| Mon 27 Aug 2001, 0:00 | | Dunlop Africa Limited - Interim Results |
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DUNLOP AFRICA LIMITED
(Incorporated in the Republic of South Africa)
(Reg. No. 1939/012141/06)
Share code: ("DNL")
ISIN code: ZAE000029542
* REVENUE UP 13.0%
* OPERATING PROFIT UP 34.9%
* HEADLINE EARNINGS PER SHARE UP 21.1%
INTERIM REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2001
INCOME STATEMENT
Restated Unaudited
Year ended six months
31 Dec ended 30 June
2000 2001 Change 2000
Rm Rm % Rm
1 004.7 Revenue 551.0 13.0 487.7
75.8 Net operating profit 51.4 34.9 38.1
Continuing operations
69.1 - Tyres and Industrial Products 47.7 25.2 38.1
3.8 - LTG Contract (China) 4.8 -
0.5 Investment income - -
Profit on sale of property,
0.6 plant and equipment 0.7 -
Revaluation of forward exchange
1.8 contracts (1.8) -
(6.7) Net financing costs (6.2) (2.1)
69.1 Profit before exceptional items 45.2 25.6 36.0
(5.8) Exceptional items (3.7) -
- Restructuring costs (2.8) -
(4.1) Investments -
fair value adjustment (0.9) -
(1.7) Impairment losses - -
63.3 Profit before taxation 41.5 36.0
(15.3) Taxation (12.7) (10.3)
48.0 Net profit after taxation 28.8 12.1 25.7
(0.1) Preference dividends - -
Net profit attributable to ordinary
47.9 shareowners 28.8 12.1 25.7
FINANCIAL RATIOS AND STATISTICS
135.5 Number of ordinary shares
in issue (millions) 135.5 135.5
135.5 Weighted number of
ordinary shares (millions) 135.5 135.5
35.4 Basic earnings
per ordinary share (cents) 21.3 12.1 19.0
39.0 Headline earnings
per ordinary share (cents) 23.0 21.1 19.0
20.0 Dividends per
ordinary share (cents) 10.5 10.5 9.5
12.0 Dividends per preference
share (cents) 6.0 6.0
1.8 Dividend cover (times) 2.0 2.0
DETERMINATION OF HEADLINE EARNINGS
Net profit attributable
47.9 to ordinary shareowners 28.8 25.7
- Restructuring costs 2.0 -
1.2 Impairment losses - -
Profit on sale of property,
(0.4) plant and equipment (0.5) -
4.1 Investments - fair
value adjustment 0.9 -
52.8 Headline earnings 31.2 25.7
SEGMENTAL REPORTING
Revenue by product type
June 2001
Tyres 77%
Industrial Products 23%
June 2000
Tyres 75%
Industrial Products 25%
Revenue by sales destination
June 2001
South Africa 66%
Rest of Africa 13%
Europe 9%
The Americas 11%
Other 1%
June 2000
South Africa 73%
Rest of Africa 8%
Europe 7%
The Americas 11%
Other 1%
BALANCE SHEET
Restated Unaudited six months
Year ended ended 30 June
31 Dec Restated
2000 2001 2000
Rm Rm Rm
ASSETS
303.1 Property, plant and equipment 308.2 309.1
82.8 Investments 81.5 77.6
199.2 Inventories 245.6 164.0
223.7 Trade and other receivables 243.6 240.2
39.2 Cash at bank 34.4 73.0
462.1 Total current assets 523.6 477.2
848.0 913.3 863.9
EQUITY AND LIABILITIES
490.6 Shareowners' equity 505.1 482.8
44.8 Deferred taxation 46.8 41.6
78.9 Interest bearing borrowings 82.9 68.0
233.7 Current interest
free liabilities 278.5 271.5
848.0 913.3 863.9
OTHER SALIENT FEATURES
362.1 Net asset value
per share (cents) 372.8 356.3
3.9 Average gearing (%) 8.9 -
51.2 Capital expenditure (Rm) 27.5 23.3
Capital commitments (Rm)
8.1 - approved and contracted 46.1 17.3
141.8 - approved not contracted 80.1 9.1
42.0 Depreciation (Rm) 22.0 20.7
CASH FLOW STATEMENT
Cash flow from operating activities
47.5 Cash available from operating
activities 31.3 52.4
(27.2) Dividends paid (14.3) (14.4)
20.3 17.0 38.0
Cash flows from investing
activities
(51.2) Investment in property, plant
and equipment (27.5) (23.3)
- Investment in subsidiary (0.7) -
Proceeds on disposal of property,
1.6 plant and equipment 1.2 0.6
(26.3) Intercompany indebtedness 1.2 (21.9)
(75.9) (25.8) (44.6)
Cash effects of financing activities
(7.3) Net loans repaid (1.2) (3.0)
(62.9) Net cash outflow (10.0) (9.6)
STATEMENT OF CHANGES IN EQUITY
138.3 Share capital and premium 138.3 138.3
92.1 Non distributable
reserves - opening 10.9 92.1
(33.9) Property revaluation reversal - (33.9)
(53.0) Deconsolidation of subsidiaries - (53.0)
5.7 Other - 5.7
10.9 Non distributable
reserves - closing 10.9 10.9
259.3 Distributable reserves - opening 341.4 259.3
47.9 Net profit 28.8 25.7
(27.2) Dividends (14.3) (14.4)
68.1 Deconsolidation
of subsidiaries - 68.1
(0.4) Prior year adjustments - (0.4)
(6.3) Other - (4.7)
341.4 Distributable reserves - closing 355.9 333.6
490.6 Shareowners' equity 505.1 482.8
REVIEW OF GROUP RESULTS
Dunlop Africa Ltd has recorded strong growth in revenue and earnings in the
six months to 30 June 2001. Revenue increased 13% to R551m whilst net
operating profit increased by 34.9%.
Headline earnings per ordinary share increased by 21.1%.
The Group has continued with its policy of not consolidating results from
its investments in Zimbabwe and Zambia. These investments, together with
Dunlop Nigeria PLC, all recorded improved results for the period.
Despite an increase in current assets, the balance sheet remains strong
although average gearing has increased to 8.9%. The higher level of
inventories at end June has since reduced, following a strong export
performance from Dunlop Tyres (Pty) Limited.
Capital expenditure of R126.2m has been approved and benefits are expected
from early 2002. These projects will be funded from own resources and
banking sector borrowings.
Review Of Trading Performance
Tyres Division
Dunlop Tyres (Pty) Limited (South Africa) increased revenue and earnings in
the six month period assisted by improved local and export demand. The
stronger acceptance of the Dunlop brand and of the Dunlop product as a top
quality product has assisted this operation.
The earnings from our UK based operations performed in line with
expectations. Raw material trading benefited from higher activity levels at
Dunlop Nigeria's Lagos plant. LTG project warranties were released to profit
following compliance with remaining warranty obligations.
Industrial Products Division
The performance continued to be unacceptable, although the order intake was
above last year. Recent management changes should assist the turn around of
this division.
Investments
No dividends were received during the period under review from Dunlop
Zimbabwe Limited, National Tyre Services Limited, Dunlop Zambia Limited or
Dunlop Nigeria PLC.
- National Tyre Services Limited (Zimbabwe) (38% shareholding)
This operation performed strongly under difficult circumstances. An
exclusive Bandag franchise, together with a new retreading plant in both
Harare and Bulawayo, will enhance returns in the future. The Group has since
increased its shareholding in this company from 38% to 45%. An interim
dividend is expected in the second half.
- Dunlop Zimbabwe Limited (75% shareholding)
Revenue and earnings improved in the period off a low base. Options to
refinance the business in the second half, to strengthen the balance sheet,
are being considered.
- Dunlop Nigeria PLC (25% shareholding)
Results to June have shown a strong improvement over the prior period and
this company will post a turnover increase of 25% and an attributable profit
improvement of over 100%, which is a result of the benefits of on-going
restructuring, repositioning programs and productivity increases. More
reliable electrical power has also assisted. Dividends are expected in the
second half of 2001, based on the 2000 results.
- Dunlop Zambia Limited (100% shareholding)
Following the increase of shareholding from 57% to 100% the business has
been restructured. Distribution has been outsourced and the company will be
reduced to a property owning shell.
Prior Year Adjustments
Comparative figures have been adjusted for the following prior year
adjustments where appropriate:
- changes in accounting policy arising from the adoption of standard AC 107
(events after the balance sheet date) and AC 116 (employee benefits).
Earnings in the current and prior year are unadjusted as the impact is not
material.
- the application of a commercial exchange rate to value the Zimbabwean
investments at 31 December 2000 which increased the write down thereof by
R6.3m. The commercial rate has been deemed more appropriate as it has since
emerged as a more realistic, and unfortunately more permanent, indicator
than the official rate of exchange used previously.
Prospects
The directors are pleased with the Group's performance and expect a
continued growth pattern in the next period.
Dividend
The board has declared an interim dividend of 10.5 cents per ordinary share
(2000: 9.5c).
On behalf of the board
M.E. King M.J. Hankinson
Chairman Chief Executive
Durban
Declaration of Ordinary Dividend No. 100
Notice is hereby given that an interim ordinary dividend (No. 100) of 10.5
cents per ordinary share has been declared to ordinary shareowners, for the
six months ended 30 June 2001.
The last day of trade ("cum" the dividend) in order to participate in the
dividend will be Friday, 14 September 2001. The company's ordinary shares
will commence trading "ex" the dividend from the commencement of business on
Monday, 17 September 2001 and the record date will be 21 September 2001.
The dividend will be payable on 28 September 2001.
By order of the board
A.D. Baxter
Secretary 27 August 2001
Directors
M.E. King* (Chairman), M.J. Hankinson (Chief Executive), R.K. Braithwaite,
M.J. Cvitanich, P.J. Dreyer, E.Ellerine*, J.E. Newbury*, R.H. Pender*, E.
Stals*, D.S. Mathews** (Zimbabwean), S.K. Mota** (Lesotho).
*Non-Executive **Alternate
Registered Office Postal Address
265 Sydney Road, Durban, 4001 PO Box 925, Durban, 4000
E-mail: abaxter@dunlop.co.za
Website: www.dunloptyres.co.za
Transfer Secretaries
Mercantile Registrars Limited, 11 Diagonal Street, Johannesburg, 2001
PO Box 1053, Johannesburg, 2000.
WHALLEY & ASSOCIATES
ADVERTISING * MARKETING
63 Windermere Road Morningside
Durban 4001 South Africa
PO Box 50671 Musgrave 4062
Tel (031) 3032871 Fax (031) 3128783
E-mail: info@whalley.co.za
ISDN: (031) 3130325
