| Mon 13 May 2002, 0:00 | | Altron - Audited Consolidated Preliminary Financia |
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ALTRON - Audited Consolidated Preliminary financial results for the year
ended 28 February 2002
ALLIED ELECTRONICS CORPORATION LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1947/024583/06)
JSE Code: ATN
ISIN: ZAE000029658
Audited Consolidated Preliminary financial results for the year ended 28
February 2002
OPERATING INCOME UP 22%
HEADLINE EARNINGS PER SHARE UP 28%
CASH ON HAND - R1.4 BILLION
DIVIDENDS UP 19%
Income statement
Year Year
% ended ended
Figures in R000 Change 28.2.02 28.2.01
Revenue 10.6 9 899 547 8 951 166
Operating income 21.6 762 876 627 300
Dividend income 22 329 22 077
Net interest income 68 965 54 465
Income from associates 23 990 10 529
Amortisation of goodwill (48 550) (43 285)
Exceptional items (note 1) (83 923) 63 615
Income before taxation 1.5 745 687 734 701
Taxation 195 371 145 564
Income after taxation 550 316 589 137
Attributable to outside shareholders (242 309) (291 556)
Attributable earnings 3.5 308 007 297 581
Basic earnings per share (cents) 111.9 103.3
Headline earnings per share (cents) 27.5 129.5 101.5
Dividend per share (cents) - proposed 37 31
Weighted average number of shares in
issue (000)
- ordinary shares 94 689 96 984
- participating preference shares 180 519 191 150
Notes:
1. Exceptional items
Loss/profit on disposal of investment (37 448) 85 417
Group restructuring costs (5 100) -
Profit on sale of operations 56 456 -
Impairment of assets 4 488 -
Capital profit on sale of property 7 423 -
Restraint of trade 2 600 32 834
Voltex settlement (36 400) -
Discontinued operations (18 497) -
Share of associates` exceptional items 2 985 (49 500)
Net loss arising on disposals and (60 430) (5 136)
closures
(83 923) 63 615
2. Reconciliation between earnings and
headline earnings
Attributable earnings 308 007 297 581
Amortisation of goodwill 48 550 43 285
Exceptional items - gross 83 923 (63 615)
440 480 277 251
Tax effect of above adjustments (13 237) (7 690)
Outside shareholders` interest (70 954) 23 013
Headline earnings 356 289 292 574
3. The group, in line with revised Generally Accepted Accounting Practice,
now only accrues a dividend in the financial statements on the last date to
register for a dividend declared and no longer in anticipation of a dividend
declaration. The comparatives have been restated.
The accounting policies and methods of computation adopted in this report
are consistent with statements of Generally Accepted Accounting Practice and
the previous year, except as reported above.
4. Diluted earnings per share and diluted headline earnings per share are
not materially different from basic earnings per share and headline earnings
per share respectively.
OPERATIONAL CONTRIBUTION
Year Pro Year
ended Forma* ended
Figures in R000 28.2.02 % 28.2.01 % 28.2.01 %
Revenue:
Altech 3 604 705 36.4 3 690 850 41.2 3 690 850 41.2
Powertech 3 737 180 37.8 3 351 581 37.4 3 351 581 37.4
BTG 2 341 499 23.7 1 731 482 19.3 382 886 4.3
Corporate/Fintech 216 163 2.1 177 253 2.1 1 525 849 17.1
9 899 547 100 8 951 166 100 8 951 166 100.0
% held
at
28.2.02
Headline
earnings:
Altech 53.4 150 661 42.3 123 443 42.2 123 443 42.2
Powertech 59.6 95 951 26.9 77 062 26.3 77 062 26.3
BTG 54.7 52 174 14.6 25 355 8.7 (6 293) (2.1)
Corporate 100 57 503 16.2 66 714 22.8 98 362 33.6
/Fintech
356 289 100 292 574 100 292 574 100
*BTG adjusted by revenue and headline earnings for the year attributable to
companies purchased from Fintech on 28 February 2001.
BALANCE SHEET
Figures in R000 28.2.02 29.2.01
Assets
Non-current assets 2 402 557 2 228 580
Fixed assets 701 845 672 391
Goodwill 265 109 256 344
Negative goodwill - (24 137)
Advances to rental finance customers 1 041 833 853 811
Finance lease assets 100 447 89 850
Investments and loans 166 539 300 811
Deferred taxation 126 784 79 510
Current assets 4 678 233 4 066 874
Inventories 1 106 345 1 124 716
Accounts receivable 2 026 511 1 860 257
Voltex sale proceeds 101 131 -
Net cash and cash equivalents 1 444 246 1 081 901
Total assets 7 080 790 6 295 454
Equity and liabilities
Ordinary shareholders` interest 1 945 075 1 761 151
Outside shareholders` interest 1 635 780 1 642 250
Non-current liabilities 986 091 733 761
Deferred taxation 49 524 50 216
Current liabilities 2 464 320 2 108 076
Total equity and liabilities 7 080 790 6 295 454
Net asset value per share (cents) 725.1 615.7
Shares in issue at end of period (000)
(excluding own shares acquired)
- ordinary shares 93 902 96 997
- participating preference shares 174 344 189 043
CASH FLOW STATEMENT
Year Year
ended ended
Figures in R000 28.2.02 28.2.01
Operating activities 584 800 313 698
Cash generated by operations 857 797 797 994
Net investment income 84 986 80 738
Changes in working capital 238 579 (174 001)
Taxation paid (244 351) (216 500)
Cash available from operating activities 937 011 488 231
Dividends paid, including to outside
shareholders (352 211) (174 533)
Investing activities (269 194) (408 126)
Financing activities (51 293) 264 767
Net funds generated 264 313 170 339
STATEMENT OF CHANGES IN EQUITY
Year Year
ended ended
Figures in R000 28.2.02 28.2.01
Balance at start of period 1 666 457 1 399 897
Changes in accounting policies 94 694 86 568
1 761 151 1 486 465
New share issues movement 27 246 5 730
Attributable earnings 308 007 297 581
Dividends (89 723) (80 651)
Net gains and losses not recognised in the income 138 892 89 815
statement
Foreign currency translation 163 735 99 464
Rights offer costs - (3 131)
Release of foreign currency translation reserve on
sale of 25% of a subsidiary (10 615) -
Other movements (14 228) (6 518)
Sub total 2 145 573 1 798 940
Change in equity as result of subsidiary company
acquiring its own shares (200 498) (37 789)
Shareholders` equity at end of year 1 945 075 1 761 151
Message to our shareholders
The past year has been characterised by the completion of a number of the
group`s stated restructuring objectives. Certain non-core businesses were
disposed of and a number of rationalisation programmes were implemented,
notably within the BTG and Powertech groups. The group repurchased some 21,5
million of its shares in terms of a specific pro rata share offer at a cost
of R 175 million and following a scheme of arrangement which was sanctioned
by the High Court, Fintech became a wholly-owned subsidiary of Altron and
was subsequently de-listed. A further action to simplify the group`s
structure has been the recently announced offer to Powertech minorities of
400 cents per Powertech share, which together with a proposed capital
reduction of 100 cents per Powertech share will, subject to Powertech
shareholder approval, result in a payment of 500 cents per Powertech share
to Powertech minorities on or about Thursday 27 June 2002
The general trading environment in which the group operated during the year
under review was impacted somewhat by the global slowdown in the
telecommunications and IT sectors and consequent reduction in demand of
certain group products. However, notwithstanding these difficult trading
conditions, the group showed resilience and once again produced solid
results. A number of core operations delivered better than expected results,
particularly in the second half, and your directors are pleased to report an
increase of 11% in revenue from R9 billion to R9.9 billion. Of this, R2.3
billion was attributable to exports and foreign operations representing 24%
of total revenue. Operating income rose by a significant 22% to R763 million
with headline earnings per share at 129.5 cents from 101.5 cents, an
improvement of 28%.
The balance sheet remains strong with cash and cash equivalents at year end
of R1.4 billion. Net asset value per share increased by 18% from 615.7 cents
to 725.1 cents. A dividend of 37 cents per Altron ordinary and participating
preference share has been proposed. This represents an increase over the
prior year of 19%.
Business activities
Altech
Altech
For the sixth consecutive year, Altech has again recorded an excellent
performance. Headline earnings per share were up 22% to 268 cents and while
revenue remained unchanged at R3.6 billion, operating income rose by 26% to
R337 million from R284 million.
Autopage Cellular also performed well during the period under review and
increased its subscriber base to more than 460 000 subscribers. Similarly,
Netstar also reported good growth and grew its subscriber base to some 160
000 vehicles.
UEC Technologies (UEC) recorded strong profit and market share growth
despite market conditions that were difficult and increasingly competitive.
Whilst UEC continued to dominate the local market, its growth for the past
year has come mainly from international markets with revenues to the Middle
East and North Africa exceeding the total revenues earned in South Africa
Alcatel Altech Telecom`s (AAT) profitability was negatively affected by
facility closure costs, plus the accrual for future closure costs. In
addition, AAT did not escape the impact of the worldwide downturn in the
telecoms market. Altech recently announced that it was exercising its option
to sell its entire 40% share of the AAT business to Alcatel CIT of France.
The sale is in furtherance of Altech`s policy of placing an even greater
emphasis on its 100% owned home-grown technolgoy product development with
the additional advantage of ownership of intellectual property rights.
During the period under review, Alcom Systems commissioned the first ever
Digital Terrestrial Trunked radio system on the African continent to the
City of Cape Town while Alcom Radio Distributors received the coveted
Motorola Top Distributor award for the Middle East and Africa region. Both
Isis and its 50%-held subsidiary Keops Isis secured several contracts which
are expected to benefit the businesses during the next reporting period.
Altech Card Solutions maintained its dominant role within its chosen markets
and produced good results during the year. Arrow Altech distribution gained
market share during the year and this trend is expected to continue into the
current year.
The past year has seen Altech make further progress in strengthening the
group. Looking forward its increased focus on TMT convergence, substantial
and sound acquisitions together with continuing globalisation, will remain
its core strategies to ensure the maintenance of long-term growth and
increased shareholder value.
Powertech
The Powertech Group was impacted during the first half, by difficult trading
conditions in the international telecommunications arena together with
reduction in demand for certain power electronics products. However despite
these conditions, Powertech recorded a full year increase of 19% in revenue
from R3.1 billion to R3.7 billion coupled with headline earnings per share
growth of a pleasing 26% to 61.2 cents from 48.5 cents. Operating income
increased by 10% from R197 million to R216 million.
The Power Cables Division of Aberdare Cables delivered a strong performance
and the corrective action taken by the management of Aberdare Cables during
the year contributed to a turnaround in the low voltage cable manufacture
business. The medium voltage cable operation reported a satisfactory
increase in sales on the back of export orders and Aberdare Telecom Networks
benefited from the roll out of the Second Network Operator where it was
awarded contracts for the supply of innovative fibre optic cable products to
Eskom`s "Esi-tel" and Transnet`s "Transtel" operations.
ABB Powertech Transformers again recorded excellent results while the
declining demand in automotive batteries together with increased operating
costs impacted the performance of the Battery Group. Corrective action in
the form of factory consolidation and branch distribution has taken place
within the Willard and Sabat Battery operations.
During the period under review a 25.1% equity interest in Aberdare Fibre
Optic Cables was sold to the world`s largest optical fibre cable
manufacturer, Corning Inc of the United States of America and black
empowerment shareholding alliances were strengthened with the Ikwezi Group
through agreements concluded with Aberdare Cables and Rentech.
The year ahead for Powertech will be one of continued focus on its core
businesses, gross profit management and provision of added value services
and solutions for its many customers.
BTG
Our IT business, BTG, posted significantly improved results that far
exceeded market expectations and was able to report headline earnings per
share of 40.3 cents compared to a prior year pro-forma figure of a loss of
16.4 cents and an actual loss of 156 cents per share. An increase in revenue
of 17% from R2 billion to R2.34 billion was recorded while operating profits
from continued operations rose by 85% to R116.6 million. Adjusted headline
attributable earnings (excluding the benefits of raising a deferred tax
asset) rose by R81 million from a loss of R20.4 million to a profit of R60.8
million.
Improved results were recorded by most of BTG`s operations, in particular
the networking and software businesses which had recorded significant losses
in the previous year. The most significant improvement was reported by BTG`s
United Kingdom business which recorded an increase in profits from R7
million to R25 million compared to the prior year.
Digital Healthcare Solutions (formerly Mediswitch and QEDI) attained
profitability during its first year of operation as a merged entity.
National Data Systems with its NCR products and Alcatel Business Systems
with its state-of-the-art PABX systems also achieved improved results. Xerox
SA produced yet another set of solid results and the acquisition from Xerox
UK of their sub-Saharan African distribution businesses contributed to
increased profitability. Negotiations are underway to extend this area of
activity within the sub-Saharan region.
As was advised in a recent cautionary, BTG is currently in an advanced stage
of acquiring 100% of an IT services company in the United Kingdom which, if
successfully concluded, will have a meaningful impact on BTG`s profit growth
for the next few years. This, together with the improvements achieved during
the past year in all its other operations, positions BTG for positive
earnings growth during the next financial year.
Corporate
Corporate activities comprise the group`s treasury operations, its London
Finance Company and more recently Fintech, the group`s financing and leasing
business which became wholly-owned in December 2001. Fintech increased its
capital financed by 23% to some R1 billion and reported headline earnings
per share of 36.9 cents. The quality of the rental book remains sound.
Repurchase of shares
Altron Finance (Pty) Limited, a wholly-owned subsidiary of the company, has
acquired since February 2001, in aggregate, the following number of ordinary
and participating preference shares in the issued share capital of Altron:
Number of shares
Ordinary Participating Preference
In terms of a general authority 1 262 100 4 718 864
In terms of the specific 1 984 369 19 591 628
pro rata authority
Total 3 246 469 24 310 492
The above equates to an effective buy back of 9% of the number of issued
shares in the market.
Outlook
It is anticipated that the trading environment in which the group operates
will continue to be somewhat difficult, but notwithstanding this, order
books are satisfactory and the first two months of trading has met
expectations. The year ahead is expected to be one of continuing progress
with emphasis on realising the full potential of the group, using its
considerable technology base and strong balance sheet to contribute to
growth in earnings for 2003.
The board is of the opinion that the rationalisation benefits, the market
share increase, and the new product introductions during the past year will
continue in the year ahead and provide further benefits. As announced on
SENS on Friday 10 May 2002, it must be noted that Mr Leslie Boyd has
resigned from the board. We thank him for his valuable contribution.
Dividends
Notice is hereby given that the following dividends have been declared in
respect of the year ended 28 February 2002:
- Ordinary dividend No. 54 of 37 cents per share; and
- Participating preference dividend No.8 of 37 cents per share.
The above dividends are payable as follows:
2002
Last day for trading to qualify for and participate
in the dividend (cum dividend) Friday 28 June
Trading ex dividend commences Monday 1 July
Record Date Friday 5 July
Dividend payment date (electronic and certificated register) Monday 8 July
Dividend cheques in payment of these dividends to certificated shareholders
will be posted to shareholders on or about Monday 8 July 2002. Electronic
payment to certificated shareholders will be undertaken simultaneously.
Shareholders who have dematerialised their share certificates will have
their bank accounts, which are linked to their safe custody accounts,
credited on Monday 8 July 2002.
In the case of certificated shareholders, notice of any change of address of
shareholders must reach the transfer secretaries, Computershare Services
Limited, on or before Friday 28 June 2002. Certificates may not be
dematerialised or rematerialised from Monday 24 June 2002 to Friday 5 July
2002, both days inclusive.
Annual Report
The annual report of Altron for the year ended 28 February 2002 will be
posted to shareholders in the month of June 2002.
On behalf of the board
Dr Bill Venter Robert Venter
Chairman Chief Executive 14 May 2002
Directors: Dr WP Venter (Chairman) RE Venter (Chief Executive)
IM Ayob MC Berzack PMO Curle* (Alternate: GJ Trollope) DA Hawton
F Mabuza-Suttle PD Redshaw* GM Rochussen Dr HA Serebro
(Alternate: Adv DC Mpofu) CG Venter PL Wilmot *British
Secretaries:
Altron Management Services (Pty) Limited - Ms SF Linford (Group Secretary)
