| Fri 26 Apr 2002, 0:00 | | Amap - Audited Preliminary Results For The Year En |
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Audited preliminary results for the year ended 28 February 2002
Strong growth through proven product marketing
Amalgamated appliance holdings limited
Registration number 1997/004130/06
("AMAP" or "the group")
ISIN number: ZAE000012647
Share code number: AMA
- Attributable earnings up 51%
- Headline earnings up 40%
- Cash inflow R92 million
- Revenue up 20%
Abridged group income statement
Audited Audited
12 months 12 months
28 February 28 February
2002 2001
Change R'000 R'000
Revenue 20% 862 338 719 780
Operating income 33 165 28 587
Net Interest expense 5 907 11 568
Profit before tax 27 258 17 019
Taxation 9 002 4 923
Profit attributable to ordinary
shareholders 51% 18 256 12 096
Dividend - proposed 5 105 3 974
Earnings per share (cents) 34% 9,0 6,7
Headline earnings per share
(cents) 25% 10,0 8,0
Diluted headline earnings per
share - weighted (cents) 36% 9,9 7,3
Dividend per share 25% 2,5 2,0
Abridged group cash flow statement
Audited Audited
12 months 12 months
28 February 28 February
2002 2001
R'000 R'000
Cash flow from operating activities 101 993 12 678
Cash generated by operations 34 134 24 914
Working capital changes 68 799 (11 210)
Cash available from operations 102 933 13 704
Taxation paid (STC) (104) (140)
Cash available from operations 102 829 13 564
Dividends paid (836) (886)
Investing activities (10 128) (10 640)
Additions of property, plant and equipment (7 902) (9 372)
Proceeds on disposal of property,
plant and equipment 1 067 1 730
Increase in loans (3 293) (2 998)
Financing activities 578 -
Increase in long-term borrowings 578 -
Net increase in cash 92 443 2 038
Cash borrowings beginning of period (24 484) (26 522)
Cash resources/(borrowings) end of period 67 959 (24 484)
Abridged group balance sheet
Audited Audited
28 February 28 February
2002 2001
R'000 R'000
ASSETS
Non-current assets
Property, plant and equipment 23 474 21 603
Trademarks and goodwill 13 430 14 853
Loans 29 230 26 416
Deferred tax 13 167 22 106
Current assets 403 697 394 117
Stock 155 249 150 828
Trade and other receivable 155 764 118 382
Bank and cash on hand 92 684 124 907
Total assets 482 998 479 095
EQUITY AND LIABILITIES
Capital and reserves 217 429 200 009
Long-term borrowings 816 394
Current liabilities 264 753 278 692
Trade and other payables 239 733 129 695
Bank overdraft and short-term borrowings 25 020 148 997
Total equity and liabilities 482 998 479 095
Abridged statement of changes in equity
Audited Audited
12 months 12 months
28 February 28 February
2002 2001
R'000 R'000
Balance at start of year 200 009 187 399
Issue of share capital 55 328
Share premium 3 083 32 433
Equity loans - (28 100)
Attributable earnings 18 256 12 096
Dividends settled:
- cash election (836) (886)
- capitalisation shares (3 138) (3 261)
Balance at end of year 217 429 200 009
Group supplementary information
Audited Audited
12 months 12 months
28 Feb 2002 28 Feb 2001
Change R'000 R'000
Shares in issue (000's) 204 198 198 696
Shares in issue - weighted (000's) 202 364 180 379
Diluted number of shares (000's) 204 198 198 696
Diluted number of shares
- weighted (000's) 204 198 198 696
Net asset value per share (cents) 106 101
Cost of sales (R'000) 692 513 554 289
Capital expenditure (R'000) 7 902 9 372
Depreciation charge (R'000) 5 299 5 448
Capital commitments not yet
contracted (R'000) 5 435 1 665
Headline earnings 40% 20 190 14 450
Goodwill amortised 469 371
Profit on disposal of property,
plant and equipment (236) (299)
Provision for write-down
of share trust loan 1 701 -
Restructuring expenditure - 2 282
Profit attributable to ordinary
shareholders 51% 18 256 12 096
Accounting policies
The accounting policies adopted for the purpose of this report comply in all
material respects with South African Statements of Generally Accepted
Accounting Practice (GAAP) as well as with applicable legislation. These
accounting policies are also consistent with those of the previous year.
Certain comparitive figures have been restated to provide more meaningful
information.
comments
Financial
In spite of the unfavourable economic environment, the directors are pleased
to record that Amap achieved strong growth in all areas of trading. Revenue
increased by 20% to R862 million and attributable earnings by 51% to R18,3
million. Sound organic growth, the strength of the Group's brands and
effective cost reduction programmes enhanced operating margins by 27% in the
second half.
Disciplined working capital management and the benefit of the Group's
considerable purchasing power in depressed overseas markets helped to
sharply reduce interest charges.
Headline earnings rose by 40% to R20,2 million and with the 12% increase in
the weighted average number of shares flowing from acquisitions in 2000,
headline earnings per share improved by 25% to 10 cents per share. Diluted
headline earnings per share advanced by a highly satisfactory 36%.
The group's financial strength was underlined by net positive cash inflow of
R92 million, which left Amap ungeared at year end with a healthy cash
balance. Net asset value is 106 cents per share.
Operations
In a year marked by turmoil in parts of Africa, the tragic events of
September 11 and the continuing crisis in Zimbabwe, the rand weakened
dramatically against most major currencies. South Africa's currency unit
lost more than 40% against the American dollar, which placed enormous
pressure on the inflation targets set by the Reserve Bank and resulted in
two interest rate increases around Amap's financial year end.
Against this background, the most encouraging aspects of the results were
the excellent performance of all three major divisions - appliances,
electronics and manufacturing, and the growing presence of our appliance
products internationally.
The improved competitiveness of locally produced Salton and Pineware branded
products once again boosted turnover in the appliances division. During the
year the division was appointed exclusive distributor for the Remington
brand of personal care products.
Partially as a result of the success of South Africa Revenue Services in
curtailing illegal activities, significant market share gains were achieved
in television. Demand for DVD and home theatre was strong. Core business in
Sansui, Pioneer, Tedelex and Toshiba all contributed meaningfully to the
results.
The drive to reduce material input costs in real terms was assisted by high
levels of factory loading and tight inventory control. This, together with
stable labour relations, ensured that the manufacturing division operated
well within its budgeted parameters.
Exports increased by 56% in the year, giving the international division
compound annual growth of 50% since 1998. Amap's increasing export success
provided an important hedge against the vagaries of the domestic market and
currency fluctuations.
Following Salton USA's acquisition of Pifco UK, the operations of Amap UK's
subsidiary, including the Cordon Bleu business, was transferred to Salton
Europe. This greatly enlarged the market potential and provided exciting new
OEM opportunities. A range of kettles and cooking appliances was exhibited
at the Chicago Housewares show and promising initial orders were obtained.
Amap's existing OEM and export business also showed strong growth.
Dividend
Amap has resolved to continue the policy of a single annual dividend after
the end of each financial year. The directors have proposed to issue
capitalisation shares to ordinary shareholders, provided that any
shareholder shall be entitled to decline all or part of the capitalisation
share award and elect instead to receive a cash dividend of 2,5 cents per
share which represents a dividend cover ratio of four times. Salton USA, the
largest shareholder, has advised of its intention to accept the
capitalisation issue.
Documentation dealing with the capitalisation issue and the cash alternative
will be posted to shareholders in due course.
The Board
In December Mr. Michael Katz resigned from the Board as a result of changes
in the structure of his firm. He has been a director since Amap's founding
and his outstanding contribution will be sorely missed.
We are gratified that Mr. Meyer Kahn, Chairman of SA Breweries, has accepted
an appointment as a non-executive director.
Annual Report
The annual report and financial statements for the year ended 28 February
2002 will be posted to shareholders at the end of May 2002.
Prospects
Trading conditions are expected to remain difficult because the recent
interest rate and petrol price hikes will inhibit consumer spending. The
personal tax cuts of R15 billion announced by the Minister of Finance in his
Budget, and the soccer World Cup should, however, underpin demand for
household electrical durables, thus partially compensating for the impact of
rand devaluation and higher interest rates.
Furthermore, recent developments have raised hopes that conditions in Africa
could begin to stabilise, thus opening additional marketing opportunities
throughout the continent.
Finally, the widespread acceptance of the Group's well-known brands across
the entire demographic spectrum, together with its strong financial
position, give cause for optimism for the coming year.
By order of the Board
B G Drummond
Secretary
26 April 2002
Amalgamated appliance holdings limited
Directors J Cohen (Chairman) F R Thompson (Deputy Chairman) S G
Bernhardt M C Berzack* S Cohen* L Dreimann* SALevitt* A Nossel S
Scafidas W B Rue*
AlternateS S Green* EGW Janssen van den Doornmalen* *Non-executive
transfer secretaries Mercantile Registrars Limited 8th Floor 11
Diagonal Street Johannesburg 2001 PO Box 1053 Johannesburg 2000
Telephone (011) 370 5000
REGISTEREDOFFICE 29 Heronmere Road Reuven 2091 PO Box 39186 Booysens 2016
Telephone (011) 490 9000
www.amap.co.za
