| Wed 12 Sep 2001, 0:00 | | Ceramic Industries Limited - Audited Financial Res |
|
July 2001
(Reg. No. 1982/008520/06)
(CERAMIC)
(CRM)
ISIN: ZAE00000838
Samca Tiles NCI Betta sanitaryware Vitro
AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 31 JULY 2001
Abridged group income statement
Year Year
ended ended
31 July 31 July
2001 2000
% Audited Audited
Change R000's R000's
Revenue 20,0 417 489 348 052
Tiles 17,4 357 477 304 386
Sanitaryware 37,4 60 012 43 666
Operating profit before depreciation 37,6 131 972 95 886
Depreciation 17,2 (31 365) (26 768)
Operating profit 45,6 100 607 69 118
Tiles 33,7 86 875 64 971
Sanitaryware 231,1 13 732 4 147
Investment income 60,1 11 353 7 093
Exceptional items - 2 632
Profit before taxation 42,0 111 960 78 843
Taxation (24 449) (15 979)
Earnings attributable to ordinary
shareholders 39,2 87 511 62 864
Weighted average number of shares
in issue (000's) 18 263 18 263
Basic earnings per share (cents) 39,2 479,2 344,2
Headline earnings per share (cents) 45,2 479,0 329,8
Dividend per share (cents) 33,3 80,0 60,0
RECONCILIATION OF HEADLINE EARNINGS
Earnings attributable to ordinary
shareholders 87 511 62 864
Exceptional item - (2 300)
Profit on disposal of fixed assets (26) (332)
Headline earnings 87 485 60 232
Abridged group balance sheet
31 July 31 July
2001 2000
Audited Audited
R000's R000's
Assets
Non-current assets
Property, plant and equipment 171 908 128 877
Current assets 268 017 203 095
Inventories 17 427 19 379
Trade and other receivables 76 129 69 710
Cash and cash equivalents 174 461 114 006
Total assets 439 925 331 972
EQUITIES AND LIABILITIES
Capital and reserves 310 299 236 886
Ordinary shares 64 962 64 962
Retained earnings and reserves 245 337 171 924
Non-current liabilities
Deferred taxation 17 326 9 770
Current liabilities 112 300 85 316
Trade creditors, other payables and provisions 89 370 64 645
Taxation 13 694 13 513
Shareholders for dividend 9 236 7 158
Total equity and liabilities 439 925 331 972
Statement of changes in shareholders equity
31 July 31 July
2001 2000
Audited Audited
R000's R000's
Balance at beginning of period 236 886 184 979
Earnings attributable to ordinary shareholders 87 511 62 864
Foreign currency translation reserve 513
Dividends (14 611) (10 957)
Balance at end of period 310 299 236 886
Abridged group cash flow statement
31 July 31 July
2001 2000
Audited Audited
R000's R000's
Operating activities
Profit before tax adjusted for non-cash items 131 946 98 236
Changes in working capital 20 258 (11 622)
Cash generated from operations 152 204 86 614
Investment income 11 353 7 093
Dividends paid (12 533) (8 140)
Taxation paid (16 712) (4 119)
134 312 81 448
Investing activities
To expand operations (73 857) (26 854)
Net increase in cash and cash equivalents 60 455 54 594
Cash and cash equivalents beginning of the year 114 006 59 412
Cash and cash equivalents end of the year 174 461 114 006
COMMENTARY
FINANCIAL RESULTS
The Board of Directors of Ceramic Industries is again pleased to report
satisfying results. Group revenue improved by 20% to
R417 million for the 2001 financial year (from R348 million).
Revenue from sanitaryware operations increased by 37% to R60 million (from
R43 million) and revenue from tile operations increased by 17% to R357
million (from R304 million).
Operating profit improved by 45% to R101 million (from R69 million), while
headline earnings per share increased 45% to 479 cents per share (from 330
cents per share).
These results were achieved despite difficulties that exist in the South
African trading environment. Although the depreciating rand increased the
cost of traditionally imported tiles from countries such as Italy and Spain,
other low-cost producers from Brazil, China and Indonesia entered the
market, thereby exerting price pressure on local manufacturers. The Group
remained competitive by continuing to upgrade its plant and equipment to
increase production and improve operating efficiencies.
OPERATING ACTIVITIES
Betta's production volumes increased by 25% to 0,6 million pieces for the
year and Betta increased its share of the South African sanitaryware market.
The new production line at Vitro was commissioned at the beginning of July
2001 and is producing a unique new product at satisfactory levels. Samca 2
increased production by 23% to 4,5 million square metres for the year. Samca
1 continued to deliver a solid performance, resulting in volume improvements
above those budgeted. NCI has not met management's expectations and ways to
improve performance are currently being assessed.
Exports remained steady at 15% of revenue. The Group plans to increase its
penetration into Sub-Saharan Africa.
Investment income increased by 60% due to strong cash flows.
LOCAL INVESTMENT AND CAPITAL EXPENDITURE
The Group is able to report good progress in identifying the clay resources
for the Pegasus tile factory, to be built near Vereeniging. Subject to
finalising necessary clay resources, the commissioning of this R90 million
investment is anticipated by the end of October 2002. Potential new markets
for the cost competitive product from Pegasus are currently being explored.
The Group plans to expand Vitro's production capacity by a further 30%
during the next financial year. This investment, which will amount to R24
million, will consist of a new kiln, dryer, glazing lines and ancillary
equipment.
As stated in the interim results, Betta's capacity was increased to 0,9
million pieces per annum by June 2001. Plans to further increase production
capacity to 1,2 million pieces per annum are well under way. The anticipated
cost of the new equipment is R30 million. This enhanced capacity is expected
to be commissioned by August 2002.
FOREIGN INVESTMENT AND EXPANSION OPPORTUNITIES
The Group's interim results reported the conclusion of a 50% joint venture
agreement between Ceramic Industries and Gruppo Ceramiche Ricchetti, the
only listed tile manufacturer in Italy. Ceramic Industries has invested R17
million of its total planned investment of R40 million. The remaining
portion will be invested before December 2001. These funds will be used
primarily for the purchase of land, buildings and equipment. Granting of
the necessary permits and licences by the Italian authorities has taken
longer than anticipated. These permits are expected to be obtained during
September 2001 and the planned commissioning date has been postponed until
July 2002.
Preliminary research on the planned expansion into Australia is nearing
finality. Should this project be feasible, the Group's Australian factory
will be operational during calendar year 2003.
PROSPECTS
Ceramic Industries remains ungeared with all capital projects financed
through cash reserves and cash flows. The Board believes operating profit
from South African operations will continue to show real growth. The tax
holiday, from which Samca 1 benefited for the past four years, ended on 31
July 2001.
Negotiations have been concluded for the installation of a pipeline to
supply gas to Samca 1 and Samca 2. This will ensure that these plants remain
cost competitive.
Ceramic Industries' existing market will remain an important focal area
during the forthcoming financial year. Trading conditions will remain
challenging due to the threat of imported products. Consequently, improved
earnings will be generated through improved volumes and a focus on cost
control rather than price increases.
DIVIDEND
The Board has declared a final dividend of 50 cents per share, which
together with the interim dividend of 30 cents per share, produces a total
dividend of 80 cents per share (2000: 60 cents), an improvement of 33%.
On behalf of the Board
G.A.M. Ravazzotti N. Booth
Chairman Chief Executive Officer
13 September 2001
STRATE
Shareholders were advised in the interim profit announcement dated 15 March
2001, that the company had been notified by the JSE Securities Exchange to
transfer its share capital to the Share Transactions Totally Electronic
(STRATE) environment as from 2 April 2001. Ceramic Industries' subsequent
dematerialisation programme has progressed very well, with a
dematerialisation figure of 98% achieved to date. Shareholders are thanked
for their co-operation in this regard. Those shareholders who have as yet
not deposited their share certificates with a CSDP or qualifying stockbroker
are reminded to do so. Enquiries in this regard are referred to STRATE on
0800 004 727.
DIVIDEND ANNOUNCEMENT
The Board has resolved to declare a final dividend (number 23) of
50 cents per share to all shareholders of Ceramic Industries Limited. The
last day to trade ("CUM" the dividend) in order to participate in the
dividend will be Friday, 19 October 2001. The shares of Ceramic Industries
Limited will commence trading "EX" the dividend from the commencement of
business on Monday, 22 October 2001 and the record date will be Friday, 26
October 2001. The dividend will be paid on 29 October 2001. Share
certificates may not be dematerialized from 15 October 2001 to 26 October
2001, both days inclusive.
By order of the Board
I.A. Mollentze
Secretary
13 September 2001
Directors: G.A.M. Ravazzotti (Chairman), N. Booth (Chief Executive Officer),
S.D. Jagoe, E. Mafuna, M. Schultz, P. Wickens (British), G. Zannoni
(Italian)
Registered office: 33 Sarel Baard Crescent, Gateway Industrial Park,
Centurion POBox 1369, Rivonia 2128
Transfer secretaries: Computershare Services Limited, 41 Fox Street,
Johannesburg 2001 POBox 61051, Marshalltown 2107
