| Thu 25 Oct 2001, 0:00 | | Value Group Limited - Interim Results |
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Value Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1997/002203/06)
(Share Code: VLE ISIN Code: ZAE000016507)
Interim results for the six months ended 31 august 2001
CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited Audited
six six twelve
months months months
% August August February
Figures in R'000s change 2001 2000 2001
Revenue 55 208 588 134 160 325 747
Operating income before
depreciation, finance
costs and abnormal items 26 358 27 314 65 537
Depreciation 22 437 11 330 26 981
Operating income (75) 3 921 15 984 38 556
Investment income 14 8 72
Finance costs 7 817 1 747 5 963
Net (loss)/income before
abnormal items (127) (3 882) 14 245 32 665
Abnormal items (note 2) (648) - (1 432)
Net (loss)/income
before taxation (132) (4 530) 14 245 31 233
Taxation (note 3) (136) 4 262 10 060
(Loss)/earnings attributable
to ordinary shareholders (4 394) 9 983 21 173
Basic (loss)/earnings per
share (cents) (144) (2,1) 4,8 10,2
Headline (loss)/earnings
per share (cents) (142) (2,0) 4,8 10,7
CONSOLIDATED BALANCE SHEET
Unaudited Unaudited Audited
six six twelve
months months months
August August February
Figures in R'000s 2001 2000 2001
Assets
Non-current assets 272 432 147 186 211 489
Property, vehicles, plant
and equipment 261 923 137 634 205 444
Goodwill 4 538 - -
Deferred tax 1 174 1 182 1 248
Investments and loans 4 797 8 370 4 797
Current assets 115 999 74 034 101 919
Total assets 388 431 221 220 313 408
Equity and liabilities
Capital and reserves 123 260 116 464 127 654
Non-current liabilities 161 104 44 063 96 687
Interest-bearing 101 147 20 533 70 170
Non-interest-bearing 40 000 6 025 6 025
Deferred tax 19 957 17 505 20 492
Current liabilities 104 067 60 693 89 067
Interest-bearing 21 327 5 047 15 202
Non-interest-bearing 82 740 55 646 73 865
Total equity and liabilities 388 431 221 220 313 408
Actual number of shares
in issue 207 599 040 207 599 040 207 599 040
Net asset value per
share (cents) 59,4 56,1 61,5
Net tangible asset value
per share (cents) 57,2 56,1 61,5
CONSOLIDATED CASH FLOW STATEMENT
Unaudited Unaudited Audited
six six twelve
months months months
August August February
Figures in R'000s 2001 2000 2001
Cash flows from operating
activities 23 745 24 087 48 570
Cash flows from investing
activities (11 678) (17 164) (106 994)
Cash flows from financing
activities 2 185 2 541 62 152
Net increase in cash and
cash equivalents 14 252 9 464 3 728
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
six six twelve
months months months
August August February
Figures in R'000s 2001 2000 2001
Share capital 208 208 208
Share premium 41 231 41 231 41 231
Accumulated profits 81 821 75 025 86 215
Balance at beginning of year 86 215 65 042 65 042
(Loss)/earnings attributable to
ordinary shareholders (4 394) 9 983 21 173
Total capital and reserves 123 260 116 464 127 654
NOTES
Unaudited Unaudited Audited
six six twelve
months months months
August August February
Figures in R'000s 2001 2000 2001
1. Accounting policies
The accounting policies adopted
For the purpose of this report
comply in all material respects
with South African Statements
of Generally Accepted Accounting
Practice and have been consistently
prepared in accordance with
the accounting policies outlined
in the Group's annual report.
2. Abnormal items
Write-down of carrying value
of loan to share incentive
trust - - (3 573)
(Goodwill)/negative goodwill
amortised (648) - 2 141
(648) - (1 432)
3. Taxation
Taxation includes a write-down of a
deferred tax asset which has
not met the criteria for recognition.
4. Reconciliation between basic
and headline (loss)/earnings
Basic (loss)/earnings (4 394) 9 983 21 173
Write-down of loan to share
incentive trust - - 3 573
Goodwill/(negative goodwill)
amortised 648 - (2 141)
Profit on disposal of fixed assets
less taxation (381) (10) (483)
Headline (loss)/earnings (4 127) 9 973 22 122
Message to Stakeholders
Your board announces the unaudited interim results for Value Group Limited
and its subsidiaries ("the Group") for the six months ended 31 August 2001.
1. Financial commentary
As mentioned in the profit warning issued on 27 August 2001, the Group has
suffered a decline in earnings. The disappointing performance of the Group
is attributable to three major factors, namely the increased finance charges
and resources to fund and integrate the acquisitions, and the depressed
economy of the retail sector, resulting in an underutilisation of vehicles.
The Group has enjoyed satisfactory revenue growth, enhanced by the
acquisition of Fleet Holdings (Pty) Limited on 1 March 2001 and the
continued contribution of the Rent-A-Bakkie operations acquired on
1 September 2000. Nevertheless, the integration of the newly acquired fleet
from Fleet Holdings (Pty) Limited into the Group's core revenue producing
fleet was costly and, as a result, the revenue growth has been adversely
impacted by an increase in depreciation, overheads and finance costs.
Consequently, a focused vehicle rationalisation has been implemented in
order to bring fixed costs in line with the level of operations sustained by
the Group, a process which will be ongoing until such time as optimal fleet
utilisation is achieved.
Notwithstanding an increase in costs, the Group is in a positive cash flow
position, having generated R14,3 million during the period under review. The
cash generated will be utilised to reduce borrowings.
The abnormal item in this period reflects the amortisation of goodwill of
R0,6 million arising from the acquisition of Fleet Holdings (Pty) Limited.
2. Review of business activities
Acquisitions
The Group acquired Fleet Holdings (Pty) Limited from Nedcor Bank Limited on
1 March 2001 for a cash consideration of R2,25 million. This acquisition has
increased the fleet by approximately 700 vehicles and has facilitated the
Group's entry into the niche refrigerated transport market. It is the
Group's intention to migrate the acquired customer base from basic
transportation to full distribution.
Ongoing operations
Value Logistics now has a national footprint in South Africa and is
delivering highly efficient service levels. Freightpak, which is operating
acceptably, has moved into a new specialised distribution facility in
Durban, which will improve efficiencies and can accommodate additional
growth. All operating and administrative facilities of Rent-A-Bakkie,
Fleetrent and Value have been consolidated.
3. Prospects
Management's intention to focus on the high growth distribution and
logistics business and to strengthen our market position in transport
services has been reaffirmed. Cost control and working capital management
remains a high priority in order to maximise the cash flows into the Group
in order to reduce gearing. Whereas the overall performance during this
period was below expectation, it is anticipated that, having regard to the
restructuring of departments and operations, the termination of unprofitable
contracts, the sale of excess vehicles and an increase in consumer spending,
the Group should show improved results for the remainder of the financial
year.
4. Dividend
In line with past practice, the Group will continue to retain earnings to
fund future expansion and to redeem borrowings. Accordingly no interim
dividend has been declared.
For and on behalf of the board
C D Stein S D Gottschalk D C Marais
(Chairman) (Chief Executive Officer) (Deputy Chief Executive Officer)
25 October 2001
Directors: C D Stein* (Chairman), S D Gottschalk (CEO), D C Marais (Deputy
CEO), J M P Desmidt*, B E Goldie *Non-executive director
