| Tue 15 May 2001, 0:00 | | Bearing Man Limited |
|
Group audited results and dividend announcement for the Nine Months ended 31
March 2001
Comparison between the current NINE-MONTH and prior TWELVE-MONTH periods:
Operating profit + 13%
Profit before taxation + 49%
Earnings + 38%
Headline earnings + 21%
Nine months Twelve months
ended ended
31 March 30 June
Income 2001 2000
Inc./
Statement R000 R000
(Dec.)%
Revenue 524 665 560 462 (6)
Operating profit 59 620 52 579 13
Interest paid 10 312 12 970
(20)
Profit before abnormal items 49 308 39 609 24
Abnormal items 1 442 7 501
(81)
Profit before taxation 47 866 32 108 49
Taxation 14 844 8 115 83
Earnings for the period 33 022 23 993 38
Note: The prior year figures have been restated for the change in accounting
policy in that properties are now depreciated from their date of acquisition
over a period of 20 years. The change in accounting policy is to comply with
AC 135.
Determination of headline earnings
Earnings 33 022 23 993 38
Adjustments - after tax where applicable
- Write-off of goodwill 158 87
- Branch closure/restructure 1 098 3 095
Goodwill set-off against the
Revaluation
reserve in prior years now
reversed, due to properties now
being valued at cost - 473
Loss on disposal of investment
in subsidiary - 184
Loss on disposal of property,
Plant and equipment 176 694
Headline earnings 34 454 28 526 21
Shares in issue
Weighted average (000's) 105 641 105 641
At end of period (000's) 105 641 105 641
Weighted average including
diluted shares (000's) 113 648 106 145
Headline earnings
per share (cents) 32,6 27,0 21
Earnings per share (cents) 31,3 22,7 38
Diluted headline
earnings per share (cents) 31,0 26,9 15
Diluted earnings
per share (cents) 29,9 22,7 32
Dividends per share* 13,0 10,0 30
Interim (cents) 6,0 4,0 50
Final (cents) 7,0* 6,0 17
*In accordance with Generally Accepted Accounting Practice Statement AC 107
the final dividend of 7 cents per share proposed by the directors has not
been reflected in the financial statements.
BALANCE SHEET
31 March 30 June
2001 2000
R000 R000
ASSETS
Non-current 62 885 59 094
Property, plant and equipment 48 408 47 103
Intangible assets 2 966 253
Deferred tax asset 1 998 2 438
Share trust and staff
incentive scheme 8 766 8 796
Long-term receivable 747 504
Current 327 665 262 227
Inventories 224 465 172 830
Accounts receivable 103 200 89 397
390 550 321 321
EQUITY AND LIABILITIES
Shareholders' interest 169 099 143 906
Non-current liabilities 16 030 16 499
Unsecured loans 11 894 12 364
Debentures 4 136 4 135
Current liabilities 205 421 160 916
Bank borrowings 68 591 36 886
Short-term borrowings 2 011 3 134
Other payables 134 819 120 896
390 550 321 321
Debt : equity (%) 51 39
Net tangible asset value
per share (cents) 157 136
Nine months Twelve months
ended ended
31 March 30 June
CASH FLOW 2001 2000
STATEMENT R000 R000
Cash flows from operating
activities
Cash receipts from customers 512 764 560 876
Cash paid to suppliers and employees 464 382 464 046
Cash flows from operating activities 48 382 96 830
Interest paid (10 603) (15 526)
Taxation paid (10 803) (6 880)
Dividends paid (12 620) (10 564)
Net cash generated by operating
activities 14 356 63 860
Cash flows from investing activities
Acquisition of property, plant and equipment
to maintain operations (10 682) (9 787)
Proceeds on disposal of property,
plant and equipment 2 861 5 279
Net (advance to)/repayment by
non-current receivable (243) 4 137
Business acquisition (36 434) -
Net cash utilised in investing
activities (44 498) (371)
cash flows from financing activities
Repayment of unsecured loans (1 593) (1 343)
Repayment from share trust 30 4
Net cash utilised in financing
activities (1 563) (1 339)
net (decrease)/increase in cash and
cash equivalents (31 705) 62 150
Cash and cash equivalents at
beginning of period (36 886) (99 036)
Cash and cash equivalents at
end of period (68 591) (36 886)
Nine months Twelve months
ended ended
31 March 30 June
Changes in equity 2001 2000
Statement R000 R000
Stated capital
Balance at beginning and end
of period 57 031 57 031
Non-distributable reserves
Balance at beginning of period - 2 195
Reversal of revaluation - 2 195
Balance at end of period - -
Retained income
Balance at beginning of period 82 603 77 265
Cumulative adjustment following
adoption of AC 133 (1 491) -
Prior year adjustment:
Depreciation of land and
buildings prior to 1 July 1999 (8 091)
As restated 81 112 69 174
Earnings for the period 33 022 23 993
Dividends* (6 338) (10 564)
Balance at end of period 107 796 82 603
Compulsorily convertible debentures
Balance at beginning of period 4 272 -
Issued during period - 4 272
Balance at end of period 4 272 4 272
Total shareholders' interest 169 099 143 906
*In accordance with Generally Accepted Accounting Practice Statement AC 107
the final dividend of 7 cents per share proposed by the directors has not
been reflected in the financial statements.
Comments
Bearing Man has experienced an eventful and rewarding nine months. On 1 July
2000 Invicta Holdings Limited acquired 54,6% of Bearing Man from Aveng
Limited. Simultaneously, Bearing Man acquired Invicta Bearings from Invicta
Holdings Limited. The acquisition of Invicta Bearings extends the company's
market leadership. It provides an excellent fit with the rest of the core
business in terms of its suppliers, customer base and business model, and
enhances the company's position as the leading value added supplier of
bearings, power transmission components, seals, belting, and geared motor
products and associated engineering support services in Southern Africa.
Results
The results for the nine months under review exceed those for the prior full
year, which is most satisfactory. Profit before tax for the nine-month
period is 49% better than the prior twelve months and earnings are up 38%.
Turnover growth is primarily as a result of the acquisition of Invicta
Bearings. Operating profits have increased as a result of the Fenner Power
Transmission business (acquired in 1998) now yielding fruits. The operating
profit margin of 11% represents a satisfactory improvement on the 9%
previously achieved. Management is continuing to focus on improving the
operating margins.
Interest bearing debt increased by R29,7 million from 30 June 2000 as a
result of the Invicta Bearings acquisition but has decreased R24,9 million
since 31 December 2000. Debt to equity was 37% and 66% at June and December
2000, respectively, and is now 51%, with a further reduction to below 40%
forecast for next year.
Accounting policies adopted
The following new accounting policies have been incorporated in the above
results:
- AC 107 (Events after the balance sheet date) with regard to the treatment
of dividends proposed after the balance sheet date.
-AC 133 (Financial instruments) resulting in a charge to retained income
brought forward of R1,5 million.
-AC 135 (Investment property) resulting in a charge to retained income
brought forward of R9,8 million and a charge of R1,2 million in this
period.
Abnormal costs
Abnormal costs amounting to R1,4 million were incurred relative to the
Invicta Bearings acquisition.
Capital expenditure
Expenditure amounting to R7,0 million (2000: R6,9 million) has been
authorised and contractually committed. Subsequent to year-end Bearing Man
purchased land in the La Lucia Ridge Business Park at a cost of R4,9 million
for the development of head office and warehousing facilities.
Prospects
Subject to there being no change in the prevailing trading conditions,
management is confident of an improvement in earnings per share.
Share Transactions Totally Electronic ("STRATE")
The company's transition took place on 12 March 2001 and trading for
electronic settlement commenced on 2 April 2001.
Annual financial statements
The annual financial statements will be posted to shareholders on or about
25 June 2001.
For and on behalf of the board
M Rose-Innes GJ Till
Chairman Managing Director
Dividends
An interim dividend of 6 cents was declared and paid. The directors have,
subsequent to year-end, declared a dividend (number 26) of 7 cents per share
payable to shareholders registered in the books of the company at the close
of business on Friday, 1 June 2001. Dividend cheques will be posted to
members on or about 11 June 2001.
By order of the board
DC Bassett
Company Secretary 16 May 2001
Registered office Auditors Transfer
secretaries
Bearing Man House PricewaterhouseCoopers Mercantile
Registrars Limited
105 West Street 7th Floor, 11
Diagonal Street
Durban 4001 Johannesburg
2001
Directors: -M Rose-Innes (Chairman), GJ Till (Managing), A Goldstone, DI
Samuels, RE Sherrell
Company Secretary: DC Bassett
These results are available on Bearing Man's Website - www.bearingman.co.za
