| Tue 19 Feb 2002, 0:00 | | Caxton: Interim Report |
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Caxton Publishers and Printers Limited
and subsidiary companies
(Incorporated in the Republic of South Africa)
(Registration number 1947/025989/06)
JSE Share code: CXT ISIN: ZAE000017182
("Caxton" or "the company")
INTERIM REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2001
INCOME STATEMENT
at 31 December 2001
Unaudited Unaudited Audited
6 months to 6 months to For the year
31 December 31 December 30 June
2001 2000 2001
R000 R000 R000
Turnover 1 403 009 1 235 000 2 380 233
Profit from operations 189 896 172 828 329 851
Depreciation (42 743) (38 490) (80 747)
147 153 134 338 249 104
Finance income - net 36 614 25 988 58 945
Associated companies 1 331 1 914 (1 895)
Income before taxation 185 098 162 240 306 154
Taxation (57 620) (46 238) (88 538)
Income after taxation 127 478 116 002 217 616
Attributable to outside shareholders (1 790) (661) (2 263)
Headline earnings 125 688 115 341 215 353
Exceptional items adjusted for taxation 31 642 - -
Earnings attributable to shareholders 157 330 115 341 215 353
Earnings per share (cents) 27 20 37
Headline earnings per share (cents) 21,6 19,8 36
Cash earnings per share (cents) 30 34 63
Weighted average number of
shares in issue 581 661 545 581 661 545 581 661
545
Cash resources 717 850 374 834 573 968
Capital expenditure 59 651 54 894 120 492
Capital commitments 63 000 20 000 25 000
CASH EARNINGS PER SHARE
Income before taxation and
exceptional items 185 098 162 240 306 154
Add: Depreciation 42 743 38 490 80 747
Add: Net loss/(profit) on sale
of fixed assets 527 (14) (4 800)
Less: Taxation (55 033) (2 625) (17 163)
Associated companies
(profits)/loss (1 331) (1 914) 1 895
Cash earnings 172 004 196 177 366 833
Cash earnings per share (cents) 30 34 63
STATEMENT OF CHANGES IN EQUITY
at 31 December 2001
Unaudited Unaudited Audited
6 months to 6 months to For the year
31 December 31 December 30 June
2001 2000 2001
R000 R000 R000
Balance at beginning of period 1 730 891 1 496 955 1 496
955
Retained income 157 330 115 341 215 353
Non-distributable reserve - loan at a
discount and transfer to deferred tax - 83 7 771
Dividend paid (87 227) - -
Rights offer - 10 812 10 812
Balance at end of period 1 800 994 1 623 191 1 730
891
BALANCE SHEET
at 31 December 2001
Unaudited Unaudited Audited
6 months to 6 months to for the year
31 December 31 December 30 June
2001 2000 2001
R000 R000 R000
ASSETS
Property, plant and equipment 720 349 694 741 709 521
Investments and loans 55 770 165 264 159 503
776 119 860 005 869 024
Current assets 1 643 420 1 257 658 1 360 870
Total assets 2 419 539 2 117 663 2 229 894
Equity and liabilities
Shareholders' equity 1 800 994 1 623 191 1 730 891
Outside shareholders' interest 4 128 2 380 3 188
1 805 122 1 625 571 1 734 079
Deferred taxation 78 873 37 683 61 959
Current liabilities 535 544 454 409 433 856
Total equity and liabilities 2 419 539 2 117 663 2 229 894
CASH FLOW STATEMENT
at 31 December 2001
Unaudited Unaudited Audited
6 months to 6 months to for the year
31 December 31 December 30 June
2001 2000 2001
R000 R000 R000
Cash flow from operating activities 38 656 65 018 304 115
Cash generated by operations 182 137 171 548 325 360
Increase in working capital (81 201) (125 431) (66 949)
Cash generated by operating activities 100 936 46 117 258 411
Less: Taxation (paid) (10 817) (7 087) (11 325)
Interest received net 36 614 25 988 57 029
Net cash inflow from
operating activities 126 733 65 018 304 115
Dividends paid (88 077) - -
Cash flows from investing activities 105 226 (148 060) (188 023)
Property, plant and equipment
- additions to maintain operations (59 561) (54 894) (99 475)
- proceeds from disposals 5 407 2 511 17 449
(54 154) (52 383) (82 026)
Investments and loans 159 380 (95 677) (105 997)
Cash flows from financing activities - 10 812 10 812
Cash by the issue of shares - 10 812 10 812
Net cash increase in cash equivalents 143 882 (72 230) 126 904
Cash and equivalents at beginning
of period 573 968 447 064 447 064
Cash and equivalents at end
of period 717 850 374 834 573 968
Basis of preparation
The financial statements of the group have been prepared in accordance with
the South African Statements of Generally Accepted Accounting Practice,
which policies are consistent with those of the prior year.
Comment
Despite a difficult trading environment it is pleasing to report that Caxton
has once again produced satisfactory results. Having regard to the exercise
which is currently underway to assess the residual value at the end of the
useful life of the presses, plant and equipment owned by the company and to
ascertain the remaining life of such equipment, shareholders are advised
that this exercise will only be completed at the end of the current
financial year due to the number of items owned by Caxtons in its various
divisions and the complexities involved in the exercise. Accordingly there
has been no change in the manner in which depreciation is calculated for the
period under review.
Earnings
Turnover increased by 13,6%, from R1,235 million to R1,403 million. Profit
from operating activities amounted to R189,896 million an improvement of
10%. After providing for depreciation of R42,743 million, net finance income
of R36,614 million and the company's share of profits of associated
companies of R1,331 million, income before taxation amounted to R185,098
million. The rate of taxation has increased from 28,5% to 31,1% as a result
of the dividend paid during the period and which attracted the payment of
STC. Net income for the period, after eliminating profits attributable to
outside shareholders of R1,79 million, amounted to R125,688 million - an
increase of 9%. Headline earnings per share of 21,6 cents, before taking
into account exceptional items, which mainly comprise the surplus on the
realisation of investments which were no longer considered "core" to the
company's future operations, on an unchanged number of shares in issue, are
similarly an improvement of 9% on the headline earnings of 19,8 cents
achieved during the comparative six months to 31 December 2000. Earnings per
share totalled 27 cents.
Packaging
A strategic decision to invest further into niche packaging markets has been
taken and with this objective in mind, additional premises and plant has
been acquired. This will necessitate the restructure of certain existing
facilities and a number of redevelopments have been undertaken which should
be complete by the financial year-end. In the past, packaging have accounted
for less than 10% of Caxton's turnover but it is anticipated that with those
new developments, Packaging could in future amount to approximately 15% of
turnover. The focus of the company's investment in this area is specifically
into Label Printing. Flexographic Packaging and Folded Carton Production.
Whilst Packaging operations throughout South Africa and even Internationally
have been going through exceedingly difficult times with margins under
extreme pressure at lower than 5%, it is anticipated that over time this
investment will yield reasonable margins.
Prospects
The six months that the company is reporting on has seen a number of
fundamental shifts having taken place such as the Terrorist attack on the
World Trade Centre and the concomitant effect that this has had on the
economies of all countries. South Africa, as a developing country, has also
had to contend with the substantial devaluation of its currency. Media
owners the world over are all commenting on the decreases taking place in
advertising revenues and, in addition, South African publishers and printers
will have to deal with increases in paper and ink prices increasing by
anywhere between 20% and 40% due to the devaluation of the Rand. Whilst
trading conditions over the Christmas period were good, mainly due to pre-
emptive buying, it is likely that inflation will increase to well in excess
of 10%. It is in these circumstances impossible to project what the level of
profitability is likely to be in the ensuing six months.
By order of the Board
Dr. F van Zyl Slabbert (Chairman)
G M Utian (Managing Director)
T D Moolman (Chief Executive Officer)
19 February 2002
