| Wed 16 May 2001, 0:00 | | Hunt Leuchars & Hepburn - Audited Financial Result |
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HUNT LEUCHARS & HEPBURN HOLDINGS LIMITED
("HL&H")
Registration number 1924/001164/06
HUNT LEUCHARS & HEPBURN: AUDITED FINANCIAL RESULTS
HUNT LEUCHARS & HEPBURN HOLDINGS LIMITED
("HL&H")
Registration number 1924/001164/06
AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2001
HIGHLIGHTS
Revenue up 16%
Operating profit up 15%
Headline earnings - diluted up 1%
Headline earnings per share - diluted up 1%
INCOME STATEMENT
March March
(Rms) 2001 2000
Revenue 2 996,9 2 582,7
Operating profit 336,1 292,2
Exceptional items 5,1 -
Profit before interest and taxation 341,2 292,2
Interest received 14,8 20,5
Interest paid (53,3) (33,7)
Share of loss of associates (0,1) (0,6)
Profit before taxation 302,6 278,4
Taxation 90,0 75,2
Profit after taxation 212,6 203,2
Preference dividends (52,8) (52,8)
Minorities (6,8) (6,2)
Net profit 153,0 144,2
BALANCE SHEET
(Rms)
Assets
Property, plant, vehicles,
equipment and plantations 1 485,7 1 440,9
Associate companies and investments 9,9 13,2
Current assets 1 181,3 864,4
Total assets 2 676,9 2 318,5
Equity and liabilities
Ordinary share capital 421,9 420,0
Non-distributable reserves 323,9 243,8
Retained earnings 744,0 621,4
Convertible debentures and
loan accounts 40,5 40,5
Convertible preference share capital 166,8 166,8
Total shareholders' equity 1 697,1 1 492,5
Minority interest 15,3 12,4
Interest bearing borrowings 299,5 276,8
Non-interest bearing liabilities 665,0 536,8
Total equity and liabilities 2 676,9 2 318,5
Net asset value
per ordinary share (cents) 678,4 586,2
STATEMENT OF CHANGES IN EQUITY
Ordinary Non- dis Preference
share tributable Retained share
(Rms) capital reserves earnings Debentures capital
Total
Balances at
1 April 2000 420,0 243,8 621,4 40,5 166,8 1
492,5
Issue of share capital 1,9 1,9
Share of
joint venture profits 23,5 (23,5)
Foreign currency
translation 56,3 56,3
Share of associate
companies' loss (0,1) 0,1
Dividends paid (6,6)
(6,6)
Other 0,4 (0,4)
Net profit 153,0
153,0
Balances at
31 March 2001 421,9 323,9 744,0 40,5 166,8 1
697,1
CASH FLOW STATEMENT
March March
(Rms) 2001 2000
Net cash inflow from operating activities 189,7 196,7
Net cash outflow from investing activities (105,3) (144,9)
Net cash (outflow)/inflow from
financing activities (4,8) 5,6
Net increase in cash and cash equivalents 79,6 57,4
HEADLINE EARNINGS AND SEGMENTAL ANALYSIS
March March
(Rms) 2001 2000
Net profit 153,0 144,2
Headline adjustments:
Expenses related to the
TSB/Tongaat-Hulett merger negotiations 4,3
Profit on disposal of property, plant,
equipment and investments (11,3) (0,5)
Headline earnings 146,0 143,7
Dilution adjustments:
Interest on debentures, after taxation 2,4 2,4
Preference dividends 52,8 52,8
Headline earnings - diluted 201,2 198,9
Segmental contribution:
Robertsons 166,1 143,5
TSB 34,7 48,9
Corporate 0,4 6,5
201,2 198,9
STATISTICS AND SUPPLEMENTARY INFORMATION
March March
2001 2000
Per share information
Weighted average number of
ordinary shares (000's) 221 283 220 526
- diluted (000's) 351 642 350 885
Basic earnings per
ordinary share (cents) 69,1 65,4
- diluted (cents) 59,2 56,8
Headline earnings per
ordinary share (cents) 66,0 65,2
- diluted (cents) 57,2 56,7
Supplementary information (Rms)
Depreciation 120,8 106,5
Capital expenditure 132,9 146,8
Capital commitments
- Contracted 20,6 28,7
- Authorised but not contracted 63,1 48,1
Dividends received 0,2 1,0
Operating lease commitments
- following year 23,3 21,3
- thereafter 64,0 36,3
Contingent liabilities 15,9 8,4
Interest capitalised 4,0
Investments and associate companies
- Unlisted: Directors' valuation 11,8 15,0
COMMENTS
Results
Transvaal Sugar Limited (TSB) increased revenue by 18% despite low
realisation prices of sugar which prevailed during the year and Robertsons
by 15% in spite of some business disruption in Israel. This resulted in
total Group revenue increasing by 16% over the previous year. Group
operating profit grew by 15%, reflecting strengthening margins in Robertsons
under difficult circumstances, with TSB's margins being affected by the loss
in its citrus operations.
Net financing costs increased during the year due to the impact of the
funding of the expansions to the sugar mills at TSB, while both TSB and
Robertsons generated cash during the year, which reduced the overall
increase. This meant that the resultant profit after interest and before tax
increased by only 9%.
The Group's diluted headline earnings (before preference dividends and
debenture interest) amounted to R201,2 million, an increase of 1% over the
R198,9 million achieved last year. The contribution from Robertsons was
R166,1 million, an increase of 16% despite margins in Israel being lower
than the previous year and the growth in insecticide sales in South Africa
not reaching last year's level, due to the prevailing climatic conditions.
TSB's headline earnings of R34,7 million fell by R14,2 million from the
previous year due largely to increased financing costs and losses incurred
in the citrus operations. Diluted headline earnings per share of 57,2 cents
compares to 56,7 cents achieved last year, an increase of 1%.
As a result of the above, the Group reports an increase in headline earnings
of 2% to R146 million for the year to 31 March 2001.
Balance sheet
The Group has sufficient cash available to eliminate interest bearing
borrowings, resulting in a positive cash to equity ratio of 2% (2000 - debt
to equity ratio of 1%), after taking account of cash resources on hand of
R335,3 million (2000 - R256,9 million).
Dividends
A preference dividend of 21,7 cents per preference share was paid in
November 2000 in respect of the period from 1 April 2000 to 30 September
2000. A final preference dividend of 21,7 cents per preference share in
respect of the period from 1 October 2000 to 31 March 2001 was declared
payable to shareholders registered as such at the close of business on
Friday, 18 May 2001 for payment by Wednesday, 30 May 2001.
An interim dividend of 3 cents per ordinary share was paid in December 2000.
The Board has declared a final ordinary dividend of 4,2 cents per share,
payable to ordinary shareholders registered as such at the close of business
on Friday, 1 June 2001. Dividend cheques will be posted to shareholders on
or about Tuesday, 12 June 2001.
Developments
* It was announced to shareholders that HL&H and The Tongaat-Hulett Group
(Tongaat) were in negotiations with regard to the acquisition by Tongaat of
TSB from HL&H. These discussions continued to the end of June 2000, when
agreement was reached on the terms and conditions of the transaction.
Approval was then sought from the Competition authorities, but their
ultimate ruling was a prohibition of the transaction. Discussions were then
terminated and shareholders were advised accordingly.
* At the same time that the above negotiations were commenced, it was
announced that Industrial Partnership Investments Limited (IPI), a
subsidiary of Remgro Limited, would consider proposing schemes of
arrangement in terms of section 311 of the Companies Act, 1973 (Act 61 of
1973), as amended, to acquire the HL&H ordinary and preference shares held
by minority members, on the final completion of the TSB/Tongaat transaction.
As a result of the transaction not being permitted, these proposals were
withdrawn.
TSB's management is now able to focus their attention on extracting maximum
value from the company's operations.
* As a consequence of Unilever's acquisition of Bestfoods' world-wide
interests, the position in Africa and Israel, the Bestfoods Joint Venture
territory, is being reviewed with Unilever. Shareholders will be advised in
due course of the outcome of these discussions.
Prospects
Robertsons has once again grown its business under difficult circumstances
and expects further growth for the coming year in all its operations.
At TSB profitability in recent years has been impacted by low world sugar
prices. With the current price levels having recovered to around 8 - 9 US
cents per pound, maintenance at this level together with the current Rand/$
exchange rate, will be favourable for TSB. In addition, the recent
investments in further capacity, the improvement in long-term water
resources available in the area, an advantage in cost competitiveness, and
an indication of a significant turnaround from last year's disappointing
performance of the citrus business, make the outlook for TSB much more
promising.
From a Group perspective, given the outlook for both Robertsons and TSB,
growth in earnings and earnings per share in real terms is expected for the
coming year.
Directors' statement
The accounting policies in respect of the financial year ended 31 March 2000
have been consistently applied to the results for the year ended 31 March
2001. These policies conform with South African statements of Generally
Accepted Accounting Practice.
On behalf of the Board
B H de Klerk
Secretary
15 May 2001
Enquiries regarding this report may be directed to Mr N Phillips
at telephone number (031) 561-4690.
Registered office:
Hunt Leuchars & Hepburn Holdings Limited, 1st Floor, Kohler House, 4 Pybus
Road, Wierda Valley, Sandton 2196
Transfer secretaries:
Fraser Street Registrars (Pty) Limited, Ground Floor, Sage Centre, 10 Fraser
Street, Johannesburg 2001
