| Thu 21 Feb 2002, 0:00 | | Grintek Limited - Interim Results For Half-year En |
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GRINTEK LIMITED
Reg. No. 1955/000013/06
Share code: GNK
ISIN code: ZAE000003067
INTERIM RESULTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2001
EXPORT REVENUE UP 66%
OPERATING PROFIT UP 39%
DILUTED HEADLINE EPS UP 10%
DIVIDEND PER SHARE 36
INCOME STATEMENT
Unaudited Unaudited Audited
half-year half-year year
ended ended ended
31 December Increase/ 1 December 30 June
2001 (Decrease) 2000 2001
R000 % R000 R000
Revenue from sales 606 364 (1) 612 996 1 189 479
Cost of sales 483 820 (6) 515 565 901 263
Gross profit 122 544 26 97 431 288 216
Selling and
administration
expenses 51 782 11 46 452 95 216
Earnings before
financing costs, taxation
depreciation and
amortisation ("EBITDA") 70 762 39 50 979 193 000
Depreciation (8 436) 37 (6 172) (14 464)
Amortisation (4 040) 41 (2 858) (8 393)
Operating profit 58 286 39 41 949 170 143
Interest received 7 674 14 6 750 16 983
Profit before
financing costs 65 960 35 48 699 187 126
Financing costs (5 597) 331 (1 300) (4 729)
Financing costs on
capitalised leases (2 005) 2 (1 975) (3 435)
Share of associated
company results 1 100 5 1 045 3 509
Exceptional items (1 500) - (2 074)
Profit before taxation 57 958 25 46 469 180 397
Taxation 19 491 34 14 526 62 595
Profit after taxation 38 467 20 31 943 117 802
Attributable to
outside shareholders 3 709 832 398 4 491
Earnings 34 758 10 31 545 113 311
GROUP BALANCE SHEET
Unaudited Unaudited Audited
half-year half-year year
ended ended ended
31 December 31 December 30 June
2001 2000 2001
R000 R000 R000
ASSETS
Non-current assets 182 073 130 528 153 967
Fixed assets 119 067 84 776 99 555
Development projects 36 400 26 126 27 133
Unlisted investments 11 963 7 854 10 862
Deferred taxation asset 7 659 9 021 5 828
Loans and long-term
receivables 6 984 2 751 10 589
Current assets 933 889 763 716 910 826
Inventories 202 623 146 652 197 601
Trade and other
receivables 513 687 454 784 495 045
Advance payments 22 600 21 891 19 129
Cash and cash equivalents 194 979 140 389 199 051
1 115 962 894 244 1 064 793
EQUITY AND LIABILITIES
Capital and reserves
Ordinary
shareholders' equity 372 346 274 444 351 320
Minority interests 57 110 21 863 25 956
Total equity 429 456 296 307 377 276
Non-current liabilities
Long-term borrowings 31 015 25 423 31 731
Current liabilities 655 491 572 514 655 786
Interest bearing 24 919 4 056 32 182
Trade and other payables 326 632 344 113 333 598
Advance receipts 230 096 156 694 178 469
Provisions 58 757 45 608 53 162
Corporate taxation 15 087 22 043 58 375
1 115 962 894 244 1 064 793
ABRIDGED CASH FLOW STATEMENTS
Unaudited Unaudited Audited
half-year half-year year
ended ended ended
31 December 31 December 30 June
2001 2000 2001
R000 R000 R000
Operating activities 9 512 (55 427) 3 571
Cash generated by
operations 67 832 52 217 188 359
Income from investments 7 674 6 750 16 983
Working capital
requirements 30 587 77 462 (143 872)
Financing costs (7 602) (3 275) (8 164)
Taxation paid (72 078) (23 192) (32 926)
Dividends paid (16 901) (10 465) (16 809)
Investing activities (11 559) (21 950) (56 284)
Fixed assets - net
investment (27 803) (18 067) (36 272)
Development projects (13 307) (4 085) (12 077)
Investments and long-term
receivables 29 551 202 (7 935)
Financing activities
Shareholders' funding 3 169 - 2 400
Long-term borrowings - net (2 751) (3 619) 1 427)
Net change in cash and
cash equivalents (1 629) (80 996) (51 740)
Cash and cash equivalents 171 689 217 329 218 609
- at beginning of year 166 869 214 345 214 345
- currency adjustments 4 820 2 984 4 264
Cash and cash equivalents
at end of period 170 060 136 333 166 869
EARNINGS AND SHARE PERFORMANCE
Unaudited Unaudited Audited
half-year half-year year
ended ended ended
31 December Increase/ 31 December 30 June
2001 (Decrease) 2000 2001
R000 % R000 R000
Earnings 34 758 10 31 545 113 311
Profit on sale of assets (146) (4) (167)
Exceptional items 1 500 - 2 074
Attributable taxation
and minority share 44 1 58
Headline earnings 36 156 15 31 542 115 276
Share performance
- headline earnings
per ordinary
share (cents) 12.4 2 12.1 42.0
- fully diluted
headline earnings
per ordinary -
share (cents) 11.9 10 10.8 38.7
Total dividend per
ordinary share (cents) 5.8 4.8 7.0
- Interim paid during
previous period 2.2
- Final paid for
previous year 5.8 4.8 4.8
Interim dividend
declared 3.0 36 2.2 2.2
Number of ordinary
shares in
issue (thousands)
- at end of period 294 395 288 395 291 395
- weighted average 292 651 260 705 274 298
- fully diluted 303 748 300 089 299 533
Net asset value per
ordinary share 126.5 95.2 120.6
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
GROUP
Unaudited Unaudited Audited
half-year half-year year
ended ended ended
31 December 31 December 30 June
2001 2000 2001
R000 R000 R000
Stated capital 127 658 122 090 124 489
Balance at beginning
of year 124 489 86 794 86 794
Ordinary shares issued 3 169 35 296 37 695
Non-distributable reserves 2 400 3 345 2 400
Balance at beginning
of year 2 400 4 304 4 304
Transfer to distributable
reserves - - 1 700
Currency translation
differences - (959) (204)
Distributable reserves 242 288 149 009 224 431
Balance at beginning
of year 224 431 127 929 127 929
Earnings attributable
to ordinary shareholders 34 758 31 545 113 311
Ordinary dividends (16 901) (10 465) (16 809)
Ordinary shareholders'
interest 372 346 274 444 351 320
SEGMENTAL ANALYSIS
Unaudited Unaudited Audited
half-year half-year year
ended ended ended
31 December 31 December 30 June
2001 2000 2001
R000 R000 R000
Revenue from sales 606 364 612 996 1 189 479
Telecommunications 293 123 366 263 648 689
Defence electronics 247 925 170 749 409 004
Industrial electronics 65 316 75 984 131 786
COMMENTS
The directors of Grintek are pleased to announce the Group results for the
six months to 31 December 2001. While revenue from sales remained static,
profit before tax increased by 24,7 per cent, earnings increased by 10,2 per
cent and fully diluted headline earnings per share increased by 10,5 per
cent to 11,9 (2000 - 10,8) cents. Export revenue from sales has increased
by 66,2 per cent and currently represents 26,1 (2000 - 15,6) per cent of the
Group's revenue from sales. The Company has reviewed its dividend policy
and will reduce the dividend cover over the next 12 months. An interim
dividend of 3,0 (2000 - 2,2) cents per share has been declared.
BUSINESS REVIEW
Telecommunications
In line with global trends in the telecom and information technology
markets, this division experienced difficult trading conditions during the
reporting period. Revenue from sales was 20,0 per cent lower compared with
the six months ended 31 December 2000. Delays in the placement of orders
from operators and corporate clients were the main contributory factors to
this reduction. Operating margins were however well maintained through
prudent control of expenses.
Industrial Electronics
Divisional turnover decreased by 19,4 per cent due to a slow-down in energy
management business. The Group however, continued its investment in product
development in this area to meet anticipated demand in the electricity
supply environment. Two expansion orders for energy management systems were
recently received from existing customers.
The antenna business, in partnership with Kathrein, performed well and is
expected to continue to do so. The power rectifier business contributed
approximately half the divisional turnover for the period but realised a
lower than expected contribution to gross margins. An upturn in business
during the second half of the year is anticipated.
Defence Electronics
The turnover of the three defence units increased sharply by 45,2 per cent
to R247,9 (2000 - R170,7) million. Exports showed a marked improvement and
contributed 61 per cent of the divisional revenue from sales. With the
international partnering of the defence businesses in place, benefits have
already become evident in the record value of the medium-term order book.
Prospects
Although we remain confident as to the medium to long-term future of the
telecommunication business, the short-term market conditions remain
capricious. New business opportunities are constantly being pursued.
Four new significant infrastructure supply contracts are currently being
finalised with telecom operators in South and Central Africa, details of
which will be made public in the near future. Recent investments in the
telecommunications field, Centricity, Syrinx and Application Integration
Software, have improved their performance considerably during the reporting
period.
Negotiations for a number of defence electronics export orders are close to
conclusion, one of which, valued at approximately R100 million, will be
announced shortly.
The order book at the end of the first half of the financial year for
delivery over the next four years is in excess of R1 000 (2000 - R802)
million. Grintek historically experiences stronger second-half trading
performance.
FINANCIAL PERFORMANCE
The changing composition of revenue from sales, with an increasing component
derived from hard-currency exports, has had a positive impact on the
earnings for the period. The foreign exchange gains for the six-month
period amounted to R25,1 (2000 - R2,2) million. The Group's operations
generated a positive cash flow of R67,8 million (2000 - R52,2 million).
Post balance sheet events
Grintek has concluded an agreement with Ewation GmbH of Germany in terms of
which Ewation has acquired a 45 per cent interest in Grintek Ewation
(Proprietary) Limited. The agreement is conditional upon approval by the
competition regulatory authorities in both South Africa and the European
Union.
Capital expenditure
Capital expenditure for the Group during the six months ended 31 December
2001 was R28,1 million (2000 - R18,2 million). Capital expenditure
amounting to a further R26,2 million (2000 - R27,0 million) has been
authorised of which R17,2 million (2000 - R7,4 million) has not been
contractually committed.
Contingent liabilities
At 31 December 2001 contingent liabilities amounted to R6,3 million (2000 -
R6,4 million).
Financial policy statements
The consolidated condensed financial statements are prepared in accordance
with and comply with the Statement of Generally Accepted Accounting Practice
in South Africa.
The accounting policies of the Group are consistent in all material respects
with those applied in the annual financial statements for the year ended 30
June 2001.
Declaration of Dividend No. 71
The directors of Grintek Limited have declared dividend No. 71 of 3,0 cents
per share to all shareholders. In compliance with the requirements of
STRATE, the following dates are applicable:
Date dividend declared Thursday 21 February 2002
Last day to trade "CUM" the dividend 2002 Wednesday 27 March 2002
Date trading commences "EX" the dividend Thursday 28 March 2002
Record date Friday 5 April 2002
Date of payment Monday 8 April 2002
Share certificates may not be dematerialised or rematerialised between
Wednesday 20 March 2002 and Friday 5 April 2002, both dates inclusive.
For and on behalf of the board
NR Kunene SA Grobbelaar
Chairman Managing Director
21 February 2002
registered office/transfer secretaries
44 Oak Avenue Mercantile Registrars Limited
Highveld Technopark 11 Diagonal Street
Centurion Johannesburg 2001
E-mail: info@grintek.com PO Box 1053
www.grintek.com Johannesburg 2000
Auditors: Ernst & Young Company secretary: A van der Merwe
directors
NR Kunene* (Chairman) SA Grobbelaar (Managing Director) JR McAlpine* P
Moholi* M Msimang* GJ Royston* AN Saulez* Dr EW Schumann EE Strauss
GE Swanepoel
* Non-executive directors
SPONSOR: INVESTEC
