| Wed 10 Apr 2002, 0:00 | | Combined Motor Holdings Limited - Profit Announcem |
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February 2002
Combined Motor Holdings Limited
(Registration number 1965/000270/06)
(Share Code: CMH ISIN number: ZAE000001541)
Profit announcement for the year ended 28 February 2002
* Headline earnings increase - 21%
* Dividend increase - 15%
* Total assets increase - 19%, to R543 million
* Cash resources exceed R120 million
GROUP FINANCIAL HIGHLIGHTS
2002 2001 % Change
Total assets (R'000) 543 098 456 317 +19,0
Net tangible asset value
per share (cents) 851 728 +16,8
Revenue (R'000) 2 647 535 2 050 755 +29,1
Operating income before
finance costs (R'000) 83 216 61 677 +34,9
Headline earnings (R'000) 47 583 39 434 +20,7
Attributable earnings (R'000) 41 368 39 434 +4,9
Operating income on
average ordinary
shareholders' interest (%) 47,7 43,7 +9,2
Earnings per
ordinary share (cents) 202,9 193,4 +4,9
Headline earnings per
ordinary share (cents) 233,4 193,4 +20,7
Dividends per ordinary
share* (cents) 66,0 57,6 +14,6
*In accordance with the provisions of Generally Accepted Accounting
Standards Statement AC130, the final dividend proposed, of 54,0 (2001: 47,0)
cents per share, has not been reflected in the financial statements.
GROUP INCOME STATEMENT
2002 2001
R'000 R'000
Turnover 2 647 535 2 050 755
Cost of sales (2 162 622) (1 758 636)
Gross profit 484 913 292 119
Selling and operating expenses (401 697) (230 442)
Operating income 83 216 61 677
Operating income to turnover (%) 3,1 3,0
Finance costs (12 636) (3 873)
Operating income before taxation 70 580 57 804
Taxation (26 335) (19 615)
44 245 38 189
Minority shareholders' interest 3 338 1 245
Headline earnings 47 583 39 434
Goodwill written off (9 715) (5 424)
Capital profit on sale of business 3 500 5 424
Attributable earnings 41 368 39 434
Dividend paid (12 028) (2 161)
Retained income 29 340 37 273
GROUP BALANCE SHEET
2002 2001
R'000 R'000
ASSETS
Long-term assets
Fixed assets 18 551 17 317
Amount owing by share trust 3 184 3 384
Intangible assets 15 609 11 510
Deferred taxation 5 360 7 466
Current assets 500 394 416 640
Total assets 543 098 456 317
EQUITY AND LIABILITIES
Capital and reserves
Share capital and reserves 189 197 159 857
Minority shareholders' interest 240 696
Interest-bearing debt 9 375 12 002
Other current liabilities 344 286 283 762
543 098 456 317
GROUP CASH FLOW STATEMENT
2002 2001
R'000 R'000
Cash flows from operating activities 96 765 15 869
Cash flows from investing activities (43 295) (20 197)
Cash flows from financing activities (2 627) 2 402
Net movement in cash resources 50 843 (1 926)
Cash resources at beginning of year 72 109 74 035
Cash resources at end of year 122 952 72 109
COMMENTS ON RESULTS
1. During the year under review the Group achieved an increase in headline
earnings of 21%. Turnover rose 29% and the operating income to turnover
ratio grew from 3,0% to 3,1%. Finance costs increased from R3,9 million to
R12,6 million primarily as a result of the R36 million purchase of a BMW and
Land Rover dealership during March 2001, and the opening of an additional
Volvo outlet, all in Menlyn, Pretoria. However, the investments generated
positive cash flow and, together with continued tight control over working
capital assets, enabled the Group to generate a free cash flow from
operations of R97 million and thereby end the year with cash resources of
R123 million (2001: R72 million).
2. Apart from the aftermath of the attacks in the USA, trading conditions
were relatively stable for most of the year. The dramatic decline in the
country's currency value during December 2001 heralded an unexpected demand
for vehicles, particularly the higher priced imported models, during January
2002 as customers sought to pre-empt the inevitable surge of price
increases. Predictably, demand has since declined to the extent that the
first quarter national sales of passenger vehicles were 6,7% below those of
2001. The fall was in line with market expectations, as the recent increase
in interest rates, coupled with the price increases, generated a measure of
customer resistance and curbed short term demand. The reduction has been
experienced to a lesser extent in the luxury segment of the market than in
the entry level segment.
3. With few exceptions, the Group's earnings growth was shared by all
segments. Particularly pleasing was the growth of the Group's luxury market
segment and the positive contribution by the car hire sector during the
second half of the year. Steps have been taken to dispose of a loss-making
subsidiary in the manufacturing sector and the Group's investment in micro-
lending was reduced to R9 million by year-end.
4. The Directors are still pursuing an offshore investment in the retail
motor industry and hope to make an announcement in this regard during May
2002.
5. In the absence of a substantial adverse change in trading conditions, the
Directors are confident that the company will continue to deliver in line
with expectations.
6. A final dividend (dividend number 30) of 54,0 cents per share will be
paid on 18 June 2002 to members reflected in the share register of the
Company at the close of business on the record date (14 June 2002). Last day
to trade "cum" dividend is 7 June 2002. First day to trade "ex" dividend is
10 June 2002. No dematerialisation/rematerialisation orders may be processed
from 3 June 2002 to 14 June 2002, both days inclusive.
7. The profit announcement has been compiled in accordance with the
statements of Generally Accepted Accounting Practices, and the accounting
policies are consistent with previous years.
By order of the Board of Directors
SK Jackson BCom (Hons) (Tax Law), CA(SA)
Secretary
10 April 2002
Registered office Transfer secretaries
1st Floor Mercantile Registrars Limited
CMH Building PO Box 1053
206 West Street Johannesburg, 2000
Durban, 4001
Directors: M Zimmerman (Chairman), JD McIntosh (Managing), MPD Conway,
SK Jackson, RTAC Nethercott, CL Odendaal, A Rogoff
