| Thu 22 Mar 2001, 0:00 | | Control Instruments Group Limited - Preliminary Au |
|
Registration number 1964/003987/06
HIGHLIGHTS
CONTINUING OPERATIONS ELECTRONICS
- Headline earnings increased by 59%
- Revenue increased by 57%
- Profit from operations increased by 115%
- Acquisition and integration of Dupec and Conlog into Shurlok completed
R44 MILLION ACQUISITIONS, UPGRADING OF MANUFACTURING FACILITIES
& INCREASE IN WORKING CAPITAL FUNDED OUT OF INTERNAL RESOURCES
HIGHLIGHTS
The Group's results for the year ended 31 December 2000 need to be reviewed
from two distinct perspectives, namely:
- the operational performance of the Group's core Electronics operations and
- the Group's investments in a number of Information Technology (IT) and
Internet related start-up businesses.
PRELIMINARY AUDITED ANNUAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2000
CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 2000
31/12/00 31/12/99
R 000 R 000
ASSETS
Non-current assets 92,634 62,688
Property, plant and equipment 36,085 28,467
Intangible assets 26,220 8,760
Investment in associate companies 3,200 6,151
Other investments and non-current receivables 25,772 19,310
Deferred tax 1,357 0
Current assets 87,633 86,248
Inventories 37,005 23,697
Receivables 39,453 32,285
Cash and cash equivalents 11,175 30,266
Total assets
180,267 148,936
EQUITY AND LIABILITIES
Capital and reserves 92,248 75,012
Minority interests 24 655
Non-current liabilities 18,253 7,272
Current liabilities 69,742 65,997
Trade and other payables 42,753 37,558
Dividends proposed 0 7,079
Current borrowings 24,211 17,854
Provisions for liabilities and charges 2,778 3,506
Total equity and liabilities 180,267 148,936
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2000
Share Share Retained
Capital Premium Reserves Earning Total
R 000 R 000 R 000 R 000 R 000
Balance at 1 January 1999 4,424 56,906 550 24,522 86,402
Net losses not recognised in the
Income Statement 0 (9,303) (188) (7,976) (17,467)
Currency translation differences 0 0 (188) 0 (188)
Goodwill written off 0 (9,303) 0 (7,976) (17,279
Net profit 0 0 0 13,156 13,156
Dividends declared 0 0 0 (7,079) (7,079)
Balance at 31 December 1999 4,424 47,603 362 22,623 75,012
Net profits / (losses) not recognised
in the Income Statement 0 0 (257) 3,153 2,896
Currency translation differences 0 0 (508) 0 (508)
Goodwill relating to associate sold 0 0 0 3,304 3,304
Transfer to maintenance reserve 0 0 251 (151) 100
Net profit 0 0 0 14,340 14,340
Balance at 31 December 2000 4,424 47,603 105 40,116 92,248
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2000
31/12/00 31/12/99
R 000 R 000
Cash flows from operating activities
Operating profit before working capital changes 9,482 11,000
Working capital changes (19,515) (3,529)
Cash (utilised in) / generated from operations (10,033) 7,471
Net interest paid (2,218) 3,356
Dividends paid (7,079) (5,309)
Tax paid (716) (1,022)
(20,046) 4,496
Cash flows from investing activities
Fixed assets purchased (12,824) (8,958)
Proceeds from disposal of fixed assets 2,668 3,535
Increase in intangible assets (13,077) (6,965)
Acquisition of operations, net of cash (11,298) (6,764)
Proceeds from disposal of investments and
operations 25,770 304
Decrease / (increase) in other investments
and non-current receivables 432 (11,836)
(8,329) (30,684)
Cash flows from financing activities
Proceeds from / (repayment of) long term borrowings 4,367 (6,731)
Net cash outflow for the year (24,008) (32,919)
Cash and cash equivalents at the beginning
of the year 16,480 49,399
Cash and cash equivalents at the end of the year (7,528) 16,480
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2000
SEGMENTAL INCOME STATEMENT*
for the year ended 31 December 2000
Continuing Discontinued
Operations Operations
(Electronics)
31/12/00 31/12/99 31/12/00 31/12/99
R 000 R 000 R 000 R 000
Revenue 180,424 115,166 24,953 30,204
Cost of sales (107,694) (71,021) (12,063) (11,596)
Gross profit 72,730 44,145 12,890 18,608
Other operating income 7,755 9,786 590 123
Operating expenses (64,695) (46,570) (22,280) (20,455)
Profit / (loss) from operations 15,790 7,361 (8,800) (1,724)
Profit on disposal of investments
and operations 0 0 13,007 0
Restructuring costs (5,384) 0 0 0
Net interest (165) 4,098 (2,054) (742)
Income from associate companies 0 0 975 3,772
Profit before tax 10,241 11,459 3,128 1,306
Tax 998 337 (14) 0
Profit after tax 11,239 11,796 3,114 1,306
Minority interests 6 (201) (19) 255
Net profit 11,245 11,595 3,095 1,561
Earnings per share (cents) 12.7 13.1 3.5 1.8
Headline earnings per share (cents) 18.0 11.3 (11.2) 1.8
31/12/00 31/12/99
R 000 R 000
Revenue 205,377 145,370
Cost of sales (119,757) (82,617)
Gross profit 85,620 62,753
Other operating income 8,345 9,909
Operating expenses (86,975) (67,025)
Profit from operations 6,990 5,637
Profit on disposal of investments and operations 13,007 0
Restructuring costs (5,384) 0
Net interest (2,219) 3,356
Income from associate companies 975 3,772
Profit before tax 13,369 12,765
Tax 984 337
Profit after tax 14,353 13,102
Minority interests (13) 54
Net profit 14,340 13,156
Earnings per share (cents) 16.2 14.9
Headline earnings per share (cents) 6.7 13.1
OPERATIONAL PERFORMANCE
CONTINUING OPERATIONS - ELECTRONICS
The Group's core Electronics operations - Shurlok, CI-FMS and CI-VDO are
in-volved in the design, manu-fac-ture and supply of:
- vehicle electronics for the international automotive industry,
- commercial vehicle and fleet management systems and equipment and
- specialised automotive instrumentation.
These businesses all performed well, profitably and experienced strong growth.
Their annual revenue grew by 57% to R180m and profit from operations by 115% to
R15,8m. They are expected to continue expanding their export activities in 2001
The Group's strong balance sheet enabled it to fund the following from its
own resources and thus without diluting its shareholders' interests:
- the acquisition of Conlog,
- the expansion and considerable upgrading of Shurlok's manufacturing facility
in Pietermaritzburg,
- the expansion of CI-FMS' research and development facility in Stellenbosch,
- the working capital growth requirements of these businesses and
- the build-up of stock necessary to ensure the smooth flow of products during
the relocation of Dupec and Conlog's manufacturing facilities. This enabled
Shurlok to integrate these operations into its business with minimum disruption
to customers.
DISCONTINUED OPERATIONS - TECHNOLOGY
Since its inception, the Group has invested in areas of technology which it
believes have the potential to complement its current businesses. Shurlok and
CI-FMS evolved out of similar investment activities.
The Group's current portfolio of investments is focussed on Internet
integration and e-business enablement.
In order to unlock some of the underlying value in these businesses and to
secure future funding for their growth and that of the Group's core Electronics
opera-tions, the Group entered into an agreement with Cycad Financial Holdings
Limited to sell a 50% interest in these businesses to a technology fund to be
managed by Cycad. Unfortunately, at a very advanced stage, this transaction
could not be completed. The Group is actively investigating alternative
strategies.
STRATE
In terms of the implementation timetable of STRATE, Control Instruments has
been selected to move to the electronic settlement environment on 2 April 2001,
with electronic trading on 23 April 2001 and electronic settlement from 30
April 2001.
To be eligible for settlement in the STRATE environment, share certificates
must be submitted to a Cen-tral Securities Depository Participant (CSDP) or
qualifying stockbroker for conversion into an electronic record. Shareholders
who have not yet entered the STRATE environment should appoint a custodian
bank, known in the STRATE environment as a CSDP, or a qualifying stockbroker as
soon as possible.
Further information can be obtained from STRATE's Information Centre:
Reception: (011) 520 7700, Info-line: 0800 004 727, Fax: (011) 520 8600,
E-mail: Liaisondesk@STRATE.co.za, Website: www.STRATE.co.za.
PROSPECTS
The Group's operations all have good prospects, should continue to grow, trade
profitably and generate cash, with the exception of SAN People which will
con-tin-ue to absorb cash to fund its development program and its international
expan-sion.
DIVIDEND
The directors have decided that as a result of the large acquisition, expansion
and growth funding requirements in 2000 and the current highly volatile and
unpredictable international economic outlook, it is prudent to conserve the
Group's cash resources. They have therefore deferred a decision in respect of a
dividend until further notice.
On behalf of the Board of Directors
HV Hefer R Friedman
Chairman Group Managing Director
Johannesburg 5 March 2001
Directors
HV Hefer (Chairman)* R Friedman (Managing) EPH Bieber* S Bromfield*
TE Buzer (British) LH Fine* RB Forrester RJ Fraenkel JR Hersov*
*non-executive
Registered Office: Rutherford Estate Block B, 1 Scott Street, Waverley,
Johannesburg 2090 PO Box 2245, Parklands 2121 www.ci.co.za Share Transfer
Secretaries: Mercantile Registrars Limited 11 Diagonal Street, Johannesburg
2000 PO Box 1053, Johannesburg 2000
PRESS RELEASE
CONTROL INSTRUMENTS REAFFIRMS FOCUS AND PUTS MONEY ON CORE ELECTRONICS BUSINESS
A surge in its core automotive electronics and fleet management operations in
the year ended 31 December 2000 helped Control Instruments to a 41% increase in
revenues to R205,4m (1999: R145,4m).
Net profit of R14,4m (1999: R13,1m) translated to earnings of 16,2c (1999:
14,9c) a share for the period.
Speaking at yesterday's (Thursday, 22 March) announcement of the group's
year-end results in Johannesburg, Control Instruments managing director Richard
Friedman said the results need to be reviewed from two perspectives, namely the
core electronics and fleet management operations and the group's investment in
IT-related businesses.
"With regards to our core business, all these areas were profitable in the year
under review. This sector's operating profits rose by 115% to R15,8m off a 57%
increase in revenue to R180m," said Friedman.
"This showed we are well on our way to becoming a leading developer and
supplier of electronic hardware and software products aimed at niche segments
of the world-wide automotive industry and vehicle and fleet management markets.
Friedman said the group's strong balance sheet had enabled it to fund various
projects in its niche automotive electronics business without diluting
shareholders' interests. The R44m required for acquisitions, upgrading of
manufacturing facilities and increased working capital was funded out of
internal resources.
Among the major developments were the acquisition and integration of automotive
electronics companies Conlog and Dupec into Control Instruments' Shurlok
operation, which manufactures various electronic products for the local and
international automotive market.
Shurlok's manufacturing facility in Pietermaritzburg was also upgraded and
expanded, as was Control Instruments' CI-FMS facility in Stellenbosch where
research and development is carried out on state-of-the-art electronic fleet
management systems and equipment.
"These businesses all performed well and are set for future growth as we
continue to expand our export activities as well as constantly seeking new
international markets," said Friedman. "We have an international client-base
including most of the world's foremost automotive manufacturers and as a major
South African manufacturer we are set to further capitalise on the benefits
offered by the Government's Motor Industry Development Programme."
During the year in review, Control Instruments posted a R13m profit on the
disposal of investments and operations, largely from the sale of its interest
in Matrix Vehicle Tracking, as well as a portion of its shares in Nasdaq-listed
Cellpoint.
In its other areas of business, the group's investments in Internet integration
and e-business enablement reaffirm its commitment to investing in areas of
technology that have the potential to complement its core operations and/or
progress to profitable ventures in their own right.
Its current IT investments are in Data Pro Services (ISP services), the E-mail
Corporation (e-mail marketing and advertising), Freight Online (B2B application
for the transport industry) and San People (specialised connectivity solutions)
During the year under review Control Instruments was in an advanced stage of
selling a 50% interest in its IT interests to a technology fund to be managed
by Cycad Financial Holdings. "Unfortunately the transaction could not be
completed, but the group is actively investigating alternative strategies to
unlock shareholder value through these IT investments," said Friedman.
"The group's operations all have good prospects and should continue to grow and
generate cash, with the exception of SAN People, which will absorb cash to fund
its development programme and its international expansion."
As a result of the large acquisition, expansion and growth funding requirements
in the year under review, as well as the current highly volatile and
unpredictable international economic outlook, the board has deemed it prudent
to conserve the Group's cash resources. A decision in respect of a dividend has
therefore been deferred until further notice.
ends
Notes to editors
Control Instruments has two areas of operation:
1. CORE ELECTRONICS OPERATIONS
Design, manufacture and supply of :
* vehicle electronics for the international automotive industry
* commercial vehicle and fleet management systems and equipment
* specialised automotive instrumentation
2. TECHNOLOGY INVESTMENTS
* Investments in new areas of technology which potentially could complement
core businesses
* Currently focused on Internet integration and B2B e-enablement
Contact
Jean Jeffery
Control Instruments Group Limited
Group Communications Manager
021 876 3738
082 650 5371
