| Tue 21 Aug 2001, 0:00 | | Voltex - Audited Results |
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VOLTEX HOLDINGS LIMITED
("Voltex")
(Registration number 1981/006220/06)
AUDITED PROFIT ANNOUNCEMENT
for the year ended 30 June 2001
All figures in R000's
ABRIDGED GROUP INCOME STATEMENT
2001 2000
Revenue 1 506 751 1 352 507
Operating income 58 146 73 577
Income from finance activities 11 100 13 056
69 246 86 633
Exceptional items (3 437) (8 484)
Net income before taxation 65 809 78 149
Taxation 13 932 25 283
51 877 52 866
Attributable from/(to) outside shareholders 1 831 (2 769)
Attributable income 53 708 50 097
Headline earnings per share (cents) 43,26 44,65
Basic earnings per share (cents) 41,27 38,82
Diluted earnings per share (cents) 39,96 37,19
Notes:
Exceptional items consist of:
Closure and rationalisation costs in a
foreign subsidiary (1 026) (467)
Impairment of investment (2 411)
Net amortisation of negative
and positive goodwill+ (8 017)
(3 437) (8 484)
Dividends per share (cents)
- interim 7 7
- final # 13
Shares in issue (000's)
- at year end 132 592 130 243
- repurchased and held by group 859
- net shares in issue 131 733 130 243
- weighted average* 130 144 129 047
*Net of own shares held.
+Refer to the Change in Accounting Policy note.
# See Dividend note.
ABRIDGED GROUP BALANCE SHEET
2001 2000
ASSETS
Non-current assets 79 265 77 481
Property, plant and equipment 61 447 60 010
Investments 1 651 4 011
Deferred taxation 16 167 13 460
Current assets 740 432 709 337
Operating assets 558 181 545 328
Cash and cash equivalents 182 251 164 009
Total assets 819 697 786 818
EQUITY AND LIABILITIES
Capital and reserves
Ordinary shareholders' equity 540 176 491 452
Outside shareholders' interest 26 207 26 584
Total shareholders' equity 566 383 518 036
Non-current liabilities
Borrowings 1 752 613
Current liabilities 251 562 268 169
Operating liabilities 251 562 251 237
Dividends payable 16 932
Total liabilities 253 314 268 782
Total equity and liabilities 819 697 786 818
Tangible net asset value per share (cents) 397,8 367,2
ABRIDGED GROUP CASH FLOW STATEMENT
2001 2000
Cash generated by operations 60 253 87 164
Cash effects of exceptional items (526) (608
Net finance income received 11 100 13 056
Taxation paid (18 774) (43 829)
Dividends paid (26 012) (25 747)
Cash retained from operations 26 041 30 036
Investment activities
Ongoing operations (8 369) (8 892)
Expansion of operations (3 422) (4 560)
Businesses acquired (5 000)
Own shares acquired (2 275)
Net proceeds on new share issues 3 560 1 132
Liabilities raised/(repaid) 1 143 (307)
Net increase in cash and cash equivalents 16 678 12 409
- Net cash in businesses acquired (367)
- Translation gain on cash balances 1 564 704
- At beginning of year 164 009 151 263
- At end of year 182 251 164 009
Statement of changes in equity
2001 2000
Balance as previously stated 491 452 457 554
Change in accounting policy+ 2 967
491 452 460 521
Attributable earnings 53 708 50 097
Net proceeds on issue of shares 3 560 4 757
Dividends (9 081) (26 000)
Items not recognised in the income statement:
- exchange difference on translation
of foreign entity 2 812 2 077
Own shares acquired (2 275)
Balance at end of year 540 176 491 452
+Refer to the Change in Accounting Policy note.
FINANCIAL RESULTS
With headline earnings of 43,26 cents per share, the group demonstrated its
ability to perform satisfactorily in extremely difficult trading conditions
which have been prevalent in the industries within which the group has
operated since 1999.
Group turnover increased by 11,4%. The drop in operating income of 21% was
attributable to operations in the sewing machine divisions in the United
Kingdom and Morocco and the group's local strut division.
Income from finance activities was 15% lower than that of the prior year, in
line with the lower level of interest rates during the year under review.
COMMENTARY
The local electrical wholesale industry has seen margin pressure for the
last two years. The group continued the process of reorganisation and
rationalisation of the wholesale branch network. Emphasis was placed on
expense reduction and more efficient management of operating assets. This
exercise has seen the closure of a number of outlets with others being
downsized to satellites of larger branches. Simultaneously, the group has
embarked on a process of opening branches in geographical areas where it
previously had insufficient representation. These endeavours have resulted
in increased profitability in the core branch network over the previous
year. In line with our philosophy of increasing our product range, a new
specialist lighting division, Voltex Lighting, was created with the group
acquiring the moulds and dies for a substantial portion of the former U-Lite
product range.
The slowdown in major building projects such as casino resorts, hospitals
and factories impacted negatively on the group's strut division. In
addition, intense competition within this sub-industry affected margins to a
greater degree. Management has reacted to the situation and is confident
that the division will be restored to profitability in the forthcoming
financial year.
Berzack South Africa exceeded last year's achievements in the fields of
industrial sewing machines and small electrical appliances. The world-wide
launch of the revamped Moulinex and Krups brand of products has stimulated
greater demand for these consumer ranges and sales are at a satisfactory
level.
In the United Kingdom, the clothing industry entered a severe recessionary
stage with most manufacturers opting to relocate to Asia and North Africa.
Eastman Staples, the group's subsidiary, has itself undergone major
reorganisation. The relatively new operation in Morocco is now expected to
contribute to earnings in 2002, following losses in the current financial
year. The polythene and computer divisions, as well as certain loss-making
operations in London and Belfast, were closed during the financial year.
OUTLOOK
The group believes that the potential in the South African economy will
begin manifesting itself in the forthcoming financial year. An encouraging
development is the introduction of the Regional Electricity Distributors
which should ensure that electricity reticulation programmes are instituted
nation-wide. The group's strategically located outlets are in a position to
supply the product needed in both the installation and secondary phases of
this project.
Flexibility has always been a feature of the Voltex group. In the ever-
changing dynamics of doing business in Southern Africa, the group has
recognised this factor well in advance and has realigned its operations
accordingly. The continuing reorganisation and rationalisation of our
infrastructure reinforces our ability to meet all aspects of the changing
needs of our customers. The group is still strongly cash positive. Numerous
potential acquisition alternatives have and will continue to become
available. The group expects to conclude a number of these smaller
negotiations in the near future.
CHANGE IN ACCOUNTING POLICY
The change in accounting policy arose from the adoption of AC131 Business
Combinations. Goodwill is amortised on a straight line basis over the
estimated useful life. Negative goodwill not exceeding the fair values of
non-monetary assets acquired is recognised in the income statement over the
weighted average useful life of the assets. Comparative figures have been
adjusted accordingly. Current year results were unaffected.
DIVIDENDS/PROPOSED CAPITAL REDUCTION
Subject to the passing of the required special resolution to be proposed at
the forthcoming annual general meeting of shareholders, and the prior
approval of the JSE Securities Exchange South Africa, the directors of the
company propose to pay by way of a reduction of share capital or share
premium, in lieu of a dividend, an amount equal to the amount which the
directors of the company would have declared and paid out of profits in
respect of the company's final dividend for the financial year ending 30
June 2001.
ANNUAL REPORT
The annual report and financial statements of Voltex for the year ended 30
June 2001 will be posted to shareholders at or about the end of September
2001.
By order of the board
Myron Berzack (Chairman)
21 August 2001
Transfer secretaries
Mercantile Registrars Limited
11 Diagonal Street, Johannesburg, 2001
Executive Directors: MC Berzack (Chairman), RM Berzack, S Green,
EGImmermann.
Non-Executive Directors: SH Illman, B Joffe, JL Pamensky, GM Rochussen, DK
Rosevear, GM Scrutton, T Sexwale, MJ Steele, RE Venter, Dr WPVenter.
