| Wed 6 Mar 2002, 0:00 | | Trencor Limited - Provisional Results For The 18 M |
|
2001
TRENCOR LIMITED
REG NO 1955/002869/06
SHARE CODE: ISIN:
TRE ZAE000007506
TED2 ZAE000007282
MOBILE INDUSTRIES LIMITED
REG NO 1968/014997/06
SHARE CODE: ISIN:
MOB ZAE000004602
MBN ZAE000012274
MOBD ZAE000004610
PROVISIONAL RESULTS
for the 18 months ended 31 December 2001
Note: Following a change in the financial year-ends from 30 June to 31
December, these unaudited provisional results are for the 18 months ended 31
December 2001 and the comparative figures are for the year ended 30 June
2000.
Abridged income statements
TRENCOR
18 months ended
31 December 2001
Unaudited
Enterprise
R Million Continuing Discontinuing as a whole
REVENUE (INCLUDING EXCHANGE GAINS) 4 362,8 73,8 4 436,6
INCOME/(LOSS) BEFORE ITEMS LISTED BELOW:516,8 (7,9) 508,9
EXCHANGE GAINS INCLUDED IN REVENUE 2 120,8 - 2 120,8
NET LONG-TERM RECEIVABLE
REVALUATION ADJUSTMENT (1 075,2) - (1 075,2)
EMPLOYEE RETRENCHMENT COSTS - (1,3) (1,3)
RECOVERY ON DISPOSAL/(WRITE DOWN)
OF INVENTORY - 12,6 12,6
LEASES AND OTHER COMMITMENTS - (0,6) (0,6)
INCOME/(LOSS) FROM OPERATIONS 1 562,4 2,8 1 565,2
NET INTEREST EXPENSE (474,4) - (474,4)
1 088,0 2,8 1 090,8
ATTRIBUTABLE (LOSS)/INCOME OF
ASSOCIATE COMPANIES:
FROM CONTINUING OPERATIONS (15,5) - (15,5)
FROM DISCONTINUING OPERATIONS - - -
INCOME/(LOSS) BEFORE TAXATION
AND ABNORMAL ITEMS 1 072,5 2,8 1 075,3
ABNORMAL ITEMS AND ASSET IMPAIRMENT
(NOTE 2) 76,3 - 76,3
INCOME/(LOSS) BEFORE TAXATION 1 148,8 2,8 1 151,6
TAXATION 268,5 0,8 269,3
INCOME/(LOSS) AFTER TAXATION 880,3 2,0 882,3
OUTSIDE SHAREHOLDERS' INTEREST 77,2 - 77,2
NET INCOME/(LOSS)
ATTRIBUTABLE TO SHAREHOLDERS 803,1 2,0 805,1
NUMBER OF SHARES IN ISSUE (MILLION) 152,8
UNDILUTED EARNINGS/(LOSS)
PER SHARE (CENTS) 526,7
DILUTED EARNINGS/(LOSS)
PER SHARE (CENTS) (NOTE 3) 452,7
UNDILUTED HEADLINE EARNINGS
PER SHARE (CENTS) (NOTE 3) 471,9
DILUTED HEADLINE EARNINGS
PER SHARE (CENTS) (NOTE 3) 406,5
PERIOD-END RATE OF EXCHANGE:
SA RAND TO US DOLLAR 12,06
Abridged income statements - continued
TRENCOR
Year ended
30 June 2000
Audited
Enterprise
R Million Continuing Discontinuing as a whole
REVENUE (INCLUDING EXCHANGE GAINS) 1 676,3 103,6 1 779,9
INCOME/(LOSS) BEFORE ITEMS LISTED BELOW:349,1 (78,4) 270,7
EXCHANGE GAINS INCLUDED IN REVENUE 345,7 - 345,7
NET LONG-TERM RECEIVABLE
REVALUATION ADJUSTMENT (50,8) (299,2) (350,0)
EMPLOYEE RETRENCHMENT COSTS - (30,3) (30,3)
RECOVERY ON DISPOSAL/(WRITE DOWN)
OF INVENTORY - (24,4) (24,4)
LEASES AND OTHER COMMITMENTS - (37,7) (37,7)
INCOME/(LOSS) FROM OPERATIONS 644,0 (470,0) 174,0
NET INTEREST EXPENSE (240,7) - (240,7)
403,3 (470,0) (66,7)
ATTRIBUTABLE (LOSS)/INCOME OF
ASSOCIATE COMPANIES:
FROM CONTINUING OPERATIONS 0,3 - 0,3
FROM DISCONTINUING OPERATIONS - - -
INCOME/(LOSS) BEFORE TAXATION
AND ABNORMAL ITEMS 403,6 (470,0) (66,4)
ABNORMAL ITEMS AND ASSET IMPAIRMENT
(NOTE 2) (26,8) (51,1) (77,9)
INCOME/(LOSS) BEFORE TAXATION 376,8 (521,1) (144,3)
TAXATION 63,4 (153,3) (89,9)
INCOME/(LOSS) AFTER TAXATION 313,4 (367,8) (54,4)
OUTSIDE SHAREHOLDERS' INTEREST 33,2 - 33,2
NET INCOME/(LOSS)
ATTRIBUTABLE TO SHAREHOLDERS 280,2 (367,8) (87,6)
NUMBER OF SHARES IN ISSUE (MILLION) 152,8
UNDILUTED EARNINGS/(LOSS)
PER SHARE (CENTS) (57,3)
DILUTED EARNINGS/(LOSS)
PER SHARE (CENTS) (NOTE 3) (57,3)
UNDILUTED HEADLINE EARNINGS
PER SHARE (CENTS) (NOTE 3) 165,0
DILUTED HEADLINE EARNINGS
PER SHARE (CENTS) (NOTE 3) 145,0
PERIOD-END RATE OF EXCHANGE:
SA RAND TO US DOLLAR 6,78
Abridged income statements - continued
MOBILE
Unaudited Audited
18 Months Year
ended ended
31 Dec 2001 30 June 2000
R Million
REVENUE (INCLUDING EXCHANGE GAINS) 49,5 38,9
INCOME/(LOSS) BEFORE ITEMS LISTED BELOW:42,5 33,1
EXCHANGE GAINS INCLUDED IN REVENUE - -
NET LONG-TERM RECEIVABLE
REVALUATION ADJUSTMENT - -
EMPLOYEE RETRENCHMENT COSTS - -
RECOVERY ON DISPOSAL/(WRITE DOWN)
OF INVENTORY - -
LEASES AND OTHER COMMITMENTS - -
INCOME/(LOSS) FROM OPERATIONS 42,5 33,1
NET INTEREST EXPENSE (38,7) (30,1)
3,8 3,0
ATTRIBUTABLE (LOSS)/INCOME OF
ASSOCIATE COMPANIES:
FROM CONTINUING OPERATIONS 344,3 145,6
FROM DISCONTINUING OPERATIONS 0,9 (174,2)
INCOME/(LOSS) BEFORE TAXATION
AND ABNORMAL ITEMS 349,0 (25,6)
ABNORMAL ITEMS AND ASSET IMPAIRMENT
(NOTE 2) 36,1 -
INCOME/(LOSS) BEFORE TAXATION 385,1 (25,6)
TAXATION 1,9 0,9
INCOME/(LOSS) AFTER TAXATION 383,2 (26,5)
OUTSIDE SHAREHOLDERS' INTEREST 0,6 0,6
NET INCOME/(LOSS)
ATTRIBUTABLE TO SHAREHOLDERS 382,6 (27,1)
NUMBER OF SHARES IN ISSUE (MILLION) 897,8 897,8
UNDILUTED EARNINGS/(LOSS)
PER SHARE (CENTS) 42,6 (3,0)
DILUTED EARNINGS/(LOSS)
PER SHARE (CENTS) (NOTE 3) 36,6 (3,0)
UNDILUTED HEADLINE EARNINGS
PER SHARE (CENTS) (NOTE 3) 38,4 13,5
DILUTED HEADLINE EARNINGS
PER SHARE (CENTS) (NOTE 3) 33,0 11,8
PERIOD-END RATE OF EXCHANGE:
SA RAND TO US DOLLAR
Notes to the abridged financial statements
1. These consolidated abridged provisional financial statements are prepared
in accordance with Generally Accepted Accounting Practice. The accounting
policies used in the preparation of the provisional financial statements are
consistent with those used in the annual financial statements for the year
ended 30 June 2000 except for:
* the policy for revaluation of properties has changed from depreciated
replacement value to open market value; and
* the company has adopted AC133 Financial Instruments: Recognition and
Measurement.
These changes in accounting policy have had no impact on headline earnings
for the current reporting period.
TRENCOR MOBILE
18 months Year 18 months Year
ended ended ended ended
31 December 30 June 31 December 30 June
2001 2000 2001 2000
Unaudited Audited Unaudited Audited
2.ABNORMAL ITEMS AND ASSET IMPAIRMENT
PROFIT ON SALE OF INVESTMENTS
WACO INTERNATIONAL LTD 94,0 - 44,5 -
CENTRICITY INC 68,5 - 32,4 -
OTHER 0,6 - 0,3 -
PROFIT ON SALE OF PROPERTY 1,3 - 0,6 -
PREMIUM PAID ON THE
ACQUISITION OF SHARES FROM
OUTSIDE SHAREHOLDERS (23,7) - (11,2) -
WRITE-OFF OF INVESTMENT (0,5) - (0,2) -
WRITE DOWN OF PROPERTIES
TO OPEN MARKET VALUE (8,6) (26,8) (4,1) -
IMPAIRMENT OF PLANT (17,5) (51,1) (8,3) -
IMPAIRMENT OF INVESTMENT (37,8) - (17,9) -
76,3 (77,9) 36,1 -
3. Headline earnings
Earnings/(Loss) 805,1 (87,6) 382,6 (27,1)
Discontinuing operations (2,0) 367,8 (0,9) 174,1
Losses incurred up to date
of discontinuance (1,6) (54,9) (0,8) (26,0)
Abnormal items (76,3) 26,8 (36,1) -
TAX ON ABNORMAL ITEMS (4,1) - - -
Headline earnings 721,1 252,1 344,8 121,0
Number of shares
in issue (million) 152,8 152,8 897,8 897,8
Headline earnings
per share (cents) 471,9 165,0 38,4 13,5
The dilution arises as a result of any future conversion of convertible
debentures. The directors are of the opinion that the debentures will not be
converted in the foreseeable future and therefore no dilution is anticipated
for the foreseeable future.
Abridged balance sheets
TRENCOR MOBILE
31 Dec 30 June 31 Dec 30 June
2001 2000 2001 2000
Unaudited Audited Unaudited Audited
ASSETS
NON-CURRENT ASSETS
PROPERTY, PLANT AND EQUIPMENT 6 112,6 2 684,2 - -
INTANGIBLE ASSETS 27,6 - - -
GOODWILL 38,2 - - -
INVESTMENTS 111,7 113,2 1 217,8 760,7
LONG-TERM LOANS 29,5 58,2 - -
NET INVESTMENT IN DIRECT
FINANCE LEASES 70,9 8,5 - -
PARTICIPATION IN
EXPORT PARTNERSHIPS - - 7,0 9,7
LONG-TERM RECEIVABLES 2 900,4 2 196,0 57,2 110,4
9 290,9 5 060,1 1 282,0 880,8
CURRENT ASSETS 1 115,5 842,7 75,5 98,8
TOTAL ASSETS 10 406,4 5 902,8 1 357,5 979,6
EQUITY AND LIABILITIES
CAPITAL AND RESERVES
SHARE CAPITAL AND PREMIUM 164,5 164,5 66,5 66,5
RESERVES 2 159,4 1 148,4 1 036,9 578,5
SHAREHOLDERS' EQUITY 2 323,9 1 312,9 1 103,4 645,0
INTEREST OF OUTSIDE SHAREHOLDERS
IN SUBSIDIARIES 635,0 186,6 3,5 2,9
TOTAL SHAREHOLDERS' FUNDS 2 958,9 1 499,5 1 106,9 647,9
CONVERTIBLE DEBENTURES 260,5 260,5 127,6 127,6
OTHER NON-CURRENT LIABILITIES
INTEREST-BEARING BORROWINGS 4 763,9 2 549,9 3,0 101,0
AMOUNTS ATTRIBUTABLE TO
THIRD PARTIES IN RESPECT OF
LONG-TERM RECEIVABLES 431,6 510,8 - -
INTEREST RATE SWAP AND
CAP CONTRACTS 130,9 - - -
DEFERRED TAXATION 594,1 209,5 6,2 8,9
9 139,9 5 030,2 1 243,7 885,4
CURRENT LIABILITIES 1 266,5 872,6 113,8 94,2
TOTAL EQUITY AND LIABILITIES 10 406,4 5 902,8 1 357,5 979,6
CAPITAL EXPENDITURE 1 467,3 428,2 - -
CAPITAL EXPENDITURE COMMITTED
AND AUTHORISED 7,8 57,1 - -
MARKET VALUE OF LISTED INVESTMENTS 49,1 104,3 881,8 284,5
DIRECTORS' VALUATION OF
UNLISTED INVESTMENTS 62,6 38,7 - -
RATIO TO AGGREGATE OF TOTAL
SHAREHOLDERS' FUNDS AND
CONVERTIBLE DEBENTURES:
TOTAL LIABILITIES EXCLUDING
CONVERTIBLE DEBENTURES (%) 223,3 235,4 10,0 26,3
INTEREST-BEARING DEBT EXCLUDING
CONVERTIBLE DEBENTURES (%) 172,9 169,2 8,6 24,7
Abridged cash flow statements
TRENCOR MOBILE
18 months Year 18 months Year
ended ended ended ended
31 Dec 30 June 31 Dec 30 June
2001 2000 2001 2000
Unaudited Audited Unaudited Audited
CASH GENERATED FROM/(UTILISED BY)
OPERATIONS 616,0 36,0 119,0 (24,3)
INTEREST RECEIVED 28,7 23,7 14,7 10,0
INTEREST PAID (503,1) (264,5) (38,7) (30,1)
DIVIDENDS RECEIVED 0,1 4,9 - 10,1
DIVIDENDS PAID - (21,4) - (10,5)
DIVIDENDS PAID TO
OUTSIDE SHAREHOLDERS (23,5) (10,0) - -
TAXATION PAID (24,7) (13,5) (0,7) (1,1)
NET CASH INFLOW/(OUTLOW)
FROM OPERATING ACTIVITIES 93,5 (244,8) 94,3 (45,9)
CASH FLOWS FROM
INVESTING ACTIVITIES (1 239,1) (447,2) - -
CASH FLOWS FROM
FINANCING ACTIVITIES 1 065,3 589,7 (83,9) 45,1
NET (DECREASE)/INCREASE IN CASH
AND CASH EQUIVALENTS BEFORE
EXCHANGE RATE CHANGES (80,3) (102,3) 10,4 (0,8)
NET CASH AND CASH EQUIVALENTS AT
THE BEGINNING OF THE PERIOD 66,9 153,3 (1,8) (1,0)
EFFECTS OF EXCHANGE RATE CHANGES
ON CASH AND CASH EQUIVALENTS 141,5 15,9 - -
NET CASH AND CASH EQUIVALENTS AT
THE END OF THE PERIOD 128,1 66,9 8,6 (1,8)
abridged statements of changes in
shareholders' funds
BALANCE AT THE BEGINNING OF
THE PERIOD 1 312,9 1 418,3 645,0 671,5
MOVEMENTS IN DISTRIBUTABLE RESERVES 805,9 (90,4) 382,6 (28,8)
NET INCOME/(LOSS) FOR THE PERIOD 805,1 (87,6) 382,6 (27,1)
TRANSFER FROM NON-DISTRIBUTABLE
RESERVES 0,8 0,8 - -
GOODWILL WRITTEN OFF - (3,6) - (1,7)
MOVEMENTS IN NON-DISTRIBUTABLE
RESERVES 205,1 (15,0) 75,8 2,3
CURRENCY TRANSLATION DIFFERENCES 275,5 33,9 - -
REVALUATION OF FIXED ASSETS (1,7) (48,1) (0,8) -
CHANGE IN ACCOUNTING POLICY
OF ASSOCIATE - 0,0 (21,7)
REALISATION ON SALE OF PROPERTY 2,2 (0,4) 1,0 -
UNRECOGNISED LOSS ON DERIVATIVE
INSTRUMENTS (IN TEXTAINER)
CUMULATIVE EFFECT DUE TO CHANGE
IN ACCOUNTING POLICY (21,9) - (10,4) -
NET CHANGE IN UNRECOGNISED LOSS
- CURRENT PERIOD (48,2) - (22,8) -
RESERVES OF ASSOCIATE COMPANIES (0,8) (0,4) 130,5 2,3
BALANCE AT THE END OF THE PERIOD 2 323,9 1 312,9 1 103,4 645,0
Comments
Holders of securities in Trencor and Mobile are reminded that, following a
change in the financial year-end from 30 June to 31 December, the current
reporting period is for the eighteen months ended 31 December 2001. The
previous financial period was for the 12 months to 30 June 2000.
TRENCOR
Our businesses generally experienced difficult trading conditions.
However, due to the effect of the exceptionally weak rand/US dollar exchange
rate at 31 December 2001, income before tax and abnormal items for the
eighteen months ended on that date was R1 075 million (twelve months to 30
June 2000: loss R66 million) and headline earnings were R721 million
(undiluted: 471,9 cents per share) compared to R252 million for the twelve
months to 30 June 2000 (undiluted: 165 cents per share). Cognisance must be
taken of the effect of the decline in the exchange rate, as discussed below.
It is important to note that, at the present time, every one cent change in
the R/$ exchange rate translates into an approximate one cent change in
earnings per share.
The period under review was characterised by a significant decline in the
value of the rand against the US dollar. In accordance with the requirements
of Generally Accepted Accounting Practice ("GAAP"), all monetary assets and
liabilities have been translated at the spot rate of exchange prevailing at
the end of the financial period: US$1=R12,06 at 31 December 2001 (30 June
2000: US$1=R6,78). This represented a 44% decline in the value of the rand
over the period, with much of that occurring in November and December 2001.
This gave rise to a foreign exchange gain on the revaluation of the net
present value of the long-term receivables amounting to R2,1 billion. In
compliance with GAAP, this gain has been included in income before tax.
The container leasing industry is currently experiencing very difficult
trading conditions. It was therefore deemed prudent to take into account the
effect that this may have on the collectibility and timing of receipt of the
long-term receivables. The aggregate increase in the net present value of
the provision, net of amounts attributable to third parties, was R1,1
billion of which approximately R200 million is attributable to the increase
in the dollar provision and R900 million to the decline in the exchange
rate.
The portion of the long-term receivables which is attributable to our
export partners is denominated in rand and payable to them as and when such
receivables are collected. The amounts so owing are stated at their net
present value. During the period under review, the rate at which these rand
amounts were discounted was reduced from 15% pa to 12% pa, resulting in an
additional charge against current income before tax amounting to R88
million.
Trading
Textainer traded well in very difficult conditions and contributed R166
million to headline earnings.
Utilisation of Textainer's fleet of dry freight marine containers remains
low, albeit stable, at about 71% and currently shows little sign of
improvement. During 2001, Textainer completed three successful financings
totalling US$595 million. These funds will be used to retire existing debt
and finance further additions to its container fleet. By 31 December 2001,
Textainer's fleet under management amounted to 940 000 TEU (twenty foot
equivalent units) of which 45% were leased out under long-term leases. 68%
of Textainer's owned fleet of 403 000 TEU are in long-term leases, which
provide a buffer against short-term fluctuations in utilisation.
The stainless steel tank container factory at Parow, near Cape Town,
continues to produce at very low volumes, due to the continuing weak
worldwide demand for these units. This facility traded below break-even
during the period under review.
The trailer manufacturing division of Henred-Fruehauf Trailers (Pty) Ltd
was merged with the businesses of SA Truck Bodies Group, effective 1
December 2001. Trencor holds a 40% interest in the merged operation.
TrenStar Inc, our US based 61% subsidiary, created during August 2001
through the merger of the intellectual property and fledgling offshore
subsidiaries of Trencor Solutions (South Africa) with the MicroStar Group in
Colorado, has been firmly established with the appointment of a US chief
executive and other senior executives. During December 2001, TrenStar
acquired 100% of KTP Ltd in the UK. TrenStar Group (including KTP), now
active in the USA, UK and Australia, is engaged in providing asset-based
financing, management services, information technology and technology
integration for the returnable assets of the supply chain (such as beer
kegs, intermediate bulk containers and other portable assets primarily for
the beverage, food, chemical and automotive industries).
Trencor Solutions in South Africa, after focusing on expanding its
activities internationally (which led to the creation of TrenStar), turned
its attention back to its domestic operations where it is enhancing its
position in South Africa as a leader in the provision of packaging solutions
and services to various industries. Its activities are similar to those of
TrenStar described above.
During this period, Trencor Solutions and TrenStar incurred losses due to
the start up stage of their businesses, but are expected to start
contributing to group earnings this year.
Finance
As announced on 7 December 2001, Trencor effectively refinanced its South
African bank facilities on more favourable terms than it previously enjoyed,
by providing the SA banks with security in the form of a letter of credit
issued by two foreign banks. Further details will be provided in the annual
report. The one-time costs incurred in procuring the letter of credit
amounted to R30 million and has been charged against current income.
The group's gearing has increased by 4% since June 2000; the ratio of
consolidated interest-bearing debt to permanent capital, being the sum of
total shareholders' funds and the convertible debentures, increased from
169% to 173% at 31 December 2001. The increase is largely as a result of the
decline in the exchange rate and the effect that this has on the translation
of Textainer's debt into rands. With Textainer notionally accounted for on
the equity method, this ratio declined from 64% in June 2000 to 40% at 31
December 2001. Textainer's liabilities are secured by its own balance sheet
and without any recourse to Trencor.
Tax queries
The enquiry by the South African Revenue Service ("SARS") into the tax
treatment of the group's export partners' participation in the export of
cargo containers (in respect of transactions entered into in prior years)
continues. It is not possible to anticipate when it will be concluded. We
remain confident that the supportive legal advice we have received will
prevail should SARS seek to challenge the tax treatment.
As previously reported, a successful challenge by SARS, which we believe
is unlikely, may result in the acceleration of the payment of a portion of
the amounts attributable to third parties (i.e. our export partners) which
are carried at their net present values, and which would otherwise be paid
over periods of up to fourteen years.
Dividend
The board of directors has decided not to declare a dividend at this time
because a large proportion of earnings (relating to the revaluation of the
long-term receivables which made an exceptionally large contribution to
income) will only be realised over a period of some years. Furthermore, in
the present difficult times being experienced in the container industry, we
believe it is in the group's interest to conserve cash and reduce
borrowings.
MOBILE
Following the merger of Henred-Fruehauf's trailer division with the
businesses of SA Truck Bodies Group, Mobile Acceptances and Transport
Acceptances ceased writing new business and the collection of the debtors is
now being carried out by Wesbank.
As Mobile's net income is almost entirely dependent upon the receipt of
dividends from Trencor, the non-declaration of a dividend by Trencor at this
stage has, in turn, caused the board of Mobile to not declare a dividend.
DIRECTORATE
Mr Gavan Ryan, who joined the boards of Trencor and Mobile on 8 November
1996, after Coronation Holdings Limited acquired a strategic shareholding in
Mobile (which was subsequently distributed in specie to Coronation
shareholders), resigned from those boards effective 6 March 2002.
ON BEHALF OF THE BOARDS
NI JOWELL CHAIRMAN TRENCOR LIMITED
C JOWELL CHAIRMAN MOBILE INDUSTRIES LIMITED
6 MARCH 2002
Registered Office: Transfer Secretaries:
1313 Main Tower Computershare Services Limited
Standard Bank Centre 1st Floor Edura, 41 Fox Street
Heerengracht Johannesburg 2001
Cape Town 8001 (PO Box 61051, Marshalltown 2107)
THESE RESULTS CAN BE VIEWED ON THE WEBSITES:
HTTP://WWW.TRENCOR.NET AND HTTP://WWW.MOBILE-INDUSTRIES.NET
