| Wed 30 May 2001, 0:00 | | Value Group Limited - Preliminary Audited Financia |
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Value Group Limited
Turnover increased by 39%
Strong operational cash flows
Net asset value increased by 20%
Preliminary audited financial results for the year ended 28 February 2001
CONSOLIDATED INCOME STATEMENT
Figures in R000 2001 2000
Revenue 325 747 233 847
Operating income before
depreciation, finance costs
and abnormal items 65 537 63 512
Depreciation 26 981 19 423
Operating income 38 556 44 089
Investment income 72 239
Finance costs 5 963 4 130
Net income before abnormal items 32 665 40 198
Abnormal items (note 2) 1 432 3 776
Net income before taxation 31 233 36 422
Taxation 10 060 10 120
Net income after taxation 21 173 26 302
Attributable to outside shareholders - 53
Earnings attributable to
ordinary shareholders 21 173 26 355
Basic earnings per share (cents) 10,2 12,7
Headline earnings per share (cents) 10,7 12,6
CONSOLIDATED BALANCE SHEET
Figures in R000 2001 2000
Assets
Non-current assets 211 489 139 678
Property, vehicles, plant
and equipment 205 444 131 787
Deferred tax 1 248 447
Investments and loans 4 797 7 444
Current assets 101 919 57 085
Total assets 313 408 196 763
Equity and liabilities
Capital and reserves 127 654 106 481
Non-current liabilities 96 687 38 087
Interest-bearing 70 170 15 419
Non-interest-bearing 6 025 7 308
Deferred tax 20 492 15 360
Current liabilities 89 067 52 195
Interest-bearing 15 202 8 561
Non-interest-bearing 73 865 43 634
Total equity and liabilities 313 408 196 763
Actual number of shares in issue 207 599 040 207 599 040
Net asset value per share (cent 61,5 51,3
CONSOLIDATED CASH FLOW
STATEMENT
Figures in R000 2001 2000
Cash flows from operating activities 48 570 44 129
Cash flows from investing activities (106 994) (63 101)
Cash flows from financing activit 62 152 15 180
Net increase/(decrease) in cash and
cash equivalents 3 728 (3 792)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Figures in R000 2001 2000
Share capital 208 208
Share premium 41 231 41 231
Balance at beginning of year 41 231 53 557
Share issue expenses
written off - (39)
Goodwill and trademarks
written off - (12 287)
Accumulated profits 86 215 65 042
Balance at beginning of year 65 042 38 687
Earnings attributable to
ordinary shareholders 21 173 26 355
Total capital and reserves 127 654 106 481
NOTES
Figures in R000 2001 2000
1. Accounting policies
The accounting policies adopted
for the purpose of this report
comply in all material respects
with South African statements of
Generally Accepted Accounting
Practice and are consistent with
the policies adopted in the
previous year.
2. Abnormal items
Write-down of carrying value of
loan to share incentive trust (3 573) -
Negative goodwill arising from
acquisition of business amortised 2 141 -
Liquidation of major customer - (3 776)
(1 432) (3 776)
3. Reconciliation between basic and
headline earnings
Basic earnings 21 173 26 355
Write-down of loan to share
incentive trust 3 573 -
Negative goodwill amortised (2 141) -
Profit on disposal of fixed
assets less taxation (483) (186)
Headline earnings 22 122 26 169
MESSAGE TO STAKEHOLDERS
Your board is pleased to announce the preliminary audited financial results
for Value Group Limited and its subsidiaries ("the Group") for the year
ended 28 February 2001.
1. Financial commentary
In the financial year under review the Group achieved revenue of
R326million, operating income of R38,6 million, earnings attributable to
ordinary shareholders of R21,2 million and headline earnings per share of
10,7 cents. When compared to the prior year revenue increased by 39%,
operating income decreased by 13% and attributable earnings declined by 20%.
Likewise, headline earnings fell by 15%.
The Group enjoyed strong organic revenue growth, enhanced by business
generated from the Rent-A-Bakkie operations acquired on 1 September 2000.
This revenue improvement has, however, been negated by the rise in fuel
prices and by staffing requirements relevant to the rapid increase in
revenue-producing business. Some pricing pressures have also become evident.
The depreciation charge has risen by some 39% as a result of the extensive
capital investment programmes undertaken over the last two years. Net
finance costs have risen by R2 million or 51% in line with the increase in
net borrowings.
The abnormal items this year reflect the write down of R3,6 million of the
loan made to the Group's share incentive trust. This was offset to an extent
by the amortisation of negative goodwill of R2,1 million arising from the
acquisition of the operations of the Rent-A-Bakkie group of companies. The
prior year's abnormal item of R3,8 million refers to the indebtedness of
Kelvinator Appliances of South Africa (Pty) Limited, which was written off
in full following that company's liquidation.
The headline earnings per share this year of 10,7 cents compares with the
12,6 cents earned in the prior year on the same number of shares in issue.
The Group has continued this year to invest in its fleet and warehousing
capabilities in order to provide a complete logistics solution to its
customers. Some R107 million has been invested in this respect, following
the R63 million invested in the prior year. This, in combination with the
increase in current assets, has lifted total assets to R313,4 million. Net
asset value per share has increased from 51,3 cents to 61,5 cents.
Gearing at the year end is 67%. The net favourable change in cash and cash
equivalents for the year is R3,7 million, with R48,5 million cash generated
from operating activities which is in line with last year's cash flows.
2. Review of business activities
- Acquisitions
The Group acquired certain assets and operations of the Rent-A-Bakkie group
of companies from the liquidators of Roadcorp Limited on 1September 2000,
whilst trade debtors were acquired on 26 August 2000. The operations had
been successfully integrated by the financial year end.
In a more recent development the Group has acquired the entire issued share
capital of Fleet Holdings (Pty) Limited from Nedcor Bank Limited on 1 March
2001 for a cash consideration not exceeding R3,5 million. The purchase
consideration represents the net asset value of Fleet Holdings and its
subsidiaries and includes approximately R75,1 million of interest-bearing
debt and R74,8 million of vehicles, plant and equipment. The acquisition
will provide medium-term benefits.
- Ongoing operations
The companies in the Group have by and large performed satisfactorily. The
logistics division whilst generating satisfactory levels of predictable
income requires an improvement in full distribution business levels.
Freightpak continues to deliver to expectation, while the vehicle rental
divisions are increasing market share.
3. Prospects
The Group foresees a return to delivering earnings growth during the
forthcoming financial year. The Group's national presence is confirmed and
the emphasis will be to aggressively increase the volumes through this
network. Furthermore, the Group is well placed to benefit from any
improvement in economic activity.
It is management's stated intention to focus on the high growth distribution
and logistics business and to strengthen our market position in transport
services. Cost control and working capital management will remain a high
priority, in order to maximise the cash flows into the Group as well as the
reduction of borrowings.
4. Dividend
In line with past practice, the Group will continue to retain earnings to
fund future expansion and to redeem borrowings. Accordingly no dividend has
been declared this year.
For and on behalf of the board
C D Stein S D Gottschalk D C Marais
(Chairman) (Chief Executive Officer) Deputy Chief Executive Officer)
29 May 2001
Value Group Limited (Incorporated in the Republic of South Africa)
(Registration number 1997/002203/06)
Directors: CD Stein* (Chairman), SD Gottschalk (CEO), DC Marais (Deputy
CEO), JM P Desmidt*, C A Dinham, BE Goldie *Non-executive director
