| Thu 30 Aug 2001, 0:00 | | Tiger Wheels: Audited Group Results For The Year E |
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Tiger Wheels Limited
Registration number (1970/011662/06)
Share code: TIW ISIN code: ZAE 000007407
Revenue up 27%
Attributable earnings up 59%
Headline earnings per share up 8%
AUDITED GROUP RESULTS FOR THE YEAR ENDED 30 JUNE 2001
Income statement
Year ended Year ended
30 June 2001 30 June 2000
R'000 R'000
Revenue 2 065 817 1 631 261
Operating income 106 949 111 605
Discontinued operations - (17 221)
Net financing costs (28 016) (26 959)
Loss from associates (1 187) (4 103)
Profit before taxation 77 746 63 322
Taxation (7 837) (16 721)
Profit after taxation 69 909 46 601
Minority interest (16 361) (12 938)
Earnings attributable to ordinary
shareholders 53 548 33 663
Reconciliation of headline earnings
per share (cents)
Attributable earnings per share 92,1 59,6
Adjusted for:
Discontinued operations - 30,5
Goodwill amortised 1,4 -
Write-down of investments/loans 4,1 -
Headline earnings per share (cents) 97,6 90,1
Dividend per share (cents) 36,0 24,0
Ordinary shares ('000)
- Issued 58 588 56 753
- Weighted 58 159 56 500
Cash flow statement
Cash flows from
Operating activities 542 184 684
Investing activities (170 459) (164 850)
Financing activities (12 775) 57 712
Movement in cash resources (182 692) 77 546
Cash resources at beginning of year 59 371 (18 175)
cash resources at end of year (123 321) 59 371
Supplementary information
Depreciation 82 855 65 517
Capital expenditure 133 003 141,724
Future capital commitments approved 135 000 92 040
Net asset value per share (cents) 843 727
Balance sheet
30 June 2001 30 June 2000
R'000 R'000
ASSETS
Non-current assets 618 675 542 667
Property, plant and equipment 573 617 494 448
Investment in associates 4 111 6 703
Other financial assets 40 947 41 516
Current assets 783 447 664 363
Other current assets 783 447 582 604
Bank and cash - 81 759
Total assets 1 402 122 1 207 030
EQUITY AND LIABILTIES
Shareholders' equity 556 994 469 535
Shareholders' funds 493 956 412 455
Minority interest 63 038 57 080
Non-current liabilities 153 853 186 928
Interest bearing debt 145 139 181 858
Deferred taxation 8 714 5 070
Current liabilties 691 275 550 567
Non-interest bearing debt 516 189 489 082
Current portion of long-term
interest bearing debt 51 765 39 097
Borrowings 123 321 22 388
Total equity and liabilities 1 402 122 1 207 030
Statement of changes in equity
Equity at beginning of year 412 455 368 869
Changes in
Share capital and premium 9 794 5 340
Non-distributable reserves 17 519 15 226
Retained income 54 188 23 020
Earnings attributable to ordinary
shareholders 53 548 33 663
Capitalisation award and dividend (547) (14 746)
Associated companies 1 187 4 103
Equity at end of year 493 956 412 455
Change in accounting policy
The adoption of Generally Accepted Accounting Practice AC 107 requires that
dividends are now accounted for only on date of declaration.
COMMENTS
Nature of business
Tiger Wheels Limited ("Tiwheel") is a group of companies focused on the
automotive aluminium wheel and passenger car tyre industries. The group
operates internationally, with wheel manufacturing plants in Germany, Poland
and South Africa, wholesale wheel distribution throughout Europe, North
America and South Africa and tyre distribution in the United Kingdom and
South Africa.
The group's 32 Tiger Wheel & Tyre retail stores in southern Africa (25
owned and seven franchised) cover all major centres and hold a significant
share of the replacement passenger tyre and wheel business in the region.
Results
Headline earnings per share of 98 cents and earnings per share of 92 cents
are in line with the forecast for the year as outlined in the interim profit
announcement released in February 2001. Considering the poor results for the
first half of the year (15 cents per share) and certain disappointments in
the second half, the results are regarded as reasonable under the
circumstances.
The ATS group, a 74% held German subsidiary, accounted for 64% of group
turnover and also contributed significantly to operating income. In the
second half of the year results from the ATS manufacturing businesses in
Germany and Poland improved to expected levels. However, the ATS group's
results were impaired by a poor European summer aftermarket season and
losses incurred on disposal of our Swedish aftermarket wholesaler.
The South African Babelegi wheel manufacturing plant continued to be
unstable, particularly in the last three months of the year under review
when a large short-term order for an international original equipment
manufacturing ("OEM") customer was deferred. Consequently, short run
aftermarket business was re-introduced which played havoc with the factory's
efficiency. This led to a significant loss, which was contrary to the profit
expectations for the second half of the year.
The South African wholesale distribution business performed reasonably
whilst results of the South African Tiger Wheel & Tyre retail group were
below expectations for the first time in many years, which understandably,
was in line with the harsh domestic retail environment.
The group results reflect a particularly low tax rate due to the one-off
use of tax credits in the German structure. Although the return to a normal
tax rate in Germany is anticipated for the current year, profits from Poland
and hopefully, Babelegi, continue to benefit from long-term tax holidays.
The future group tax rate is estimated at 20%.
Whilst our financial gearing ratios are within acceptable limits, group
cash flow for this year was worse than expected.
The foreign associated companies involved in wholesale distribution
continued to be unimpressive in part due to inconsistent deliveries from
Babelegi.
Prospects
The Tiger Wheel & Tyre retail group is budgeting for improved results with a
net addition of two stores. The South African wholesale distribution
business is also budgeting a small improvement.
In the Babelegi manufacturing business, there has been a fundamental
shift in emphasis to long run OEM business, for which the plant is far more
suitable. The transition has required certain harsh measures to be taken,
including the laying off of approximately 250 employees. This, and the
recent strikes in the South African motor industry, have impacted on the
first few months' performance. The long awaited commissioning of the second
heat treatment plant will facilitate long run OEM business, which should
enable this business to end the full year in a profit situation.
The ATS group's manufacturing division, particularly the Polish factory,
is budgeting for a capacity increase, which will culminate in sales and
profit increases. ATS has a full order book reflecting the growth in demand
for its products. Production of lower engine-crankcase castings (bedplates)
is growing. The process uses the group's low-pressure casting expertise and
will lead to a valuable contribution to future earnings. The ATS aftermarket
division is expected to be more stable. In the interest of servicing our
aftermarket customers better, we are focusing efforts on the changing market
conditions and maximising efficiencies within the business.
Planning is in progress for the new ATS wheel factory in America, with
first deliveries expected in July 2003.
The group is intensifying its focus on working capital asset management
and its achievements in this area will be balanced against the pace of
capital expenditure, which will be funded through these and other internal
resources as well as term funding.
The group's operating income as a percentage of sales is currently 5%.
Our medium-term goal is to achieve returns in excess of 7%.
Over 75% of our revenue structure is in Euro-related currencies, hedging
us well against any future devaluation of the rand.
In the absence of unforeseen circumstances, the group is budgeting to
show a meaningful increase in earnings per share for the current year.
STRATE
Shareholders are advised that the company is scheduled to be officially
transferred to the new STRATE (Share Transactions Totally Electronic) system
of electronic settlement on the JSE Securities Exchange South Africa ("JSE")
with effect from Monday, 10 December 2001, with electronic trading and
electronic settlement commencing on Monday, 7 January 2002 and Monday, 14
January 2002, respectively. Consequently, the company's share certificates
will no longer be good for delivery in respect of transactions entered into
on the JSE on or after Monday, 7 January 2002.
A letter containing further detailed information relating to STRATE and
the dematerialisation process will, in the near future, be posted to
shareholders with registered addresses recorded in the company's register of
members. Copies of the letter will also be available from the office of the
company's share registrars.
Capitalisation share award and cash dividend
The directors of Tiwheel have resolved to award capitalisation shares to
ordinary shareholders registered in the books of the company on Friday, 14
September 2001 ("the record date"). The capitalisation share award will be
determined by the ratio that 36 cents multiplied by 1,10 bears to the
closing price of Tiwheel shares on the JSE on Thursday, 11 October 2001,
averaged with the closing price on the three business days prior to that
date.
Shareholders are entitled to, and will be given the opportunity to
decline, the award of capitalisation shares in respect of all or part of
their shareholding and instead may elect to receive a cash dividend of 36
cents per Tiwheel share in respect of the year ended 30 June 2001 ("the
election") (2000: 24 cents). Documentation dealing with the capitalisation
share award and the election will be posted to shareholders on or about 20
September 2001. In order to be valid, completed forms of election will need
to be received by the company's transfer secretaries by no later than 16:00
on Friday, 12 October 2001. Application will be made to the JSE for the
capitalisation shares to be listed with effect from the commencement of
business on Wednesday, 17 October 2001. It is expected that
dividend/fraction cheques and share certificates in respect of new ordinary
shares will be posted, by registered post, to shareholders on or about
Wednesday, 17 October 2001.
On behalf of the board
Eddie Keizan Martin Glatt
Joint Chairman and CEO Joint Chairman
Johannesburg
31 August 2001
Directors:
Eddie Keizan (Joint Chairman and Chief Executive), Martin Glatt* (Joint
Chairman), Jacques Desmidt*, Rainer Hagemann* (German), Josh Loots, Keith
Rivers, Annette Stahlschmidt* (German), Siegfried Teichert (German) *
Non-executive
Company secretary:
Diane Cousins (dianec@tsw.co.za)
Registered office:
Corner Old Pretoria Road and K101, Midrand 1685
Contact numbers:
Telephone (011) 256 4500, fax (011) 256 4515
Available on our Internet website www.tsw.co.za
