| Tue 23 Apr 2002, 0:00 | | Nu-world Holdings Limited - Interim Report For |
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February 2002
Nu-World Holdings Limited
(Registration No. 1968/002490/06)
SHARE CODE : NWL
ISIN : ZAE000005070
INTERIM REPORT FOR THE HALF YEAR ENDED 28 FEBRUARY 2002
Turnover up 25%
Attributable Income up 24%
Headline Earnings Per Share up 24%
Cash Generated by Operations R 6, 096m
SALIENT FEATURES
*South African market performs well.
*Exports in hard currencies increase 206%.
*Nu-World is in the process of doubling manufacturing capacity over the
forthcoming 18 months to meet the requirements of rising export demand.
*Manufacturing facility quality approved by Underwriters Laboratory for
export to the United States.
*Manufacturing facility quality approved by General Electric Quality and
Technology Transfer for the manufacturing of specified products under the GE
brand, for export worldwide.
*Australian Associate provides a positive contribution.
STRATEGIC FOCUS
*Nu-World's strategic focus is to utilize local and international leading
brand positions as a key supplier of branded consumer durables to Southern
African retailers.
*A sustained design and engineering effort to secure our position as an
international low-cost, high volume manufacturer of domestic appliances.
*Renewed focus on the export of finished products, to exploit the benefit of
a Rand based manufacturing cost of production, destined for sale in export
markets around the world, in hard currency.
*A focus on international growth by investing in strategic distributors in
key export markets.
INCOME STATEMENT
Unaudited Six Unaudited Six
Months Ended Months Ended % Change
28 Feb 2002 28 Feb 2001
R000 R000
Turnover - SA operations 461,818 369,351 25.0%
Turnover - offshore operations 0 70,034 (100,0%)
Group turnover 461,818 439,385 5.1%
Net operating income 28,522 24,693 15.5%
Depreciation 2,131 2,302
Interest paid 5,309 4,783
Income before taxation 21,082 17,608 19.7%
Taxation 4,772 3,737
Income after taxation 16,310 13,871 17,6%
Income from associate company 778
Outside shareholders' interest 87
Attributable income 17,088 13,784 24,0%
Dividend
Retained earnings for the period 17,088 13,784 24,0%
Headline earnings 17,088 13,784 24,0%
Earnings per share (cents) 78.8 63.5 24,0%
Earnings per share (cents) 78.8 63.5 24.0%
- weighted
Headline Earnings
per share (cents) 78.8 63.5 24.0%
Headline Earnings per
share (cents) 78.8 63.5 24.0%
- weighted
Dividend per share (cents) 0.0 0.0
Dividend cover
Interest Cover 5.0 4.7
Shares in issue 21,695 21,695
Shares in issue - weighted 21,695 21,695
BALANCE SHEET
Unaudited Six Unaudited Six Year
Months Ended Months Ended Ended
28 Feb 2002 28 Feb 2001 31 Aug 2001
R000 R000 R000
Assets
Non-current assets
Fixed assets 30,503 29,212 28,089
Goodwill 7,374
Investment in associate 20,911 12,864
Current assets
Inventory 119,580 189,050 103,137
Trade and other receivables 134,330 166,650 162,433
Cash equivalents 55,889 18,673 65,078
Total assets 361,213 410,959 371,601
Equity and liabilities
Shareholders' interest 251,016 221,839 234,780
Minority interest 22,873
Non-current liabilities 10,430 15,486 12,973
Current liabilities
Trade and other payables 99,767 150,643 123,848
Current portion of interest
Bearing liabilities 118
Total equity and liabilities 361,213 410,959 371,601
Debt : Equity Ratio 0,0% 0.0% 0.0%
STATEMENT OF CHANGES IN EQUITY
Equity at beginning of period 234,780 208,101 208,101
Share capital redeemed (1,272)
Transfer from deferred taxation 61
Transfer from minority interest 94
Foreign currency translation reserve (201) (87)
Conversion of subsidiary to
associate (852)
Retained earnings for the
Period 17,088 13,784 33.941
Dividend proposed (5,903)
Equity at end of the period 251,016 221,839 234,780
CASH FLOW STATEMENT Unaudited Six Unaudited Six Year
Months Ended Months Ended Ended
28 Feb 2002 28 Feb 2001 31 Aug 2001
R000 R000 R000
Cash generated/(utilized)
by operating
Activities 6,096 (35,018) 12,335
Cash generated/(utilized)
by activities 21,830 (13,578) 41,052
Interest paid (5,309) (4,783) (8,723)
Dividend paid (5,909) (4,900) (4,895)
Taxation paid (4,516) (11,757) (15,099)
Cash flows from investing
activities (12,666) (3,242) (254)
Purchase of tangible
fixed assets (4,544) (3,312) (6,507)
Proceeds on disposal of
fixed assets 70 107
Increase in investment
in associate (8,122)
Conversion of subsidiary
to associate 6,146
Cash flows from financing
Activities (2,619) (3,598) (7,333)
Repayment of long term
Borrowing (2,619) (3,390) (6,062)
Share repurchase (1,271)
Proceeds from issue of shares to
Minority shareholders' (208)
Net decrease (increase) in cash
And cash equivalents (9,189) (41,858) 4,748
Effect of exchange rate changes (201)
Cash and cash equivalents at the
Beginning of the period 65,078 60,531 60,531
Cash and cash equivalents at the
End of the period 55,889 18,673 65,078
FINANCIAL REVIEW
The run up to the Christmas season during the period under review was
characterized by record revenues and sound margins. The major deterioration
in the value of the Rand in December 2001, added additional impetus to
consumer buying before impending price increases.
South African Turnover of R461,818m is up 25.0% on February 2001. The
comparative year's Turnover related to the consolidation of Prima
Australasia Pty Ltd, subsequently shown as an Associate Company in the
current financial year.
Operating Income is up 15.5% to R28,522m (February 2001 : R24,693m)
Associate Company, Prima Australasia Pty Ltd provided a positive
contribution of R778,000 for the period.
H.E.P.S. is up 24% to 78.8 cents. (Feb 2001 : 63.5 cents).
The Balance Sheet reflects the benefits of the sustained focus on effective
working capital management. Inventories and Debtors are significantly down
whilst cash on hand is up threefold to R55,9m.
The Group generated funds from operations of R6,096m - a significant
turnaround from the February 2001 position.
The interim financial statements comply with South African Statements of
Generally Accepted Accounting Practice. The Accounting policies are the
same as the annual results.
EXPORTS
The Group continues to make strong inroads into international markets with
our manufactured domestic appliances.
Nu-World is in the process of doubling manufacturing capacity over the
forthcoming 18 months to meet the requirements of rising export demand.
Exports in hard currencies have increased more than 200% year on year. New
contracts from the United States are expected to generate an additional USD
$1.0m per month from the third quarter of the financial year.
Products designed, developed, engineered and manufactured in our South
African plant, have been listed by Wal-Mart, the world's largest retailer,
as well as other leading U.S.A. retailers.
Increasing exports will serve to underpin and improve gross profit margins.
PRIMA AUSTRALASIA PTY LTD
Nu-World increased its shareholding in Prima to 44.7% in September 2001.
Prima is budgeting to generate revenues of AUD $50 million for the year to
August 2002.
The AKAI brand is now successfully re-established with major retailers and
profit margins are improving. The launch of a range of consumer electronics
under the Telefunken brand is on stream for April 2002. Prima now enjoys
support from all major Australian retailers.
PROSPECTS
Whilst higher pricing and higher interest rates are expected to have a
moderating influence on consumer spending, Nu-World is expecting to sustain
current levels of growth by:-
- Increasing market penetration across all of our brands, in all areas of
operation, in the South African market.
- Ongoing negotiations to take on additional brands to enhance our leading
brand position - in South Africa and Australia.
- Launching new products for the local market as well as for the United
Kingdom and the United States.
- Increasing production throughput by commissioning plant and equipment and
attaining higher standards of production efficiency.
- Increasing export of Rand denominated manufactured products, selling in
hard currencies internationally.
- An ongoing improvement in the performance of Prima Australasia Pty Ltd.
Our broadly diversified product range, our low-cost manufacturing base,
together with our increasing global research, place Nu-World in a
strategically stronger position, to sustain current levels of growth
DIRECTORS
M.S. Goldberg BCom MBA (Wits) (Chairman), J.A. Goldberg BSc (Eng) (Wits)
(Managing), G.R. Hindle CA (SA), B. Haikney CA (SA) (Company Secretary), P.
Gross B.Com L.L.B. (Wits)*, J.M. Judin Dip Law (Wits)* (* Non-executive
Directors.)
