our balance sheet remains strong and gearing low.
Although we are not under any illusion that the year ahead will be
challenge-free, we do anticipate it to be even more successful. From an
operational view we have increased our production shifts in an effort to meet
current and projected demand for our products, locally and internationally, and
changes introduced over previous years are now beginning to bear fruit - both
in our figures and hopefully in shareholder and employee satisfaction,"
concludes Hankinson.
Dunlop Africa's Board has declared a final dividend of 10.5 cents per ordinary
share.
Further details regarding Dunlop Africa's results can be found on SENS at
www.sharenet.co.za.
ends
Issued by: Coppin Communications
On behalf of: Dunlop Africa Limited
Further information: Janet Coppin
Tel: 011 883 4265
Fax: 011 883 8836
Cell: 083 456 3904
E-mail: Coppin.Communications@iafrica.com
For immediate comment: Mike Hankinson
Tel: 031 460 1114
Cell: 083 390 5555
Janet Coppin
Coppin Communications
Tel: +27 11 883 4265
Fax: +27 11 883 8836
Cell: 083 456 3904
E-mail: Coppin.Communications@iafrica.com
