| Mon 2 Sep 2002, 0:00 | | Tiger Wheels Limited - Audited Group Results As At |
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TIGER WHEELS LIMITED - AUDITED GROUP RESULTS AS AT 30 JUNE 2002
Registration No. 1970/011662/06
Share Code: TIW / ISIN code: ZAE000007407
BALANCE SHEET As at Restated
30 June As at
2002 30 June
2001
R`000 R`000
ASSETS
Non-current assets 769,772 607,618
Property, plant and equipment 718,218 558,382
Goodwill 6,059 4,178
Investment in associates 4,555 4,111
Other financial assets 40,940 40,947
Current assets 1,125,015 783,447
Inventories 448,076 348,262
Trade and other receivables 636,665 435,185
Bank and cash balances 40,274 -
TOTAL ASSETS 1,894,787 1,391,065
EQUITY AND LIABILTIES
Shareholders` equity 755,666 549,028
Shareholders` funds 675,194 487,135
Minority interest 80,472 61,893
Interest-bearing debt 424,725 320,225
Long-term debt 282,952 145,139
Current portion of long-term debt 115,337 51,765
Short-term borrowings 26,436 123,321
Interest-free liabilities 714,396 521,812
Trade and other payables 708,497 516,189
Deferred taxation 5,899 5,623
Total equity and liabilities 1,894,787 1,391,065
Net asset value per share (cents) 1,128 831
INCOME STATEMENT Year ended Restated
Year ended
30 June 2002 30 June 2001
R`000 R`000
Revenue 2,530,268 2,065,817
Operating income 152,638 102,155
Net financing costs (41,828) (28,016)
Income(Loss) from associates 91 (1,187)
Profit before taxation 110,901 72,952
Taxation (8,311) (6,015)
Profit after taxation 102,590 66,937
Minority interest (18,579) (15,588)
Earnings attributable to
ordinary shareholders 84,011 51,349
Reconciliation of headline earnings
per share (cents)
Attributable earnings per share 141.3 88.3
Adjusted for :
- Goodwill amortised 3.0 1.4
- Write-down of investments / loans 24.9 4.1
Headline earnings per share (cents) 169.2 93.8
Number of shares in issue (`000)
- At end of year 59,882 58,588
- Weighted average 59,438 58,159
SEGMENTAL ANALYSIS Year ended Restated
30 June 2002 Year ended
30 June 2001
ATS Balance Total ATS Balance Total
group of group Of
group group
Rm Rm Rm Rm Rm Rm
Revenue
Manufacturing 1,674 382 2,056 1,331 341 1,672
Wholesale 172 183 355 124 145 269
Retail - 338 338 - 285 285
Group services and (53) (166) (219) (69) (91) (160)
inter-group
eliminations
1,793 737 2,530 1,386 680 2,066
Operating Income
Manufacturing 134 38 172 102 (11) 91
Wholesale (34) 4 (30) (9) 2 (7)
Retail - 34 34 - 19 19
Group services and (8) (15) (23) (11) 10 (1)
inter-group
eliminations
92 61 153 82 20 102
Interest 16 26 42 7 21 28
Interest-bearing debt 264 161 425 133 187 320
Capital expenditure 137 28 166 99 34 133
Depreciation 85 45 130 42 41 83
Future capital 299 47 346 113 22 135
commitments approved
STATEMENT OF CHANGES IN EQUITY Restated
Year ended Year ended
30 June 2002 30 June 2001
R`000 R`000
Equity at beginning of year
As previously stated 487,135 412,455
Change in accounting policy - (4,622)
Restated equity at beginning of year 487,135 407,833
Changes in
Share capital, premium and reserves 14,024 9,794
Non-distributable reserves 112,422 17,519
Accumulated profit 61,613 51,989
Earnings attributable to ordinary
Shareholders 84,011 53,548
Change in accounting policy - (2,199)
84,011 51,349
Capitalisation award and dividend (22,307) (547)
Associated companies (91) 1,187
Equity at end of year 675,194 487,135
CASH FLOW STATEMENT Restated
Year ended Year ended
30 June 30 June
2002 2001
R`000 R`000
Cash flows from
Operating activities 88,029 (37,443)
Investing activities (152,912) (132,474)
Financing activities 202,042 (12,775)
Movement in cash resources 137,159 (182,692)
Cash resources at beginning of year (123,321) 59,371
Cash resources at end of year 13,838 (123,321)
Comprising:
Bank and cash balances 40,274 -
Short-term borrowings (26,436) (123,321)
13,838 (123,321)
FOREIGN EXCHANGE RATES Year ended Year ended
30 June 30 June
2002 2001
Euro / Rand
Year-end rate (balance sheet) 10.23 6.67
Average rate (income statement) 8.95 6.63
Euro / Zloty
Year-end rate (balance sheet) 4.00 3.33
Average rate(income statement) 3.70 3.70
COMMENTS
Nature of business
Tiger Wheels Limited ("Tiwheel") is a group of companies focused on the
automotive aluminium wheel and passenger car tyre industries. The group
operates internationally, with wheel manufacturing plants in Germany, Poland and
South Africa, wholesale wheel distribution throughout Europe, North America and
South Africa, and tyre distribution in the United Kingdom and South Africa.
The group`s 31 Tiger Wheel & Tyre retail stores in Southern Africa (24 owned and
7 franchised) cover all major centres and hold a significant share of the
replacement passenger tyre and wheel business in the region.
Results
Partially assisted by the devaluation of the Rand, headline earnings per share
increased from 93,8 cents to 169,2 cents - a pleasing performance under the
circumstances which prevailed.
The weaker Rand had a positive impact on the results, which is sustainable at
current exchange rates. The translation gain of the foreign equity holdings is
recorded in non-distributable reserves, whereas the abnormal losses referred to
hereunder have all been accounted for in the income statement.
The German based ATS group accounted for 71% of group turnover and, except for
the aftermarket division, performed satisfactorily in a difficult year. In
Euro`s, ATS` group manufacturing revenue declined by 10% but, because of
improved efficiencies income was only 7% lower. The unexpected and tragic
events of 11 September, created havoc in the international motor industry,
leading not only to a net decline in order volumes but also to imbalances and
inefficiencies owing to unexpected changes in the production mix. As a result,
the old joint venture Polish wheel manufacturing plant was run down earlier than
anticipated. The new Polish plant - where capacity has been expanded in phases
over the past few years and where the paint plant became fully operational
during the year - improved its efficiency and performed well, despite not
operating at full capacity after September 2001.
After a dismal performance in the previous year, the ATS group`s aftermarket
businesses reflected a significant loss. Underlying reasons for this included
changes in the market and certain management deficiencies. The liquidation of
the purchaser of the group`s Swedish aftermarket wholesale business was the
largest loss contributor.
The South African wheel manufacturing plant at Babelegi finally started meeting
expectations on a more consistent basis, due to improved efficiency and
productivity, lower expenses and the Rand`s devaluation, all of which resulted
in a significant turnaround in its operating income.
The South African Tiger Wheel & Tyre retail group produced an excellent
improvement in profitability and efficiency, with many of the plans and
strategies having a positive impact. The South African wholesale distribution
business also performed well and showed improved results.
The group has a low tax rate because the profits of the Polish and Babelegi
plants are both earned in tax-free environments.
During the year the group disposed of its minority investment in the aftermarket
wholesale distribution business, Just Wheels & Tires Co Inc, in the USA at a
loss of R14,8 million which is adjusted for in headline earnings. The other
equity accounted investment, Yokohama HPT Limited in the UK, posted a small
profit.
Prospects
We are happy to report that all the group`s wheel manufacturing businesses have
a full order book for the current year.
After installation of additional machining capacity, the Babelegi plant is
budgeting an increase in output - with a higher ratio of larger diameter wheels
and long-run OEM business from prime local and international customers - which
should result in an increase in profits.
While the German manufacturing operation aims to consolidate its position, the
Polish plant is budgeting for an increase in wheel output as additional
manufacturing capacity is commissioned. It also plans to increase its
production of bedplates (lower engine crankcase castings).
The management and operations of the ATS group`s wholesale aftermarket
businesses are now under review with a view to restructuring them.
Phase 1 of the new USA manufacturing plant is currently being built in Auburn,
Alabama, with plans to be operational in a year`s time. Its initial production
capacity, which has already been pre-sold, comprises of long-run OEM business of
limited wheel styles. Given that some wheel styles are already made in other
plants for international customers - and bearing in mind that the inter-plant
transferability of technology and production facilitates the transfer of moulds
to other group locations where needed - a low risk commissioning programme has
been carefully planned for the plant.
Both the South African wholesale distribution business and the Tiger Wheel and
Tyre retail group are budgeting for improved results - the latter with the help
of a net addition of 4 stores in the current year.
The group`s gearing continues to be closely monitored, particularly in view of
the significant capital expenditure planned for the current year to meet the
strong demand of our customers. Funding facilities for this are available.
While the group`s consistent policy has been to pay dividends totalling 40% of
attributable earnings, an unchanged dividend of 36 cents per share has been
declared for the year under review, taking into account the high capital
expenditure budget. As usual, shareholders are offered a capitalisation share
award as an alternative. As the company has elected to pay the STC, the base
cost for capital gains tax purposes is the market price on the day of issue.
Over the past few years, the group has focused its efforts on being one of the
finest international aluminium wheel manufacturing businesses, producing high
quality product for prestigious car manufacturers, and continues to commit
infrastructure and technology as part of this goal.
Although group strategy has been clearly defined, we are nevertheless conducting
a review to see if a single shareholding structure can be created for the
manufacturing operations.
In the absence of unforeseen circumstances, further growth and increases in
revenue and profitability are expected in the year ahead.
Basis of Preparation of Financial Statements
The financial statements have been prepared in accordance with South African
statements of Generally Accepted Accounting Practice and the accounting policies
used are consistent with the prior year other than as set out below.
Change in Accounting Policies
In accordance with recently amended South African statements of Generally
Accepted Accounting Practice with regard to depreciation of buildings (AC 135),
the Group has changed its policy and now provides for depreciation of buildings.
These changes have resulted in additional charges to the income statement for
the current year totalling R3,1 million (2001: R2,2 million), net of tax and
outside shareholders` interest. The changes in accounting policy affected
headline earnings per share by 5.2 cents for the year under review (2001: 3,8
cents per share).
Audit Report
The consolidated results for the year have been audited by Fisher Hoffman PKF
(Jhb) Inc. and their unqualified audit report is available for inspection at the
company`s registered office.
Cash Dividend and Capitalisation Share Award
The directors have resolved to pay a cash dividend of 36 cents per share to
ordinary shareholders recorded in the books of the company at the close of
business on Friday, 25 October 2002 ("the record date").
Shareholders are entitled and will be given the opportunity to convert the cash
dividend in respect of all or part of their shareholding to capitalisation
shares. As the company has elected to pay the STC, the base cost for capital
gains tax purposes is the weighted average trading price of an ordinary share of
the company on the JSE for the three days ending Thursday, 10 October 2002 ("the
issue price").
The rounded number of capitalisation shares to which a shareholder will be
entitled in terms of the capitalisation award will be determined by multiplying
the number of ordinary shares held by the shareholder by 36 cents and then
dividing by the issue price. This issue price will be announced in the press on
Friday, 11 October 2002.
The last day to trade the company`s shares on the JSE to ensure a purchaser
appears as an owner on the record date will be Friday, 18 October 2002. The
uncertificated securities in terms of this capitalisation award can be traded
from Monday, 21 October 2002.
A form of election dealing with the share award and election will be posted to
shareholders who have not yet dematerialised their shares ("certificated
shareholders") on or about 25 September 2002. Certificated shareholders who
wish to elect to convert the cash dividend to shares should complete the form of
election and deliver/post it to the transfer secretaries so that it is received
by them by no later than 12h00 on Friday, 25 October 2002.
Dematerialised shareholders will be contacted by their Central Securities
Depository Participant ("CSDP") or broker regarding their election of converting
their cash dividend to shares. Dematerialised shareholders are advised to
contact their CSDP or broker should their CSDP or broker fail to inform them of
their election choice. This should be done in terms of the agreement in
existence between the dematerialised shareholder and the CSDP or broker.
Application will be made to the JSE for the maximum number of capitalisation
shares to be listed with effect from the commencement of business on Monday, 21
October 2002 when the price of the company`s securities will be quoted "ex" the
capitalisation award.
It is expected that dividend cheques or share certificates (where required) in
respect of new ordinary shares will be posted to certificated shareholders on or
about Monday, 28 October 2002. Dematerialised shareholders will have their safe
custody accounts held at their CSDP or broker credited or updated on Monday, 28
October 2002.
Summary of the salient dates:
Action Day Date
Circular and form of election Wednesday 25 September 2002
posted to shareholders
3 day price determination ends Thursday 10 October 2002
Issue price announced Friday 11 October 2002
Last day to trade to qualify Friday 18 October 2002
Shares trade ex-entitlement and Monday 21 October 2002
trade in entitlement shares
commences
Maximum number of capitalisation Monday 21 October 2002
shares listed
Offer closes at 12h00 Friday 25 October 2002
Record date Friday 25 October 2002
Actual number of capitalisation Monday 28 October 2002
shares listed
Share certificates or dividend Monday 28 October 2002
cheques posted and CSDP accounts
credited / updated
Results announcement Monday 28 October 2002
Share certificates may not be dematerialised / rematerialised between, Monday 21
October 2002 and Friday 25 October 2002, both days inclusive.
On behalf of the board
Eddie Keizan Martin Glatt
Joint Chairman and CEO Joint Chairman
Johannesburg
3 September 2002
Directors: Eddie Keizan (Joint Chairman & Chief Executive), Martin Glatt*(Joint
Chairman), Jacques Desmidt**, Rainer Hagemann** (German), Josh Loots, Keith
Rivers, Siegfried Teichert (German)
* Non-executive
** Independent non-executive
Company secretary: Diane Cousins (dianec@tsw.co.za)
Registered office: Cnr Old Pretoria Road and K101, Midrand 1685, Telephone (011)
256 4500, Fax (011) 256 4515
Transfer secretaries: Computershare Investor Services Limited, Registration
number 1958/003546/06, 2nd Floor Edura, 41 Fox Street, Johannesburg 2001, PO Box
61051, Marshalltown, 2107, Telephone (011) 370 7700
www.tiwheel.co.za
Date: 02/09/2002 02:28:00 PM Produced by the JSE SENS Department
Tiger Wheels Limited - Press Release
Tiger Wheels Limited - Press Release
Final Results for 2002
TiWheels year-end results for 2002
TIWHEEL Rolls Out An 80 Per Cent Increase In Headline Earnings
The benefits of earning income in foreign currency are reflected in the latest
results of Tiger Wheels (TIWHEEL), which has rolled out an 80 per cent increase
in headline earnings - from 93,8 cents to 169,2 cents a share - in the year to
30 June 2002.
This was a pleasing performance under the circumstances which prevailed,
according to joint chairmen Eddie Keizan and Martin Glatt. The results are
sustainable at current exchange rates, they add.
All of the group`s wheel manufacturing operations have kicked off the new year
with full order books and "further growth and increases in revenue and
profitability are expected," say Keizan and Glatt.
Riding on the back of an average Euro/Rand rate for the year of 8,95 (against
6,63 the previous year) the international wheel and tyre group raised operating
income by 43 per cent from - R107-million to R153-million.
This was achieved on a 22 per cent increase in turnover from R2-billion to R2,5-
billion - 71 per cent of which was accounted for by the offshore ATS division,
which is based in Germany.
Improved efficiency and productivity, lower expenses and the devaluation of the
Rand all combined to bring a turnaround in operating income at the once problem-
plagued South African wheel plant at Babelegi - which finally started meeting
expectations on a more consistent basis during the year.
Following installation of additional machining capacity, Babelegi is budgeting
an increase in output - with a higher ratio of larger diameter wheels and long-
run OEM business from prime local and international customers - which should
result in an increase in the plant`s profits.
The new Polish plant is also budgeting for an increase in wheel output as
additional manufacturing capacity is commissioned, while the German plant aims
to consolidate its position.
Phase One of the new USA wheel manufacturing facility at Auburn, Alabama, is
currently being built and should be operational in a year. Its initial
production capacity - already pre-sold -comprises long-run OEM business of
limited wheel styles.
Meanwhile, the South African wholesale distribution business, as well as the
Tiger Wheel & Tyre retail group, are budgeting for improved results this year -
the latter with the help of the net addition of four new stores.
The management and operations of the ATS group`s underperforming wholesale
aftermarket businesses are being reviewed with a view to restructuring them. At
the same time, the creation of a single shareholding structure for the group`s
manufacturing operations is being investigated.
Keizan and Glatt say a close watch is being kept on gearing in view of the
significant capital expenditure planned for the current year, for which funding
facilities are available. That is why an unchanged dividend of 36 cents a share
has been declared. This is a slight shift from the group`s past consistent
policy of paying 40 per cent of attributable earnings in dividends.
Shareholders are offered the opportunity to convert the cash dividend into
capitalisation shares. As the company has elected to pay the STC, the base cost
for capital gains tax purposes will be the market price on the day of issue.
Ends
From Greg Kukard - Investor Relations (Pty) Ltd - Tel (011) 444 6900
Date: 02/09/2002 02:29:00 PM Produced by the JSE SENS Department
