| Tue 19 Mar 2002, 0:00 | | Gubb & Inggs - Profit Announcement For The Half Ye |
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Gubb & Inggs Limited
(Incorporated in the Republic of South Africa)
(Registration number 1916/001495/06)
JSE code: GUB ISIN code: ZAE000003208
PROFIT ANNOUNCEMENT FOR THE HALF YEAR ENDED 31 DECEMBER 2001
CONSOLIDATED INCOME STATEMENT
Half year ended Year ended
June 2001
(Audited)
R'000
Dec 2001 Dec 2000
(Unaudited) (Unaudited)
R'000 R'000
Revenue 172 773 187 256 405 742
Trading profit before 13 460 15 642 34 105
depreciation
Depreciation 1 931 1 948 3 698
Results from operating activities 11 529 13 694 30 407
Financing costs 6 259 7 686 16 230
Profit before taxation 5 270 6 008 14 177
Taxation 773 609 3 681
Profit after taxation 4 497 5 399 10 496
Minority interest 232 2 (648)
Profit for the period 4 265 5 397 11 144
Shares issued 2 031 2 031 2 031
Earnings per ordinary share 210,0 265,7 548,7
(cents)
Headline earnings per share 210,0 265,7 548,7
(cents)
Dividend per ordinary share - 15,0 50,0
(cents)
Dividend cover per share (times) - 17,7 11,0
CONSOLIDATED STATEMENT OF CHANGES IN ORDINARY SHAREHOLDERS' FUNDS
Share Share Non- Accumu- Total
capital premium distri- lated
butable profit
reserves
R'000 R'000 R'000 R'000 R'000
Balance at beginning of 1 015 277 22 592 71 191 95 075
the period
Surplus on translation 1 698 1 698
of foreign subsidiaries
1 015 277 24 290 71 191 96 773
Net profit for the 4 265 4 265
period
Balance at end 1 015 277 24 290 75 456 101 038
of the period
CONSOLIDATED BALANCE SHEET
Dec 2001 Dec 2000 June 2001
(Unaudited) (Unaudited) (Audited)
R'000 R'000 R'000
Assets
Non-current assets
Property, plant and equipment 31 304 33 863 32 325
Investment properties 14 512 13 300 14 512
Unlisted investments and loans 958 958 958
Deferred taxation - 1 227 225
46 774 49 348 48 020
Current assets
Inventories 139 065 133 999 126 354
Trade and other receivables 85 723 75 917 78 394
224 788 209 916 204 748
Total assets 271 562 259 264 252 768
Equity and liabilities
Capital and reserves
Share capital 1 015 1 015 1 015
Share premium 277 277 277
Non-distributable reserves 24 290 21 823 22 592
Distributable reserves 75 456 66 460 71 191
Ordinary shareholders' interest 101 038 89 575 95 075
Outside shareholders' interest 654 1 069 422
101 692 90 644 95 497
Non-current liabilities
Deferred taxation 1 724 2 453 1 884
Long-term liabilities 1 115 1 112 1 130
2 839 3 565 3 014
Current liabilities
Trade and other payables 15 271 11 841 24 727
Amount owing to group companies 4 860 3 577 4 748
Bank overdrafts and short-term 146 900 149 637 124 782
loans
167 031 165 055 154 257
Total equity and liabilities 271 562 259 264 252 768
SUMMARISED CONSOLIDATED CASH FLOW STATEMENT
Dec 2001 Dec 2000 June 2001
(Unaudited) (Unaudited) (Audited)
R'000 R'000 R'000
Cash flow from
operating activities
Operating income before 12 749 8 844 34 506
working capital changes
(Increase) decrease in (25 702) (7 384) 3 776
working capital
Cash (utilised) generated (12 953) 1 460 38 282
in operations
Financing costs (6 259) (7 686) (16 230)
Taxation paid (2 195) (89) (841)
Dividends paid (711) (711) (1 016)
Net cash from operating activities (22 118) (7 026) 20 195
Purchase of property, plant - - (2 563)
and equipment
Proceeds from sale of plant - - 180
and equipment
Net cash used in investing - - (2 383)
activities
Increase in long term liabilities - 426 443
Net (increase) decrease in bank (22 118) (6 600) 18 255
overdrafts and short-term loans
Bank overdrafts and short-term (124 782) (143 037) (143 037)
loans at beginning of the period
Bank overdrafts and short-term (146 900) (149 637) (124 782)
loans at end of the period
Basis of preparation
The financial statements of the Group have been prepared in accordance with
the South African Statements of Generally Accepted Accounting Practices,
which policies are consistent with those of the prior year.
REVIEW OF ACTIVITIES
The first half of your Group's trading period began with a degree of
uncertainty, both as far as wool and mohair was concerned. Early season
signs of further reductions of wool production prompted local processors to
pay prices above world levels to secure adequate raw material supplies.
Mohair opened the season on a depressed note and the market continued to be
affected by the `hangover' of excessively high prices of the 2001/2002 boom.
On the economic front global conditions were anything but positive with
recession talk in the USA and Europe, not to mention Japan's economic woes,
hardly encouraging world demand. Then came September 11th, which virtually
brought new business to a standstill.
There was one psychologically positive milestone for wool with the sale of
the last bale of the infamous Australian stockpile on 1st August 2001,
bringing to an end one of the toughest decades in the industry's history.
Certainly this event was no signal for better world wool consumption,
however, against a backdrop of dwindling world wool production (a 30 year
low will be seen this year in main producer - Australia), the end of the
stockpile era gave rise to fears in some industry circles, particularly
among early stage processors, that there "will just not be enough wool to go
around."
As far as your Group's current trading period is concerned it needs to be
said that six months under review cannot be considered in isolation. Both
the depreciation of the Rand and higher wool prices in Australia were
significantly extended in the early part of 2002 to the extent that by the
end of January wool prices in local currency were 70% higher compared to the
season's opening in September. Of this rise 35% can be attributed to the
sharpest rise in raw wool markets in Australia since 1972. Wool growers are
smiling and, after a decade of low prices, deservedly so. Early stage wool
processors on the other hand are finding strongest spinner resistance to the
new price levels as a consequence of their scramble for raw wool, and as the
negative gap between cost of raw wool and saleable market prices of wool
tops widens some short-time could well be seen in the industry.
While your Group would normally benefit from a weaker Rand and higher wool
prices, this is hardly the case when change is as volatile as seen during
the past three months and particularly when market price rises are mainly
supply driven and have given rise to so much uncertainty in
the industry.
Your directors are confident of extending the positive half-year results to
the remainder of the financial year despite the turbulent events referred to
above. At the same time they must point out that the dramatic per kilogram
increase in the Rand price of wool will result in a strain on your Group's
working capital required to maintain a satisfactory wool and mohair
throughput in the processing plant, and under these circumstances feel it
would not be appropriate to declare a dividend.
Finally, despite the generally better sentiment among local wool and mohair
producers, it is not expected that any significant increases in production
levels will be seen in South Africa. The fundamental problem of inadequate
raw wool supplies is therefore unlikely to improve in the short-term and
your directors advise that a restructuring and modernisation programme is
being undertaken to further enhance production efficiencies.
By order of the Board 14 March 2002
HN Bonner
Company Secretary
Transfer Secretaries: Computershare Services Limited, PO Box 61051,
Marshalltown 2107
Registered Office: Hendrik van Eck Drive, Uitenhage. PO Box 23, Uitenhage
6230
Directors: JP Stucken (Chairman) HN Bonner, CR Haw*, OEW Isenbeck* (German),
RA Kirsten, W MacDonald*, KD Mielke* (German), DJ Van Deemter
* (Non-executive)
