| Thu 10 May 2001, 0:00 | | Abi - Audited Annual Results 2001 For The Year End |
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Amalgamated Beverage Industries Limited
Registration number 1970/006820/06
1976 - 2001
25 years
Audited Annual Results 2001 for the year ended 31 March
Attributable earnings increase by 23% to R363 million
Headline earnings per share up 17%
Dividends per share increase by 17%
Cash flow from operations up by 31%
Interest bearing debt extinguished
Income Statements
2001 2000 %
Rm Rm Change
Revenue 3 799 3 572 6
Trading profit 487 380 28
Share of associates' earnings 51 49
Net financing costs (17) (50)
Profit before taxation 521 379
Taxation 158 84
Earnings attributable to
ordinary shareholders 363 295 23
Ordinary dividends 219 187
Retained earnings for the year 144 108
Earnings per share (cents)
Headline earnings basis 289,6 248,3 17
Attributable earnings basis 238,3 195,0 22
Dividends per ordinary
share (cents)
- interim 27,5 23,0
- final 116,5 100,0
- total for the year 144,0 123,0 17
Reconciliation of
headline earnings
Attributable earnings 363 295 23
Goodwill amortisation 78 78
Loss on sale of fixed assets - 3
Headline earnings basis 441 376 17
Weighted average number of
ordinary shares in issue
(millions) 152 151
Number of ordinary shares in
issue at end of year (millions) 152 152
Cash Flow Statements
2001 2000
Rm Rm
Cash retained from operating activities
Trading profit 487 380
Depreciation and amortisation 217 234
Other non-cash items 16 20
Cash generated from trading 720 634
Decrease in net working capital 16 (77)
Dividend income received 25 28
Cash generated from
operating activities 761 585
Interest received 16 6
Financing costs paid (33) (59)
Taxation paid (148) (77)
Cash flow from operations 596 455
Dividends paid (194) (42)
Net cash retained 402 413
Cash utilised in investment activities
Net investment to maintain and
upgrade operations (3) (72)
Net investment in returnable bottles
and crates (5) (39)
Investment to expand operations (122) (171)
Net cash invested (130) (282)
Cash effects of financing activities
Decrease in interest bearing debt (274) (132)
Decrease in liquid resources (2) (1)
Attributable cash flow per
ordinary share (cents) 391,8 300,4
Cash Value Added Statements
2001 2000
Rm Rm
Cash generated
Cash derived from sales 3 750 3 569
Income from investment 25 28
Cash value generated 3 775 3 597
Cash payments outside the group to
suppliers of materials, facilities
and services (2 388) (2 344)
Cash value added 1 387 1 253
Cash utilised to:
Remunerate employees for their services 542 534
Pay direct and excise taxes to the state 232 211
Provide lenders with a return
on borrowings 17 53
Provide shareholders with cash dividends 194 42
Cash disbursed to among stakeholders 985 840
Cash retained in the business:
From shareholders in exchange for
capitalisation share awards - 86
For further retentions 402 327
Available to fund the replacement
of assets and facilitate growth 402 413
Beneficiaries % %
Employees 39 43
State 17 17
Lenders 1 4
Shareholders 14 10
Retentions 29 26
100 100
Reconciliation with cash generation
Cash value added (above) 1 387 1 253
Remuneration of employees (542) (534)
Payment of excise duty (84) (134)
Cash generated from operations
(per cash flow statement) 761 585
State taxes summary
Direct taxes 148 77
Excise duty 84 134
232 211
Value added tax 200 166
Employee tax 108 105
RSC levies 7 7
547 489
Balance Sheets
2001 2000
Rm Rm
Shareholders' funds 2 461 2 317
Interest bearing debt - 274
Total capital employed 2 461 2 591
Non-current assets
Goodwill 1 341 1 419
Operating assets 1 059 1 057
Investment in associate 169 143
Other investments 22 21
2 591 2 640
Returnable bottles and crates 353 373
Inventories 186 178
Debtors 315 351
Liquid resources 47 49
548 578
Total assets 3 492 3 591
Interest free liabilities
Current 921 883
Deferred 110 117
1 031 1 000
Net assets 2 461 2 591
Gearing ratio
Net interest bearing debt to total
shareholders' funds (0,02) 0,10
Capital expenditure Rm Rm
Incurred 130 282
Contracted - -
Authorised by directors not
yet contracted 178 210
Fair value of associate 408 386
Net worth per ordinary share (cents) 1 617,7 1 523,0
Statement of Changes in Ordinary Shareholders' Equity
Non-distributable
Share capital Share premium reserves Retained income
Rm Rm Rm Rm
Balance at 31 March 1999
- as previously reported 1 1 464 89 696
Changes in accounting policies (2) (78)
Restated balance
at 31 March 1999 1 1 464 87 618
Premium on shares issued 125
Transfer from share election
reserve for shares issued (86)
Earnings attributable to
ordinary shareholders 295
Ordinary dividends (187)
Balance at 31 March 2000 1 1 589 1 726
Earnings attributable to
ordinary shareholders 363
Ordinary dividends (219)
Balance at 31 March 2001 1 1 589 1 870
Commentary
The company has delivered a satisfactory set of results despite the difficult
trading environment experienced throughout the year. The decline in volumes of
3% to 4 474 thousand hectolitres at the interim reporting stage, was reversed
with growth of 3% in the second half. Sales volumes ended the year at
10 968 thousand hectolitres, an improvement of 0,5% on the 10 910 thousand
hectolitres achieved in the prior year.
Financial performance
Input cost containment and the delivery of productivity in the post-merger ABI
has resulted in an increase in the trading margin. This improvement in margin
has delivered growth in trading profit of 28%.
The tax rate of 30,3% has increased compared to 22,2% for the prior year. The
rate in 2000 was unusually low due to adjustments passed in that year, relating
to earlier years. Net finance costs were substantially reduced as a result of
strong cash flow, which has enabled interest bearing debt to be extinguished.
Attributable earnings grew by 23%, whilst headline earnings, after adding back
the amortisation of goodwill, increased by 17%.
The directors remain of the opinion that the purchased goodwill has an
indefinite life. However, the South African accounting statement, AC 131:
Business Combinations, requires that goodwill be amortised. Consequently,
goodwill in the balance sheet at 31 March 2000 is now being amortised over 20
years from date of acquisition. The effect of this change has been a charge to
the income statement of R78 million for both the current and prior (restated)
reporting periods.
Dividends
A final dividend of 116,5 cents per share has been declared. This will be
payable out of profits as determined by the directors. Together with the
interim dividend of 27,5 cents, the total annual dividend of 144,0 cents per
share is 17% higher than last year, which is in line with the headline earnings
per share increase. The dividend will be paid on or about 29 June 2001 to
shareholders registered in the books of the company at the close of business on
25 May 2001.
Prospects
Trading conditions are likely to remain difficult in the coming year. However,
management efforts to stimulate the market are expected to improve volumes in
both carbonated soft drinks as well as our other beverage categories.
Accordingly, further earnings growth is expected, and this will be aided by the
ongoing implementation of productivity initiatives.
By order of the board
DA Butler
Company Secretary
Johannesburg
9 May 2001
Website: www.abi.co.za
Chairman: EAG Mackay
Non-executive Directors: NJ Adami, MP Adonisi, PM Bester, JA Mabuza, MI
Wyman (British)
Executive Directors: AJ Clark (Managing Director),
EM Borcherds, GS Brockett, TK Gibbon, MJ Hoy, HBB Lloyd, AJ Parker, ATW
Pickerell
Company Secretary
DA Butler
Registered office
ABI House
14 Pongola Crescent
Eastgate Extension 17
Sandton 2199
(PO Box 76202
Wendywood 2144)
Transfer secretaries
Mercantile Registrars Limited 10th Floor
11 Diagonal Street Johannesburg 2001
(PO Box 1053
Johannesburg 2000)
