| Wed 12 Sep 2001, 0:00 | | Kunene Technology Limited - Financial Results For |
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KUNENE TECHNOLOGY LIMITED
Reg. No. 1964/004561/06
Share code: KTL
ISIN code: ZAE000014924
FINANCIAL RESULTS FOR YEAR ENDED 30 JUNE 2001
* PROFORMA
Fully diluted headline earnings per share up 26%
Financial results for the year ended 30 June 2001
GROUP OPERATING RESULTS
Audited Audited
Group operating results 2001 2000
R000 R000
Revenue from sales 942 100 -
Cost of sales 693 265 -
Gross profit 248 835 -
Income from investments 18 772 9 608
- interest received 13 921 407
- fees received 148 1 819
- dividends received 4 703 7 382
Operating expenses 95 212 4 398
Profit before finance costs 172 395 5 210
Finance costs 7 150 853
Income from associates before
exceptional items 1 810 44 800
Profit before taxation 167 055 49 157
Taxation 59 469 8
Attributable to outside shareholders
of subsidiaries 48 726 -
Headline earnings 58 860 49 149
Headline earnings per share (cents) 102.1 140.6
Dividend per share (cents) 16.7 18.8
- No. 70, declared 12 September 2000
(1999 - No 68) 12.0 13.2
- No. 71, declared 13 March 2001
(2000 - No 69) 4.7 5.6
Dividend no 72 declared 11 September 2001,
payable 15 October 2001 12.5 12.0
Weighted average shares in issue
during the year 57 640 618 34 948 696
Shares in issue at end of year 63 237 520 34 948 696
Fully diluted shares for the year 57 640 618 35 153 804
GROUP BALANCE SHEETS
Audited Audited*
2001 2000
R000 R000
ASSETS
Non-current assets 209 151 170 289
Fixed assets 99 573 69
Development projects 27 133 -
Goodwill 52 017 -
Listed investments - 168 232
Unlisted investments 11 250 388
Deferred taxation asset 5 828 -
Loans and long-term receivables 13 350 1 600
Current assets 913 050 508
Inventories 197 601 -
Trade and other receivables 495 176 294
Advance payments 19 129 -
Deposits and cash 201 144 214
Total Assets 1 122 201 170 797
EQUITY AND LIABILITIES
Capital and reserves 240 533 159 748
Minority interest 176 658 -
Long-term liabilities 43 731 -
Current liabilities 661 279 11 049
Trade and other payables 334 468 817
Advance receipts 178 469 -
Provisions 53 162 -
Receiver of Revenue 62 998 3 122
Overdrafts and short-term borrowings 32 182 7 110
Total Equity and Liabilities 1 122 201 170 797
Net asset value per ordinary share (cents) 380 457
Reconciliation of capital and reserves:
Opening balance 159 748 126 730
- change in treatment of dividends - 4 613
- shares issued 101 064 -
- write off against investment in associates (1 798) (9 890)
- earnings 52 908 44 865
- dividends (71 389) (6 570)
Closing balance 240 533 159 748
* Restated to reflect the change in treatment of dividends
RECONCILIATION OF EARNINGS
Audited Audited
2001 2000
R000 R000
Headline earnings 58 860 49 149
Unbundling costs (1 379) -
Amortisation of goodwill (1 996) -
Tax prior year under provision (864) (707)
Interest on under provision for tax (645) (1 165)
Share of associated companies' exceptional items - 2 430
Impairment of investment (1 700) -
Impairment of property (374) -
Net profit on disposal of fixed assets 162 18
Attributable taxation and minority share 767 -
Profit on issue of shares in subsidiary 77 -
Attributable earnings to ordinary shareholders 52 908 44 865
Attributable earnings per ordinary share (cents) 91.8 128.4
* PROFORMA CALCULATION
Audited Audited
2001 2000
R000 R000
Headline earnings 58 860 49 149
Adjustment for attributable Siltek headline
earnings 2 522 (15 288)
Headline earnings (excl. Siltek) 61 382 33 861
Dilution in attributable headline earnings (98) (4 224)
Fully diluted headline earnings (excl. Siltek) 61 284 29 637
Fully diluted headline earnings (excl. Siltek)
per share 106.3 84.3
COMMENTS
The directors of Kunene Technology Limited (KTL) are pleased to report an
excellent performance for the year ended 30 June 2001 by its sole underlying
investment, Grintek Limited, in which it holds 57,3 per cent.
Helped by a turnaround in the industrial and defence businesses during the
year, Grintek increased its headline earnings by 43 per cent to R115,3
million. Earnings increased by 48 per cent to R113,3 million and profit
before taxation increased by 78 per cent to R180,4 million on a turnover
which increased by 11 per cent to R1,189 billion. Fully diluted headline
earnings per share from continuing operations increased by 35 per cent to
38,7 cents and a final dividend of 5,8 cents has been declared. Grintek
ended the year with a strong order book and healthy cash resources.
The board of KTL congratulates Grintek's management team for their excellent
achievements during the past year.
PERFORMANCE MEASUREMENT
The current year results are not comparable with those of the prior year due
to KTL's acquisition on 11 September 2000 of 69 016 334 additional shares in
Grintek and the unbundling of Siltek.
Had Siltek's results been excluded from the current and prior year results,
and adjusting for the dilution from the conversion of the convertible
debentures in Grintek, fully diluted headline earnings per share increased
by 26,1 per cent.
At 30 June 2001 the discount at which KTL shares were valued relative to the
underlying value of its listed investment amounted to 24,2 per cent.
REVIEW OF GRINTEK'S OPERATIONS
The telecommunication division maintained acceptable trading levels by
providing specialised solutions to the market, notwithstanding a general
market slowdown in infrastructure expenditure during the reporting period.
Margins improved by the Group having actively worked towards supplying
systems with greater added value. A sound foundation for growth was
established by the introduction of new solutions such as Voice-over-Internet
Protocol, which is based on world-class technology.
The industrial electronics division achieved a significant increase in sales
through the antenna and aviation business units and by the DC power unit
having gained a significant market share in the telecommunications industry.
Difficult trading conditions were experienced by the energy management unit
but it is well positioned to take advantage of market opportunities once the
regulatory issues related to free electricity quotas are in place.
The defence electronics division was the main contributor to revenue growth
during the year due to the increased level of business in the defence
electronics market and by unlocking considerable value through international
partnerships established during the past two years. Over at least the next
six years, this division is set to gain from long-term orders received from
the main suppliers to the South African National Defence Force's strategic
procurement programme. The company's defence electronics business is now
also firmly linked to major international companies in line with the Group's
internationalisation programme.
PROSPECTS
The deregulation of the telecommunications industry, which provides for the
introduction of a future second fixed line operator, and the establishment
of the third cellular network will require increased network capacity.
Grintek is well positioned to provide elements of these new networks. It is
further expected that the DC power and antenna business will also benefit
from these requirements. Further growth in defence exports is expected as
this division is now well placed as a global supplier of specialised
solutions, in conjunction with its international partners.
DECLARATION OF DIVIDEND NO. 72
The directors of KTL have declared dividend no. 72 of 12,5 cents per share
to all shareholders. In compliance with the requirements of STRATE, the
following dates are applicable:
Date dividend declared Tuesday 11 September 2001
Last day to trade CUM the dividend Friday 5 October 2001
Date trading commences EX the dividend Monday 8 October 2001
Record date Friday 12 October 2001
Date of payment Monday 15 October 2001
Certificated shareholders may not dematerialise their shares between Monday
1 October 2001 and Friday 12 October 2001, both dates inclusive.
For and on behalf of the board
NR Kunene
Chairman
11 September 2001
REGISTERED OFFICE/TRANSFER SECRETARIES
4th Floor, South Block Mercantile Registrars Limited
Waterview Corner 7th Floor, 11 Diagonal Street
Cnr. Ernest Oppenheimer Avenue and Queen Street Johannesburg 2001
Bruma 2026
E-mail: kunenetech@grintek.com
DIRECTORS
NR Kunene (Chairman) MF Kunene GJ Royston JR McAlpine* P Moholi*
M Msimang* AN Saulez*
*Non Executive
SPONSOR: WIPCAPITAL (PTY) LTD
