| Wed 27 Feb 2002, 0:00 | | Kunene Technology Limited - Interim Results For Ha |
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2001
Kunene Technology Limited
Reg. No. 1964/004561/06
Share code: KTL
ISIN code: ZAE000014924
INTERIM RESULTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2001
results from continuing operations
Headline earnings UP 41%
Headline earnings per share UP 16%
Dividend per share 60%
Group OPERATING RESULTS
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
Revenue from Sales 606 364 (1) 612 996 942 100
Cost of Sales 483 820 (6) 515 565 693 265
Gross Profit 122 544 26 97 431 248 835
Income from Investments 7 789 12 6 951 18 772
- Interest Received 7 789 14 6 843 13 921
- Fees Received - (100) 108 148
- Dividends Received - - 4 703
Operating Expenses 65 122 15 56 783 95 212
Profit before Finance Costs 65 211 37 47 599 172 395
Finance Costs (7 973) 143 (3 275) (7 150)
Income from Associates 1 100 5 1 045 1 810
Share of Siltek Limited
(loss)/income - (100) (2 522) -
Profit before Taxation 58 338 36 42 847 167 055
Taxation 19 491 34 14 526 59 469
Profit after Taxation 38 847 37 28 321 107 586
Attributable to
Outside Shareholders
of Subsidiaries 18 985 13 16 759 48 726
Headline earnings 19 862 72 11 562 58 860
Headline Earnings
per Share (cents) 31.4 16 27.0 102.1
Dividend per Share (cents) 12.5 166 4.7 200.3
- Ordinary Dividend 12.5 166 4.7 16.7
- Dividend in Specie - - 183.6
Dividend no 73 declared
26 February 2002
payable 15 April 2002 7.5 60 4.7 12.5
Weighted average
shares in issue
during the period 63 237 520 52 134 969 57 640 618
Shares in issue
at end of period 63 237 520 63 237 520 63 237 520
* Reflects KTL's
controlling
shareholding in Grintek
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 234 183 185 837 209 151
Fixed assets 119 077 84 807 99 573
Development Projects 36 400 26 126 27 133
Goodwill 49 120 51 583 52 017
Unlisted Investments 12 350 8 241 11 250
Deferred Taxation Asset 7 659 9 021 5 828
Loans and Long-term Receivables 9 577 6 059 13 350
Current Assets 936 475 765 309 913 050
Inventories 202 623 146 652 197 601
Trade and Other Receivables 513 942 454 119 495 176
Advance Payments 22 600 21 891 19 129
Deposits and Cash 197 310 142 647 201 144
Total Assets 1 170 658 951 146 1 122 201
EQUITY AND LIABILITIES
Capital and Reserves 258 891 200 003 240 533
Minority Interest 224 805 146 714 176 658
Long-term Liabilities 31 015 25 423 43 731
Current Liabilities 655 947 579 006 661 279
Interest bearing 24 919 4 056 -
Trade and Other Payables 327 088 344 376 334 468
Advance Receipts 230 096 156 694 178 469
Provisions 58 757 45 608 53 162
Receiver of Revenue 15 087 26 467 62 998
Members for dividends - 1 805 -
Overdrafts and
Short-term Borrowings - - 32 182
Total Equity and Liabilities 1 170 658 951 146 1 122 201
Net Asset Value per
Ordinary Share (cents) 409 316 380
* Restated to reflect a change in accounting policy
STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
half-year half-year year
ended ended ended
31 December 31 December 30 June
2001 2000 2001
R000 R000 R000
Opening Balance 240 533 155 491 155 491
- Change in treatment
of dividends - 4 257 4 257
- Shares Issued - 101 064 101 064
- Write Off against
Investment in Associates - (1 798) (1 798)
- Earnings 26 263 7 901 52 908
- Other Movements - (437) -
- Dividends (7 905) (66 475) (71 389)
Closing Balance 258 891 200 003 240 533
ABRIDGED CASH FLOW STATEMENT
Unaudited Unaudited Audited
half-year half-year year
ended ended ended
31 December 31 December 30 June
2001 2000 2001
R000 R000 R000
Cash flow from Operating Activities 35 945 28 310 63 298
Cash flow from Investing Activities 5 119 130 564 99 319
Cash flow from Financing Activities (12 716) (9 331) 8 977
Net change in Cash and
Cash Equivalents 28 348 149 543 171 594
Cash and Cash Equivalents
at beginning of period 168 962 (6 896) (2 632)
Cash and Cash Equivalents
at end of period 197 310 142 647 168 962
reconciliation of earnings
Unaudited Unaudited Audited
half-year half-year year
ended ended ended
31 December 31 December 30 June
2001 2000 2001
R000 R000 R000
Headline earnings from
Continuing Operations 19 862 14 084 58 860
Share of Siltek Limited
(loss)/income - (2 522) -
Headline Earnings 19 862 11 562 58 860
Unbundling costs - (1 706) (1 379)
Amortisation of Goodwill (781) (653) (1 996)
Tax Prior Year under Provision - (855) (864)
Interest on Under Provision
for Tax - (447) (645)
Exceptional Items (1 500) - -
Impairment of Investment - - (1 700)
Impairment of Property - - (374)
Profit on Disposal of
Fixed Assets 146 - 162
Profit on Disposal of
Investment 8 591 - -
(Loss)/profit on issue
of Shares in Subsidiary (55) - 77
Attributable Taxation and
Minority Share - - 767
Earnings Attributable
to Ordinary Shareholders 26 263 7 901 52 908
Attributable Earnings
per Ordinary Share (cents) 41.5 15.2 91.8
Attributable Headline
Earnings per Ordinary Share
from Continuing
Investments (cents) 31.4 27.0 102.1
COMMENTS
The directors are pleased to report the Group's results for the six months
ended 31 December 2001.
While turnover remained static, headline earnings from continuing operations
increased by 41 per cent and headline earnings per share increased by 16,3
per cent to 31,4 cents (2000 - 27,0 cents).
What is particularly pleasing in assessing Grintek's performance is the
progress the company has made with two of its key strategic initiatives.
Firstly, the internationalisation of its defence business has contributed
towards a 66 per cent increase in the Group's export revenues. This is very
encouraging as not only is the company increasing its turnover into hard
currency markets but it is also building a very secure platform for future
growth in offshore earnings. Secondly, notwithstanding the lower turnover
in Grintek's Telecommunications business we are encouraged by the progress
made by that business in growing its product offering and customer base.
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 the
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 million (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
Grintek's telecommunication business, the short term market conditions
remain capricious.
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 million (2000 -
R802 million). Grintek historically experiences a stronger second half
trading performance.
FINANCIAL PERFORMANCE
The increasing component of turnover derived from hard currency exports
resulted in foreign exchange gains of R25,1 million (2000 - R2,2 million)
for the six month period. Further, Grintek generated a positive cash flow of
R67,8 million (2000 - R52,2 million).
During the six month period KTL's wholly owned subsidiary, K T Financial
Services (Pty) Ltd. (KTFS), raised an amount of R16,5 million through the
sale of 5 192 400 Grintek shares. These funds were applied by KTFS in the
settlement of all amounts owing by the company to the Receiver of Revenue
and in the redemption of R12,0 million redeemable preference shares. As a
consequence of the above, the company's holding in Grintek was reduced from
167 000 000 shares to 161 807 600 shares representing 55 per cent of
Grintek's issued ordinary share capital.
Financial policy statements
The consolidated condensed financial statements for the half-year ended 31
December 2001 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.
Cautionary Announcement
Shareholders are referred to the cautionary announcement published by the
company on 13 February 2002. In this announcement shareholders were advised
that the company is considering the unbundling of its equity interest in
Grintek which, if successfully implemented, may have a material affect on
the price at which this company's securities trade on the JSE Securities
Exchange, South Africa.
Shareholders are advised to continue to exercise caution when dealing in the
company's securities until a detailed announcement, including the final
terms of the unbundling, is made.
Declaration of Dividend Number 73
The directors of KTL have declared dividend number 73 of 7,5 cents (2001 -
4,7 cents) per share to all shareholders. In compliance with the
requirements of STRATE, the following dates are applicable:
Date dividend declared Tuesday, 26 February 2002
Last date to trade "CUM" the dividend 2002 Friday, 5 April 2002
Date trading commences "EX" the dividend Monday, 8 April 2002
Record date Friday, 12 April 2002
Date of payment Monday, 15 April 2002
Share certificates may not be dematerialized or rematerialized between
Thursday, 28 March 2002 and Friday 12 April 2002, both dates inclusive.
For and on behalf of the Board
N R KUNENE
CHAIRMAN
26 FEBRUARY 2002
registered office/transfer secretaries
4th Floor, South Block Mercantile Registrars
Limited
Waterview Corner 7th Floor, 11 Diagonal
Street
Cnr. Ernest Oppenheimer Avenue and Queen Street Johannesburg 2001
Bruma 2026
E-mail: kunenetech@grintek.com
directors
NR Kunene (Chairman) MF Kunene GJ Royston JR McAlpine* P Moholi* M
Msimang* AN Saulez*
*Non Executive
SPONSOR: WIPCAPITAL
