| Wed 13 Mar 2002, 0:00 | | Ceramic - Interim Results For The Six Months Ended |
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Ceramic Industries
(Reg. No. 1982/008520/06)
(CERAMIC)
(CRM)
ISIN: ZAE00000838
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 JANUARY 2002
Abridged group income statement
6 Months 6 Months Year
ended ended ended
31 January 31 January 31 July
2002 2001 2001
% Unaudited Reviewed Audited
Change R000's R000's R000's
Revenue 23,2 246 530 200 170 417 489
Tiles 22,7 209 796 170 945 357 477
Sanitaryware 25,7 36 734 29 225 60 012
Operating profit before
depreciation 30,5 82 255 63 042 131 972
Depreciation 22,5 (19 420) (15 850) (31 365)
Operating profit 33,1 62 835 47 192 100 607
Tiles 33,8 54 154 40 482 86 875
Sanitaryware 29,4 8 681 6 710 13 732
Investment income 54,4 6 767 4 383 11 353
Exceptional items (100,0) - 61 -
Profit before taxation 34,8 69 602 51 636 111 960
Taxation (18,793) (12 351) (24 449)
Earnings attributable to
ordinary shareholders 29,3 50 809 39 285 87 511
Weighted average number
of shares in
issue (000's) 18 263 18 263 18 263
Basic earnings per
share (cents) 29,3 278,2 215,1 479,2
Headline earnings
per share (cents) 29,2 277,4 214,8 479,0
Dividends per
share (cents) 26,7 38,0 30,0 80,0
RECONCILIATION OF HEADLINE EARNINGS
Income attributable to
ordinary shareholders 50 809 39 285 87 511
Profit on disposal of
fixed assets (140) (61) (26)
Headline earnings 50 669 39 224 87 485
Abridged group balance sheet
31 January 31 January 31 July
2002 2001 2001
Unaudited Reviewed Audited
R000's R000's R000's
ASSETS
Non-current assets
Property, plant and equipment 205 094 131 721 171 908
Current assets 278 656 239 006 268 017
Inventories 10 053 20 044 17 427
Trade and other receivables 87 945 63 084 76 129
Cash and cash equivalents 180 658 155 878 174 461
Total assets 483 750 370 727 439 925
EQUITIES AND LIABILITIES
Capital and reserves 363 069 270 694 310 299
Ordinary shares 64 962 64 962 64 962
Retained earnings and reserves 298 107 205 732 245 337
Non-current liabilities
Deferred taxation 16 340 13 838 17 326
Current liabilities 104 341 86 195 112 300
Trade creditors, other payables
and provisions 74 696 66 929 89 370
Taxation 22 610 13 513 13 694
Shareholders for dividend 7 035 5 753 9 236
Total equity and liabilities 483 750 370 727 439 925
Statement of changes in shareholders equity
31 January 31 January 31 July
2002 2001 2001
Unaudited Reviewed Audited
R000's R000's R000's
Balance at beginning of period 310 299 236 886 236 886
Earnings attributable to
ordinary shareholders 50 809 39 285 87 511
Foreign currency translation
reserve arising in year 8 901 - 513
Dividends (6,940) (5 477) (14 611)
Balance at end of period 363 069 270 694 310 299
Abridged group cash flow statement
31 January 31 January 31 July
2002 2001 2001
Unaudited Reviewed Audited
R000's R000's R000's
Operating activities
Profit before tax adjusted
for non-cash items 82 115 63 042 131 946
Changes in working capital (20 102) 740 20 258
Cash generated from operations 62 013 63 782 152 204
Investment income 6 767 4 383 11 353
Dividends paid (9 141) (4 253) (12 533)
Taxation paid (9 877) (6 251) (16 712)
49 762 57 661 134 312
Investing activities
To expand operations (43 565) (15 789) (73 857)
Net increase in cash and
cash equivalents 6 197 41 872 60 455
Cash and cash equivalents
beginning of period 174 461 114 006 114 006
Cash and cash equivalents
end of period 180 658 155 878 174 461
COMMENTARY
FINANCIAL RESULTS
Ceramic Industries Limited is pleased to announce its results for the six
months ended 31 January 2002. Turnover improved by 23% to R246,5 million,
from R200,2 million in the comparative period. Revenue from tiles increased
to R209,8 million, up 23% (2001: R170,9 million), while revenue from
sanitaryware grew 26% to R36,7 million (2001: R29,2 million).
Operating profit and headline earnings increased by 33% to R62,8 million
(2001: R47,1 million) and by 29% to 277,4 cents per share (2001: 214,8 cents
per share) respectively.
These results can be attributed to:
Increased production volumes;
Increased market share; and
Improved efficiencies, resulting in cost reductions
OPERATING ACTIVITIES
During the period under review, the Group entrenched its position as the
leading ceramic tile manufacturer in South Africa, and Betta Sanitaryware as
the leading local manufacturer of vitreous china sanitaryware.
The Group's philosophy to remain at the forefront of utilising the latest
technology at all of its factories, proved successful. This technology was
the main reason for the overall growth experienced in the production of
tiles, which increased by 21% to 6,9 million square metres (2001: 5,7
million square metres) and in the production of sanitaryware, which
increased by 14% to 0,32 million pieces for the six months (2001: 0,28
million pieces).
While the depreciation of the Rand impacted heavily on importers of tiles
and sanitaryware and favoured the Ceramic Industries Group, it
simultaneously negatively affected the cost of equipment and imported raw
materials. Although the depreciation of the Rand increased the cost of
imported raw materials by up to 35%, the Group was able to limit selling
price increases to between 3,5% and 4,0%.
After prolonged efforts were made to effect a turnaround at NCI, the effect
of the changes failed to meet management's expectations. A decision was
taken by the Board to close the factory on 31 October 2001. NCI's revenue
and operating results before depreciation, which are included in these
financial results, are as follows:
6 Months 6 Months
ended ended
31 January 2002 31 January 2001
Unaudited Reviewed
R'000 R'000
Revenue 2 666 10 270
Operating (loss)/profit
before depreciation (383) 664
Adequate provision has been made for possible losses on the disposal of NCI
assets. It is anticipated that the majority of the assets will be disposed
of during the next six months. Some of the NCI product is now being
successfully manufactured at the Vitro plant.
Although the Group intends to continue to drive export sales into Southern
Africa, it remains committed to its South African based customers. For this
reason, export sales decreased to 12% of Group revenue.
PROSPECTS
The Group continues its expansion, both locally and abroad, as indicated
below. The Group will also continue to focus on the lowering of production
costs. Import replacement will remain a key driver of the Group's turnover.
The company remains ungeared, with all capital projects financed through
cash reserves. The balance sheet reflects cash reserves of R181 million.
Local investment and capital expenditure
Construction of the gas pipeline from Rosslyn to Babelegi is well advanced
and it is expected to be operational by the end of August 2002. The new
pipeline will reduce production costs at the two Samca factories.
The Group will remain competitive by continuing to improve operating
efficiencies and explore advancements in product and technology. The
following expansions are being undertaken:
A third full production line will be installed at Samca II during June 2002.
This investment, necessitated by an increased demand in the wall tile
market, is valued at R20 million and will increase capacity by a further
30%. The expected commissioning date is September 2002;
The Board approved the installation of a fourth kiln at Samca 1, subject to
the procurement of the required clay reserves. The cost of this investment
is estimated at R35 million. It is expected that this expansion will be
commissioned at the end of July 2003;
In its audited financial results for the year ended 31 July 2001, the Group
stated that plans had been made to increase production capacity at Betta to
1,2 million pieces of sanitaryware per annum. The installation of the
additional manufacturing capacity, enabling production of one million
pieces, is well advanced and should be completed by the end of March 2002.
Further expansion to produce the balance will be completed by the end of
August 2002. The total cost of these expansions is estimated at R30 million;
and
A new production line is being installed at Vitro. This line, which will be
commissioned during May 2002, will result in an additional 2,1 million
square metres of extruded punched tiles per annum. In addition to this
expansion, the drying equipment of one of the existing lines at Vitro, which
is being used for the manufacturing of the NCI product, will be replaced at
a cost of approximately R5 million.
Progress has been made with regard to the Pegasus plant to be located in
Vereeniging. Clay reserves have been secured and the construction programme
has been approved. Negotiations for equipment are at an advanced stage, and
commissioning is anticipated by the end of October 2002. As a result of the
depreciation in the Rand, the cost of the project is now estimated to be
R110 million, against the original budget of R90 million.
Foreign investment and expansion opportunities
With regard to the Group's 50-50 joint venture with Gruppo Ceramiche
Ricchetti, Ceramic Industries has invested its total contribution of 5
million. This contribution has been consolidated into cash and cash
equivalents and property, plant and equipment on the abridged balance sheet.
The Board has however, in conjunction with partner Gruppo Ceramiche
Ricchetti, elected to postpone the establishment of the Italian factory for
a further six months, due to the uncertain tile market in Europe. The
expected commissioning date is thus July 2003.
In terms of the Group's expansion plans into Australia, preliminary
negotiations for clay supplies have been concluded, and the location of
factory premises will be finalised in June 2002. It is anticipated that
construction of the plant will commence in October 2002 and commissioning is
scheduled for calendar year 2003. The cost of this expansion amounts to
US$10 million.
STAFF AND DIRECTORATE
Mr. Len Pereira, the Group's operations officer, was appointed to the Board
of Directors with effect from 27 August 2001. Mr. Pereira has extensive
experience in the tile and sanitaryware industries and the Board welcomes
his valuable contribution.
DIVIDEND
The Board has declared an interim dividend of 38 cents, which is an
improvement of 27% (2001: 30 cents). This dividend has been fully provided
in the financial results.
On behalf of the Board
G.A.M. Ravazzotti
Chairman
N. Booth
Chief Executive Officer
ACCOUNTING POLICY
These financial results have been prepared according to Generally Accepted
Accounting Practice, in a manner consistent with prior periods.
DIVIDEND ANNOUNCEMENT
The Board has resolved to declare an interim dividend (number 24) of 38
cents per share to all shareholders of Ceramic Industries Limited. The last
day to trade ("CUM" the dividend) in order to participate in the dividend
will be Friday, 12 April 2002. The shares of Ceramic Industries Limited will
commence trading "EX" the dividend from the commencement of business on
Monday, 15 April 2002 and the record date will be Friday, 19 April 2002. The
dividend will be paid on 29 April 2002. Share certificates may not be
dematerialised from 8 April 2002 to 19 April 2002, both days inclusive.
By order of the Board
I.A. Mollentze
Secretary
14 March 2002
Directors: G.A.M. Ravazzotti (Chairman), N. Booth (Chief Executive Officer),
L. Pereira, S.D. Jagoe, E. Mafuna, K. Schultz, P. Wickens (British),
G. Zannoni (Italian)
Registered office: 33 Sarel Baard Crescent, Gateway Industrial Park,
Centurion
POBox 1369, Rivonia 2128
Transfer secretaries: Computershare Services Limited, 41 Fox Street,
Johannesburg 2001 POBox 61051, Marshalltown 2107
File name: EmailDetails.txt
NOTE-
DESCRIPTION-
From: typesettingdb
To: sens@jse.co.za;
CC: dmenglish@signatures.co.za;
Subject: Ceramic Industries Limited
Message:
Wednesday - 13.3.2002 - 13:00
Attached, please find new document with changes as requested. Also cover
page.
Thanks
Derick
