| Wed 14 Nov 2001, 0:00 | | Hunt Leuchars & Hepburn - Interim Report |
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HUNT LEUCHARS & HEPBURN HOLDINGS LIMITED
("HL&H")
Registration number 1924/001164/06
Share Code HLH ISIN ZAE000003299
Share Code HLHP ISIN ZAE000011441
INTERIM REPORT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2001 (UNAUDITED)
SALIENT FEATURES
* Revenue up 19%
* Operating profit up 3%
* Diluted headline earnings and earnings per share up 1%
INCOME STATEMENTS
6 MONTHS 6 MONTHS 12 MONTHS
SEPTEMBER SEPTEMBER MARCH
(Rms) 2001 2000 2001
Revenue 1 623,9 1 367,2 2 996,9
Operating profit 135,2 130,8 336,1
Exceptional items (3,0) (4,0) 5,1
Profit before interest and taxation 132,2 126,8 341,2
Interest received 8,2 4,5 14,8
Interest paid (23,1) (24,9) (53,3)
Share of earnings/(loss) of associates 0,3 0,5 (0,1)
Profit before taxation 117,6 106,9 302,6
Taxation 39,3 32,6 90,0
Profit after taxation 78,3 74,3 212,6
Preference dividends (26,4) (26,4) (52,8)
Minorities (4,2) (3,3) (6,8)
Net profit attributable to
ordinary shareholders 47,7 44,6 153,0
SEGMENTAL REPORTS
(Rms)
Revenue
Food and homecare products 1 017,0 864,0 1 940,1
Sugar, citrus and tea 606,9 503,2 1 056,8
1 623,9 1 367,2 2 996,9
Operating profit
Food and homecare products 62,3 96,0 249,2
Sugar, citrus and tea 76,6 39,9 93,9
Corporate (3,7) (5,1) (7,0)
135,2 130,8 336,1
BALANCE SHEETS
SEPTEMBER SEPTEMBER MARCH
(Rms) 2001 2000 2001
Assets:
Property, plant, vehicles, equipment
and plantations 1 500,8 1 470,2 1 485,7
Associate companies and investments 10,4 15,0 9,9
Current assets 1 160,3 1 100,1 1 181,3
Total assets 2 671,5 2 585,3 2 676,9
Equity and liabilities:
Ordinary share capital 422,3 420,2 421,9
Non-distributable reserves 398,8 268,6 323,9
Retained earnings 742,0 673,8 744,0
Convertible debentures and
loan accounts 40,5 40,5 40,5
Convertible preference share capital 166,8 166,8 166,8
Ordinary shareholders' equity 1 770,4 1 569,9 1 697,1
Minority interest 17,0 13,6 15,3
Interest bearing debt 171,3 270,2 299,5
Non-interest bearing liabilities 712,8 731,6 665,0
Total equity and liabilities 2 671,5 2 585,3 2 676,9
Net asset value
per ordinary share (cents) 711,9 621,6 678,4
STATEMENTS OF CHANGES IN EQUITY
Non-
Ordinary distribu Preference
share table Retained share
(Rms) capital reserves earnings Debentures capital Total
Balances at
1 April 2001 421,9 323,9 744,0 40,5 166,8 1 697,1
Issue of
share capital 0,4 0,4
Share of joint
venture profits 40,1 (40,1)
Foreign currency
translation 34,5 34,5
Share of associate
companies' earnings 0,3 (0,3)
Net profit 47,7 47,7
Dividends paid (9,3) (9,3)
Balances at
30 September 2001 422,3 398,8 742,0 40,5 166,8 1 770,4
Balances at
1 April 2000 420,0 243,8 621,4 40,5 166,8 1 492,5
Issue of
share capital 0,2 0,2
Share of joint
venture profits (8,3) 8,3
Foreign currency
translation 32,6 32,6
Share of associate
companies' earnings 0,5 (0,5)
Net profit 44,6 44,6
Balances at
30 September 2000 420,2 268,6 673,8 40,5 166,8 1 569,9
CASH FLOW STATEMENTS
SEPTEMBER SEPTEMBER MARCH
(Rms) 2001 2000 2001
Net cash (outflow)/inflow from
operating activities (143,1) (176,1) 189,7
Net cash outflow from
investing activities (54,5) (70,2) (105,3)
Net cash (outflow)/inflow from
financing activities (33,6) 4,6 (4,8)
Net (decrease)/increase in cash and
cash equivalents (231,2) (241,7) 79,6
HEADLINE EARNINGS AND SEGMENTAL ANALYSIS
SEPTEMBER SEPTEMBER MARCH
(Rms) 2001 2000 2001
Net profit 47,7 44,6 153,0
Headline adjustments:
Exceptional items: 3,0 4,0 (5,1)
Loss on conversion of TSB debentures 16,9
Release of provision no longer required (15,0)
Expenses incurred related to the
Robertsons/ Unifoods negotiations 1,1
Expenses related to the
TSB/Tongaat-Hulett
merger negotiations 4,0 4,3
Profit on disposal of Israeli
distribution centre (9,4)
Profit on disposal of property, plant,
equipment and investments (2,0) (0,6) (1,9)
Headline earnings 48,7 48,0 146,0
Dilution adjustments:
Interest on debentures, after taxation 1,2 1,2 2,4
Preference dividends 26,4 26,4 52,8
Headline earnings - diluted 76,3 75,6 201,2
Segmental contribution:
Robertsons 44,4 58,1 166,1
TSB 35,0 18,8 34,7
Corporate (3,1) (1,3) 0,4
76,3 75,6 201,2
STATISTICS AND SUPPLEMENTARY INFORMATION
SEPTEMBER SEPTEMBER MARCH
2001 2000 2001
Per share information
Weighted average number of
ordinary shares (000's) 221 710 221 215 221 283
- diluted (000's) 352 070 351 574 351 642
Basic earnings
per ordinary share (cents) 21,5 20,2 69,1
- diluted (cents) 21,4 20,5 59,2
Headline earnings per
ordinary share (cents) 22,0 21,7 66,0
- diluted (cents) 21,7 21,5 57,2
Supplementary information (Rms)
Depreciation 65,0 60,4 120,8
Capital expenditure 61,1 69,8 132,9
Capital commitments
- Contracted 18,4 33,4 20,6
- Authorised but not contracted 36,2 30,6 63,1
Dividends received 0,2 0,2 0,2
Operating lease commitments
- following year 23,1 21,9 23,3
- thereafter 244,9 36,0 64,0
Contingent liabilities 18,7 9,6 15,9
Interest capitalised 0,4
Investments and associate companies
- Unlisted: Directors' valuation 12,3 16,8 11,8
COMMENTS
Results
Total Group revenue increased by 19% over the same period in the previous
year. Transvaal Sugar Limited ("TSB") benefitted from the improvement in
world sugar prices to show a 21% revenue increase. The revenue of Robertsons
increased by 18%, but 11% of this growth is due to the Rand depreciation,
while unfavourable conditions in Israel and a poor insecticide season have
resulted in reduced margins and a decline in operating profit.
Group profit after interest and before tax and exceptional items
increased by 8% over the previous comparable period, benefitting from net
financial costs having decreased marginally largely due to the lower
prevailing interest rates.
The Group's diluted headline earnings (before preference dividends and
debenture interest) amounted to R76,3 million, in line with the R75,6
million achieved last year. TSB's headline earnings almost doubled from
R18,8 million to R35,0 million emanating from better world sugar prices and
a significant improvement in its citrus operations. Robertsons' contribution
of R44,4 million reflected a decrease of some 24% as a result of the adverse
trading conditions in Israel and the other factors referred to above.
The Group headline earnings increased by 1% to R48,7 million for the
period to September 2001, while Group diluted headline earnings per share of
21,7 cents compares to 21,5 cents achieved last year.
Exceptional items
A loss of R16,9 million was incurred on the conversion of debentures in
TSB. This conversion is beneficial to the company due to the low interest
rates currently prevailing. A warranty provision of R15 million, raised in
respect of a previous transaction in a prior year, has now been released as
it is no longer required.
Balance sheet
The Group's interest bearing debt amounted to R171,3 million (2000 -
R270,2 million) giving a net debt to equity ratio of 9,7% (2000 - 17%),
after taking account of cash resources on hand of R94,2 million (2000 - R4,3
million).
Dividends
Preference dividend No. 10
The board resolved to declare a cash dividend of 21,7 cents per share in
respect of the period from 1 April 2001 to 30 September 2001 payable to
holders of 7% compulsorily convertible cumulative preference shares
("preference shares"). In accordance with the settlement procedures of
STRATE, the last day to trade "cum" the dividend is Friday, 16 November
2001, the preference shares commence trading "ex" the dividend on Monday, 19
November 2001 and the record date is Friday, 23 November 2001.
The last day to transfer for holders of certificated preference shares is
Friday, 16 November 2001. Holders of certificated preference shares may not
dematerialise/rematerialise their shares from Monday, 12 November 2001 to
Friday, 23 November 2001, both days inclusive.
The dividend will be paid on Monday, 26 November 2001.
Ordinary dividend No. 38
Notice is hereby given that the board has resolved to declare an interim
dividend of 3,0 cents per share payable to holders of ordinary shares. In
accordance with the settlement procedures of STRATE, the last day to trade
"cum" the dividend is Friday, 30 November 2001, the ordinary shares will
commence trading "ex" the dividend on Monday, 3 December 2001 and the record
date is Friday, 7 December 2001.
The last day to transfer for holders of certificated ordinary shares is
Friday, 30 November 2001. Holders of certificated ordinary shares may not
dematerialise/rematerialise their shares from Monday, 26 November 2001 to
Friday, 7 December 2001, both days inclusive.
The dividend will be paid on Monday, 10 December 2001.
STRATE
The board implemented the Issuer-Sponsored Nominee programme to assist
shareholders to dematerialise existing certificated shares. The
dematerialisation programme has progressed to the extent that in excess of
61% of the ordinary shares and 59% of the preference shares respectively
held by the public have been dematerialised to date. Shareholders are
thanked for their co-operation in this regard. Those shareholders who have
as yet not deposited their shares with a Central Securities Depository
Participant or a qualifying broker are reminded to do so. Enquiries in this
regard may be referred to STRATE on 0800 004 727 or Computershare Services
on 086 110 0933.
The company's shares commenced trading on the JSE Securities Exchange
South Africa ("JSE") in uncertificated form on Monday, 3 September 2001 with
the first electronic settlement under STRATE occurring on Monday, 10
September 2001.
Proposed joint venture with Unilever
On 12 September 2001 it was announced that the Group and Unilever had
entered into a Memorandum of Understanding in terms of which both Robertsons
and Unilever propose to restructure their interests in the existing joint
venture between Robertsons and Bestfoods Europe, resulting in a new venture.
This proposal is a direct result of Unilever's acquisition of the worldwide
interests of Bestfoods.
The proposed transaction is subject to the conclusion of a definitive
agreement and the fulfilment of certain conditions precedent, the most
important of which are:
- approval of the proposed transaction in general meeting by shareholders of
HL&H; and
- approval by the necessary regulatory authorities, including the JSE, the
South African Reserve Bank and the South African Competition Authorities.
Further announcement
A further announcement, setting out more comprehensive details of the
proposed transaction, will be published on conclusion of the definitive
agreement. Until publication of such further announcement, shareholders are
advised to exercise caution in dealing in their shares.
Prospects
As the trading conditions, especially in Israel, continue to be difficult
and if the Unilever transaction does not become effective during the current
financial year, Robertsons is not expected to maintain its headline earnings
at last year's level.
With current world sugar prices at higher levels than last year, together
with the current R/$ exchange rate and a material improvement in the citrus
business, TSB's headline earnings are expected to increase significantly
over last year's.
Given the above, the group expects to maintain headline earnings for the
year to 31 March 2002.
Accounting policies
The accounting policies in respect of the financial year ended 31 March
2001 have been consistently applied to the results for the period ended 30
September 2001. These policies conform with South African Generally Accepted
Accounting Practices.
On behalf of the board
B H de Klerk
Secretary
13 November 2001
Enquiries regarding this report may be directed to Mr N Phillips at
telephone number (031) 561-4690.
Registered office:
Hunt Leuchars & Hepburn Holdings Limited, 1st Floor, Kohler House, 4 Pybus
Road, Wierda Valley, Sandton 2196
Transfer secretaries:
Computershare Services Limited, 2nd Floor, Edura, 41 Fox Street,
Johannesburg 2001
