| Wed 10 Jul 2002, 0:00 | | Hudaco Interim Group Results For The Six Months En |
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Hudaco Interim group results for the six months ended 31 May 2002
Hudaco Industries Limited
Reg no 1985/004617/06
Share code HDC ISIN code ZAE000003273
These results are available on the Internet at www.hudaco.co.za
* Sales up 45% to R672 million
* Headline EPS up 50% to 94 cents
* Dividend 29 cents - DPS increase 32%
Bearings and transmission products
ABES Technoseal - Importer and distributor of world-class oilseals,
hydraulic, pneumatic and rotary shaft seals.
Bearings International - Sells a full range of leading brand bearings,
chains, sprockets, couplings and seals and provides value-adding
customer services such as supply chain optimisation, inventory
management and product training.
Belting Supply Servies - Specialist suppliers of conveyor belting, power
transmission products and industrial hoses.
Bestobell South Africa - Supplies internationally branded products and
systems for the control
and monitoring of flow, temperature1, pressure and moisture.
Bosworth - Market leaders in design and manufacture of conveyor pulleys,
forge, heat treatment and plate rolling.
Ernest Lowe - Quality automation solutions using world-class pneumatic
and hydraulic products.
Mather+Platt - Distributors of Viking, Lowara and Mather + Platt pumps
and spares.
Valard Bearings - specialising in repair and manufacture of whitemetal
bearings.
Vivian Regina - Manufactures glass-fibre tissues for the glass-
reinforced plastics, waterproofing, lead acid battery and pipeline
protection markets.
Security products
Elvey Security Technologies - Africa`s leading service provider of
electronic security systems
to the security industry, through distribution, training and technical
support.
Vision Line - Distributor of closed-circuit television, access control,
fire detection and fibre-optic equipment.
Powered products
Deutz Dieselpower - Marketing and servicing of Deutz diesel engines and
spares.
Rutherford - Sole distributor of Makita industrial power tools, Mercury
and Mariner outboard engines and accessories and survey and GPS
equipment.
Automotive products
Angus-Hawken - Manufacturer of rotary shaft and pneumatic seals in NBR,
Viton and Silicone compounds.
Hudaco Friction - Manufacturers and distributors of quality passenger
and commercial vehicle disc pads and linings to vehicle manufacturers,
replacement and export markets.
PHC Clutch - Distributes the Valeo brand of light and medium-duty
clutches.
RESULTS
Hudaco had an excellent first half year with sales increasing 45% over
2001 to R672 million. On a like-for-like basis (which excludes the
effect of acquisitions and disposals) sales are up 30%. Much of this
improvement can be attributed to price increases brought about by the
substantial decline of the Rand at the beginning of the financial year.
The effect of its subsequent partial recovery will largely be felt in
the second half of the year and is dealt with under "Prospects". Our
security products business reports another sharp increase in real sales
reflecting growth in both its South African operation as well as from
the two acquisitions in the United Kingdom announced on SENS on 25
February 2002. The two security products distributors acquired had
total assets of R20m and the agreements provide for total goodwill of
some R25 million to be paid of which R13 million is based on the
attainment of targeted levels of sales and profitability for the two
years ending 30 November 2003.
The operating profit margin rose to 6,8% from 6,4% last year and
operating profit increased by 53% to R46 million. Net financing costs
increased to R4,7 million from R2,2 million last year mainly as a result
of the reduction in cash balances after the payment of R22 million for
acquisitions. As anticipated, the tax rate rose to 33% resulting in a
charge of R13,3 million, up 60% on last year.
Headline earnings rose 52% to R27 million and the interim distribution
to shareholders, which this year is in the form of a dividend, has been
increased by 32% to 29 cents per share. Net capital items written off
amounting to R4,3 million comprise amortisation of goodwill and a R2
million expected loss on the impending sale of the investment in our
associate, Midas Limited.
Total assets increased by R99 million from November 2001. This is
mainly due to acquisitions which added R61 million and inventory levels
rising 21% or R53 million as imported stock was replaced at less
favourable exchange rates. Net borrowings (interest bearing debt less
cash balances) at 31 May amounted to R25 million which represents
gearing of 7%.
PROSPECTS
The improvement in the Rand in recent months has partially reversed the
factors which led to price increases and high sales levels in most of
the first half of the year. Prices and margins are under pressure in
certain areas as stock ordered at the beginning of the year is arriving
at higher Rand costs due to Hudaco`s policy of taking forward cover on
foreign commitments. As a result we do not expect the increased sales
and earnings momentum of the first half to continue at the same level
into the second half of the year.
Hudaco`s industrial parts businesses are nevertheless expected to
continue their sound performances and the additional sales base being
created by the security products division will make a steadily
increasing contribution to earnings. Whilst second half earnings are
unlikely to match the 50% growth achieved in the first half, headline
earnings per share for the full year are still expected to show a
substantial improvement over 2001.
DIVIDEND
Notice is hereby given that interim dividend No 30 of 29 cents per share
has been declared in respect of the six months ended 31 May 2002 ("the
dividend").
The last day to trade in order to participate in the dividend ("cum" the
dividend), will be Thursday, 8 August 2002. The share will commence
trading "ex" the dividend from the commencement of business on Monday,
12 August 2002 and the record date will be Friday, 16 August 2002. The
dividend will be paid on Monday, 19 August 2002.
Share certificates may not be dematerialised or rematerialised between
Friday, 2 August 2002 and Friday, 16 August 2002, both days inclusive
For and on behalf of the Board
PL Campbell (Chairman) SJ Connelly (Chief Executive)
9 July 2002
Transfer secretaries
Computershare Investor Services Limited PO Box 61051 Marshalltown
2107
Registered office
Hudaco Park 190 Barbara Road Elandsfontein 1406
Tel +27 11 345 8200 Fax +27 11 392 2740 E-mail info@hudaco.co.za
Directors
PL Campbell# (Chairman) SJ Connelly (Chief Executive) GE Gardiner
JB Gibbon# MS Jolly PG Joubert# A Keschner YKN Molefi# PM
Poole #Non-executive
Secretary
RGL Arnestad
Group income statement
Six months Year
ended ended
Unaudited 31 May % 31 May 30 Nov
R million 2002 change 2001 2001*
Turnover 672,2 45,3 462,6 1 073,4
Continuing operations 638,6 38,0 462,6 1 073,4
Acquisitions in 2002 33,6
Cost of sales 458,6 298,3 675,9
Gross profit 213,6 164,3 397,5
Operating expenses 167,9 134,5 297,4
Operating profit 45,7 53,4 29,8 100,1
Continuing operations 46,5 56,0 29,8 100,1
Acquisitions in 2002 (0,8)
Capital items written off 4,3 1,0 4,0
Profit before interest 41,4 28,8 96,1
Net finance costs 4,7 2,2 4,2
Profit before taxation 36,7 26,6 91,9
Taxation 13,3 8,3 28,3
Profit after taxation 23,4 18,3 63,6
Share of associate
company profits 2,0 0,9 1,7
Attributable to outside
shareholders (3,2) (2,8) (6,8)
Profit attributable to
shareholders 22,2 16,4 58,5
Add back capital items 4,3 1,0 4,0
Headline earnings 26,5 52,3 17,4 62,5
Headline earnings
per share (cents) 94,2 50,4 62,6 224,1
Basic earnings per share (cents) 78,9 58,8 209,7
Diluted earnings per share (cents) 77,1 57,5 204,7
Distributions to shareholders
- Per share (cents) 29,0 31,8 22,0 75,0
- Amount (Rm) 8,2 6,1 21,0
Shares in issue 28 332 27 916 28 018
- Total (000) 30 840 30 424 30 526
- Held by subsidiary (2 508) (2 508) (2 508)
Weighted average shares in issue
- Basic (000) 28 144 27 857 27 892
- Diluted (000) 28 810 28 502 28 586
Group balance sheet
Unaudited 31 May 31 May 30 Nov
R million 2002 2001 2001*
ASSETS
Non-current assets 119,5 85,4 88,7
Property, plant and equipment 44,2 40,4 39,7
Deferred taxation - net 3,9 1,4 3,8
Investment in associate 23,7 24,4 25,1
Goodwill 47,7 19,2 20,1
Current assets 668,2 528,7 600,2
Inventories 322,9 266,8 259,5
Accounts receivable 248,4 188,1 226,0
Bank deposits and balances 96,9 73,8 114,7
TOTAL ASSETS 787,7 614,1 688,9
EQUITY AND LIABILITIES
Equity 381,5 330,8 370,6
Shareholders` equity 340,1 295,9 332,4
Outside shareholders` interest 41,4 34,9 38,2
Non-current liabilities 64,2 50,5 50,9
Interest-bearing debt 50,9 50,5 50,9
Amounts due to vendors 13,3
Current liabilities 342,0 232,8 267,4
Accounts payable 250,7 168,1 238,4
Taxation 20,5 13,4 29,0
Interest-bearing debt 70,8 51,3
TOTAL EQUITY AND LIABILITIES 787,7 614,1 688,9
Group cash flow statement
Six months Year
ended ended
Unaudited 31 May 31 May 30 Nov
R million 2002 2001 2001*
Cash generated from trading 53,2 34,2 110,4
Cash applied to working capital (66,2) (13,8) 21,5
Cash applied to operating activities (13,0) 20,4 131,9
Net finance costs (4,7) (2,2) (4,2)
Taxation paid (23,6) (11,1) (18,1)
Cash consumed by operations (41,3) 7,1 109,6
Cash capital repayments and dividends (14,9) (10,6) (17,0)
Net cash utilised (56,2) (3,5) 92,6
Investment in new operations - net (22,4) (48,1) (49,3)
Net investment in fixed assets (10,4) (5,5) (9,0)
Net cash invested (32,8) (53,6) (58,3)
CASH UTILISED (89,0) (57,1) 34,3
Shareholder funding 1,3 0,2 0,8
Shares repurchased by subsidiary
company (0,1) (0,1)
Foreign currency translation
effect (0,9)
DECREASE IN NET CASH (88,6) (57,0) 35,0
Group statement of changes in equity
Unaudited 31 May 31 May 30 Nov
R million 2002 2001 2001*
Equity at beginning of period 332,4 290,0 290,0
- As previously stated 332,4 282,1 282,1
- Change in accounting
policy - AC 107 10,6 10,6
- Change in accounting
policy - AC 135 (2,7) (2,7)
Attributable profit for the period 22,2 16,4 58,5
Capital transactions with and capital
repayments to shareholders (14,5) (10,5) (16,1)
Share issues 1,3 0,2 0,7
Shares repurchased by subsidiary company (0,1) (0,1)
Loss on translation of foreign entities (0,9)
Capital repayments and dividends (14,9) (10,6) (16,7)
Equity at the end of the period 340,1 295,9 332,4
Supplementary information
These results were prepared applying accounting policies which conform
with South African Statements of Generally Accepted Accounting Practice
and are consistent with those applied in the most recent annual
financial statements, except for changes resulting from the mandatory
application of the following new accounting statements:
- AC 107, "Events after the balance sheet date", which requires that
distributions to shareholders and the related STC expense be recognised
only when declared. Previously distribution payments were recognised in
the period to which the distribution related.
- AC 135, "Investment property", which requires that owner-occupied
property be depreciated. Land and buildings were previously classified
as investment properties, which were not depreciated.
The resulting restatement of opening reserves is reflected in the
Statement of Changes in Equity. These changes had an insignificant
effect on the profit for the 2001 year and they have therefore not been
restated.
Unaudited 31 May 31 May 30 Nov
R million 2002 2001 2001*
Average net operating assets (Rm) 362,9 312,8 320,0
Operating profit margin (%) 6,8 6,4 9,3
Average NOA turn (times - annualised) 3,7 3,0 3,4
Return on average NOA (% - annualised) 25,2 18,4 31,3
Depreciation (Rm) 6,4 5,2 11,0
Interest covered by
operating profit (times) 9,7 13,5 23,8
Gearing - net (%) 7,3 9,6 nil
Net asset value per share (cents) 1 200 1 060 1 186
Capital expenditure (Rm)
- Spent during the year 10,4 5,5 11,7
- Budgeted for second half of the year 11,4 8,5 -
Net (borrowings) cash comprises (Rm) (24,8) (28,0) 63,8
- Bank call deposits and balances 96,9 73,8 114,7
- Interest-bearing debt - Non-current (50,9) (50,5) (50,9)
- Current (70,8) (51,3) -
Operating lease commitments
- Property (Rm) 26,8 24,4 27,4
Capital items written off (Rm) 4,3 1,0 4,0
Amortisation of goodwill 2,0 0,5 1,5
Impairment in value of investment
in associate 2,3
Cost of closure of business 0,5 2,5
SEGMENTAL ANALYSIS
Turnover Operating profit Average net operating assets
Unaudited 31 May 31 May 30 Nov 31 May 31 May 30 Nov 31 May 31 May 30 Nov
R million 2002 2001 2001* 2002 2001 2001* 2002 2001 2001*
Bearings
and
Transmission
Products 340,5 266,6 576,1 31,2 18,8 52,7 194,0 175,3 180,1
Security
Products
(from March
2001) 138,0 35,2 126,3 6,7 3,0 11,5 69,6 22,6 34,9
Powered
Products 135,5 103,3 233,0 10,5 7,9 26,4 58,4 65,0 63,0
Automotive
Products 59,8 58,9 135,7 1,3 1,8 11,5 57,7 59,5 56,1
Internal/
Head
Office (1,6) (1,4) 2,3 (4,0) (1,7) (2,0) (16,8) (9,6) (14,1)
Total
Group 672,2 462,6 1 073,4 45,7 29,8 100,1 362,9 312,8 320,0
*Audited
value-added distribution
Date: 10/07/2002 11:53:59 AM Produced by the JSE SENS Department
