| Mon 25 Jun 2012, 16:59 | | AER - Amalgamated Electronic Corporation Limited - Group condensed |
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AER
AER
AER - Amalgamated Electronic Corporation Limited - Group condensed
consolidated reviewed results for the year ended 31 March 2012 and dividend
declaration
AMALGAMATED ELECTRONIC CORPORATION LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/010036/06)
Share code: AER ISIN: ZAE000070587
("Amecor" or "the Company")
GROUP CONDENSED CONSOLIDATED REVIEWED RESULTS FOR THE YEAR ENDED 31 MARCH 2012
AND DIVIDEND DECLARATION
GROUP CONDENSED STATEMENT OF COMPREHENSIVE INCOME
Year ended Year ended
31 March 2012 31 March 2011
(Reviewed) (Audited)
Note R`000 R`000
Revenue 218 474 142 810
Turnover 214 982 140 732
Cost of sales (126 329) (77 410)
Gross profit 88 653 63 322
Operating cost excluding depreciation (51 805) (27 574)
and amortisation
EBITDA 36 848 35 748
Depreciation and amortisation (3 554) (3 279)
Operating profit 33 294 32 469
Finance income 1 857 1 435
Finance expenses (3 190) (962)
Profit before taxation 31 961 32 942
Taxation (10 616) (9 598)
Profit 21 345 23 344
Other comprehensive income - -
Total comprehensive income 21 345 23 344
Attributable to:
Ordinary shareholders of Amecor 18 632 21 360
Non-controlling interest 2 713 1 984
Profit and total comprehensive income 21 345 23 344
for the year
Earnings per share (cents) 3 25,0 28,3
Diluted earnings per share (cents) 3 25,0 28,3
GROUP CONDENSED STATEMENT OF FINANCIAL POSITION
31 March 2012 31 March 2011
(Reviewed) (Audited)
Note R`000 R`000
ASSETS
Non-current assets 101 749 85 939
Property, plant and equipment 5 22 497 16 811
Intangible assets 17 838 14 756
Goodwill 59 661 54 034
Deferred tax asset 1 753 338
Current assets 166 761 87 636
Inventories 44 931 22 325
Trade and other receivables 58 870 27 450
Taxation 3 328 2 837
Cash and cash equivalents 59 632 35 024
Total assets 268 510 173 575
EQUITY AND LIABILITIES
Issued capital 70 843 72 560
Retained earnings 75 506 62 915
Non-controlling interest 18 222 16 007
Total equity 164 571 151 482
Non-current liabilities 62 834 6 551
Borrowings 57 684 3 143
Deferred tax liabilities 5 150 3 408
Current liabilities 41 105 15 542
Trade and other payables 39 831 12 895
Borrowings 1 274 2 647
Total equity and liabilities 268 510 173 575
GROUP CONDENSED STATEMENT OF CASH FLOWS
Year ended Year ended
31 March 2012 31 March 2011
(Reviewed) (Audited)
R`000 R`000
Net inflow from operating activities 11 325 21 924
Cash generated from operations 29 975 39 256
Net finance (expense)/income (1 333) 473
Taxation paid (10 778) (10 710)
Dividends paid (6 539) (7 095)
Net outflow from investing activities (38 168) (9 105)
Net inflow/(outflow) from financing 51 451 (4 640)
activities
Net movement in cash balances 24 608 8 179
Cash and cash equivalents at the beginning 35 024 26 845
of the year
Cash and cash equivalents at the end of 59 632 35 024
the year
GROUP CONDENSED STATEMENT OF CHANGES IN EQUITY
Attributable
Issued capital to ordinary Non-
(share capital and shareholders controlling Total
share premium) of Amecor interest equity
R`000 R`000 R`000 R`000
Balance at 1 72 610 47 576 15 097 135 283
April 2010
Dividends paid - (6 021) (1 074) (7 095)
Profit for the - 21 360 1 984 23 344
year in total
comprehensive
income
Treasury share (50) - - (50)
purchase
Total changes (50) 15 339 910 16 199
Balance at 1 72 560 62 915 16 007 151 482
April 2011
Dividends paid - (6 041) (498) (6 539)
Profit for the - 18 632 2 713 21 345
year in total
comprehensive
income
Treasury share (1 717) - - (1 717)
purchase
Total changes (1 717) 12 591 2 215 13 089
Balance at 31 70 843 75 506 18 222 164 571
March 2012
Dividend declaration
The directors have elected to pay a single annual dividend in the amount of
8,0 cents (F2011: 8,0 cents) per ordinary share in respect of the year ended
31 March 2012. This is a dividend as defined in the Income Tax Act, 1962, and
is payable from income reserves. The South African Dividend Witholding Tax
("DWT") rate is 15% and no credits in terms of Secondary Tax on Companies have
been utilised. The net amount payable to shareholders who are not exempt from
DWT is 6,8 cents per share, while it is 8,0 cents per share to those who are
exempt from DWT. Amecor tax number is 9381483842.
The 77 985 337 ordinary shares in issue; the total dividend amount payable is
R6 238 827.
F2013 F2012
Distributable dividend (R`000) 6 239 6 239
Total number of shares in issue (`000) 77 986 77 986
Dividend payable per share (cents) 8,0 8,0
Declaration date Wednesday, 27 June 2012
Last day to trade cum dividend Friday, 13 July 2012
Trading ex dividend commences Monday, 16 July 2012
Record date Friday, 20 July 2012
Payment date Monday, 23 July 2012
Share certificates may not be dematerialised or rematerialised between Monday,
16 July 2012 and Friday, 20 July 2012, both dates inclusive.
MANAGEMENT COMMENTARY
General review
Amecor and its subsidiaries (collectively "the Amecor Group" or "the Group")
is a South African group of companies specialising in the design, manufacture
and distribution of leading brands within the electronic security and
alternative energy industries.
During the year under review Amecor acquired the business ("the Secequip
business") of Secequip Supplies Proprietary Limited registration number
1999/025079/07 ("Secequip"). The effective date of the acquisition of the
Secequip business ("the Secequip transaction") was 1 October 2011. The
Secequip business is the business of an importer and distributor of electronic
products through its established national network of 13 branches. Details of
the Secequip transaction are summarised below in note 4.
Financial review
Turnover increased by 53% to R215,0 million (F2011: R140,7 million). The
increase on last year resulted primarily from the Secequip transaction and a
growth in annuity income in Sabre Radio Networks. EBITDA increased by 3% to
R36,8 million (F2011: R35,7 million). The production and sales element of the
Group faced challenges in the current economic conditions, resulting in
reduction in margins to remain competitive in the market. The Group, as a
whole, experienced an increase in operating costs as a direct result of
electricity rate hikes, higher salaries and wages, and increasing fuel prices.
In addition, non-recurring costs were incurred in effecting the integration of
the Secequip business into the Group.
Finance income increased by R0,5 million from R1,4 million in F2011 to R1,9
million, while finance costs rose to R3,2 million (F2011: R1,0 million). Both
were attributable to the Bond issued by Amecor in the amount of R60,0 million
as R17,0 million remains in treasury, attracting interest income. Quarterly
interest payments are processed at an interest rate of 3-month JIBAR + 5%.
Income attributable to Amecor shareholders reduced from R21,4 million to R18,6
million and earnings per share was down 11,7% to 25,0 cents (F2011: 28,3
cents).
Cash generated from operations reduced from R39,3 million (F2011) to R30,0
million in the year under review. Working capital changes, as a direct result
of the Secequip transaction, is the primary reason for this movement,
resulting in an additional investment in working capital of R11,1 million.
Total interest-bearing debt of R59,0 million (F2011: R5,8 million) represents
a Group debt to equity ratio of 35,8% (F2011: 3,8%). The Company issued a
corporate bond through its Private Placement Programme in November 2011
raising R60,0 million ("the Bond issue"). The bond is repayable in 2016. The
majority of the proceeds were used to acquire the Secequip business (R27,0
million), settle short-term debt and provide additional working capital within
the Group.
Fixed assets increased by 33,8% to R22,5 million (F2011: R16,8 million) as a
result of the purchase of a further property adjoining the existing premises,
an additional Surface Mount production line and the replacement of several
vehicles. A further R4,2 million was invested in research and development, and
additional treasury shares to the value of R1,7 million were acquired on the
open market at an average price of R1,80 per share.
Future capital commitments
To ensure the ongoing success of the Group through new and improved product
development, the Group has budgeted a further R4,0 million to invest in
product development in F2013.
Amecor, through its wholly-owned subsidiary Amecor Property Development
Proprietary Limited, recently acquired the property adjoining the existing
business premises in Industria. The Company intends to construct a new
production plant adjoining the existing building out of the remaining proceeds
of the Bond issue and to invest in additional stock items and products which
will be distributed through the Secequip branch network. The plan is to extend
the existing building and accommodate the Group`s principal activities in one
corporate campus. The estimated cost of this project is approximately R20,0
million.
Prospects
It is expected that the full economic benefits of the Secequip acquisition and
integration will begin to be reflected in F2013. The FSK and PDS divisions are
collectively expected to contribute steady income in line with the general
economy and the modest recovery in infrastructure and security spend.
NOTES TO THE CONDENSED CONSOLIDATED REVIEWED FINANCIAL STATEMENTS
1. Significant accounting policies
Amecor is a company domiciled in South Africa. These condensed consolidated
reviewed annual financial statements of the Amecor Group for the year ended 31
March 2012 comprise condensed consolidated reviewed annual financial
statements of Amecor and its subsidiaries.
These condensed consolidated annual financial statements were authorised for
issue by the board of directors on 25 June 2012. The reviewed condensed
consolidated financial statements for the year ended 31 March 2012 were
prepared by the financial director, Mrs Kerry Colley and have been reviewed by
the Company`s auditors, Mazars.
Basis of preparation
These condensed consolidated reviewed results have been prepared in accordance
with the Framework concepts and the measurement and recognition requirements
of the International Financial Reporting Standards ("IFRS") and contain
information required by the International Accounting Standards 34 - Interim
Financial Reporting, the AC 500 standards issued by the Accounting Practices
Board, and in compliance with the Listings Requirements of the JSE Limited.
The review of the reviewed condensed consolidated financial statements has not
been performed in terms of the requirements of the South African Companies
Act, 71 of 2008, as amended. These condensed consolidated reviewed financial
statements are prepared on the historical cost basis and do not include all of
the information required for full financial statements. This announcement
should be read in conjunction with the consolidated annual financial
statements for the year ended 31 March 2011.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period or in the period
of the revision and future periods if the revision affects both current and
future periods.
The accounting policies and methods of computation have been applied
consistently by Group companies and have been applied consistently to all
periods presented in these condensed consolidated reviewed financial
statements. The new IFRS and interpretations that became effective for the
year under review, have not had an effect on the Group`s accounting policies.
The comparative figures referred to in the commentary relate to the prior year
equivalent period.
2. Review of results
Mazars has signed an unqualified review opinion on these condensed
consolidated financial statements, as required by the JSE Limited. These
financial statements have been approved by the board and condensed for the
purposes of this report. The auditors review opinion is available for
inspection at Amecor`s registered office.
3. Earnings per share ("EPS")
EPS is based on the Group`s profit for the year ended 31 March 2012, divided
by the weighted average number of shares in issue during the year.
Weighted
average number
Profit attributable of shares in
to equity holders issue (net of
of Amecor treasury shares Earnings
(Reviewed) of 3,3 million) per share
F2012 R`000 `000 Cents
Earnings 18 632 74 677 25,0
Diluted earnings 18 632 74 677 25,0
Headline earnings
reconciliation
Basic earnings 18 632
Less: Profit on sale of (115)
assets
Add back: Taxation on 32
the above (28%)
Headline earnings 18 549 74 677 24,8
Diluted headline 18 549 74 677 24,8
earnings
Weighted
average number
Profit attributable of shares in
to equity holders issue (net of
of Amecor treasury shares Earnings
(Audited) of 2,4 million) per share
F2011 R`000 `000 Cents
Earnings 21 360 75 553 28,3
Diluted earnings 21 360 75 553 28,3
Headline earnings
reconciliation
Basic earnings 21 360
Less: Profit on sale of (248)
assets
Add back: Taxation on 69
the above (28%)
Headline earnings 21 181 75 553 28,0
Diluted headline 21 181 75 553 28,0
earnings
4. Acquisition of the Secequip business from Secequip
On 18 August 2011 Amecor entered into an agreement with Secequip to purchase
the Secequip business consisting of the plant and equipment, stock, the
customers, the intellectual property, the goodwill and the business name and
logo ("the business assets"), and the continuing contracts, the employee
liabilities and the employees, but excluding the debtors and other business
liabilities of Secequip, as a going concern.
The Secequip business is that of an importer and distributor of electronic
products, including the well-known Texecom range of products and related
services and solutions to primarily the security industry and secondarily, the
broader electronics industry. The Secequip business has an established network
of 13 branches across South Africa together with a central warehouse and a
country-wide sales and marketing team.
Details of the transaction
Amecor advanced a loan of R27 million (twenty seven million Rand) ("the loan")
to Greater Gauteng Alarm Networks Proprietary Limited, registration number
2000/023652/07 ("GGAN"), an existing dormant subsidiary company of Amecor.
GGAN`s 1 000 ordinary shares are held as follows:
No. of shares %
Amecor 790 79
Non-controlling shareholder (Secequip) 210 21
The 21% non-controlling interest formed part of the transaction agreement, and
the shares were issued at no value.
Purchase price allocation summary
Secequip business
Acquisition date 1 October 2011
Effective voting rights 100%
At acquisition fair value R`000
Plant and equipment 1 733
Inventory 19 640
Net asset value ("NAV") 21 373
Less: Total purchase price discharged - cash 27 000
Goodwill on acquisition 5 627
Acquisition costs included in net administration and 137
other operating expenses
Revenue since acquisition 1 October 2011 70 262
Net profit since acquisition 1 October 2011 2 777
It is impracticable to determine the revenue or the net profit for the
combined entity from the beginning of the financial period, as only certain
assets were acquired from Secequip.
At the time of this announcement, the purchase price allocation had not yet
been completed; an independent party has been assigned to attribute a value to
the business name, logo and customer base acquired. Until such valuation has
been concluded, the goodwill component of the purchase price allocation will
assume the value of the business name, logo and customer base. Acquisition
expenses incurred were expensed in operating expenses in the statement of
comprehensive income.
GGAN has subsequently changed its name to Secequip Proprietary Limited.
5. Property, plant and equipment
During the year under review, the Group purchased property, plant and
equipment to the value of R6,9 million and recognised R1,7 million additions
due to the acquisition of the Secequip business (note 4). There were no
material disposals during the year.
6. Net asset value per share
Year ended Year ended
31 March 2012 31 March 2011
(Reviewed) (Audited)
Net asset value per share (cents) 220,8 200,5
Net number of shares in issue (`000) 74 548 75 553
7. Segmental analysis
The Group`s operating segments and segmental information presented in the
condensed consolidated reviewed results for the year ended 31 March 2012
represents the Group`s management and internal reporting structure. Inter-
segment transactions are concluded at arm`s length terms and conditions.
Year ended Year ended
31 March 2012 31 March 2011
(Reviewed) (Audited)
R`000 R`000
Segment turnover
Security and related production and sales 115 809 45 410
Network and annuity income 20 374 18 968
Supply and maintenance of alternative 88 687 76 354
power sources
Holding and management subsidiary 16 106 8 668
companies
Consolidation adjustments (25 994) (8 668)
Total turnover 214 982 140 732
Comprehensive income
Security and related production and sales 11 137 10 930
Network and annuity income 11 222 10 457
Supply and maintenance of alternative 4 275 3 718
power sources
Holding and management subsidiary 3 817 5 145
companies
Consolidation adjustments (9 106) (6 906)
Total comprehensive income 21 345 23 344
Comprehensive income attributable to non-
controlling shareholders
Supply and maintenance of alternative 2 713 1 984
power sources
Assets
Security and related production and sales 114 159 48 026
Network and annuity income 39 454 32 527
Supply and maintenance of alternative 53 172 43 848
power sources
Holding and management subsidiary 143 659 104 698
companies
Consolidation adjustments (81 934) (55 524)
Total assets 268 510 173 575
Liabilities
Security and related production and sales (62 267) (4 895)
Network and annuity income (1 033) (1 966)
Supply and maintenance of alternative (17 797) (11 750)
power sources
Holding and management subsidiary (90 233) (54 408)
companies
Consolidation adjustments 67 391 50 926
Total liabilities (103 939) (22 093)
8. Related party transactions
F2012 F2011
R`000 R`000
The Company and its subsidiaries do have
dealings with each other but these are
eliminated on consolidation.
Purchases between subsidiary companies 15 126 11 348
Management fees 10 420 7 928
Operating lease 578 874
Other related parties:
Property rental agreements
- The Company relocated to the offices - 200
situated in Industria resulting in no
further rent being paid to a related party
9. Directors
HS Courtney (Non-executive chairman), DH Alexander (Chief executive officer),
KA Colley (Financial director and Company secretary), KA Vieira (Operational
director), M Noge (Independent non-executive director), CH Boulle (Independent
non-executive director), PFC Ying (Independent non-executive director)
(appointed 16 March 2012)
All of the above directors are South African and are resident in South Africa.
On behalf of the board
HS Courtney DH Alexander
Chairman Chief executive officer
Roodepoort
25 June 2012
Registered Office
Amecor House, 14 Richard Road, Industria North, Roodepoort, 1709
(PO Box 720, Florida Hills, 1716)
Auditors
Mazars, 2nd Floor Mazars House
5 St Davids` Place, Parktown, 2193
(PO Box 6697, Johannesburg, 2000)
Transfer Secretaries
Link Market Services South Africa Proprietary Limited
13th Floor, Rennies House, 19 Ameshoff Street, Braamfontein, 2001
(PO Box 4844, Johannesburg, 2000)
Sponsor
Sasfin Capital Limited
(A division of Sasfin Limited)
29 Scott Street, Waverley, 2090
(PO Box 95104, Grant Park, 2051)
Visit us at www.amecor.com
INNOVATION THROUGH TECHNOLOGY
Date: 25/06/2012 16:59:19 Produced by the JSE SENS Department.
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