| Mon 29 Apr 2002, 0:00 | | Forza - Interim Results For The Six Months Ended 2 |
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Forza Group Limited
(Registration number 1987/004218/06)
("Forza" or "the Group")
Share Code: FOZ
ISIN Code: ZAE000018446
Interim results for the six months ended 28 February 2002
Highlights
Turnover 27%
EBITDA growth 27%
Headline earnings 29%
Consolidated income statement
Unaudited Unaudited Audited
6 months 6 months 12 months
Feb 2002 Feb 2001 Aug 2001
R'000 R'000 % change R'000
Turnover 636 597 501 721 26,9 988 477
Operating profit before
interest, depreciation and
amortisation (EBITDA) 27 991 22 277 25,6 42 557
Depreciation 1 643 1 442 3 527
Operating profit 26 348 20 835 26,5 39 030
Net interest paid 3 461 2 463 6 073
Profit before taxation 22 887 18 372 24,6 32 957
Taxation 6 787 5 720 9 887
Profit after taxation 16 100 12 652 27,3 23 070
Minority interest 1 901 1 622 1 029
Headline earnings 14 199 11 030 28,7 22 041
Goodwill amortised 933 727 1 865
Attributable earnings 13 266 10 303 28,8 20 176
Shares in issue and to be
issued (`000) 564 736 564 736 564 736
Weighted average number
of fully diluted ordinary
shares in issue (`000) 564 736 564 736 564 736
Earnings per share (cents) 2,35 1,82 3,57
Headline earnings per
share (HEPS) (cents) 2,51 1,95 28,7 3,90
Net tangible asset value
per share (cents) 11,9 8,3 9,2
Consolidated balance sheet
Unaudited Unaudited Audited
6 months 6 months 12 months
Feb 2002 Feb 2001 Aug 2001
R'000 R'000 R'000
ASSETS
Non-current assets 51 088 49 842 54 407
Property, plant and equipment 10 801 9 672 11 910
Investment in associate company 389 - 389
Goodwill 15 868 13 808 16 801
Deferred tax asset 24 030 26 362 25 307
Current assets 204 342 172 460 175 424
Inventories 117 846 122 200 118 353
Trade and other receivables 68 812 49 728 46 046
Cash and cash equivalents 17 684 532 11 025
Total assets 255 430 222 302 229 831
EQUITY AND LIABILITIES
Shareholders' equity 71 123 47 367 57 857
Shares to be issued - acquisitions 4 300 8 200 4 300
Non-distributable reserve 31 402 31 633 31 633
106 825 87 200 93 790
Minority interest 10 628 8 949 8 727
Total shareholder's equity 117 453 96 149 102 517
Non-current liabilities 826 1 838 608
Long-term liabilities 751 1 838 505
Deferred tax liability 75 - 103
Current liabilities 137 151 124 315 126 706
Trade and other payables 134 923 119 616 118 029
Vendor loan - 500 -
Current portion of long-term
liability 907 1 181 2 440
Taxation 1 321 3 018 6 237
Total shareholders' equity
and liabilities 255 430 222 302 229 831
Abridged consolidated cash flow statement
Unaudited Unaudited Audited
6 months 6 months 12 months
Feb 2002 Feb 2001 Aug 2001
R'000 R'000 R'000
EBITDA 27 991 22 277 42 557
Working capital changes (5 363) (3 535) 1 060
Taxation paid (10 687) (13 130) (13 130)
Finance charges (3 461) (2 463) (6 073)
Cash flows from operating
activities 8 480 3 149 24 414
Investing activities (534) (31 839) (32 679)
Financing activities (1 287) 13 076 7 738
Net increase/(decrease) in cash 6 659 (15 614) (527)
Cash acquired (4 594)
Balance at beginning of period 11 025 16 146 16 146
Balance at end of period 17 684 532 11 025
Statement of changes in total shareholders' equity
Unaudited Unaudited Audited
6 months 6 months 12 months
Feb 2002 Feb 2001 Aug 2001
R'000 R'000 R'000
Balance at beginning of period 102 517 68 697 68 697
Shares issued and to be issued - 8 200 4 917
Non-distributable reserve (231) - -
Minority interest 1 901 8 949 8 727
Attributable profit for the
period 13 266 10 303 20 176
Balance at end of period 117 453 96 149 102 517
Introduction
The directors of Forza are pleased to report the interim financial results
for the six months ended 28 February 2002 ("the interim period"), which
reflect substantial increases in turnover and earnings.
Strong trading performance, together with the benefits of the Group's
restructuring, consolidation and strategic focus, contributed to Forza's
steady growth.
Forza is an integrated group of luxury motor and watercraft retail
operations listed in the Industrial - "Retail" sector of the JSE Securities
Exchange SA lists. The Group comprises three divisions - Leisure; Luxury
Dealerships and Marine.
Review of operations
The Leisure and Luxury Dealerships divisions performed exceptionally well.
Growing consumer demand in anticipation of price increases as a result of
the weakening Rand, boosted sales during the interim period. The relocation
of a Lyndhurst Auto dealership to Melrose Arch further enhanced vehicle
sales and workshop activity in the Luxury Dealerships division, supported by
the continued strength of the BMW brand.
Marine, a small Group component, did not benefit to the same extent from the
buoyant consumer demand in the major divisions. The division nonetheless
performed satisfactorily.
As Forza operates in the leisure lifestyle market no segmental analysis has
been provided.
Accounting policies and comparative figures
The accounting policies applied in the interim report are consistent with
those applied in the annual financial statements dated 31 August 2001, and
comply with South African Statements of Generally Accepted Accounting
Practice.
A deferred tax asset was raised in the annual financial statements dated 31
August 2001 in compliance with new accounting standards, to bring to account
the anticipated future tax benefits arising on the write-off of trademarks.
Comparatives have accordingly been restated.
Financial commentary
The Group posted turnover of R636,6 million for the interim period, 26,9%
ahead of the R501,7 million reported in the previous corresponding interim
period to 28 February 2001.
EBITDA increased by 25,6% to R28 million from R22,3 million for the previous
corresponding interim period, reflecting an EBITDA margin of 4,4%.
Headline earnings of R14,2 million exceeded the R11 million for the previous
corresponding interim period by 28,7%, resulting in a 28,7% increase in HEPS
to 2,5 cents per share from 1,95 cents per share.
While the Group debtors' book grew by 38%, it comprises mainly vehicle
debtors, secured by financial institutions, of a short-term nature not
exceeding twelve days.
Prospects
Rand volatility and increases in new vehicle pricing and interest rates will
result in a more challenging trading environment in the motor industry going
forward. It is anticipated however, that used vehicle sales, which account
for more than 80% of Group vehicle sales, will be less affected than new
vehicle sales.
While a slower economy will impact the Group, Forza is well positioned to
deliver real growth.
Dividends
No dividend has been declared for the interim period. The board will
consider the declaration of a dividend for the full year ending 31 August
2002.
P D Acheson I D McAlpin
Chairman Chief Executive Officer
30 April 2002
Directors: P D Acheson (Chairman), I D Mc Alpin (CEO), R Arenson, S M
Hochstadter, G B Liebmann,* A M Schlesinger,* R P Sexton
*Non-executive
24 Hurlingham Road Illovo 2196, PO Box 1348, Highlands North 2037
Tel: +27 11 327 7007
Fax: +27 11 327 7009
www.forza.co.za
