| Thu 28 Feb 2002, 0:00 | | Delta Electrical Industries Limited - Audited Grou |
|
ended 27 December 2001
Delta Electrical Industries Limited
(Reg. No. 1919/006020/06)
Share Code: DEL
ISIN Code : ZAE000002036
Directors:
PG Joubert (Chairman), EW van Zyl (Joint Managing), BR Wright (Joint
Managing), PL Campbell, DJ Gleeson, BG Hitchcock, ME Ramano, MPW Robson, JP
Scott-Maxwell*
*British
* Headline earnings per share up 33%
* Operating margin up 5,1 percentage points to 28,7%
* Cash available from operating activities R190,7 million
Audited group results for the year ended 27 December 2001
GROUP INCOME STATEMENT
2001 2000 %
R000 R000 Change
Revenue 1 123 465 1 050 249 7
Earnings before interest,
taxation, depreciation and
amortisation 310 381 271 705 14
Foreign exchange gain 52 383 11 082
Depreciation (40 018) (33 975)
Amortisation (589) (589)
Operating profit 322 157 248 223 30
Exceptional items - (56 303)
Profit before interest 322 157 191 920
Interest received 25 382 21 780
Interest paid (19 651) (18 710)
Profit before taxation 327 888 194 990
Taxation 102 074 80 917
Profit after taxation 225 814 114 073
Outside shareholder's
interest 5 449 4 161
Attributable net profit 220 365 109 912
Dividends 66 373 50 149
Retained profit 153 992 59 763
Shares in issue and on which
earnings per share
are based 49 166 49 166
Attributable earnings
per share (cents) 448.2 223.6 100
Headline earnings
per share (cents) 448.0 336.2 33
Dividends paid (cents) 135.0 102.0 32
Dividends per share (cents) 169.0 130.0 30
RECONCILIATION OF
HEADLINE EARNINGS
Attributable net profit
for the period 220 365 109 912
Goodwill on acquisitions
written off - 56 303
Profit on the disposal
of property, plant & equipment (84) (199)
Other - (736)
Headline earnings 220 281 165 280 33
statement of changes in equity
Share Non-
Capital and distributable Distributable
Premium Reserves Reserves Total
R'000 R'000 R'000 R'000
Balance at
28 December 1999 117 445 14 898 309 960 442 303
As previously
stated 117 445 14 898 278 494 410 837
Prior year
adjustment
- dividend
restatement - - 31 466 31 466
Net profit
for the year - - 109 912 109 912
Dividends declared
and paid - - (50 149) (50 149)
Foreign currency
translation movement - 15 398 15 398
Balance at
27 December 2000 117 445 30 296 369 723 517 464
Net profit
for the year - - 220 365 220 365
Dividends declared
and paid - - (66 373) (66 373)
Foreign currency
translation movement - 28 876 - 28 876
Balance at
27 December 2001 117 445 59 172 523 715 700 332
segmental analysis
Revenue
Electrolytic
Manganese Dioxide 508 352 474 109 7
Repairs and Services 548 093 515 296 6
Replacement Parts 125 276 111 570 12
Intergroup elimination
of revenue (58 256) (50 726)
1 123 465 1 050 249 7
Operating Profit
Electrolytic Manganese
Dioxide* 236 732 171 560 38
Repairs and Services 67 113 61 785 9
Replacement Parts 18 312 14 878 23
322 157 248 223 30
Depreciation and Amortisation
Electrolytic Manganese Dioxide 29 530 25 264
Repairs and Services 8 552 7 800
Replacement Parts 2 525 1 500
40 607 34 564
Capital Expenditure
Electrolytic Manganese Dioxide 118 946 65 618
Repairs and Services 14 313 10 473
Replacement Parts 3 404 4 585
136 663 80 676
Segmental Assets
Electrolytic Manganese Dioxide 745 511 505 287
Repairs and Services 185 693 196 128
Replacement Parts 63 265 57 354
Other 34 705 10 896
1 029 174 769 665
Cash & cash equivalents 166 971 101 213
Deferred taxation asset 12 366 -
Total assets 1 208 511 870 878
Segmental Liabilities
Electrolytic Manganese Dioxide 251 740 128 584
Repairs and Services 88 791 93 895
Replacement Parts 23 464 17 572
Other 9 375 (5 435)
373 370 234 616
Taxation 113 681 71 464
Deferred taxation liability - 29 727
Total liabilities 487 051 335 807
* Inclusive of all net
foreign exchange gains.
group cash flow statement
2001 2000
R000 R000
Cash generated from operations 297 799 279 202
Decrease in working capital 3 383 14 487
Taxation paid (110 437) (69 149)
Cash available from operating
activities 190 745 225 540
Dividends paid (69 046) (54 951)
Cash retained from operating activities 121 699 170 589
Investment in businesses - (79 620)
Replacement of property,
plant & equipment (39 304) (33 075)
Expansion of property,
plant, & equipment (97 359) (47 601)
Disposal of property,
plant and equipment 993 789
Net cash flow from investing activities (135 670) (159 507)
Repayment by share incentive schemes 3 140 220
Net cash flow from financing activities 3 140 220
Movement in cash and cash equivalents (10 831) 11 302
Translation difference on
cash and cash equivalents (8 589) 1 487
Cash and cash equivalents
at beginning of period 39 169 26 380
Cash and cash equivalents
at end of period 19 749 39 169
GROUP BALANCE SHEET
2001 2000
R000 R000
Assets
Property, plant & equipment 441 681 295 170
Trademarks 2 657 3 246
Deferred taxation asset 12 366 -
Loans to share incentive schemes 29 961 33 101
Current assets 721 846 539 361
Total assets 1 208 511 870 878
Equity and liabilities
Ordinary shareholders' equity 700 332 517 464
Outside shareholders' equity 21 128 17 607
Total equity and reserves 721 460 535 071
Deferred taxation liability - 29 727
Current liabilities 487 051 306 080
Total equity and liabilities 1 208 511 870 878
Net asset value per share (cents) 1 424 1 052
Net gearing (%) nil nil
Capital commitments 159 824 231 405
Authorised but not contracted 118 738 185 740
Contracted 41 086 45 665
Operating lease commitment 21 867 26 656
Minority contingent liabilities 20 103 10 481
ACCOUNTING POLICIES
Generally Accepted Accounting Statements:
Except as mentioned below, the accounting policies used to prepare the
financial statements are consistent with those used in the preparation of
the 2000 annual financial statements. The financial statements have been
prepared in accordance with South African Statements of Generally Accepted
Accounting Practice.
Revenue:
The company's accounting policy for revenue recognition has changed in order
to comply with Generally Accepted Accounting Statement AC132. Arms length
inter group sales are now eliminated on consolidation whereas previously
they were not. The comparative figures have been re-stated accordingly.
Dividends and Secondary Tax on Companies ("STC"):
During the year the company implemented Generally Accepted Accounting
Statement AC107, Events After the Balance Sheet Date. This results in
dividends only being recognised in the period in which they are declared
which in turn impacts on the timing of the accrual of STC. The prior year
comparative numbers have been restated to take account of this change.
COMMENT ON RESULTS
Financial:
Headline earnings per share increased by 33% to 448,0 cents from 336,2 cents
in 2000. This was achieved under very uncertain and volatile trading
conditions and was assisted by the devaluation of the rand against both the
American and Australian dollars.
The operating margin increased by 5,1 percentage points to 28,7% with all
operations showing improvements. The main increase arose in the EMD business
which benefited from improved operating efficiencies as well as currency
devaluation.
Net interest earned for the year increased to R5,7 million. Interest of R7,7
million was capitalised on the EMD plant expansion.
The effective rate of tax for the year was impacted positively by the
reduction in the official rate of company tax in Australia from 34% in 2000
to 30% currently.
The group continued to generate strong cash flows albeit at lower levels
than in 2000. The lower level was due to increased inventories in the EMD
business as well as higher tax payments in the current year. The group
remained in an ungeared position at year end with net cash balances of R19,8
million.
Operations:
EMD
The EMD division had a difficult start to 2001 as a result of the slowdown
in the US economy and continued destocking by the major battery
manufacturers. While trading conditions improved during the second half of
2001 as battery manufacturers increased production to replace depleted
inventories, total EMD sold during the year was significantly down on the
previous year.
Management decided to delay the commissioning of the South African plant
expansion as a result of the then deteriorating trading conditions and
operate existing production facilities at full capacity in order to minimise
unit costs of production. Further debottlenecking and improvements in
operational efficiencies of the Newcastle plant has increased the capacity
by 17% to 27,000 metric tonnes per annum. Management are confident that due
to the short term nature of the fall in demand for EMD, the holding cost of
increased inventories will be more than compensated for by lower unit costs
of production.
Repairs and Services:
The Repairs and Services division achieved a very satisfactory result
despite market conditions which provided little opportunity for growth.
Improvements in operating efficiencies also contributed positively to the
year's result.
Electrical Repair Engineering achieved growth in the heavy transformer
division and in traditional markets such as traction and off-highway vehicle
repairs. Progress was made in broadening the range of services provided with
the highlight being the refurbishment of two dragline electrical drive
systems. A significant contract for the refurbishment of electrical
equipment on the Zambian copper mines was successfully completed during the
year.
Transwire achieved sales growth in the transformer industry and in exports
while Wire Electric benefited from rationalisation of the company's product
range and customer base and improved working capital management.
Replacement Parts:
Replacement Parts achieved excellent results despite a moderate growth in
sales. The transport industry remained depressed and there was only minimal
increased activity in the construction industry. Export sales enjoyed good
growth and significant inroads were made into the mining industry.
Prospects:
The more favourable outlook for the United States economy, the continuing
weak Rand and the group's leading position in the markets which it serves,
places it in a favourable position to continue to produce earnings growth in
2002.
DIVIDEND
Policy:
It is the company's policy to declare dividends for the year based on a
dividend cover of 2,5 times headline earnings per share.
Dividend No. 60:
Notice is hereby given that a final dividend number 60 of 126,0 cents per
share has been declared by the directors in respect of the twelve months
ended 27 December 2001. The last date to trade in order to receive the
dividend will be 14 March 2002 and Delta Electrical Industries Limited
shares will trade
ex-dividend from start of trade on 15 March 2002. The record date will be 22
March 2002 and the date of payment of the dividend will be 25 March 2002.
The dividend is declared in the currency of the Republic of South Africa and
will be paid either by electronic funds transfer or cheque posted on or
about 25 March 2002.
Shareholders may not rematerialise or dematerialise their shares between 08
March 2002 and 22 March 2002, both days inclusive.
PG Joubert
(Chairman)
EW van Zyl
(Joint Managing)
BR Wright
(Joint Managing)
28 February 2002
Registered Office Transfer Secretaries
11th Floor, Office Tower Mercantile Registrars Limited
Sandton City 11 Diagonal Street
Rivonia Road Johannesburg
Sandown 2146 2001
website: www.dei.co.za
