| Tue 10 Jul 2001, 0:00 | | Hudaco - Interim Results |
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Hudaco
Interim Group Results for the six months ended 31 May 2001
- Headline EPS up 18%
- Acquisition of security products distributor completed
A network of branches and distributors throughout Southern Africa serves the
replacement market in virtually every sector of Southern Africa's primary
and secondary industries.
RESULTS
Hudaco's traditional businesses produce acceptable rates of return and are
highly cash generative as they operate in mature markets. Hudaco has
resolved to deploy this cash in faster growing areas and the investment in
Elvey Security Technologies ("Elsec") in March 2001 is the first step in
this strategy. Elsec, a leading South African distributor of alarm and CCTV
monitoring equipment is achieving sales growth of 35% this year and its
positive growth potential is expected to impact increasingly on Hudaco's
future results.
Turnover grew 9,6%, mainly due to the inclusion of Elsec for three months.
Operating profit grew by 26,8% due to a slightly higher gross profit margin,
a lower expense to sales ratio and to the inclusion of Elsec. The operating
profit margin improved to 6,4% compared with 5,6% last year. Net financing
costs were R2,2 million ahead of the R1,5 million last year, mainly as a
result of the reduction in cash balances after the investment of R48 million
in Elsec. The tax rate rose from 24% to 30%.
Headline earnings per share at 62,6 cents are 18% ahead of last year, a
pleasing result which follows a 20% increase last year. The capital
repayment to shareholders has been increased by 16% to 22 cents per share.
BALANCE SHEET
Total assets increased from R569 million at November 2000 to R617 million,
mainly as a result of the inclusion of the assets of Elsec which was
acquired at a cost of R48 million including goodwill of R19 million. Gearing
(based on net borrowings) is a healthy 9,6%.
PROSPECTS
It is anticipated that trading conditions in Hudaco's traditional markets
will remain weak for the remainder of this financial year but there are
signs of improvement in 2002 and beyond. In the short term, Hudaco
businesses serving these markets are expected to continue to produce
acceptable returns on assets employed and generate strong cash flow. Elsec
is expected to continue to grow strongly and to make an increasing
contribution to Hudaco's earnings base.
Headline earnings per share for the 2001 financial year are expected to
increase at the same rate as the first half.
notice of capital repayment
Notice is hereby given that interim capital repayment No 4 to shareholders
of 22 cents per share in respect of the six months ended 31 May 2001 has
been declared from the special reserve (formerly the share premium account)
leaving a balance of 47 cents per share in the reserve.
The last day to trade ("cum" the capital repayment) in order to participate
in the capital repayment will be Friday, 10 August 2001. The share will
commence trading "ex" the capital repayment from the commencement of
business on Monday, 13 August 2001 and the record date will be Friday, 17
August 2001. The capital repayment will be made on Monday 20 August 2001.
The capital repayment is freely remittable to non-resident shareholders
except for emigrant shareholders (an emigrant from South Africa who resides
outside the common monetary area) where the capital repayment will be
regarded as blocked assets in terms of a ruling by the Exchange Control
Department of the South African Reserve Bank.
For and on behalf of the Board
PL Campbell SJ Connelly
Chairman Chief Executive
10 July 2001
Transfer secretaries
Computershare Services Limited
PO Box 61051 Marshalltown 2107
Registered office
Hudaco Park 190 Barbara Road Tel (011) 345 8200
Elandsfontein 1406 Fax (011) 392 2740
E-mail info@hudaco.co.za
Directors
PL Campbell* (Chairman) SJ Connelly (Chief Executive)
AJ Behrmann* GE Gardiner JB Gibbon* MS Jolly
PG Joubert* A Keschner SP Makins PM Poole
*Non-executive
Secretary
RGL Arnestad
GROUP INCOME STATEMENT
Six months ended Year ended
Unaudited 31 May 31 May 30 Nov
R million 2001 2000 2000*
Turnover 462,6 9,6% 422,1 908,3
Ongoing operations 427,4 1,3% 422,1 908,3
Acquisitions in 2001 35,2
Cost of sales 298,3 274,1 577,0
Gross profit 164,3 148,0 331,3
Operating expenses 134,5 124,5 258,8
Operating profit 29,8 26,8% 23,5 72,5
Ongoing operations 26,8 14,0% 23,5 72,5
Acquisitions in 2001 3,0
Capital items written off 1,0
Profit before interest 28,8 23,5 72,5
Net finance costs 2,2 1,5 1,9
Profit before taxation 26,6 22,0 70,6
Taxation 8,3 5,3 17,4
Profit after taxation 18,3 16,7 53,2
Share of associate company profits 0,9 1,2 2,3
Attributable to outside shareholders (2,8) (1,9) (4,7)
Profit attributable to shareholders 16,4 16,0 50,8
Add back capital items 1,0
Headline earnings 17,4 8,8% 16,0 50,8
Headline earnings per share (cents) 62,6 18,1% 53,0 171,1
Basic earnings per share (cents) 58,8 53,0 171,1
Diluted earnings per share (cents) 57,5 51,6 166,9
Capital repayments to shareholders
- Per share (cents) 22,0 15,8% 19,0 57,0
- Amount (Rm) 6,1 5,8 16,4
Shares in issue 27 916 30 339 27 865
- Total (000) 30 424 30 339 30 353
- Held by subsidiary company (000) (2 508) (2 488)
Weighted average shares in issue
- Basic (000) 27 857 30 241 29 682
- Diluted (000) 28 502 31 078 30 436
GROUP BALANCE SHEET
Unaudited 31 May 30 Nov
R million 2001 2000*
ASSETS
Non-current assets 88,1 66,7
Property, plant and equipment 43,1 41,3
Deferred taxation - net 1,4 1,5
Investment in associate 24,4 23,9
Goodwill 19,2
Current assets 528,7 502,0
Inventories 266,8 244,0
Accounts receivable 188,1 178,1
Bank deposits and balances 73,8 79,9
TOTAL ASSETS 616,8 568,7
EQUITY AND LIABILITIES
Equity 327,4 314,6
Shareholders' equity 292,5 282,1
Outside shareholders' interest 34,9 32,5
Non-current liabilities
Interest-bearing debt 50,5 50,8
Current liabilities 238,9 203,3
Accounts payable 168,1 176,7
Taxation 13,4 15,6
Interest-bearing debt 51,3 0,3
Capital repayments due to shareholders 6,1 10,7
TOTAL EQUITY AND LIABILITIES 616,8 568,7
GROUP CASH FLOW STATEMENT
Six months ended Year ended
Unaudited 31 May 31 May 30 Nov
R million 2001 2000 2000*
Cash generated from trading 34,2 29,1 82,8
Cash (invested) in working capital (13,8) 4,6 (3,5)
Cash generated from operating activities 20,4 33,7 79,3
Finance cost (2,2) (1,5) (1,9)
Taxation paid (11,1) (10,0) (16,4)
Cash flow from operations 7,1 22,2 61,0
Cash capital repayments to shareholders (10,6) (8,7) (16,9)
Net cash (utilised) retained (3,5) 13,5 44,1
Investment in new operations (48,1)
Net investment in fixed assets (5,5) (4,3) (7,2)
Net cash invested (53,6) (4,3) (7,2)
CASH (required) RETAINED (57,1) 9,2 36,9
Issue of shares 0,3 0,8 0,8
Shares repurchased by subsidiary company (0,2) (21,3)
(DECREASE) INCREASE IN NET CASH (57,0) 10,0 16,4
GROUP STATEMENT OF CHANGES IN EQUITY
Six months ended Year ended
Unaudited 31 May 30 Nov
R million 2001 2000*
Equity at beginning of period 282,1 268,2
Attributable profit for the period 16,4 50,8
Capital transactions with and
capital repayments to shareholders (6,0) (36,9)
Share issues 0,3 0,8
Shares repurchased by subsidiary company (0,2) (21,3)
Capital repayments to shareholders (6,1) (16,4)
Equity at the end of the period 292,5 282,1
Supplementary Information
These results were prepared applying accounting policies which are
consistent with those applied in the most recent annual financial statements
and which conform with the South African Statements of Generally Accepted
Accounting Practice.
Six months ended Year ended
Unaudited 31 May 31 May 30 Nov
R million 2001 2000 2000*
Average net operating assets (Rm) 312,8 303,7 284,7
Operating profit margin (%) 6,4 5,6 8,0
Average NOA turn (times) 3,0 2,8 3,2
Return on average NOA (%) 18,4 15,5 25,5
Depreciation (Rm) 5,2 5,3 10,3
Interest cover by operating profit (times) 13,1 15,7 39,1
Gearing - net (%) 9,6 nil nil
Net asset value per share (cents) 1 048 939 1 012
Capital expenditure
- Spent during the year (Rm) 5,5 5,0 13,3
- Budgeted for second half of the year (Rm) 8,5 9,1
Net (borrowings)/cash comprises (Rm) (28,0) 22,3 28,8
- Bank call deposits and balances 73,8 75,6 79,9
- Interest-bearing debt - Non-current (50,5) (50,5) (50,8)
- Current (51,3) (2,8) (0,3)
Operating lease commitments
- Property (Rm) 24,4 29,1 26,1
Capital items written off (Rm) 1,0
Amortisation of goodwill 0,5
Other 0,5
The contingent liability of R3,9 million noted in the November 2000 annual
report has fallen away as the action was withdrawn during trial.
SEGMENTAL ANALYSIS
Turnover Operating profit
Year Year
Six months ended ended Six months ended ended
Unaudited 31 May 31 May 30 Nov 31 May 31 May 30 Nov
R million 2001 2000 2000* 2001 2000 2000*
Industrial motion
products 266,6 259,2 554,4 18,8 17,1 45,1
Powered
products 103,3 104,8 223,2 7,9 5,6 18,4
Automotive
products 58,9 60,0 133,0 1,8 1,8 11,6
Security products
(three months) 35,2 3,0
Internal/Head
office (1,4) (1,9) (2,3) (1,7) (1,0) (2,6)
462,6 422,1 908,3 29,8 23,5 72,5
Average net
Operating assets (NOA)
Unaudited 31 May 31 May 30 Nov
R million 2001 2000 2000*
Industrial motion
products 175,3 86,0 172,8
Powered
products 65,0 75,4 68,7
Automotive
products 59,5 52,5 52,9
Security products
(three months) 22,6
Internal/Head
office (9,6) (10,2) (9,7)
312,8 303,7 284,7*
Audited
Hudaco Industries Limited Reg no 1985/004617/06
These results are available on the Internet at www.hudaco.co.za
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industrial motion products
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Importer and distributor of world-class oilseals, hydraulic, pneumatic and
rotary shaft seals.
Bearings International
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and seals and provides value-adding customer services such as supply chain
optimisation, inventory management and product training.
Belting Supply Services
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BEP Bestobell
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Bosworth
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Ernest Lowe
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Mather + Platt
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residential, industrial and agricultural pumps and Mather + Platt
pumps/spares.
Valard Bearings
Valard Bearings - specialising in repair and manufacture of whitemetal
bearings.
Vivian Regina
Manufactures glass fibre tissues for the glass reinforced plastics,
waterproofing, lead acid battery and pipeline protection markets.
POWERED PRODUCTS
Deutz Dieselpower
Marketing and servicing of Deutz diesel engines and spares.
Rutherford
Sole distributor of Makita industrial power tools, Mercury and Mariner
outboard engines and accessories, Topcon and Ashtech survey and GPS
equipment.
SECURITY PRODUCTS
Elvey Security Technologies
Africa's leading service provider of electronic security systems to the
security industry, through distribution, training and technical support.
AUTOMOTIVE PRODUCTS
Angus Hawken
Manufacturer of rotary shaft and pneumatic seals in NBR, Viton and Silicone
compounds.
Hudaco Friction
Manufacturers and distributors of quality passenger and commercial vehicle
disc pads and linings to vehicle manufacturers, replacement and export
markets.
PHC Clutch
Distributes the Valeo brand of light and medium duty clutches.
