| Thu 31 Jan 2002, 0:00 | | Bridgestone Firestone Maxiprest Limited - Commenta |
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31 December 2001
Bridgestone Firestone Maxiprest Limited or "the company"
(Formerly Maxiprest Limited)
(Registration number: 1988/006456/06))
ISIN Code: ZAE000027447 Share Code:BDS
BRIDGESTONE FIRESTONE MAXIPREST LIMITED
COMMENTARY ON YEAR END RESULTS - 31 DECEMBER 2001
THE COMPANY
Bridgestone Firestone Maxiprest Limited, listed on the JSE Securities
Exchange under the "industrial - transport" sector, is Southern Africa's
predominant retreader and new tyre distributor and tyre management service
provider. Its operations in the region are conducted through 22 retread
factories and 98 retail and services outlets that support its 24 hour
transporters' tyre breakdown service.
The operations are conducted through its wholly owned subsidiaries Maxiprest
Tyres (passenger, truck, bus and agriculture), Quality Tyres (mining and
earthmover) and Pentamax (export and regional development and distribution)
and its recent 51% acquisition of Prima Maxiprest in the Western Cape.
The world's leading new tyre and rubber manufacturer, Bridgestone
Corporation (Japan), holds a strategic 53% stake in the group through its
local wholly owned subsidiary Bridgestone Firestone South Africa Holdings
(Pty) Ltd - with the balance of the shares being held by management,
institutions and the investing public.
OPERATIONAL PERFORMANCE
The group's results for the year ended 31 December 2001 reflect the
commitment of management and every employee of Maxiprest to the group's
value-based management philosophy - `creating and enhancing value for all
its stakeholders'.
Sales margins were affected during the year, and in particular in the latter
period, by the rapid depreciation of the Rand which culminated in escalating
purchase costs of both imported and locally manufactured new tyres where a
large component of the local manufacturer's input costs are directly
affected by such depreciation.
Management's focus on increasing tyre management services to the
professional transport operator and mining operations and an aggressive
policy towards improving the return on assets managed and cost reduction has
contributed to an increase in operating margins to 6,3% (2000: 6,0%).
In summary the group achieved an 8,8% increase in turnover at R1,108million
(2000: R1,019million). Headline earnings increased by 12,4% to R50,7million
(2000: R45,1million) while at R49,3million (2000: R43,3million) attributable
earnings reflect an increase of 13,9%.
The dividend received of R1,651million (2000: Nil) is the cash dividend from
the group's 57% stake in the non-consolidated Zimbabwean subsidiary.
Regional trading, however, has benefited profits by R5.4million (2000:
R0.6million) through gains made from foreign currency denominated sales.
During the year the group increased its stake in the Zambian operation from
37% to 70% at a cost of R3,8million. Management continues to consider it
prudent not to consolidate the Zimbabwean and Zambian earnings based on the
relative unstable political and economic conditions that prevail in the
region as well as the currency constraints which impact on the ability to
repatriate funds.
Earnings this year have been affected by a change in accounting policy in
order to comply with the requirements of accounting standards (AC123)
relating to owner occupied properties which resulted in an additional
depreciation charge of R1,383million (2000: R1,365million). Earnings ratios
and net asset values have been accordingly restated. The adjustment to prior
years, 1997 to 1999, of R3,519million has been affected against the
appropriation account.
Net asset value has increased by 12,9% to 185 cents per share (2000: 164
cents per share). The manufacture of the precured tread rubber has
transferred, with effect from 1 January 2002, to the Bridgestone/Firestone
factory in Port Elizabeth. In order to ensure continuity of supply during
this transition period it was decided to strategically stockpile precured
tread rubber ahead of the transfer. This resulted in the stock holding
increasing significantly to R129,7million (2000: R85.5million). The stock
holding will be reduced during the first half of 2002 as production in Port
Elizabeth achieves full capacity.
A final dividend of 6 cents per share (2000: 5 cents per share) has been
declared, which with the interim dividend of 5 cents per share (2000: 5
cents per share), amounts to a total of 11 cents per share for the year
(2000: 10 cents per share) reflecting the company's continuing dividend
policy of approximately three times cover.
FUTURE OUTLOOK
Tyre management services to transporters and mining operators, improved
distribution of new and retreaded tyres in the domestic market along with
the development of the sub-saharan market, continue to head management's key
growth drivers.
The inroads made during the year by specialist OTR (off-the-road)
subsidiary, Quality Tyres, through it being awarded significant three-year
supply, maintenance and management contracts in the mining sector, in both
the domestic and regional markets, will enhance future earnings for the
group.
The release in November 2001 of Tyre Maximizer, the software package "for
intelligent tyre management", will assist the tyre leasing and maintenance
divisions in promoting contractual outsourced business from transport
operators. The anticipated incremental contract business will add to annuity
income securing future earnings and growth.
The full year's contribution from the investment in Prima Maxiprest in the
Western Cape and the further planned strategic alliances in that area and
the Eastern Cape will enhance earnings in 2002.
Earnings will further benefit from the acquisition of a 51% stake in Quality
Tyres Namibia, which will be effective from 1 February 2002, and the
establishment of a wholly owned distribution warehouse in Windhoek, from
which it will distribute Bridgestone/Firestone new tyres and Maxiprest
precured tread rubber in Namibia.
Pentamax has concluded an agreement with the Mozambiquean Entreposto Group
for the wholesale and retail distribution of Bridgestone/Firestone new tyres
in Mozambique. Pentamax has a 60% stake in the new business created by this
agreement and is currently establishing a distribution and service network
in that country. The benefits to earnings will only be felt in the latter
part of 2002 and thereafter.
Management is confident that the continued focus on and execution of its key
growth drivers will continue to achieve consistent growth to `create and
enhance value for all its stakeholders'
ON BEHALF OF THE BOARD
M E DAVISON C E BROWN
Joint Managing Directors
30 January 2002
DIVIDEND DECLARATION
Notice is hereby given that a final dividend of 6 cents per share (dividend
no. 9) has been declared which along with the interim dividend of 5 cents
per share (dividend no 8) amounts to an annual dividend of 11 cents per
share.
Shareholders are advised that the last day to trade cum dividend will be
Friday, 15 February 2002 . The shares will trade ex dividend as of Monday,
18 February 2002 and the record date will be Friday, 22 February 2002. The
dividend will be payable on Monday, 25 February 2002.
Certificated shareholders may not dematerialised or rematerialised their
shares between Monday, 11 February 2002 and Friday, 22 February 2002 both
days inclusive.
BY ORDER OF THE BOARD
G M SINCLAIR CA(SA)
Company Secretary
30 January 2002
BRIDGESTONE FIRESTONE MAXIPREST
LIMITED
CASH FLOW STATEMENTS
for the year ended 31 December 2001 Restated
Audited Audited
Dec 2001 Dec 2000
R'000 R'000
Net cash from operating activities 11,598 34,025
Net cash used in investing (22,518) (17,979)
activities
Net cash used in financing (2,439) (5,178)
activities
Net (decrease) increase in cash and (13,359) 10,868
cash equivalents
Cash and cash equivalents at 33,792 24,578
beginning of the year
Cash and cash equivalents - (1,654)
deconsolidated
Cash and cash equivalents at end of 20,433 33,792
year
BRIDGESTONE FIRESTONE MAXIPREST
LIMITED
STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2001 Restated
Audited Audited
Dec 2001 Dec 2000
R'000 R'000
Share capital and premium
Balance at end of year 130,487 130,487
Accumulated profits
Balance at beginning of year restated 120,357 92,914
Balance at beginning of year as 125,241 96,433
previously reported
Change in accounting policy (4,884) (3,519)
Profit for the year 49,291 43,263
Distribution to shareholders (17,402) (15,820)
Balance at end of year 152,246 120,357
Shareholders for dividend
Balance at beginning of year 7,910 2,689
Distribution to shareholders 17,402 15,820
Paid during the year (15,820) (10,599)
Balance at end of year 9,492 7,910
Capital and reserves 292,225 258,754
BRIDGESTONE FIRESTONE MAXIPREST
LIMITED
INCOME STATEMENT
for the year ended 31 December
2001
Restated
Audited Audited
Dec 2001 Dec 2000
R'000 R'000
Revenue 1,108,117
1,018,777
Cost of sales (788,465)
(714,335)
Gross profit 319,652 304,442
Other operating expenses (249,493)
(243,619)
Profit from operations 70,159 60,823
Net finance costs (629) (656)
(Loss) income from associates (581) 211
Income from investments 1,651 -
Profit before tax 70,600 60,378
Income tax expense (21,290) (16,775)
Profit after tax 49,310 43,603
Minority interest (19) (340)
Profit for the year 49,291 43,263
Issued shares (million) 158.2 158.2
Earnings per share, basic and 31.2 27.3
fully diluted (cents)
Headline earnings (Rm)
Profit for the year 49,291 43,263
Exceptional items, net of tax 1,400 1,847
50,691 45,110
Headline earnings per share 32.0 28.5
(cents)
Dividends per share 11.0 10.0
Capital expenditure (R'000)
-incurred 20,052 20,536
-approved 12,511 9,502
Depreciation 14,292 14,868
BRIDGESTONE FIRESTONE MAXIPREST
LIMITED
BALANCE SHEET
at 31 December 2001 Restated
Audited Audited
Dec 2001 Dec 2000
R'000 R'000
ASSETS
Non-current assets
Property, plant and equipment 110,431 107,113
Goodwill 6,817 7,633
Investments in associates 930 728
Unconsolidated subsidiaries 21,714 17,857
Share incentive scheme 9,414 8,591
149,306 141,922
Current assets
Inventory 129,668 85,552
Accounts receivable 236,998 253,508
Cash at bank 23,528 34,413
390,194 373,473
TOTAL ASSETS 539,500 515,395
EQUITY AND LIABILITIES
Capital and reserves
Share capital 130,487 130,487
Accumulated profits 152,246 120,357
Shareholders for dividend 9,492 7,910
292,225 258,754
Outside shareholders' interest 19 -
Long term liabilities 554 1,035
Current liabilities
Accounts payable 220,776 233,647
Short term portion of long term 1,199 3,157
liabilities
Taxation payable 21,632 18,181
Bank overdraft 3,095 621
246,702 255,606
TOTAL EQUITY AND LIABILITIES 539,500 515,395
cents cents
Net Asset Value per share (cents) 184.7 163.6
