| Wed 29 Aug 2001, 0:00 | | Trencor Limited - Interim Results |
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TRENCOR LIMITED
REG NO 1955/002869/06
TRE ZAE000007506
MOBILE INDUSTRIES LIMITED
REG NO 1968/014997/06
MOB ZAE000004602 MOBD ZAE000004610 MBN ZAE000012274
INTERIM RESULTS
FOR THE TWELVE MONTHS ENDED 30 JUNE 2001
The unaudited results for the twelve months ended 30 June 2001, and
comparative figures, are as follows:
ABRIDGED INCOME STATEMENTS
TRENCOR
12 months ended 30 June 2001
Enterprise
Continuing Discontinuing as a whole
R Million
REVENUE
(INCLUDING EXCHANGE GAINS) 1 963,6 71,9 2 035,5
INCOME/(LOSS)
BEFORE ITEMS LISTED BELOW: 328,3 (10,3) 318,0
EXCHANGE GAINS INCLUDED IN REVENUE 573,0 - 573,0
LONG-TERM RECEIVABLE REVALUATION
ADJUSTMENT (198,0) - (198,0)
EMPLOYEE RETRENCHMENT COSTS - (0,2) (0,2)
IMPAIRMENT OF FIXED ASSETS - (2,4) (2,4)
RECOVERY ON DISPOSAL/(WRITE DOWN)
OF INVENTORY - 12,6 12,6
LEASES AND OTHER COMMITMENTS - (1,2) (1,2)
INCOME/(LOSS) FROM OPERATIONS 703,3 (1,5) 701,8
NET INTEREST EXPENSE (280,6) - (280,6)
422,7 (1,5) 421,2
ATTRIBUTABLE (LOSS)/INCOME
OF ASSOCIATE COMPANIES:
FROM CONTINUING OPERATIONS (22,4) - (22,4)
FROM DISCONTINUING OPERATIONS - - -
INCOME/(LOSS) BEFORE TAXATION
AND ABNORMAL ITEMS 400,3 (1,5) 398,8
ABNORMAL ITEMS (NOTE 2) 152,6 - 152,6
INCOME/(LOSS) BEFORE TAXATION 552,9 (1,5) 551,4
TAXATION 77,7 (0,5) 77,2
INCOME/(LOSS) AFTER TAXATION 475,2 (1,0) 474,2
OUTSIDE SHAREHOLDERS' INTEREST 41,4 - 41,4
NET INCOME/(LOSS)
ATTRIBUTABLE TO SHAREHOLDERS 433,8 (1,0) 432,8
NUMBER OF SHARES IN ISSUE (MILLION) 152,8
UNDILUTED EARNINGS/(LOSS) PER SHARE (CENTS) 283,2
DILUTED EARNINGS/(LOSS) PER SHARE (CENTS)
(NOTE 3) 244,6
UNDILUTED HEADLINE EARNINGS PER SHARE (CENTS)
(NOTE 3) 183,0
DILUTED HEADLINE EARNINGS PER SHARE (CENTS) (NOTE 3) 160,1
PERIOD-END RATE OF EXCHANGE: SA RAND TO US DOLLAR 8,07
ABRIDGED INCOME STATEMENTS
TRENCOR MOBILE
Year ended 30 June 2000
Enterprise
Continuing Discontinuing as a whole
R Million Audited
REVENUE (INCLUDING EXCHANGE GAINS) 1 676,3 103,6 1 779,9
INCOME/(LOSS)
BEFORE ITEMS LISTED BELOW: 348,8 (78,4) 270,4
EXCHANGE GAINS INCLUDED IN REVENUE 346,0 - 346,0
LONG-TERM RECEIVABLE REVALUATION
ADJUSTMENT (50,8) (299,2) (350,0)
EMPLOYEE RETRENCHMENT COSTS - (30,3) (30,3)
IMPAIRMENT OF FIXED ASSETS - (51,1) (51,1)
RECOVERY ON DISPOSAL/(WRITE DOWN)
OF INVENTORY - (24,4) (24,4)
LEASES AND OTHER COMMITMENTS - (37,7) (37,7)
INCOME/(LOSS) FROM OPERATIONS 644,0 (521,1) 122,9
NET INTEREST EXPENSE (240,7) - (240,7)
403,3 (521,1) (117,8)
ATTRIBUTABLE (LOSS)/INCOME OF
ASSOCIATE COMPANIES:
FROM CONTINUING OPERATIONS 0,3 - 0,3
FROM DISCONTINUING OPERATIONS - - -
INCOME/(LOSS) BEFORE TAXATION
AND ABNORMAL ITEMS 403,6 (521,1) (117,5)
ABNORMAL ITEMS (NOTE 2) - - -
INCOME/(LOSS) BEFORE TAXATION 403,6 (521,1) (117,5)
TAXATION 63,4 (153,3) (89,9)
INCOME/(LOSS) AFTER TAXATION 340,2 (367,8) (27,6)
OUTSIDE SHAREHOLDERS' INTEREST 33,2 - 33,2
NET INCOME/(LOSS)
ATTRIBUTABLE TO SHAREHOLDERS 307,0 (367,8) (60,8)
NUMBER OF SHARES IN ISSUE (MILLION) 152,8
UNDILUTED EARNINGS/(LOSS) PER SHARE (CENTS) 283,2
DILUTED EARNINGS/(LOSS) PER SHARE (CENTS)
(NOTE 3) (39,8)
UNDILUTED HEADLINE EARNINGS PER SHARE (CENTS)
(NOTE 3) 165,0
DILUTED HEADLINE EARNINGS PER SHARE (CENTS) (NOTE 3) 145,0
PERIOD-END RATE OF EXCHANGE: SA RAND TO US DOLLAR 6,78
ABRIDGED INCOME STATEMENTS
MOBILE
12 Months Year
ended ended
30 June 2001 30 June 2000
Audited
R Million
REVENUE (INCLUDING EXCHANGE GAINS) 37,1 39,7
INCOME/(LOSS)
BEFORE ITEMS LISTED BELOW: 22,5 23,1
EXCHANGE GAINS INCLUDED IN REVENUE - -
LONG-TERM RECEIVABLE REVALUATION
ADJUSTMENT - -
EMPLOYEE RETRENCHMENT COSTS - -
IMPAIRMENT OF FIXED ASSETS - -
RECOVERY ON DISPOSAL/(WRITE DOWN)
OF INVENTORY - -
LEASES AND OTHER COMMITMENTS - -
INCOME/(LOSS) FROM OPERATIONS 22,5 23,1
NET INTEREST EXPENSE (18,6) (20,1)
3,9 3,0
ATTRIBUTABLE (LOSS)/INCOME OF
ASSOCIATE COMPANIES:
FROM CONTINUING OPERATIONS 133,2 145,6
FROM DISCONTINUING OPERATIONS (0,5) (174,2)
INCOME/(LOSS) BEFORE TAXATION
AND ABNORMAL ITEMS 136,6 (25,6)
ABNORMAL ITEMS (NOTE 2) 72,3 -
INCOME/(LOSS) BEFORE TAXATION 208,9 (25,6)
TAXATION 1,3 0,9
INCOME/(LOSS) AFTER TAXATION 207,6 (26,5)
OUTSIDE SHAREHOLDERS' INTEREST 0,7 0,6
NET INCOME/(LOSS)
ATTRIBUTABLE TO SHAREHOLDERS 206,9 (27,1)
NUMBER OF SHARES IN ISSUE (MILLION) 897,8 897,8
UNDILUTED EARNINGS/(LOSS)
PER SHARE (CENTS) 23,0 (3,0)
DILUTED EARNINGS/(LOSS)
PER SHARE (CENTS) (NOTE 3) 19,9 (3,0)
UNDILUTED HEADLINE EARNINGS
PER SHARE (CENTS) (NOTE 3) 15,0 13,5
DILUTED HEADLINE EARNINGS
PER SHARE (CENTS) (NOTE 3) 12,6 11,8
ABRIDGED BALANCE SHEETS
TRENCOR MOBILE
30 June 30 June 30 June 30 June
2001 2000 2001 2000
Audited Audited
ASSETS
NON-CURRENT ASSETS
PROPERTY, PLANT AND EQUIPMENT 3 235,9 2 730,1 - -
INVESTMENTS 114,6 113,2 1 000,4 760,7
LONG-TERM LOANS 37,8 58,2 - -
NET INVESTMENT IN
DIRECT FINANCE LEASES 30,8 8,5 - -
LONG-TERM RECEIVABLES 2 417,6 2 196,0 97,5 110,4
5 836,7 5 106,0 1 097,9 871,1
CURRENT ASSETS 835,7 842,7 88,0 98,8
TOTAL ASSETS 6 672,4 5 948,7 1 185,9 969,9
EQUITY AND LIABILITIES
CAPITAL AND RESERVES
SHARE CAPITAL AND PREMIUM 164,5 164,5 66,5 66,5
RESERVES 1 700,3 1 194,3 820,1 578,5
SHAREHOLDERS' EQUITY 1 864,8 1 358,8 886,6 645,0
INTEREST OF OUTSIDE
SHAREHOLDERS IN SUBSIDIARIES 234,4 186,6 3,6 2,9
TOTAL SHAREHOLDERS' FUNDS 2 099,2 1 545,4 890,2 647,9
CONVERTIBLE DEBENTURES 260,5 260,5 127,6 127,6
OTHER NON-CURRENT LIABILITIES
INTEREST-BEARING BORROWINGS 2 757,1 2 549,9 80,8 101,0
AMOUNTS ATTRIBUTABLE TO
THIRD PARTIES IN RESPECT OF
LONG-TERM RECEIVABLES 480,0 510,8 - -
DEFERRED TAXATION 319,0 209,5 (0,8) (0,8)
5 915,8 5 076,1 1 097,8 875,7
CURRENT LIABILITIES 756,6 872,6 88,1 94,2
TOTAL EQUITY AND LIABILITIES 6 672,4 5 948,7 1 185,9 969,9
CAPITAL EXPENDITURE 355,3 428,2 - -
CAPITAL EXPENDITURE COMMITTED
AND AUTHORISED 37,0 57,1 - -
MARKET VALUE OF
LISTED INVESTMENTS 86,9 104,3 452,8 284,5
DIRECTORS' VALUATION OF
UNLISTED INVESTMENTS 27,7 38,7 - -
RATIO TO AGGREGATE OF TOTAL
SHAREHOLDERS' FUNDS AND
CONVERTIBLE DEBENTURES:
TOTAL LIABILITIES EXCLUDING
CONVERTIBLE DEBENTURES (%) 182,8 229,4 16,6 25,0
INTEREST-BEARING DEBT EXCLUDING
CONVERTIBLE DEBENTURES (%) 133,3 164,9 15,0 24,9
NOTES TO THE ABRIDGED FINANCIAL STATEMENTS
1. These consolidated abridged interim financial statements are prepared in
accordance with Generally Accepted Accounting Practice. The accounting
policies used in the preparation of the interim financial statements are
consistent with those used in the annual financial statements for the year
ended 30 June 2000.
TRENCOR MOBILE
12 months Year 12 months Year
ended ended ended ended
30 June 30 June 30 June 30 June
2001 2000 2001 2000
Audited Audited
2. ABNORMAL ITEMS
PROFIT ON SALE OF INVESTMENTS
WACO INTERNATIONAL LTD 94,1 - 44,6 -
CENTRICITY INC 75,5 - 35,8 -
OTHER 0,5 - 0,2 -
PREMIUM PAID ON THE
ACQUISITION OF SHARES FROM
OUTSIDE SHAREHOLDERS (18,8) - (8,9) -
PROFIT ON SALE OF PROPERTY 1,3 - 0,6 -
152,6 - 72,3 -
3. Headline earnings
Earnings/(Loss) 432,8 (60,8) 206,9 (27,1)
Discontinuing operations 1,0 367,8 0,5 174,1
Losses incurred up to date
of discontinuance (1,6) (54,9) (0,8) (26,0)
Abnormal items (152,6) - (72,3) -
Headline earnings
per share (cents) 279,6 252,1 134,3 121,0
Number of shares in issue
(million) 152,8 152,8 897,8 897,8
Headline earnings per share
(cents) 183,0 165,0 15,0 13,5
The dilution arises as a result of any future conversion of convertible
debentures. The directors are of the opinion that the debentures will not be
converted in the foreseeable future and therefore no dilution is anticipated
for the foreseeable future.
4. Segmental reporting
REVENUE:
Trailers 292,9 259,2
Container sales and
financing continuing 776,4 690,6
Container sales and
financing discontinuing 71,9 103,6
Container leasing 866,1 683,9
Other 28,2 42,6
2 035,5 1 779,9
Income/(Loss) from operations:
Trailers (25,4) (6,9)
Container sales and
financing continuing 473,5 430,1
Container sales and
financing discontinuing (1,5) (521,1)
Container leasing 317,5 249,8
Other (62,3) (29,0)
701,8 122,9
ABRIDGED CASH FLOW STATEMENTS
TRENCOR MOBILE
12 months Year 12 months Year
ended ended ended ended
30 June 30 June 30 June 30 June
2001 2000 2001 2000
Audited Audited
CASH GENERATED FROM/
(UTILISED BY) OPERATIONS 269,0 36,0 37,9 (24,3)
INTEREST RECEIVED 31,1 23,7 10,8 10,0
INTEREST PAID (311,7) (264,5) (29,5) (30,1)
DIVIDENDS RECEIVED - 4,9 - 10,1
DIVIDENDS PAID - (21,4) - (10,5)
DIVIDENDS PAID TO
OUTSIDE SHAREHOLDERS (23,6) (10,0) - -
TAXATION PAID (8,0) (13,5) (1,0) (1,1)
NET CASH (OUTLOW)/INFLOW
FROM OPERATING ACTIVITIES (43,2) (244,8) 18,2 (45,9)
CASH FLOWS FROM
INVESTING ACTIVITIES (146,5) (447,2) 12,8 -
CASH FLOWS FROM
FINANCING ACTIVITIES 127,6 589,7 (20,2) 45,1
NET (DECREASE)/INCREASE IN CASH
AND CASH EQUIVALENTS
BEFORE EXCHANGE RATE CHANGES (62,1) (102,3) 10,8 (0,8)
NET CASH AND CASH EQUIVALENTS AT
THE BEGINNING OF THE PERIOD 66,9 153,3 (1,8) (1,0)
EFFECTS OF EXCHANGE RATE
CHANGES ON CASH AND CASH
EQUIVALENTS 37,4 15,9 - -
NET CASH AND CASH EQUIVALENTS
AT THE END OF THE PERIOD 42,2 66,9 9,0 (1,8)
ABRIDGED STATEMENTS OF CHANGES IN SHAREHOLDERS' FUNDS
TRENCOR MOBILE
12 months Year 12 months Year
ended ended ended ended
30 June 30 June 30 June 30 June
2001 2000 2001 2000
Audited Audited
BALANCE AT THE BEGINNING
OF THE PERIOD 1 358,8 1 418,3 645,0 671,5
MOVEMENTS IN DISTRIBUTABLE
RESERVES 433,6 (64,4) 206,9 (28,8)
NET INCOME/(LOSS)
FOR THE PERIOD 432,8 (60,8) 206,9 (27,1)
TRANSFER FROM NON-DISTRIBUTABLE
RESERVES 0,8 - - -
GOODWILL WRITTEN OFF - (3,6) - (1,7)
MOVEMENTS IN NON-DISTRIBUTABLE
RESERVES 72,4 4,9 34,7 2,3
CURRENCY TRANSLATION DIFFERENCES 71,0 33,9 - -
REVALUATION OF FIXED ASSETS - (29,0) - -
REALISATION ON SALE OF PROPERTY 2,2 - -
RESERVES OF ASSOCIATE COMPANIES (0,8) - 34,7 2,3
BALANCE AT THE END OF THE PERIOD 1 864,8 1 358,8 886,6 645,0
COMMENTS
Holders of securities in Trencor and Mobile are reminded that the current
financial period is for the eighteen months ending 31 December 2001. These
interim reports cover the twelve months to 30 June 2001.
TRENCOR
Income before tax and non-trade items for the twelve months ended 30 June
2001 was R399 million (2000: loss R118 million) and undiluted headline
earnings per share were 183,0 cents (2000: 165,0 cents). The further decline
in the value of the rand against the US dollar resulted in a foreign
exchange revaluation gain of R573 million, but also necessitated a currency
translation adjustment to the existing dollar-based provision against the
net value of the long-term receivables, increasing the net provision by R161
million. Management considered it prudent to increase the amount of this
dollar-based provision by a further R37 million in view of current trading
conditions in the global container leasing business; the aggregate increase
in the net adjustment to the long-term receivables thus amounted to R198
million.
Textainer contributed R114 million to headline earnings (2000: R92
million).
The financial results are based on an exchange rate of US$1 = R8,07 at 30
June 2001 (2000: US$1 = R6,78).
Trading
The decline in Textainer's fleet utilisation, which commenced in November
2000, continued through until June 2001. Since then the utilisation level
stabilised but has not shown signs of improving. From the high-point of 85%
in September 2000, utilisation has declined to just over 73%, but management
believes that the company is well positioned to take full advantage when the
container leasing market starts to improve. It is anticipated that the size
of the container fleet under Textainer's management will reach the one
million TEU (twenty foot equivalent units) level before the end of the
current year.
The stainless steel tank container factory at Parow has continued to
produce an outstanding product but due to current weak demand, volumes
remain low. The future of this facility remains under constant review.
All of our other operations continued to experience difficult trading
conditions during the period. There are no significant seasonal trading
patterns in our businesses.
During June 2001, the company concluded a contract in terms of which its
40% shareholding in Centricity Inc was exchanged for 546 757 shares in
Descartes Systems Group Inc (a Canadian corporation listed on NASDAQ and the
Toronto Stock Exchanges) valued at US$19,70 per share, the weighted average
listed price over 20 days prior to the conclusion of the contract. This
transaction yielded a net gain of R76 million which has been included in non-
trade items. Descartes shares are currently trading at about US$7 per share,
but the directors do not consider the diminution in value to be permanent.
In August 2001, the group concluded an agreement with MicroStar Logistics
Inc to establish TrenStar Inc, which will be owned 66% by Trencor Solutions
and the balance of 34% by MicroStar's shareholders. Based in Denver,
Colorado, TrenStar will develop internationally the current activities of
Trencor Solutions, which comprise the owning, management and leasing out of
returnable packaging equipment and the provision of technology and software
solutions in transportation logistics.
Finance
Textainer's 49,99% interest in Textainer Marine Containers Limited ("TMCL"),
a joint venture financing entity with an overseas financial institution,
formed for the purpose of purchasing containers that will be managed by
Textainer, has been accounted for by Trencor on the proportionate
consolidation method on a line-by-line basis. It is likely that from October
2001, Textainer's shareholding in TMCL will exceed 50%. In that event,
Trencor will fully consolidate the results of TMCL. This will have an impact
on the consolidated group gearing ratios as indicated below.
Virtually all of the capital expenditure of the group for the period
under review was incurred in TMCL by Textainer in replenishing and expanding
its container fleet; most of these additions were placed into long-term
leases by Textainer.
The ratio of Trencor's consolidated interest-bearing debt to permanent
capital, being the sum of total shareholders' funds and the convertible
debentures, decreased to 133% (had TMCL been fully consolidated at 30 June
2001, this ratio would have been 144%) from 165% a year ago. With Textainer
notionally equity accounted (its debt is without recourse to Trencor), this
ratio was 37% compared to 62% at 30 June 2000.
Tax queries
The enquiry by the South African Revenue Service ("SARS") into the tax
treatment of the group's export partners' participation in the export of
cargo containers (in respect of transactions entered into in prior years)
continues. It is not possible to anticipate when it will be concluded. We
remain confident that the supportive legal advice we have received will
prevail should SARS seek to challenge the tax treatment.
As previously reported, a successful challenge by SARS, which we believe
is unlikely, may result in the acceleration of the payment of a portion of
the amounts attributable to third parties (i.e. our export partners) which
are carried at their net present values, and which would otherwise be paid
over periods of up to fourteen years.
Dividends
As previously reported, Trencor will not declare dividends until the
advances under its South African banking facilities have been repaid.
MOBILE
Mobile Acceptances traded satisfactorily during the twelve months to 30 June
2001. As Mobile Industries derives most of its income from dividends it
receives from Trencor, Mobile will not declare dividends unless and until
Trencor does.
AUDITORS
KPMG Inc has been appointed as auditors to all South African group entities
in the place of Arthur Andersen & Co, effective 29 June 2001. KPMG are
auditors to Textainer and most of our major overseas subsidiaries and
associates, whilst Arthur Andersen has been providing audit services to the
Trencor and Mobile groups locally. It became necessary to appoint a single
firm as auditors to the groups and, after due consideration of all relevant
factors, the appointment was awarded to KPMG.
STRATE
Holders of securities in Trencor and Mobile are advised that the companies
are scheduled to transfer to the STRATE (Share Transactions Totally
Electronic) system of electronic settlement on the JSE Securities Exchange
South Africa with effect from Monday 12 November 2001. Trading for
electronic settlement commences on Monday 3 December 2001 with electronic
settlement from Monday 10 December 2001. Consequently, paper certificates
will no longer be good for delivery from 3 December 2001. Further
information will be included with the interim reports being posted to
holders of securities.
ON BEHALF OF THE BOARDS
NI JOWELL CHAIRMAN TRENCOR LIMITED
C JOWELL CHAIRMAN MOBILE INDUSTRIES LIMITED
28 AUGUST 2001
REGISTERED OFFICE: TRANSFER SECRETARIES:
1313 MAIN TOWER COMPUTERSHARE SERVICES LIMITED
STANDARD BANK CENTRE 1ST FLOOR EDURA, 41 FOX STREET
HEERENGRACHT JOHANNESBURG 2001
CAPE TOWN 8001 (PO BOX 61051, MARSHALLTOWN 2107)
These results can be viewed on the new websites:
http://www.trencor.net and http://www.mobile-industries.net
