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Bridgestone Firestone Maxiprest Limited
("Maxiprest")
JSE SHARE CODE : BDS
ISIN CODE : ZAE000027447
Interim results
INCOME STATEMENT
for the six months ended RESTATED
30 June 2002
UNAUDITED INCREASE UNAUDITED AUDITED
SIX MONTHS SIX MONTHS 12 MONTHS
30 JUN 2002 30 JUN 31 DEC
2001 2001
R`000 R`000 R`000
Revenue 668,987 16.1 575,977 1,108,117
Cost of sales (482,738) (421,174) (803,675)
Gross profit 186,249 154,803 304,442
Other operating expenses (142,264) (115,991) (234,283)
Operating profit 43,985 13.3 38,812 70,159
Net finance cost (996) (1,185) (629)
Interest received 1,550 1,529 3,651
Interest paid (2,546) (2,714) (4,280)
Share of losses of (90) 0 (581)
associated companies
Investment income 871 807 1,651
Profit before tax 43,770 13.9 38,434 70,600
Income tax expense (13,530) (10,903) (21,290)
Profit after tax 30,240 9.8 27,531 49,310
Attributable to outside (504) 0 (19)
shareholders
Profit for the period 29,736 8.0 27,531 49,291
Shares in issue 158.2 158.2 158.2
(million)
Earnings per share, 18.8 8.0 17.4 31.2
weighted and fully
diluted (cents)
Headline earnings
(R`000)
Profit for the period 29,736 27,531 49,291
Exceptional items after 1,577 734 1,400
tax
31,313 10.8 28,265 50,691
Headline earnings per 19.8 10.8 17.9 32.0
share (cents)
Dividend per share 5.0 5.0 11.0
Depreciation (R`000) 7,056 6,700 14,292
Capital Expenditure
(R`000)
- incurred 12,511 6,300 20,052
- approved 5,000 4,800 12,511
BALANCE SHEET
at 30 June 2002 RESTATED
UNAUDITED UNAUDITED AUDITED
30 JUN 2002 30 JUN 31 DEC
2001 2001
R`000 R`000 R`000
ASSETS
Non-current assets
Property, plant and 110,824 104,894 110,431
equipment
Goodwill 8,433 6,345 6,817
Investment in associates 840 728 930
Unconsolidated 17,730 17,857 21,714
subsidiaries
Share incentive scheme 7,629 10,166 9,414
145,456 139,990 149,306
Current assets
Inventory 150,357 116,750 129,668
Accounts receivable 251,370 223,062 236,998
Cash at bank 17,378 23,883 23,528
419,105 363,695 390,194
TOTAL ASSETS 564,561 503,685 539,500
EQUITY AND LIABILITIES
Capital and reserves
Share capital and 130,487 130,487 130,487
premium
Accumulated profits 174,072 139,978 152,246
Shareholders for 7,910 7,910 9,492
dividend
312,469 278,375 292,225
Outside shareholders 523 0 19
interest
Long term liabilities 554 1,035 554
Current liabilities
Accounts payable 234,675 210,159 220,776
Short term portion of 275 1,179 1,199
long term liabilities
Taxation payable 16,065 12,937 21,632
Bank overdraft 0 0 3,095
251,015 224,275 246,702
TOTAL EQUITY AND 564,561 503,685 539,500
LIABILITIES
Net asset value per 198 176 185
share (cents)
STATEMENTS OF CHANGES IN
EQUITY
for the six months ended RESTATED
30 June 2002
UNAUDITED UNAUDITED AUDITED
30 JUN 2002 30 JUN 31 DEC
2001 2001
R`000 R`000 R`000
Share capital and
premium
Balance at beginning and 130,487 130,487 130,487
end of period
Accumulated profits
Balance at beginning of 152,246 120,357 120,357
period, restated
- As previously reported 152,246 125,241 125,241
- Change in accounting 0 (4,884) (4,884)
policy
Profit for the period 29,736 27,531 49,291
Distribution to (7,910) (7,910) (17,402)
shareholders
Balance at end of period 174,072 139,978 152,246
Shareholders for
dividend
Balance at beginning of 9,492 7,910 7,910
period
Distribution to 7,910 7,910 17,402
shareholders
Paid during the period (9,492) (7,910) (15,820)
Balance at end of period 7,910 7,910 9,492
Capital and reserves 312,469 278,375 292,225
ABRIDGED CASH FLOW
STATEMENT
for the six months ended RESTATED
30 June 2002
UNAUDITED UNAUDITED AUDITED
30 JUN 2002 30 JUN 31 DEC
2001 2001
R`000 R`000 R`000
Net cash flows from 8,586 (1,717) 11,598
operating activities
Net cash flows from (10,717) (6,214) (22,518)
investing activities
Net cash flows from (924) (1,978) (2,439)
financing activities
Net cash utilised (3,055) (9,909) (13,359)
Cash and cash 20,433 33,792 33,792
equivalents at beginning
of period
Cash and cash 17,378 23,883 20,433
equivalents end of
period
Notes
1. Accounting policies
The financial
statements have been
prepared in accordance
with South African
Statements of Generally
Accepted Accounting
Practice with the
exception of a segmental
analysis which will be
provided in the annual
financial statements.
The principal
accounting policies
applied in the
preparation of these
financial statements are
consistent with those
applied in the prior
period.
2 Comparative figures
The comparative
figures for the period
ended June 30, 2001 have
been adjusted to take
account
of changes made to
accounting policies in
the prior period but not
applied as at June 30,
2001
Depreciation of
owner occupied buildings
in terms of AC123-
Property, plant and
equipment not provided
in June 30, 2001
amounted to
R734,000. This amount
has been applied to the
comparative.
INTERIM RESULTS JUNE 2002
THE COMPANY
Bridgestone Firestone Maxiprest Limited ("Maxiprest") is Southern
Africa`s predominant retreader, multi-brand new tyre distributor and
tyre management service provider. It is listed on the JSE Securities
Exchange ("JSE") as "Bridgestn" under the "cyclical consumer goods -
automobiles and parts" sector. The group`s current footprint comprises
22 retread factories and 98 retail and service outlets across the sub-
continent
- also enabling its regional 24 hour transporters` tyre breakdown
service.
The operations are conducted through wholly or majority owned
subsidiaries in the South African market through Maxiprest Tyres
(passenger, truck, bus and agriculture), Quality Tyres (mining and earth
mover) and Prima Maxiprest (Western Cape). In the sub-Saharan market
operations are conducted in Botswana, Mozambique, Namibia, Swaziland,
Zambia and Zimbabwe where the companies also enjoy the status of
approved Bridgestone Firestone agents and distributors.
The world`s leading new tyre and rubber manufacturer, Bridgestone
Corporation (Japan), holds a strategic 53% stake in the group via its
local subsidiary Bridgestone Firestone South Africa Holdings (Pty) Ltd -
with the balance of the shareholding being held by management,
institutions and the investing public.
An equity interest of 18,8 million ordinary shares, held until now by
the founders of the group, was placed with a consortium of financial
institutions and management led by Hampton Securities on 26 April 2002
at a price of 170 cents per share. This improved the free float
component of the shares on the JSE.
OPERATIONAL PERFORMANCE
The results for the six-month period under review continue to reflect
the commitment of management and every employee to the group`s value-
based management philosophy - `creating and enhancing value for all its
stakeholders`.
In summary, the group achieved a 16.1% increase in revenue at R669
million (2001: R576 million). Headline earnings increased by 10.8% to
R31.3 million (2001: R28.3 million), while at R29.7 million (2001: R27.5
million) attributable earnings reflect an increase of 8.0%.
The results have been affected by increases in manufacturing input costs
and vigorous competitor activity adding pressure in an already
competitive environment. Turnover was aided by two product price
increases during the period, the benefit of which has not yet been fully
experienced by the group.
Headline earnings have been impacted by an increased tax charge due to
assessed losses having been fully utilised in 2001. The tax charge in
this period is 30.9% compared with 28.4% of the comparative period. Net
asset value has increased by 12.2% from 176 cent per share at June 2001
to 198 cents per share.
The investment income of R871 000 (2001: R807 000) relates to the
dividend received from the group`s unconsolidated Zimbabwe subsidiary.
Due to the prevailing economic and political situation in Zimbabwe and
Zambia management continues to deem it prudent not to consolidate the
earnings of these operations, and to account on a cash dividend received
basis. This situation will, however, be reviewed in line with any
changing circumstances. In April the Zimbabwean subsidiary became wholly
owned through the acquisition of the minority shareholder`s 43% stake by
way of a share buy-back arrangement utilizing local financing
facilities.
COMMENTARY AND OUTLOOK
Management`s key focus continues to be tyre management services to
transporters and mining operators and improved distribution of new and
retreaded tyres. The investments and developments made during the
previous eighteen months with the continued drive to increase tyre
management contract business will ensure increased market penetration,
securing future business and earnings flow.
The Bridgestone newly developed precured rubber tread which, in
conjunction with the group`s proprietary Maxiprest Compressed Tread
Retread Process, will enforce the group`s position as a leader in the
retreading industry.
Future market share growth in South Africa will be achieved through
relocated branches at Edenvale, Krugersdorp and Vereeniging and new
branches at Burgersfort, Wesselsbron, Vredendal and Port Elizabeth.
Current plans for increasing the group`s distribution and service
footprint along with the upgrading of outlets and service centers will
further enhance this growth.
The development of the sub-Saharan market continues in line with the
development plan with new branches being opened in Kitwe (Zambia),
Maputo (Mozambique), Tsumeb and Oshakati (Namibia) and Maun (Botswana)
during the period. Additional branches are projected to enhance earnings
during 2003. The acquisition of the minority stake in the Zimbabwean
operations and the Zambian expansion will create further earnings flow
in the second half of the year. The group is currently reviewing the
Angolan and Tanzanian markets with the objective of establishing
distribution operations.
Management remains committed to `creating and enhancing value for all
its stakeholders`.
CORPORATE GOVERNANCE
In compliance with good corporate governance the group has appointed two
independent non-executive directors, Messrs Neill Davies and Ray Hislop,
who will serve on the remuneration and audit committees and would chair
them respectively.
Kevin Yamamoto, a director of Bridgestone Firestone South Africa
Holdings (Pty) Ltd, has been appointed Executive Chairman on the
Bridgestone Firestone Maxiprest Ltd board. He assists the company with
the development and co-ordination of regional distribution markets.
Takashi Wada, Chairman and CEO of Bridgestone Firestone South Africa
Holdings (Pty) Ltd joined the Maxiprest board as a non-executive
director on 1 March this year. His appointment emphasises the commitment
of Bridgestone to developing additional markets on the African
continent.
ON BEHALF OF THE BOARD
Joint Managing Directors: M. E. DAVISON
C. E. BROWN: 29 July 2002
DIVIDEND DECLARATION
Notice is hereby given that an interim dividend of 5 cents per share
(2001: 5 cents per share) has been declared in respect of dividend no.10
for the six months ended June 2002. Shareholders are advised that the
last day to trade cum dividend will be 13 September 2002. The shares
will trade ex dividend as of 16 September 2002. The record date will be
20 September 2002 and payable on 23 September 2002.
Share certificates may not dematerialised or rematerialised between
Monday, 16 September 2002 and Friday, 20 September 2002, both days
inclusive.
BY ORDER OF THE BOARD
GM Sinclair CA (SA) - Company Secretary: 29 July 2002
DIRECTORS
Executive: K Yamamoto (Chairman)*,
C E Brown (Joint Managing),
M E Davison (Joint Managing),
R D Boulanger, G M Sinclair, H Wessels
Non-executive: R Barlow, S Hashimoto*, Y Kobayashi*,
D H Rabin, T Wada*
Independent non-executive:N O Davies, R Hislop
* - (Japanese)
Company Secretary: G M Sinclair CA(SA)
CORPORATE INFORMATION
Registered office: 65 Chadwick Avenue, Wynberg 2090 (PO Box 543,
Bergvlei 2012)
Auditors: Deloitte & Touche, Private Bag X6, Gallo Manor
2052
Transfer Secretaries: Compushare Limited, PO Box 1053, Johannesburg
2000
www.maxiprest.co.za
Date: 31/07/2002 10:00:00 AM Produced by the JSE SENS Department
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