| Tue 12 Mar 2002, 0:00 | | Fortune Beverages Limited - Audited Results For Ye |
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Fortune Beverages Limited
Reg. No. 1986/002814/06
Share code: FOR
ISIN code: ZAE000017323
Audited results for year ended 31 December 2001
TURNOVER UP 12%
OPERATING PROFITS UP 214%
HEADLINE EARNINGS UP 151%
MERGER APPROVED
CONSOLIDATED INCOME STATEMENTS
Audited Audited
year ended Increase/ year ended
31 December 2001 (Decrease) 31 DECEMBER 2000
R000 % R000
Revenue 287 731 12 256 792
Trading profit before
depreciation 50 793 23 132
Depreciation (10 774) (10 407)
Operating profit 40 019 214 12 725
Interest expense (1 479) (2 009)
Interest income 1 400 3 712
Dividend income 1 035 1 094
Other income - 2 677
Profit before taxation 40 975 125 18 199
Taxation (12 180) 205 (3 991)
Profit for the year 28 795 103 14 208
Number of ordinary
shares in issue 86 893 250 86 893 250
Earnings per share (cents) 33,1 16,4
Headline earnings
per share (cents) 33,1 151 13,2
Dividends declared 6 March 2002
payable Tuesday
2 April 2002 (cents) 7,0 40 5,0
Total dividends
for the year (cents) 10,0 100 5,0
C
ONSOLIDATED BALANCE SHEET
Audited Audited
year ended year ended
31 December 2001 31 December 2000
R000 R000
ASSETS
Property, plant and equipment 92 866 100 717
Unlisted investments 3 349 3 349
Current assets 81 743 68 298
Total assets 177 958 172 364
EQUITY AND LIABILITIES
Shareholder's equity 119 803 97 959
Long term liabilities 6 565 8 928
Deferred income - 5 026
Deferred taxation 8 765 10 119
Current liabilities 42 825 50 332
Total equity and liabilities 177 958 172 364
Net asset value per
share in issue (cent) 137,87 112,73
Number of ordinary
shares in issue 86 893 250 86 893 250
CONSOLIDATED CASHFLOW STATEMENT
Audited Audited
year ended year ended
31 December 2001 31 December 2000
R000 R000
Cash generated from operating activities 59 097 27 947
Deferred income 683 1 658
Interest received 1 400 3 712
Dividends received 1 035 1 094
Interest paid (1 479) (2 009)
Taxation paid (8 114) (7 390)
Dividend paid (6 951) (5 215)
Net cash inflow from operating
activities 45 671 19 797
Net cash (outflow) from investing
activities (4 045) (9 895)
Net cash (outflow)/inflow from
financing activities (2 363) 225
Cash movement during the year 39 263 10 127
Net overdraft at beginning of year (7 136) (17 263)
Cash resources/(net overdraft)
at end of year 32 127 (7 136)
STATEMENT OF CHANGES IN EQUITY
Share Share Retained
capital premium income Total
R000 R000 R000 R000
Balance at 1 January 2000 21 723 20 496 41 532 83 751
Profit for the year - - 14 208 14 208
Balance at 31 December 2000 21 723 20 496 55 740 97 959
Profit for the year - - 28 795 28 795
Dividend paid - - (6 951) (6 951)
21 723 20 496 77 584 119 803
COMMENT
The expected substantial improvement in our performance as indicated to
shareholders' in our March 2001 report did indeed materialise. The
directors' are pleased to report a 12 per cent increase in revenue which,
after rigorous cost containment throughout the business, translated into a
214 per cent increase in operating profits from R12.7 million to R40.0
million. The trading margin increased from 10 per cent to 18 per cent.
Headline earnings per share increased by 151 per cent to 33,1 cents per
share.
In addition to the improved profitability the Group's net cash inflow from
operations increased from R19.8 million to R45.7 million. For the first
time since the company acquired Coca-Cola Bottling Mpumalanga in 1998 the
group reflected a positive cash balance which, at 31 December 2001, amounted
to R32.1 million.
MERGER AND FORMATION OF COCA-COLA FORTUNE (PROPRIETARY) LIMITED
The merger of our bottling operations with the South African bottling
operations of Coca-Cola SABCO (Proprietary) Limited has been approved by the
Competitions Commission. Accordingly all the conditions precedent to that
merger have now been fulfilled. The merged company, Coca-Cola Fortune,
formaly came into effect on Friday, 01 March 2002.
DELISTING
As a consequence of the merger and as advised to shareholders' in the
circular dated 16 November 2001, Fortune Beverages no longer qualifies for a
listing in terms of the listing requirements of the JSE Securities Exchange,
South Africa (`JSE'). Accordingly, the listing will be suspended from
commencement of business on Monday 2 September 2002 and will be terminated
from commencement of business on Monday 9 September 2002.
It is the intention of the parties to the merger agreement to seek a listing
of Coca-Cola Fortune shares on the JSE within a period of five years.
Following the listing, Fortune Beverages, will be wound up, resulting inter
alia, in a distribution of its shareholding in Coca-Cola Fortune, to its own
shareholders'.
Further details pertaining to the de-listing procedures and the future
administration of the company will be set out in the annual report to
shareholders' which is to be dispatched during the month of April.
TAXATION
One of the Company's non-operating subsidiaries, Vinto Beverages, has
recently received a revised assessment from the Revenue authorities in
respect of its financial year ended 30 June 1997. Under the revised
assessment, Vinto Beverages has been assessed as owing R5,0 million in
taxation and interest. Vinto Beverages has lodged an objection to this
assessment. A provision of R2,8 million has been made to cover the
appropriate portion of this assessment.
During the course of this year's audit, it has come to our attention that
the possibility exists that certain tax allowances amounting to R8,0 million
have not been claimed in prior years. While we have no reason to believe
that a claim for these allowances will not be allowed, the directors
consider it prudent not to provide for the refund until such time as the
matter has been successfully finalised with the Revenue authorities.
VOLUMES
Physical case volumes increased by 4.4 per cent. The graph below reflects
physical case volume trends for the four year period ended 31 December 2001.
PROSPECTS
Although last year produced excellent results, these results were measured
off a very low base. It can be seen from the above chart that volumes in
2001 were below the volumes achieved in 1998 and 1999.
The formation of Coca-Cola Fortune and our continued involvement in the
management of the business provides our company with an excellent
opportunity to participate in the ongoing growth of the Coca-Cola system in
South Africa. The merger also provides us with a platform to participate in
any further consolidation of the bottling system in South Africa.
Our challenge now is to bring these two businesses' together and to leverage
our combined position to:
- Drive volume growth;
- Engineer improvements throughout the value chain; and
- Give effect to cost containment and efficiencies throughout our production
and distribution systems;
If we are successful in this regard our prospects for continued growth are
excellent.
Financial policy statements
The consolidated condensed financial statements for the 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 31 December
2000.
DIRECTORS
We regret to report the resignation from our board of Mr Dave Andrews. In
his capacity as Group Managing Director, Dave's contribution to the improved
operating efficiency and group results is much appreciated by the board. We
wish to thank him for his valuable contribution and wish him well in the
future.
Following the merger, our only investment is our 19.5 per cent shareholding
in Coca-Cola Fortune. In future we will be operating as an investment
holding company with an active ownership role in our new investment. Our
Chairman, Mr M W Z Kunene will be joining the board of Coca-Cola Fortune in
the capacity of Executive Chairman and Mr G J Royston will be joining the
board as a Non-Executive Director and a member of the Remuneration and Audit
Committees.
DIVIDENDS
Notice is hereby given that final dividend of 7.0 cents per share for the
financial year ended 31 December 2001 has been declared. In compliance with
the requirements of STRATE, the following dates are applicable:
Date dividend declared Wednesday, 6 March 2002
Last date to trade `CUM' the dividend 2002 Wednesday, 20 March 2002
Date trading commences `Ex' the dividend Friday, 22 March 2002
Record date Thursday, 28 March 2002
Date of payment Tuesday, 02 April 2002
Share certificates may not be dematerialise or rematerialise between
Thursday, 14 March 2002 and Thursday, 28 March 2002, both dates inclusive.
For and behalf of the Board
L C WILLIAMS
COMPANY SECRETARY
12 March 2002
Registered office Transfer secretaries
Suite 501 The Pinnacle Building Mercantile Registrars Limited
1 Parkin Street 11 Diagonal Street
Nelspruit 1200 Johannesburg 2001
DIRECTORS
MWZ Kunene (Chairman and Chief Executive Officer)* DM Andrews* (Group
Managing Director) T Dingaan DV Lewis S McLeod (Alt) GJ Royston A
Tlakula AE Wentzel
*Executive Directors
Sponsor: Nedcor Investment Bank
