| Tue 6 Mar 2012, 11:23 | | KAP - KAP International Holdings Limited - Unaudited Interim Group Results |
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KAP
KAP
KAP - KAP International Holdings Limited - Unaudited Interim Group Results
for the six months ended 31 December 2011
KAP INTERNATIONAL HOLDINGS LIMITED
Registration number: 1978/000181/06
Share code: KAP
ISIN: ZAE000059564
("KAP" or "the group")
Unaudited Interim Group Results
for the six months ended 31 December 2011
Highlights
- Revenue from continuing operations grows by 13.5% to R2 449 million
- Headline earnings grow by 22% to 17,0 cents per share
- Interest-bearing debt/equity ratio at 12% (2010: 19%)
- Net asset value of 343,9 cents per share
PERFORMANCE
We submit our report to shareholders for the six months ended 31 December
2011.
Revenue and earnings
Revenue from continuing operations increased by 14% to R2 448,6 million (2010:
R2 157,0 million) due to good growth in the automotive and PET divisions.
Operating profit increased to R108,6 million (2010: R107,1 million). Coupled
with a further reduction in finance costs, this resulted in headline earnings
per share improving by 22% to 17,0 cents (2010: 13,9 cents). Earnings per
share increased by 22% to 16,9 cents (2010: 13,9 cents).
Financial position and cash flow
Despite increased trading activity, net interest-bearing borrowings decreased
by 28% to R187,4 million (2010: R260,2 million), and the period-end interest-
bearing debt/equity ratio was 12,4% (2010: 18,6%).
Operational overview
Industrial segment
Hosaf
Another excellent performance by the polymer plant is the result of strong
customer demand for PET. Sales increased by 31% over the previous period as a
result of higher commodity prices and favourable market conditions. Plant
efficiencies are at record levels, and quality and consistency of product
remains good.
Feltex Automotive
Global vehicle sales are showing a favourable trend, with locally manufactured
vehicles having increased by 8% to 243 950 (2010: 225 616 units) due mainly to
growth from Volkswagen and Toyota. Vehicle sales remain dependent on the
strength of the global recovery.
Industrial Footwear
A new marketing drive at United Fram and a revitalised product range are
anticipated to have a positive effect. At Wayne Plastics a new gumboot machine
is expected to address current capacity constraints.
Consumer segment
Bull Brand Foods
Comprehensive restructuring at Bull Brand is starting to yield results, with
the management team targeting a significant reduction in the cost base and
focussing on procurement and production efficiencies.
Brenner Mills
Rising maize prices are putting further pressure on consumers` pockets in all
maize categories which has affected Brenner`s margins.
Jordan
Increased sales were reported by the Asics, Ladies and Corporate divisions,
and margins improved due to tight control of expenses.
Glodina
A dramatic spike in yarn prices in recent months has resulted in a poor
performance. However, yarn prices have now begun to normalise.
Corporate activity
On 18 October 2011, the group announced the acquisition of the South African
industrial assets of Steinhoff Africa. At the date of this announcement, all
conditions precedent have been met, except for the approval by the competition
authorities.
An announcement will be made once all conditions precedent have been met.
Outlook
The group will continue to focus on strong cash generation and strict cost
control. In addition, the existing industrial assets and brands are well
positioned to remain competitive in the current market environment.
Appreciation
As always, we are grateful to our shareholders, employees and other
stakeholders, and thank them for their continued support.
Claas Daun Paul Schouten John Haveman
Non-executive Chief Executive Chief Financial
Chairman Officer Officer
6 March 2012
Condensed Statements of Comprehensive Income
31 Dec 2011 31 Dec 2010 30 Jun 2011
6 months 6 months 12 months
Unaudited Unaudited Audited
Rm Rm Rm
CONTINUING OPERATIONS
Revenue 2 448,6 2 157,0 4 217,1
Operating profit before
restructuring costs 109,9 113,1 231,6
Restructuring costs (0,6) - (2,9)
Operating profit 109,3 113,1 228,7
Net finance costs (14,0) (21,1) (25,6)
Share of results of joint ventures 1,9 1,3 2,0
Profit before taxation 97,2 93,3 205,1
Taxation (20,6) (26,9) (59,1)
Profit after taxation from
continuing operations 76,6 66,4 146,0
DISCONTINUED OPERATIONS
Revenue - 78,4 134,6
Operating (loss)/profit before
restructuring costs (0,7) (6,0) 34,3
Restructuring costs - - (31,4)
Operating (loss)/profit (0,7) (6,0) 2,9
Net finance costs - - (7,1)
Loss after taxation from
discontinued operations (0,5) (4,3) (7,8)
TOTAL PROFIT FOR THE PERIOD 76,1 62,1 138,2
Owners of the company 71,7 58,8 131,0
Non-controlling interest 4,4 3,3 7,2
Other comprehensive income
Movement in foreign currency
translation reserve - - 0,2
Total comprehensive income 76,1 62,1 138,4
Owners of the company 71,7 58,8 131,2
Non-controlling interest 4,4 3,3 7,2
Rm Rm Rm
RECONCILIATION OF HEADLINE EARNINGS
Net profit attributable to owners
of the company 71,7 58,8 131,0
Loss/(profit) on sale of property
plant and equipment 0,4 - (39,0)
Impairments - - 12,7
Headline earnings 72,1 58,8 104,7
Loss after taxation from
discontinued operations 0,5 4,3 7,8
Profit on sale of property, plant
and equipment - discontinued operations - - 38,8
Impairment - discontinued operations - - (12,7)
Headline earnings - continuing
operations 72,6 63,1 138,6
Weighted average shares in issue 424,5 424,5 424,5
Earnings Per Share
31 Dec 2011 31 Dec 2010 30 Jun 2011
6 months 6 months 12 months
Unaudited Unaudited Audited
Rm Rm Rm
Earnings per share (basic and diluted) 16,9 13,9 30,9
Earnings per share - continuing
operations 17,0 14,9 32,7
Headline earnings per share (basic
and diluted) 17,0 13,9 24,7
Headline earnings per share -
continuing operations 17,1 14,9 32,7
Condensed Statements of Changes in Equity
31 Dec 2011 31 Dec 2010 30 Jun 2011
6 months 6 months 12 months
Unaudited Unaudited Audited
Rm Rm Rm
Balance at the beginning of period 1 471,8 1 364,7 1 364,7
Other comprehensive income - - 0,2
Movement in share-based payment reserve 0,9 0,4 1,2
Net profit for the period 76,1 62,1 138,2
Distributions to shareholders (42,4) (29,7) (29,7)
Dividends to minorities - - (2,8)
Balance at the end of the period 1 506,4 1 397,5 1 471,8
Owners of the company 1 459,9 1 356,4 1 429,7
Non-controlling interest 46,5 41,1 42,1
Condensed Statements of Financial Position
31 Dec 2011 31 Dec 2010 30 Jun 2011
6 months 6 months 12 months
Unaudited Unaudited Audited
Rm Rm Rm
ASSETS
Non-current assets 1 015,1 1 098,8 1 017,9
Property, plant and equipment and
investment properties 909,0 933,8 902,6
Goodwill 66,7 66,7 66,7
Interest in joint ventures 26,4 26,3 24,4
Pension fund surplus - 22,0 3,8
Deferred taxation assets 13,0 50,0 20,4
Current assets 1 871,7 1 446,0 1 617,7
Inventories 850,2 626,5 729,8
Receivables, prepayments and other
receivables 903,2 767,4 750,0
Bank balances and cash 109,1 40,0 128,7
Assets held for sale 9,2 12,1 9,2
Total assets 2 886,8 2 544,8 2 635,6
EQUITY AND LIABILITIES
Capital and reserves 1 506,4 1 397,5 1 471,8
Equity holders` interest 1 459,9 1 356,4 1 429,7
Non-controlling interest 46,5 41,1 42,1
Non-current liabilities 78,4 66,4 56,6
Long-term interest-bearing borrowings 37,4 33,2 22,5
Retirement benefit obligations 9,7 10,5 9,7
Deferred taxation liabilities 31,3 22,7 24,4
Current liabilities 1 302,0 1 080,9 1 107,2
Short-term interest-bearing borrowings 21,7 56,6 22,2
Trade and other payables 1 022,1 795,8 813,1
Provisions 20,8 18,1 53,3
Bank overdrafts 237,4 210,4 218,6
Total equity and liabilities 2 886,8 2 544,8 2 635,6
Number of shares in issue (millions) 424,5 424,5 424,5
Net asset value per share (cents) 343,9 319,5 336,8
Net interest-bearing debt to equity (%) 12,4% 18,6% 9,1%
Condensed Statements of Cash Flow
31 Dec 2011 31 Dec 2010 30 Jun 2011
6 months 6 months 12 months
Unaudited Unaudited Audited
Rm Rm Rm
Cash flows from operating activities 28,8 121,0 223,5
Cash generated by operations before
working capital changes 152,2 146,0 288,3
Net working capital changes (103,0) 3,1 (18,3)
Cash generated from operations 49,2 149,1 270,0
Net finance costs (14,0) (21,1) (32,7)
Taxation paid (6,4) (7,0) (13,8)
Cash flows to investing activities (42,0) (25,9) -
Net Capital Expenditure (42,0) (24,3) (57,0)
Purchase of property, plant and equipment
Expansion (7,7) (3,4) (11,9)
Replacement (56,8) (20,9) (49,6)
Government capital incentives 22,5 - 4,5
Proceeds on disposals - - 56,6
Other investing activities - (1,6) 0,4
Cash flows (to)/ from operating and
investing activities (13,2) 95,1 223,5
Cash flows to financing activities (25,2) (43,1) (91,0)
Dividends paid to minorities - - (2,8)
Capital distributions to
shareholders (42,4) (29,7) (29,7)
Increase/(decrease) in borrowings 17,2 (13,4) (58,5)
Net (decrease)/increase in cash and
cash equivalents (38,4) 52,0 132,5
Cash and cash equivalents at the
beginning of the period (89,9) (222,4) (222,4)
Cash and cash equivalents at the
end of the period (128,3) (170,4) (89,9)
Notes
31 Dec 2011 31 Dec 2010 30 Jun 2011
6 months 6 months 12 months
Unaudited Unaudited Audited
Rm Rm Rm
1 Net finance costs - continuing
operations 14,0 21,1 25,6
Interest received (2,7) (1,3) (3,3)
Interest paid 16,7 22,4 28,9
Net finance costs - discontinued
operations - - 7,1
2 Capital expenditure commitments 74,1 33,3 110,9
Contracted 38,1 7,4 30,0
Approved but not yet contracted 36,0 25,9 80,9
3 Operating lease commitments 91,0 59,5 81,6
4 Guarantees and contingent
liabilities 10,8 11,4 10,9
5 Taxation
The taxation rate is lower than the statutory rate mainly due to the raising
of a deferred tax asset.
6 Basis of preparation of results
These condensed financial statements have been prepared in accordance with the
framework concepts and the measurement and recognition requirements of
International Financial Reporting Standards (IFRS), the interpretations
adopted by the International Accounting Standards Board, South African
interpretations of Generally Accepted Accounting Practice and have been
prepared in compliance with IAS 34: Interim Financial Reporting, the Companies
Act of South Africa and the Listings Requirements of the JSE Limited.
The financial statements have been prepared using accounting policies that
comply with IFRS and which are consistent with those applied in the
preparation of the financial statements for the year ended 30 June 2011.
The disclosure for the prior interim period has been re-presented to comply
with the requirements of IFRS 5: Non-current Assets Held for Sale and
Discontinued Operations.
7 Unaudited results
These results have not been reviewed or reported on by the group`s auditors.
The condensed financial statements have been prepared under the supervision of
JP Haveman CA(SA) and were approved by the board of directors on 5 March 2012.
Condensed Segmental Analyses
Operating
profit before
restructuring
Revenue costs Depreciation Total assets
Rm Rm Rm Rm
Dec 2011 (6 months)
Unaudited 2 448,6 109,2 34,8 2 886,8
Industrial 1 604,6 92,5 25,1 2 018,9
Consumer 844,0 16,7 9,7 859,6
Other - - - 8,3
Dec 2010 (6 months)
Unaudited 2 235,4 107,1 35,5 2 544,8
Industrial 1 416,2 67,8 28,2 1 709,1
Consumer 819,2 39,3 7,3 782,6
Other - - - 53,1
June 2011 (12 months)
Audited 4 351,7 265,9 69,9 2 635,6
Industrial 2 847,3 224,6 51,2 1 841,7
Consumer 1 504,4 41,3 18,7 779,4
Other - - - 14,5
Corporate information
Non-executive directors: C E Daun* (Chairman), J B Magwaza
(Lead Independent Director), M J Jooste, I N Mkhari, F Moller*, S H Nomvete,
U Schackermann*, K E Schmidt, D M van der Merwe * (German)
Executive directors: P C T Schouten (CEO), J P Haveman (CFO)
Registered address: 1st Floor, New Link Centre, 1 New Street, Paarl, 7646
Postal address: PO Box 3639, Paarl, 7620
Telephone: 021 872 8726
Facsimile: 021 872 9064
Transfer secretaries: Computershare Investor Services (Proprietary) Limited
Address: 70 Marshall Street, Johannesburg, 2001
Postal address: PO Box 61051, Marshalltown, 2107
Telephone: 011 370 5000
Facsimile: 011 688 7710
Sponsor: PSG Capital (Proprietary) Limited
These results can be viewed on: www.kapinternational.com
Date: 06/03/2012 11:23:12 Produced by the JSE SENS Department.
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