| Fri 15 Mar 2002, 0:00 | | ELB Group Limited - Interim Report and dividend |
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ELB GROUP LIMITED
(formerly Edward L Bateman Limited)
(Registration number 1930/002553/06)
Share code ELR
ISIN code ZAE000035101
Interim Report and dividend announcement
for the six months ended 31 December 2001
Group Income statement
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31/12/01 31/12/00 30/06/01
R000 R000 R000
Sales revenue 2 201 433 1 064 600 2 937 537
Net operating costs
excluding depreciation
and amortisation (2 159 431) (1 028 188) (2 845 959)
Operating profit before
depreciation, amortisation
and abnormal items 42 002 36 412 91 578
Depreciation and amortisation (29 008) (17 131) (36 568)
Operating profit before
abnormal items 12 994 19 281 55 010
Abnormal items:
income/(expense) 84 288 (2 896) (2 143)
Profit from operations 97 282 16 385 52 867
Net treasury income not
related to projects 70 470 15 091 25 547
Income/(loss) from associates 1 039 1 381 (6 960)
Profit before tax 168 791 32 857 71 454
Income tax expense (34 838) (2 694) (14 438)
Profit after tax 133 953 30 163 57 016
Preference dividends - - (1)
Minority interest (6 365) (7 316) (16 037)
Net profit for the period 127 588 22 847 40 978
Weighted average number of
shares on which basic
earnings per share are
based (000's) 30 257 29 869 30 020
Earnings per ordinary share
(cents) - basic 421,7 76,5 136,5
- fully diluted 415,5 73,6 132,3
Headline earnings per ordinary
share (cents) - basic 156,4 73,6 138,1
- fully diluted 154,1 70,9 133,9
Adjusted headline earnings
(before abnormal trading
items) per ordinary share
(cents) - basic 155,7 83,4 144,7
Dividends per ordinary
share (cents) 30,0 17,0 50,0
Abnormal items
Capital items
Surplus on disposal of Bateman
Project Holdings Limited
(Batepro) 83 836 - -
Impairment of property (287) - (509)
Net surplus on disposal
of property 414 - -
(Deficit)/surplus on disposal
of interest in joint venture (30) - 1 613
Surplus on disposal of
interest in equipment licence - 858 858
Accrual for possible
patent infringement - - (2 000)
Net capital items:
income/(expense) 83 933 858 (38)
Abnormal trading items
Loss before tax of share
investment and share
dealing operations (145) (539) (548)
Impairment of inventories
and debtors - (5 715) (5 659)
Impairment reversal
of inventory 500 2 500 3 000
Accruals for disputes relating
to goods supplied and
services rendered - - (2 398)
Insurance refund for
legal expenses - - 3 500
Net abnormal trading items:
income/(expense) 355 (3 754) (2 105)
Net abnormal items:
income/(expense) 84 288 (2 896) (2 143)
Reconciliation of
headline earnings
Net profit for the
period as above 127 588 22 847 40 978
Deduct capital items: 80 266 858 (467)
- before tax as detailed above 83 933 858 (38)
- income tax expense (3 667) - (429)
Headline earnings 47 322 21 989 41 445
Deduct abnormal trading items: 207 (2 907) (1 993)
- before tax as detailed above 355 (3 754) (2 105)
- income tax (expense)/income (148) 847 112
Adjusted headline earnings
(before abnormal trading
items) 47 115 24 896 43 438
Note
Profit or loss before
abnormal items is arrived
at after taking into account:
Surplus on disposal of
equipment and vehicles 191 313 914
Net treasury income includes
interest paid amounting to (8 718) (3 508) (9 192)
Group balance sheet
Audited
Pro forma
Unaudited Unaudited (see note 1) Audited
31/12/01 31/12/00 30/06/01 30/06/01
R000 R000 R000 R000
ASSETS
Non current assets 112 435 206 815 97 452 260 642
Property, plant
and equipment 90 826 161 956 80 939 165 686
Intangible assets 326 7 586 479 12 958
Investments in associates - 3 057 1 147 17 375
Other investments - 1 187 - 27 185
Non current debtors 4 386 12 100 4 386 11 888
Deferred tax assets 16 897 20 929 10 501 25 550
Current assets 489 605 1 040 409 458 002 1 476 382
Other 304 436 546 802 323 577 562 789
Cash 185 169 493 607 134 425 913 593
Total assets 602 040 1 247 224 555 454 1 737 024
EQUITY AND LIABILITIES
Capital and reserves 402 881 276 160 378 713 283 567
Issued capital 7 639 8 570 7 923 7 923
Reserves 2 130 2 130 2 130 2 130
Accumulated profit 393 112 265 460 368 660 273 514
Preference shares 8 13 13 13
Minority interest 70 138 95 213 39 814 86 989
Minority interest in
capital and
reserves of
subsidiaries 21 516 79 213 21 066 68 241
Interest bearing
minority loans
to subsidiary 54 874 16 000 29 500 29 500
Current portion of
loans included in
current liabilities (6 252) - (10 752) (10 752)
Non current
liabilities 25 517 2 605 4 245 5 697
Interest bearing
liabilities 360 373 292 292
Non interest bearing
liabilities - 1 515 - 806
Deferred tax
liabilities 25 157 717 3 953 4 599
Current liabilities 103 496 873 233 132 669 1 360 758
Non interest bearing 64 086 797 973 89 704 1 246 090
Interest bearing
- other 39 103 30 895 40 429 40 429
Interest bearing
- banks 307 44 365 2 536 74 239
Total equity and
liabilities 602 040 1 247 224 555 454 1 737 024
Ordinary shares in
issue (000's) 30 240 29 869 30 257 30 257
Net asset value per
share (cents) 1 332 925 1 252 937
Notes
1. The pro forma balance sheet at 30 June 2001 excludes Batepro, and
includes the consideration of R182,7 million on the disposal of Batepro as
an amount receivable in other current assets. The amount was received on 4
February 2002.
2. In accordance with AC 107 (revised) the proposed interim dividend,
amounting to R9 072 000, has not been accrued at 31 December 2001. The
comparative non interest bearing current liabilities at 31 December 2000 and
30 June 2001 include the accrual of the proposed dividend, amounting to R5
078 000 and R9 985 000 respectively.
3. Where necessary, comparative numbers have been restated.
4. There were no capital commitments at 31 December 2001.
DECLARATION OF DIVIDENDS
PREFERENCE DIVIDEND NO 102
Notice is hereby given that a preference dividend has been declared payable
for the interim period ended 31 December 2001, at the rate of 6% per annum
on the 6% fixed cumulative redeemable preference shares of R2 each
equivalent to 6 cents per share. The last day to trade "cum" the dividend
will be Friday, 12 April 2002. The preference shares will commence trading
"ex" the dividend from the commencement of business on Monday,
15 April 2002. The record date will be Friday, 19 April 2002. Payment will
be made on Monday, 22 April 2002.
Shareholders may not dematerialise or rematerialise their holding of ELB
preference shares between Monday, 8 April 2002 and Friday, 19 April 2002,
both days inclusive.
ORDINARY DIVIDEND NO 108
Notice is hereby given that an ordinary dividend of 30 cents per share has
been declared payable for the interim period ended 31 December 2001. The
last day to trade "cum" the dividend will be Friday, 12 April 2002. The
shares of ELB will commence trading "ex" the dividend from the commencement
of business on Monday, 15 April 2002. The record date will be Friday, 19
April 2002. Payment will be made on Monday, 22 April 2002.
Shareholders may not dematerialise or rematerialise their holdings of ELB
ordinary shares between Monday, 8 April 2002 and Friday, 19 April 2002,
both days inclusive.
By order of the board
HAC Poole
Secretary
Boksburg
12 March 2002
Group cash flow statement
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31/12/01 31/12/00 30/06/01
R000 R000 R000
Cash flows from operating
activities
Profit before abnormal items 12 994 19 281 55 010
Abnormal items (145) (539) 2 952
Non cash adjustments 26 437 16 818 39 155
Changes in working capital 610 731 (45 602) 358 802
Net treasury income not
related to projects 70 470 15 091 25 547
Replacement of equipment
and vehicles (11 566) (15 430) (33 157)
Income tax paid (17 128) (1 549) (6 887)
Cash inflow/(outflow) from
operating activities
before dividends paid 691 793 (11 930) 441 422
Dividends paid (10 020) (10 465) (31 166)
Cash inflow/(outflow) from
operating activities 681 773 (22 395) 410 256
Cash flows from investment
activities
Expenses on disposal of
interest in Batepro (804) - -
Other investment activities (22 952) (17 529) (59 500)
Cash inflow/(outflow) before
financing activities 658 017 (39 924) 350 756
Cash flows from financing
activities 29 218 15 622 17 146
Increase/(decrease) in cash
and cash equivalents 687 235 (24 302) 367 902
Cash and cash equivalents
at the beginning of the
period, including net
cash of Batepro 839 354 473 544 473 544
Proportionate share of
cash borrowing/(cash) in
joint venture on disposal 37 - (2 092)
Net cash of Batepro at
disposal no longer included
in ELB Group cash (1 341 764) - -
Group cash and cash
equivalents at the end
of the period, comprising
continuing operations 184 862 449 242 839 354
Reconciliation to balance sheet
Current assets: cash 185 169 493 607 913 593
Current liabilities:
interest bearing bank
borrowings (307) (44 365) (74 239)
Net cash and cash equivalents 184 862 449 242 839 354
Six months Six months Year
ended ended ended
31/12/01 31/12/00 30/06/01
R000 R000 R000
Segment analysis of
cash inflow/(outflow)
Continuing operations
Safbin 4 969 9 748 25
ELB Industrial operations (330) note 1 note 1
ELB Treasury 48 297 (1 064) 43 159
Total continuing operations 52 936 8 684 43 184
Discontinued operation
Batepro 634 299 (32 986) 324 718
Increase/(decrease) in cash
and cash equivalents as
reported above 687 235 (24 302) 367 902
Notes
1. The cash flow of ELB Industrial operations, including discontinued ELB
Industrial operations, is included in the cash flow of ELB Treasury for the
six months ended 31 December 2000 and the year ended 30 June 2001.
2. The cash inflow of Batepro for the six months ended 31 December 2001
includes working capital changes net inflow of R617 846 000. Within the
working capital changes is an increase in construction contract liabilities
of R762 643 000.
Segment analysis
Six months Six months Year
ended ended ended
31/12/01 31/12/00 30/06/01
R000 R000 R000
Sales revenue
Continuing operations
Safbin 15 709 43 228 71 172
ELB Industrial operations 135 773 109 749 227 265
ELB Treasury - - -
Total continuing operations 151 482 152 977 298 437
Discontinued operations
Batepro 2 047 714 890 500 2 605 612
Other 2 237 21 123 33 488
Total 2 201 433 1 064 600 2 937 537
Profit/(loss)
Headline earnings
Continuing operations
Safbin (7 463) (1 541) (5 194)
ELB Industrial operations 4 653 5 350 10 515
ELB Treasury 41 330 11 675 15 224
Total continuing operations 38 520 15 484 20 545
Discontinued operations
Batepro 10 526 8 784 22 004
Other (1 724) (2 279) (1 104)
Headline earnings for the period 47 322 21 989 41 445
Capital items after tax
Discontinued operations
Accrual for possible
patent infringement - - (2 000)
Surplus on disposal of
interest in Batepro 80 238 - -
(Deficit)/surplus on disposal
of interest in joint venture (30) - 1 184
Surplus on disposal of property 414 - -
Impairment of property (356) - (509)
Surplus on disposal of
interest in equipment licence - 858 858
Net profit for the period per
the income statement 127 588 22 847 40 978
Net assets attributable
to ELB Group
Continuing operations
Safbin 33 441 44 567 43 802
ELB Industrial operations 72 425 66 057 66 281
ELB Treasury 294 740 68 749 80 289
Total continuing operations 400 606 179 373 190 372
Discontinued operations
Batepro - 80 956 88 939
Other 2 275 15 831 4 256
Total 402 881 276 160 283 567
GROUP STATEMENT OF CHANGES IN CAPITAL AND RESERVES
Unaudited Unaudited Audited
Issued Accumulated Total Total Total
capital Reserves profit 31/12/01 31/12/00 30/06/01
R000 R000 R000 R000 R000 R000
Balance at
the beginning
of the period 7 923 2 130 273 514 283 567 258 391 258 391
Movements in
issued capital
Shares issued
under the
share incentive
scheme 82 82 - 4 168
Shares repurchased
in terms
of the share
repurchase
programme (366) (366) - (4 815)
Movements in
accumulated profit
Net profit for
the period 127 588 127 588 22 847 40 978
Minority equity adjustments
following the issue
of shares by subsidiaries (7 983) (7 983) - 10
Ordinary dividends - - (5 078) (15 165)
Ordinary dividends
under accrued (7) (7) - -
Balance at the
end of the
period 7 639 2 130 393 112 402 881 276 160 283 567
COMMENTS
FINANCIAL RESULTS
The results for the six months to 31 December 2001 are characterised by the
abnormal profit after tax of R80,238 million realised on the disposal of
ELB's 66% interest in Bateman Project Holdings Limited and the R70,470
million of treasury income attributable largely to the significant fall in
the value of the Rand during the period.
ELB Industrial produced satisfactory results for the period and this trend
should continue during the second half of the year.
Safbin continues to achieve market penetration in its leasing business and
should show improved results during the second half of the year. The results
for the manufacturing division are down on the previous six month period due
to a lack of any significant orders. It is not anticipated that Safbin will
be profitable for the year.
The financial results for Bateman Project Holdings Limited for the six
months are shown as part of discontinued operations in the segmental
analysis.
LITIGATION WITH MR HPN BRERETON
Following his dismissal in 1996, Mr Brereton brought a case of unfair
dismissal against the ELB Group. In October 1999, the Industrial Court
dismissed his case with costs. Mr Brereton then appealed the judgement which
appeal was dismissed with costs during February 2002. Neither Mr WGL Bateman
nor the ELB Group was found guilty of any unfair labour practices.
PROSPECTS
The financial performance achieved during the first six months cannot be
repeated during the second half.
Our intention is to grow our industrial interests as and when suitable
acquisition opportunities arise.
Treasury activities will include both suitable investment banking
opportunities as well as the investing of surplus funds in the equity
markets in order to protect shareholders against inflation.
ACCOUNTING POLICIES
Proposed dividends are no longer accrued in terms of AC 107 (revised). Apart
from this change, the same accounting policies outlined in the 2001 annual
report apply to this report, which complies with AC 127 on Interim Financial
Reporting.
DIRECTORATE
Following the disposal of Bateman Project Holdings Limited, Mr RER Falls
resigned as a director on 5 February 2002. The board appreciates his
contribution over the years.
DIVIDENDS
ELB has declared an interim dividend of 30 cents per share (2000:
17 cents per share).
Though the final dividend is expected to be increased, the percentage
increase will not be as high as at the interim stage.
On behalf of the board
AG Fletcher
Chairman
Share transfer secretaries
Mercantile Registrars Limited
11 Diagonal Street
Johannesburg 2001
Sponsor
Rand Merchant Bank Corporate Finance
A division of FirstRand Bank Limited
1 Merchant Place
Cnr Fredman Drive & Rivonia Road
Sandton 2196
