| Wed 19 Jun 2002, 0:00 | | Remgro Limited - Audited consolidated results for |
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2002
Remgro Limited
Registration number 1968/006415/06
ISIN ZAE000026480 Share Code REM
Audited consolidated results for the year ended 31 March 2002
Increase in headline earnings per share: +33.9%
Increase in ordinary dividend per share: +27%
Special dividend per share: 100 cents
Five year compound growth rates: (pro forma)
- Headline earnings per share 21% per annum
- Ordinary dividend per share 22% per annum
Abridged consolidated balance sheet
2002 2001
R million R million
Assets
Property, plant and equipment 2 056 2 007
Investment properties 20 20
Goodwill and trade marks 2 687 2 834
Investments - Associated companies 16 958 13 164
- Other 115 115
Loans 12 10
Deferred taxation 17 9
Current assets 4 435 3 395
(Includes cash and cash equivalents of
R2 697 million (2001: R1 810 million))
Total assets 26 300 21 554
Equity and liabilities
Interest of own members 24 047 19 387
Minority interest 945 790
Total shareholders` equity 24 992 20 177
Interest-bearing loans 151 300
Other non-current liabilities 169 99
Other current liabilities 988 978
Total equity and liabilities 26 300 21 554
Net asset value per share (Rand)
(attributable to own members)
- At book value R46.07 R37.14
- Allowing for market value/directors`
valuation of investments and listed
subsidiary companies R89.50 R64.32
Abridged cash flow statement
2002 2001
R million R million
Cash flow from operating activities 688 442
Taxation paid (111) (116)
Dividends received 1 627 1 155
Dividends paid (968) (303)
Net cash inflow from operating activities 1 236 1 178
Investing activities (201) 356
Financing activities (158) (631)
Net increase in cash and cash equivalents 877 903
Cash and cash equivalents at the beginning
of the year 1 800 897
Cash and cash equivalents at the end
of the year 2 677 1 800
Abridged consolidated statement of changes in equity
2002 2001
R million R million
Balance at 1 April 2001 - as previously
reported 19 536 12 556
Prior year adjustments (149) (133)
Adjusted balance at 1 April 19 387 12 423
Net profit for the year 3 532 6 574
Dividends paid (934) (292)
Exchange rate adjustments 2 131 892
Change in interests in subsidiary companies,
associated companies and joint ventures 1 (51)
Change in reserves of associated companies
and other non-distributable reserves (70) (159)
Balance at 31 March 2002 24 047 19 387
Abridged consolidated income statement
2002 2001
R million R million
Revenue of the Company and its subsidiaries 8 441 7 358
Operating profit before depreciation 1 000 740
Depreciation (184) (169)
Finance costs (58) (67)
Profit from normal operations 758 504
Amortisation of goodwill (138) -
Exceptional items (20) 1 523
600 2 027
Taxation 172 109
Profit after tax of the Company
and its subsidiaries 428 1 918
Share of after-tax profit
of associated companies 3 255 4 765
- Profit from normal operations 3 881 2 901
- Amortisation of goodwill (276) (159)
- Exceptional items (350) 2 023
Group profit after tax 3 683 6 683
Minority interest 151 109
Net profit for the year 3 532 6 574
Reconciliation of headline earnings:
Basic earnings - Net profit for the year 3 532 6 574
Plus/(minus) - portion attributable
to own members:
- Amortisation of goodwill 414 159
- Exceptional items 351 (3 541)
- Net surplus, after taxation, on disposal
of property, plant and equipment (35) (6)
- Other 15 9
Headline earnings 4 277 3 195
Earnings and dividends per share
2002 2001
Cents Cents
Headline earnings 819.3 612.1
- Diluted 817.8 611.6
Basic earnings 676.6 1 259.4
- Diluted 675.3 1 258.5
Dividends
Ordinary 206.00 162.00
- Interim 73.00 56.00
- Final 133.00 106.00
Special 100.00
Additional information
2002 2001
Shares in issue
- Ordinary shares of 1 cent each 486 493 650 486 493 650
- Unlisted B ordinary shares of 10 cents each 35 506 352 35 506 352
Total 522 000 002 522 000 002
- In determining the headline and basic earnings per share the total
number of shares in issue was taken into account.
In determining diluted headline and basic earnings per share the total
number of shares in issue was adjusted for the dilutive effect of the
Company`s long-term share incentive scheme.
2002 2001
R million R million
Listed investments
Associated
- Book value 6 766 5 780
- Market value 10 786 9 943
Other
- Book value 50 50
- Market value 136 131
Unlisted investments
Associated
- Book value 10 192 7 384
- Directors` valuation 30 895 18 442
Other
- Book value 65 65
- Directors` valuation 73 75
Additions to and replacement of property,
plant and equipment 185 172
Additions to and replacement of
investment properties - 4
Capital commitments 112 100
(Including amounts authorised, but not yet
contracted for)
Dividends received
- Dividends included in operating profit 8 33
- Dividends from associated companies
set-off against investments 1 469 1 482
Interest received
From unlisted investments and deposits 235 108
(Included in operating profit)
Exceptional items
Exceptional items of subsidiary companies
consist of the following:
Net capital surplus/(loss) on the sale of
investments and businesses (18) 1 518
Other (2) 5
Total before taxation - per income statement (20) 1 523
Taxation 18 (3)
Total after taxation (2) 1 520
Attributable to minorities 1 (2)
Attributable to own members (1) 1 518
Share of exceptional items of associated
companies - per income statement (350) 2 023
Restructuring costs (148) (273)
Capital surplus on redemption of convertible
preference shares in British American
Tobacco Plc (BAT) - 2 202
Net capital loss on sale of investments
and businesses (250) -
Other (19) (43)
Taxation thereon 65 123
Attributable to minorities of associated
companies 2 14
Total (351) 3 541
Comments
1. Accounting policies
The annual financial statements are prepared mainly on the historical cost
basis, in accordance with South African Statements of Generally Accepted
Accounting Practice and incorporates accounting policies which, with the
exception of accounting for property, plant and equipment, investment
properties and employee benefits, are consistent in all respects with those
of the previous financial year.
2. Restatement of comparative figures
The accounting policy in respect of accounting for investment properties has
been changed to comply with the amended South African Statement of Generally
Accepted Accounting Practice (AC 135). Investment properties are accounted
for as long-term investments and are stated at cost less accumulated
depreciation. Buildings are depreciated on a straight-line basis over their
expected useful lives. This represents a change in accounting policy as
investment properties were previously accounted for at cost.
Rainbow Chicken Limited (Rainbow) has changed its accounting policy in
respect of property, plant and equipment. Effective 1 April 2001, land and
buildings are accounted for on the historical cost basis whereas previously
they were revalued.
During 2002 the Group implemented AC 116 (revised) in respect of employee
benefits.
Remgro`s comparative figures have been restated.
3. Results
- Headline earnings
Headline earnings reflected growth of 33.9%, from R3 195 million to R4 277
million. The contribution of the tobacco interests increased by 35.7% to R2
088 million of which R427 million was as a result of the weaker rand.
Financial services are now the second largest source of earnings,
contributing R958 million or 22.4% of total headline earnings. Included in
the combined contribution of R821 million by FirstRand Limited (FirstRand)
and RMB Holdings Limited (RMBH), is an amount of R110 million relating to
"abnormal" exchange profits during the six months to 31 December 2001. ABSA
Group Limited`s contribution decreased, from R234 million to R179 million,
whilst Remgro`s share of Sage Group Limited`s results, according to South
African Statements of Generally Accepted Accounting Practice (GAAP), was
negative in the amount of R42 million.
The contribution of the industrial interests also increased, mainly as a
result of the improved earnings of Malbak Limited (Malbak), Dorbyl Limited
and Rainbow. The contribution of the mining interests was lower as a result
of the exchange of the interests in Billiton Plc and Gold Fields Limited
(Gold Fields) for shares in FirstRand and RMBH. However, both Gencor Limited
and Trans Hex Group Limited performed well.
- Basic earnings
Basic earnings decreased from R6 574 million to R3 532 million, mainly as a
result of the inclusion in the previous financial year of a surplus of R1
371 million in respect of the sale of the interests in Billiton Plc and Gold
Fields and a further surplus of R2 202 million relating to R&R Holdings
exercising its put option over one half of the BAT convertible redeemable
preference shares in June 2000. The attributable amortisation of goodwill by
subsidiaries and associated companies was R255 million higher than in the
previous year.
4. Revenue 2002 2001
- of the Company and its subsidiaries R million R million
Revenue, excluding dividends and interest 6 729 5 735
Dividends and interest 1 712 1 623
Total revenue 8 441 7 358
Due to the nature and composition of the Group, segmental information in
respect of revenue is not meaningful.
5. Source of headline earnings
2002 2001
R million % R million %
Trade mark interests 2 167 51 1 598 50
Financial services 958 22 241 8
Industrial interests 570 13 364 11
Mining interests 306 7 823 26
Corporate finance and
other interests 276 7 169 5
4 277 100 3 195 100
6. Tobacco
Remgro`s tobacco interests are represented by a one-third shareholding in
R&R Holdings Luxembourg (R&R). The other two-thirds are held by Compagnie
Financi
re Richemont AG (Richemont).
During the comparative period, R&R exercised its put option in respect of
one half of its holding of BAT preference shares, reducing its effective
interest in that company from 35.0% to 31.6% in June 2000. In terms of the
Rembrandt Group Limited restructuring during 2000, the non-tobacco assets of
R&R, including the proceeds of the aforementioned redemption, were
transferred to R&V Holdings Limited, Jersey (R&V) of which VenFin Limited
holds one-third and Richemont two-thirds. In R&R`s results for the
comparative twelve months, the income attributable to the redeemed BAT
preference shares and other non-tobacco assets was allocated to R&V. In the
period under review, R&R has equity accounted its effective 31.5% interest
in BAT for the full twelve months period.
In line with the practice adopted in the prior year, R&R`s share of BAT`s
earnings for the twelve months to 31 March 2002 is based on BAT`s results
for the twelve months period to 31 December 2001, adjusted to eliminate the
results for the quarter to 31 March 2001 and to include the results for the
quarter to 31 March 2002. After elimination of exceptional items and
goodwill amortisation, R&R`s contribution to Remgro`s headline earnings is
made up as follows:
2002 2001
GBP million GBP million
Adjusted attributable profit of BAT
for the year 1 456 1 352
R&R`s share of the adjusted attributable
profit of BAT for the period
1 April 2000 to 7 June 2000 - 80
R&R`s share of the adjusted attributable
profit of BAT for the twelve months to
31 March 2002 (2001: 8 June 2000 to
31 March 2001) 459 354
R&R`s other income 3 4
462 438
Less: Portion allocated to R&V Holdings - (11)
R&R`s headline earnings for the year
to 31 March 462 427
Remgro`s 331/3% share thereof 154 142
R million R million
Translated at an average GBP/R rate of
13.5592 (2001: 10.8046) 2 088 1 539
BAT has a 15% share of the global cigarette market. It is the second largest
international tobacco company and is the market leader outside of the United
States. It has an impressive market position in Latin America and a robust
position in all other regions. With its strong broad-based portfolio of
international, regional and local brands, BAT has the platform for achieving
its vision to establish leadership of the global tobacco industry.
In the twelve months to 31 December 2001, shipments of BAT`s international
brand cigarettes grew by 3% but overall group sales volumes remained
consistent with the prior year at 807 billion cigarettes. Europe recorded
good growth of 7%, predominantly in the central and eastern European
markets, but this was offset by small declines in the other regions. Despite
flat sales volumes, net revenues were up by 4% to GBP12 039 million with
increases being recorded in all regions except for Asia-Pacific. In addition
to the increase in net sales revenue, the shift in brand mix resulted in the
improved operating profit and margins compared to the prior year.
BAT`s four principal global brands, Lucky Strike, Kent, Dunhill and Pall
Mall, achieved an overall growth of more than 10%, with "light" blends
growing by 11%. Strategically BAT continues to shift its brand mix towards
more profitable segments of the tobacco market, being the international and
premium priced brands and the "lights" category. The effect of this has
beneficially impacted operating profit and margins.
Earnings per share on an adjusted basis, (after elimination of exceptional
items and goodwill amortisation) which is regarded by BAT as being the most
comparable measure of the company`s performance, increased by 9% in BAT`s
financial year ended 31 December 2001 and by 10% in the quarter ended 31
March 2002.
7. Investments
The most important changes during the year under review were as follows:
Lenco Holdings Limited (Lenco)
During May 2001, Lenco unbundled its shareholding in Malbak and thereafter,
in terms of an offer made to minority shareholders, became a wholly-owned
subsidiary of Lenco (Pty) Limited. The latter was subsequently put into
voluntary liquidation and the assets were distributed to the two
shareholders of Lenco (Pty) Limited in such a manner that Remgro received
Malbak shares and the other shareholder all the shares in Lenco.
Malbak Limited (Malbak)
As a result of the liquidation of Lenco (Pty) Limited and further
acquisitions, Remgro`s direct interest in Malbak increased by 9.1% to 58.0%.
During the past financial year, Malbak and Nampak Limited (Nampak) issued a
joint cautionary announcement stating that the two companies entered into
negotiations regarding a possible merger.
It was subsequently announced that an agreement had been reached that
Nampak, subject to certain suspensive conditions, will make a formal offer
to Malbak shareholders to acquire their total shareholding of Malbak.
The transaction has been approved conditionally by the Competition
Commission. Certain further suspensive conditions have yet to be met.
Due to the potential dilution of Remgro`s effective interest in the larger
packaging group, Malbak was not consolidated in the year under review but
equity accounted as in the past.
Trans Hex Group Limited (Trans Hex)
On 28 February 2002, Trans Hex issued 16 million unsecured 13.5%
participating compulsory convertible debentures to Mvelaphanda Diamonds
(Proprietary) Limited (Mvelaphanda). After conversion of these debentures
Mvelaphanda will have an interest of approximately 19.4% in Trans Hex. On 31
March 2002, Remgro`s diluted interest was 35.2%.
Mvelaphanda also has an option to acquire 5 million shares in Trans Hex from
Remgro which could further dilute Remgro`s interest to 30.2%.
Robertsons Holdings (Pty) Limited (Robertsons)
On 12 September 2001 it was announced that Robertsons and Unilever Plc
(Unilever) had agreed in principle to restructure their interests in the
existing joint venture between Robertsons and Bestfoods Europe. This
proposal was a direct result of Unilever`s acquisition of Bestfoods` global
interests.
All the necessary conditions were met and the new Unilever Bestfoods
Robertsons venture, in which Robertsons holds 41%, was established with
effect from 1 April 2002.
Directorate
Mr P K Harris was appointed as a non-executive director on 28 November 2001.
Secretary
On 28 November 2001, Mrs M Lubbe was appointed as Company Secretary in the
place of Mr J C Engelbrecht who has retired.
Strate
The Company`s shares were transferred to the new STRATE system of electronic
settlement on 12 November 2001.
Shareholders who have not yet dematerialised their shares are advised to do
so immediately, or at least before the closure of the Dispossessed Members
Fund. It is not the intention of STRATE to continue with this fund after
September 2002.
Dividends
Declaration of Dividend No 4
Notice is hereby given that a final dividend of 133 cents per share has been
declared in respect of both the ordinary shares of one cent each and the
unlisted B ordinary shares of ten cents each, for the financial year ended
31 March 2002.
Together with the interim dividend of 73 cents per share paid during January
2002, total dividends for the financial year amounted to 206 cents per
share.
Declaration of Special Dividend
Notice is hereby given that a special dividend of 100 cents per share has
been declared in respect of both the ordinary shares of one cent each and
the unlisted B ordinary shares of ten cents each.
Dates of importance:
Last day to trade in order to participate in
the final and special dividend Thursday, 8 August 2002
Trading on or after this date will be ex the
final and special dividend Monday, 12 August 2002
Record date Friday, 16 August 2002
Payment date Monday, 19 August 2002
On payment date, if so mandated, dividends due to holders of certificated
securities will either be transferred electronically to bank accounts or,
alternatively, cheques will be posted to their registered addresses.
Dividends in respect of dematerialised shareholdings will be credited to
shareholders` accounts with their Central Securities Depository Participant
(CSDP) or broker.
Shareholders may not dematerialise or rematerialise their holdings of
ordinary shares between Friday, 2 August 2002 and Friday, 16 August 2002,
both days inclusive.
The Annual Report will be posted to members during July 2002.
Signed on behalf of the Board of Directors.
Johann Rupert Thys Visser
Chairman Chief Executive Officer/Deputy Chairman
Stellenbosch
19 June 2002
Directorate and administration
Directors
Johann Rupert* (Chairman)
M H Visser (Deputy Chairman/Chief Executive Officer)
P E Beyers*, W E Bhrmann, G D de Jager*, J W Dreyer*, P J Erasmus*,
D M Falck, P K Harris*, E de la H Hertzog*, E Molobi*, J F Mouton*,
J A Preller (Mrs), F Robertson*, P G Steyn*, T van Wyk
(* Non-executive)
Secretary
M Lubbe (Mrs)
Listing
JSE Securities Exchange South Africa
Sector: Diversified Industrial
American depositary receipt (ADR) program
Cusip number 75956M107 ADR to ordinary share 1:1
Depositary
The Bank of New York, 620 Avenue of the Americas, New York NY 10011
Business address and registered office
Carpe Diem Office Park, Quantum Street,
Techno Park, Stellenbosch 7600
(PO Box 456, Stellenbosch 7599)
Transfer Secretaries
Computershare Investor Services Limited, 41 Fox Street,
Johannesburg 2001 (PO Box 61051, Marshalltown 2107)
Auditors
PricewaterhouseCoopers Inc.
Sponsor
Rand Merchant Bank Corporate Finance
Website
www.remgro.com
Date: 19/06/2002 05:18:08 PM Produced by the SENS Department
