| Tue 21 May 2002, 0:00 | | Dorbyl Limited - Group Results For The Year Ended |
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Dorbyl Limited - Group Results For The Year Ended 31 March 2002
Dorbyl Limited
Incorporated in the Republic of South Africa
Company registration number 1911/001510/06
Share code: DLV ISIN: ZAE 000002184
GROUP RESULTS FOR THE YEAR ENDED 31 MARCH 2002
Headline earnings per share increase by 67% Recovery in USA profitability
Group Income Statement
Audited Audited
year to year to
March 2002 March 2001 %
R000 R000 Change
Revenue 4 410 682 4 641 679 (5)
- continuing operations 3 550 234 3 146 973 13
- discontinued operations 860 448 1 494 706
Operating income 170 024 123 482 38
- continuing operations 147 788 121 221 22
- discontinued operations 22 236 2 261
Finance cost (22 848) (30 273)
Income - associates 27 014 11 167
Profit before exceptional items 174 190 104 376 67
Exceptional items (33 307) (51 911)
Profit before taxation 140 883 52 465 169
Taxation (36 577) (1 633)
Profit after taxation 104 306 50 832 105
Minority interest (16 950) (13 316)
Preference dividends (212) (212)
Earnings attributable to
ordinary shareholders 87 144 37 304 134
Ordinary dividends (47 590) (50 941)
Surplus/(deficit) for the year 39 554 (13 637)
Earnings per share (cents)
Earnings per share 258.9 109.8 136
Headline earnings per share 334.2 199.8 67
Dividends paid per share (cents) 140 150 (7)
Final - year ended
31 March 2001 (2000) 70 80
Interim - period ended
30 September 2001 (2000) 70 70
Dividend cover - headline earnings 2.4 1.3
Dividends declared
per share - final (cents) 80 70
Exceptional items before taxation (33 307) (51 911)
Loss on the disposal and
discontinuation of businesses (25 009) (49 054)
Net profit/(loss) on disposal of
fixed property 373 (2 857)
Impairment of assets (6 938) -
Translation reserve released on
disposal of foreign operations (1 733) -
Tax relief attributable to
exceptional items 7 158 17 339
Headline earnings reconciliation
Earnings per the income statement 87 144 37 304
Adjusted for: 25 354 30 545
Exceptional items 33 307 51 911
Amortisation of goodwill 416 -
Surplus on sale of other
fixed assets (1 784) (2 273)
31 939 49 638
Tax relief attributable to
adjustments (6 623) (16 657)
Attributable to minority
shareholders 38 (2 436)
Headline earnings 112 498 67 849
Diluted earnings per share
Dilution shares (000) 1 956 2 300
Earnings adjustment 2 209 3 042
Diluted earnings per share (cents) 250.9 111.3
Diluted headline earnings
per share (cents) 322.0 195.5
Operating income to net
operating assets (%) 19 13
Earnings to ordinary
shareholders` funds (%) 10 5
Additional financial information
Depreciation 76 548 80 497
Finance cost (22 848) (30 273)
Interest received 12 094 12 200
Interest paid (34 942) (42 473)
Segmental Analysis
Audited Audited
year to year to
March 2002 March 2001
R000 R000
Revenue
Business Segment
Automotive manufacturing 911 451 1 266 315
Midas 985 592 914 579
Metals trading 747 103 802 389
Building products 1 216 519 1 036 973
Engineering and water products 607 711 672 387
Corporate and consolidation (57 694) (50 964)
Total revenue 4 410 682 4 641 679
Geographical Location
South African operations - local 2 974 198 3 337 266
South African operations - export 396 717 401 847
International operations 1 039 767 902 566
Total revenue 4 410 682 4 641 679
Operating income
Business Segment
Automotive manufacturing 18 787 16 735
Midas 29 684 28 361
Metals trading 23 000 29 024
Building products 63 522 13 968
Engineering and water products 36 545 41 789
Corporate and consolidation (1 514) (6 395)
Total operating income 170 024 123 482
Geographical Location
South African operations
(including exports) 126 998 120 374
International operations 43 026 3 108
Total operating income 170 024 123 482
Group Abridged Balance Sheet
Audited Audited
March March
2002 2001
R000 R000
EQUITY AND LIABILITIES
Capital and reserves 914 709 877 708
Ordinary shareholders` funds 831 423 804 198
Preference share capital 3 980 3 980
Minority interest 79 306 69 530
Non-current liabilities 363 525 283 198
Deferred tax liabilities 4 973 5 028
Post retirement medical aid obligations 45 439 50 500
Long-term borrowings 313 113 227 670
Current liabilities 761 174 845 842
Trade and other payables 697 477 767 343
Short-term borrowings 63 697 78 499
Total equity and liabilities 2 039 408 2 006 748
ASSETS
Non-current assets 523 148 480 711
Fixed and intangible assets 412 017 403 521
Investments and advances - associates 49 871 30 297
Deferred tax assets 52 034 39 805
Other non-interest bearing advances 9 226 7 088
Current assets 1 516 260 1 526 037
Inventories 482 920 534 737
Trade and other receivables 563 839 733 204
Cash and cash equivalents 469 501 258 096
Total assets 2 039 408 2 006 748
Additional financial information
Cash and cash equivalents 469 501 258 096
Cash at bank, on deposit and on hand 288 553 243 346
Interest bearing short-term advances 180 948 14 750
Net (cash)/borrowings (92 691) 48 073
Long-term borrowings 313 113 227 670
Short-term borrowings 63 697 78 499
Cash and cash equivalents (469 501) (258 096)
Net operating assets 872 430 981 309
Total assets 2 039 408 2 006 748
Trade and other payables (697 477) (767 343)
Cash and cash equivalents (469 501) (258 096)
Capital commitments authorised 10 877 55 795
Contracted for 9 653 19 741
Not contracted for 1 224 1 332
Purchase of business - Stalcor
(30% share) - 34 722
Operating lease commitments 250 216 468 055
Investments and advances to
associates at valuation 124 065 59 086
Net asset value per share (cents) 2 520 2 367
Contingent liabilities 84 445 36 102
Debtors discounted with recourse 5 178 1 533
Operating lease guarantees 62 110 22 813
Other 17 157 11 756
Repurchase commitments of debtors discounted with recourse, where the
underlying securities exceed the outstanding debt, amount to R23 million at
31 March 2002 (2001: R31 million).
Audited Audited
year to year to
March 2002 March 2001
R000 R000
Capital expenditure
Replacement 42 196 42 766
Expansion 57 319 40 598
Ordinary shares (000)
Issued 32 998 33 976
Weighted average 33 664 33 964
Statement of Changes in Equity
Audited Audited
year to year to
Mar-02 Mar-01
R000 R000
Balance at beginning of year 804 198 824 659
Movement in translation reserves 5 915 (7 112)
Attributable earnings for the year 87 144 37 304
Dividends (47 590) (50 941)
Share capital purchased by subsidiary (18 486) -
Increase in stated capital 242 288
Balance at end of year 831 423 804 198
Group Cash Flow Statement
Audited Audited
year to year to
March 2002 March
2002
R000 R000
Net cash inflow from operating activities 110 404 10 554
Operating cash flow 212 525 141 534
Movement in working capital (1 198) 2 310
Finance cost (22 848) (30 273)
Taxation paid (30 273) (51 864)
Dividends paid (47 802) (51 153)
Net cash effect from investing activities 120 868 92 106
Capital expenditure (99 515) (83 364)
Disposals of fixed assets 21 450 13 850
Disposals and acquisitions of businesses 197 722 160 898
Decrease in advances 1 211 722
Net cash effect from financing activities (59 738) (72 651)
Decrease in minority interest (6 703) (7 267)
Net repayment of long-/short-term borrowings (34 791) (65 672)
(Decrease)/Increase in stated capital (18 244) 288
Net cash inflow 171 534 30 009
Foreign currency translation effect 39 871 14 688
Increase in cash and cash equivalents 211 405 44 697
Cash and cash equivalents at beginning of year 258 096 213 399
Cash and cash equivalents at end of year 469 501 258 096
Results
Group results for the second six months were significantly better than the
equivalent period last year and exceeded expectations. Headline earnings for
the second six months were 183,7 cents per share compared to a slight loss
in the equivalent period last year. As a result, the Group produced headline
earnings of 334,2 cents per share for the full year, a 67% improvement on
the figure of 199,8 cents per share for the year ended 31 March 2001.
The results for the six months to 31 March 2002 were enhanced by the
weakening of the Rand and the sale/closure of a number of loss making
operations towards the end of the previous year, thereby removing a
significant drain on profitability. In addition, the operations in the USA,
despite the events of 11 September 2001, reflected improved results, as the
harsh winter that adversely affected trading conditions last year did not re-
occur.
Turnover declined by 5% to R4,4 Billion due to the further rationalisation
of Group operations. If the turnover of only those operations that
constituted the Group at the year-end is compared, the increase was 13%.
Operating margins improved, due to ongoing efficiency drives, the
elimination of loss makers and the weakening Rand. As a result, operating
income improved by 38% or R46,5M. The excellent performance of the associate
companies, whose contribution increased by R15,8M to R27M, also played an
important part in the increase in earnings.
The improving cash situation in South Africa resulted in a R7,4M decline in
the interest charge. It should be noted however that the interest charge in
respect of the offshore loan will be much higher in Rand terms in future due
to the weakening of the Rand.
Exceptional items, though lower than last year, amounted to R26,1M, net of
tax mainly due to losses on prior year disposals and the impairment of
certain assets, in particular, Dorbyl Transport Products.
Disposals
As part of the Group`s rationalisation strategy and the stated intention to
release shareholder value, the Group disposed of further operations during
the year the most significant being the Water and Metals Trading divisions.
Cash on Hand/Borrowings
The cash position can be analysed as follows:
2002 2001
Alpine net offshore borrowings $24,3M $28,6M
Alpine (converted to rand) R274,8M R229,6M
Less : Net cash held by South African operations (R367,5M)(R181,5M)
Net (cash)/borrowings (R92,7M) R48,1M
The cash build-up in South Africa over the last few years is the result of
numerous disposals of non-core and poorly performing operations, and, though
some of this cash will be needed for ongoing investment in core businesses,
the major portion is considered surplus to the Group`s requirements.
Accordingly consideration is being given to the method whereby these funds
can be returned to shareholders in compliance with borrowings covenants.
Prior to mid-January, the group had repurchased 996 790 of its shares at an
average price of R18,94 per share, and will continue to repurchase shares as
and when considered opportune.
Accounting Policies
The abridged financial statements have been prepared using accounting
policies which are in accordance with South African Statements of Generally
Accepted Accounting Practice (GAAP). Other than a change in policy to
provide for depreciation of buildings in accordance with GAAP, such policies
are consistent with those applied in prior years.
The above accounting policy change (i.e. depreciation of buildings) has been
accounted for retroactively and accordingly a prior year adjustment has been
raised and comparative figures restated. The effects are as follows:
R000
Effect on prior years
Retained surplus at 31 March 2000
as previously shown 547 500
Net effect on earnings in respect
of prior years (32 952)
Restated retained surplus at
31 March 2000 514 548
Retained surplus at 31 March 2001
as previously shown 533 762
Net effect prior to 1 April 2000 (32 952)
Net effect on earnings for the year ended
31 March 2001 (1 166)
Restated retained surplus at
31 March 2001 499 644
Net decrease in earnings for the current year (1 166)
DIVISIONAL REVIEW
Automotive Manufacturing
This segment of the Group consists of Dorbyl Automotive Technologies and
Dorbyl Transport Products.
Automotive Technologies experienced a much improved second half, the first
half having been adversely affected by strike action in the industry and the
slow down of the American economy. In future, the key to this operation will
be its exports and, in that regard, the gradually improving USA economy and
the weaker Rand has significantly increased export tendering activity.
Further growth in exports is therefore expected, although additional capital
expenditure, both to expand capacity and to upgrade equipment, will be
required to achieve the anticipated growth.
Building Products
Alpine (USA) had a much improved second half when compared to last year and
signs of improved activity in equipment sales were noted. Some consolidation
has occurred in the industry, with the two largest competitors having
recently merged. In this regard, Alpine undertook significant
rationalisation in the previous year and it continued during the current
year with the sale of its small German operation. Activity in the housing
market in the USA has been fairly stable during the past year, having been
stimulated by the lower interest rates.
The local Global Roofing Solutions operations are generating good returns
and are achieving success with new product initiatives. Export growth
prospects are favourable at present and a growing number of orders have been
received from new customers in Africa.
Engineering and Water Products
This division continues to generate superior returns on its capital employed
and improved order levels were noted towards the year end. The majority of
the associates improved their performances significantly. The Water
Solutions division produced satisfactory returns until its disposal on 1
August 2001.
Midas
The Midas group noted an increase in its activity levels during the second
six months, which improved results for that period. The operation however
still ended the year with headline earnings 7,8% below those of the previous
year.
Metals Trading
The Metals Trading division was sold effective 1 February 2002. Until then,
the operation had reflected an improvement in its results when compared to
those for the corresponding period of the previous year.
Prospects
While the weakening of the Rand has improved prospects, this benefit will
be eroded by the inflation that is expected to follow in its wake. Further,
while there is evidence of some recovery in the world economy, the rising
conflict in the Middle East has placed significant pressure on oil prices,
which could dampen the recovery. Rising interest rates in South Africa will
also adversely affect growth. Nevertheless, it is expected that the Group`s
activity levels should improve as a result of the expected growth in
exports. As the policy of disposing of non-core businesses is pursued, a
loss of earnings is expected as the profitability relinquished is unlikely
to be fully compensated by the interest earned on the funds realised.
Results of General Meeting - Metals Trading Division
At the general meeting of Dorbyl Limited held at 09h30 on Tuesday, 21 May
2002, ordinary resolutions were passed by the requisite majority of Dorbyl
Limited shareholders to approve the disposal by Dorbyl Limited and Dorbyl
Marine (Proprietary) Limited of the Metals Trading division, consisting of
the businesses of Baldwins Steel and Stalcor, as a going concern, to
Kulungile Metals (Proprietary) Limited.
Final Dividend No. 104
A final dividend of 80 cents (2001 - 70 cents) per ordinary share has been
declared. The last date to trade "cum" the dividend in order to participate
in the dividend will be Tuesday, 18 June 2002. The shares of Dorbyl will
commence trading "ex" the dividend from the commencement of business on
Wednesday, 19 June 2002 and the record date will be Tuesday, 25 June 2002.
The dividend is payable on Wednesday, 26 June 2002.
No dematerialisation or rematerialisation of share certificates may take
place between Tuesday, 11 June 2002 and Tuesday, 25 June 2002, both days
inclusive.
On behalf of the board
N Phillips (Chairman) W W Cooper (Group Chief Executive) 21
May 2002
Directors:
N Phillips (Chairman), W W Cooper (Group Chief Executive), W E Bhrmann,
R C Duff, M J Gouws, J B Magwaza, D Orwin, E J Vorster, T van Wyk.
Company secretary and registered office:
B D Bhikha
Dorbyl Ridge, 16 Jan Smuts Avenue
Parktown, 2193
Transfer secretaries:
Computershare Investor Services Limited
11 Diagonal Street, Johannesburg, 2001
PO Box 1053, Johannesburg, 2000
Investment bank and sponsor
PSG Investment Bank
For more information visit our website: www.dorbyl.co.za
Date: 21/05/2002 04:15:00 PM Produced by the SENS Department
