| Wed 4 Sep 2002, 0:00 | | Anglovaal Industries Limited - Audited Results For |
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Anglovaal Industries Limited - Audited Results for the 12 months ended 30
June 2002
Anglovaal Industries Limited
("AVI" or "the Group")
(Registration Number 1944/017201/06)
Share Code: AVI
ISIN: ZAE000030102
Audited Results for the 12 months ended 30 June 2002
AVI is a South African based company focusing on the consumer products and
services industry. Its key competencies are the marketing, processing,
manufacturing and distribution of food, cosmetics and packaging. AVI is made
up of three segments: (i) Branded Consumer Goods, comprising National Brands
Food and Cosmetics and I&J. (ii) Packaging, comprising Consol Glass and
Plastics and (iii) Logistics, comprising Vector Logistics. The company is
listed in the Food Producers & Processors sector of the JSE Securities
Exchange South Africa and has an approximate market capitalisation of R4.6
billion.
Highlights:
Turnover from cont. operations up 18% to R5,8bn
Operating profit from cont. operations up 44% to R716m
Diluted headline earnings per share up 56% to 156.1c
Return on equity at 19.0%
Dividend per share declared up 39% to 53c
* Implementation of growth strategy positively impacting AVI.
* Strong operating contributions from all three business segments - with
Branded Consumer Goods trading particularly well.
Branded Consumer Goods - Operating profit: R398 million (2001: R248 million):
* I&J delivered excellent results, as the domestic market performed well
and higher US$ pricing and favourable exchange rates had a positive impact on
exports and foreign operations.
* Hake demand continued to benefit from shifts to healthier eating and the
decline in Northern Hemisphere fishing stocks.
* I&J acquired an Argentinean seafood company Alpesca, which achieved a
small operating profit in line with expectations. The production facilities
have been successfully refurbished, and a new shrimper vessel acquired.
* National Brands biscuit category growth spurred by strong innovation
through new product launches and line extensions.
* As forecast, National Brands snacks category continued to incur
operating losses. The revised operating model has been implemented and is
starting to produce tangible improvements.
* Continued growth from National Brands cosmetics driven by innovation.
Packaging - Operating profit: R 289 million (2001: R225 million):
* Consol operating profit benefited from 6% volume growth and efficiency
gains.
* Productivity records broken and furnace utilisation at an all time high.
* Consol XPRS doubled growth targets and Speciality Glass substantially
improved sales and profit.
* R250 million investment in two new furnaces at Wadeville and Pretoria,
scheduled to be commissioned in early 2003.
Logistics - Operating profit: R 35 million (2001: R32 million):
* I&J`s customer division incorporated as a stand-alone business unit,
Vector Logistics, a specialist third party logistics provider.
* Vector revenues increased by 22%, with volumes increasing by 7%.
* One off SAP implementation costs of R8 million impacted on operating
profit.
Angus Band, Group Managing Director, commented:
"The fact that AVI continued to generate strong growth during this volatile
period is a tribute to the commitment of our people and our leading brands.
These strengths, together with our growth strategy, gives us confidence that
AVI will continue to produce real earnings growth in the new financial year."
Sandton
3rd September 2002
AVI
Angus Band, Group Managing Director Tel:+27(0)11 779 2703
Robert Katzen, Group Financial Director Tel:+27(0)11 779 2704
College Hill
Tom Allison Tel:+27(0)11 447 3030
Cindy Coelho
ANGLOVAAL INDUSTRIES LIMITED
("AVI" or "the Group")
(Registration Number 1944/017201/06)
Share Code AVI
ISIN: ZAE000030102
Audited Results for the 12 months ended 30 June 2002
GROUP OVERVIEW
The financial year under review has been very successful with headline
earnings per share growing by 56% and the implementation of a strategy to
drive AVI`s growth post the successful turnaround strategy that was initiated
at the time of the Group`s restructuring in 1999. Although it is still early
in this new growth phase, the Group experienced positive results with solid
growth from innovation, exports and the Alpesca acquisition combining to lift
volumes and turnover from continuing operations by 5% and 18% respectively.
During the year the collapse of the Rand and steep price escalations in
respect of various commodities caused consumer price inflation to increase
beyond the Reserve Bank`s target and food inflation to soar. The defensive
interest rate increases imposed by the Reserve Bank, instability within the
Southern African region resulting from the currency collapse, the problems in
Zimbabwe and global turbulence following the tragedy of 11 September 2001
placed extreme pressure on the consumer. Within this environment, domestic
trading conditions showed surprising strength with satisfactory levels of
demand holding into the New Year. Export demand remained strong with total
foreign turnover at 21% of Group turnover compared to 15% in 2001.
Financial overview
The year was characterised by strong operating contributions from all of
the business segments resulting in turnover from continuing operations
growing to R5,8 billion. The branded consumer goods segment had a
particularly good year, posting turnover growth of 19%, largely driven by
higher exports, which benefited from both the currency depreciation and
improved international seafood prices.
Operating profit from continuing operations improved by 44% to R 716
million with the operating margin at a healthy 12.4% compared to 10.1% in the
prior year. The decline in the Rand generally impacted positively on the
Group as the Rand proceeds on exports and foreign operations more than offset
the impact on imports. There were a number of one-off items associated with
the acquisition of the Argentinean based seafood company Alpesca S.A. as well
as currency gains resulting from the devaluation of the Argentinean Peso
following its de-linking from the US$ during the year. The net effect of
these on operating profit is not material.
The sale of the loss making ingredients business effective 1 July 2001
lifted the increase in total operating profit to 46%.
Net income from investments (after interest paid) increased by 13% to R 85
million, primarily as a result of foreign currency translation gains of R 25
million (2001: R14 million) in respect of the "integrated foreign operations"
of I&J. Other foreign currency gains totalling R 66 million relating to the
translation of the balance sheets of foreign entities have been taken
directly to non-distributable reserves.
Headline earnings increased by 38% to R503 million. Headline earnings per
share was boosted by the impact of the significant share buy back completed
in April 2001, which resulted in a 12% reduction in the weighted average
number of shares in issue. As a result, diluted headline earnings per share
increased by 56% to 156.1 cents
Net cash after borrowings was R 729 million at the year end (2001: R586
million). This is after the settlement of Alpesca S.A. liabilities existing
on acquisition of R 191 million and significant capital expenditure as the
Group continued to reinvest in its fixed asset base. Group capital
expenditure of R 332 million was in excess of the depreciation charge of R
268 million. The major capital expenditure projects during the year were the
new vessels acquired by I&J and investment in the manufacturing facilities in
Alpesca. The percentage of working capital to sales remains within acceptable
levels at 12.3%.
The strong improvement in Group profitability has resulted in our return on
equity increasing to 19%.
SEGMENTAL PERFORMANCE
Turnover from Operating profit
continuing from continuing
operations operations
2002 2001 Change 2002 2001 Change
Rm Rm % Rm Rm %
Branded
Consumer Goods 3,875 3,258 19% 398 248 60%
Packaging 1,576 1,378 14% 289 225 28%
Logistics 328 269 22% 35 32 9%
Corporate - - (6) (9) 33%
Total 5,779 4,905 18% 716 496 44%
BRANDED CONSUMER GOODS
This segment had an excellent year with turnover growth of 19% and a 60%
increase in operating profit to R 398 million. This represents an operating
margin of 10.3% compared to 7.6% in the prior year.
NBL food
Turnover increased by 6% to R 2,1 billion with operating profit growing by
7% to R 111 million. Excluding snacks, which continued to experience very
difficult trading conditions, the growth in turnover was 12% and the
improvement in operating profit 12%. Raw material input prices rose sharply
following the sudden decline of the Rand and placed margins under some
pressure, particularly in respect of tea, coffee and snacks.
Improved biscuit volumes and a growth of 37% in sales into Africa were the
major contributors to the turnover growth. The biscuit category benefited
from a 9% growth in volumes as its innovation drive continued with the launch
of a number of new products and line extensions including BN and Provita
Multigrain. The strategy of repositioning the Baumann brand to combat cheap
imports also proved successful. Management`s continued focus on operating
efficiencies contributed to a strong improvement in operating profit in the
category.
The impact of the Rand`s depreciation was particularly strong in our tea
category, where most of the raw materials are imported. Notwithstanding
significant price increases in the second half driven by these raw material
price increases, the category delivered volume growth of 2%, leading to a 13%
increase in turnover which, with a strong manufacturing performance,
contributed to an increase in operating profit.
The coffee category experienced a mixed trading year with strong growth in
premium brewed coffee following its innovative launch in soft packs and an
improved performance from Frisco as a result of its re-launch. This was
offset by a sharp decline in volumes in affordable brewed coffee due to the
pressure on lower income consumers. The deterioration in the Rand and
operating inefficiencies eroded margins in the second half of the year,
although these had been corrected by the year end.
In our half-year review, we reported that the snacks category continued to
incur operating losses and that no improvement was forecast for the full
year. Turnover for the year ended in line with our forecast, down 15%
following a decline in total market volume in the second half and our
decision to exit the baler bag business. The depreciation of the Rand and its
effect on oil, maize and packaging costs, caused a significant increase in
the cost of sales which could not be recovered through price increases and
contributed to an operating loss of R 49 million (2001: R 40 million). The
management attention and changes implemented during the year are starting to
take effect and we are seeing the early signs of a real improvement in
performance.
Ciro Alliances, the foodservice division, enjoyed an excellent year with
turnover growth of 18% and a 108% improvement in operating profit arising
from the focus on more profitable product lines and a lower cost structure.
NBL cosmetics
The cosmetics division continued its strong growth trend with turnover and
operating profit increasing by 17% to R 345 million and R37 million
respectively despite a significant increase in the cost of imported raw
materials. Toiletries, in particular, performed well with continued market
share growth in male deodorant and female body sprays. Good results were also
achieved in expanding the export market, which now represents 5% of turnover.
The Coty licence for sub-Saharan Africa, which was acquired two years ago,
contributed to a larger sales base and provided additional benefits through
its affiliation to an international market leader in the world of cosmetics.
The financial benefits of this arrangement will increase next year as Coty
maximises its potential in the fragrance and toiletries categories with the
introduction of a new range of products.
I&J
I&J delivered excellent financial results, primarily due to the combination
of higher US$ pricing and favourable movements in exchange rates which
together had a positive impact on exports. The Rand/Dollar exchange rate
averaged R10.1 for the year compared to R7.6 for 2001. The domestic market
also performed well in spite of price increases above CPI. These factors,
together with the successful introduction of innovative new products and the
impact of the Alpesca acquisition, combined to lift turnover by 45% to R 1,5
billion. Excluding the impact of the Alpesca acquisition, the growth was 30%.
Foreign sales now represent 65% of I&J`s turnover.
The reduction of the losses incurred in the international fishing
operations last year, a substantial increase in the profitability of the
abalone farm and operating efficiencies, together with the impact of the
higher turnover, combined to lift operating profit by 121% to R 250 million.
This represented an operating margin of 16.8% compared to 11.0% in 2001.
The economic difficulties of the past year in the USA, Europe and the East
had no impact on the demand for hake as the trends towards healthier eating
continued. The decline in Northern Hemisphere fish stocks and health concerns
regarding farmed fish supported demand. However, the economic conditions
impacted negatively on the higher priced items in our range such as scallops.
In the South African domestic market, the retail sector was resilient
despite significant price increases. This was particularly evident in coated
products where the Light & Crispy flagship brand performed particularly well,
contributing to an increase in market share to 43.9% (2001: 39.7%). I&J`s
total frozen fish market share increased marginally to 62.3%. Market shares
in retail beef and chicken products improved with chicken, in particular,
showing excellent growth. I&J continued to build its brand through increased
marketing support and product innovation launching eight new products during
the year.
Domestic foodservice volumes declined as a result of both supply issues and
softening demand following substantially increased prices. As a consequence,
domestic consumers, particularly in fast foods, moved to alternative white
protein products.
The implementation of the acquisition of Alpesca S.A., was a key focus
during 2002. This acquisition was motivated by growing demand for I&J
products, the continued drive for healthier eating, an increasing global
customer base and the reduction of our South African fishing quotas. The
potential exists to add significant value to Alpesca`s present catch through
the upgrading of its operations, to yield both better margins and product mix
for our existing market channels. During the year Alpesca`s management was
strengthened and various measures to restructure and refinance the company
resulted in a secure, solvent operating unit. The company`s four hake vessels
were refurbished and the processing plants comprehensively upgraded. One new
replacement shrimp vessel was acquired at a cost of R34 million.
The difficult and volatile Argentine socio-economic environment has
certainly challenged the management team and caused some delays in the plan
to derive full benefit. Notwithstanding these disruptions, Alpesca achieved a
small operating profit of R 2 million for the period to June 2002 which was
satisfactory given the circumstances and the state of the operations on
acquisition.
The pelagic fleet recorded a significant improvement in operating profit as
a result of higher prices particularly in respect of fishmeal. Fishing
conditions for hake in Namibia, together with a number of management
problems, resulted in a poor performance from Hangana. While the Australian
economy was buoyant during the period, competitive launches of products by
retailers curtailed the growth in profitability in AUD$ although the Rand
profitability of the Simplot joint venture improved by 33%.
PACKAGING
The Consol team produced another year of sustained growth and improved
operating performance despite a volatile trading environment, impacted by
price increases in key raw material and energy costs. Turnover grew by 14% to
R 1,6 billion supporting a 28% improvement in operating income to R 289
million. The operating margin was 18.3% compared with 16.3% in 2001.
Glass volume grew by 6% due to a combination of organic growth, innovation,
superior service and quality. This would have been higher but for the
cyclical decline in demand for returnable beer containers. The wine category
showed strong growth led by exports and market share gains.
Consol XPRS, the channel for the supply of smaller volume glass and
speciality containers, achieved growth of nearly double its targets. The new
XPRS facility in Stellenbosch was completed during the year and XPRS
commenced operating in Gauteng during the second half of the year.
Consol Speciality Glass operated at full capacity during the year and
further improved its sales and profit. The successful re-launch of the
tableware range retail packs was completed and these have been well received
by consumers. Substantial progress was made in the speciality wine category
both organically and in respect of import replacement. Further capacity
expansion at this facility has been approved and will come on stream early in
2003 at a cost of R30 million.
The glass division continued to improve operational performance across a
broad range of key benchmarks. Core productivity records were broken and
furnace utilisation was at an all-time high despite increases in the number
of colour and job changes.
The R220 million investment in the construction of the new W3 furnace at
the Wadeville glass facility approved during the year is on schedule for
commissioning in early 2003, increasing the division`s overall glass
container capacity by 12%.
The plastic packaging division experienced another difficult year
characterised by rising raw material prices, low market prices and increased
competitor activity. Turnover decreased by 5% with operating profit
significantly below expectation and the prior year.
Essential restructuring and management changes in the plastics divisions
were implemented without compromising overall market performance and these
changes are starting to impact with the result that we expect a lift in
performance in 2003.
LOGISTICS
I&J`s customer division was incorporated as a stand-alone business on 1
July 2002. The new company, Vector Logistics, is a specialist third party
logistics provider and is positioned to take advantage of the opportunities
presented within the Southern African food supply chain industry. Vector has
the same effective shareholders as I&J.
Revenue increased by 22% arising mainly from a 7% volume increase and an
average selling price increase of 12%. The introduction of the new Multi-
Temperature Contract Distribution (MTCD) business also increased turnover.
The main contributor to both volume and value growth was poultry through
increased demand and a reduction in national stock shortages.
The adverse impact of the weak exchange rate on certain costs and the
expensing of R 8 million in non-recurring SAP system implementation costs,
restricted the increase in operating profits to 9%. Without the system costs,
the improvement would have been 33%. The focus on improving efficiencies and
an ongoing cost reduction drive helped lift performance.
The MTCD business was launched in the second quarter. The business model is
to offer a one-stop distribution service of frozen, chilled and ambient
products to the food service industry. The operation has not yet reached full
capacity although the response of the target customer base has been very
positive.
The SAP implementation commenced in May 2002 and is due to be completed
nationally by end September 2002. The system represents an investment in
excess of R30 million and replaces the remaining legacy systems in the areas
of sales, distribution and materials management. The MTCD operation and seven
branches of the traditional business were live by year end with no
significant problems
PROSPECTS
The fact that AVI continued to generate strong growth during this volatile
period is a tribute to the commitment of its people and the resilience of its
brands. These strengths, together with our growth strategy, give us
confidence that AVI will continue to produce real earnings growth in the new
financial year.
DIVIDEND
A final ordinary dividend 53,0 cents per share for the year ended 30 June
2002 has today been declared payable to holders of ordinary shares. This
represents a dividend cover of 3 times calculated on headline earnings.
Group Income Statements
Audited
Year ended 30
June
Increase/
2002 2001 (decrease)
Note Rm Rm %
Turnover 5,779.6 5,112.9 13
Continuing operations 5,779.6 4,905.1 18
Discontinuing operations - 207.8
Cost of sales 3,266.8 3,068.6
Gross profit 2,512.8 2,044.3
Selling and administrative
expenses 1,797.2 1,554.5
Operating profit 715.6 489.8 46
Continuing operations 715.6 496.3 44
Discontinuing operations - (6.5)
Income from investments 102.6 102.7
Profit before interest paid 818.2 592.5
Interest paid 17.9 27.5
Profit before exceptional items 800.3 565.0 42
Exceptional and capital items 13.8 (69.1)
Profit before taxation 814.1 495.9 64
Taxation 227.7 51.3
-normal 227.7 147.0
-deferred tax asset raised - (95.7)
Profit after taxation 586.4 444.6 32
Share of equity accounted earnings
of associated companies and joint
ventures 28.5 5.6
614.9 450.2
Minority interests 105.4 52.5
509.5 397.7
Preference dividends - 3.9
Earnings 509.5 393.8 29
Determination of headline earnings
Earnings 509.5 393.8
Deferred tax asset raised - (95.7)
Exceptional items, net of tax
credit and minority interests (7.0) 63.6
Items of a capital nature net of
tax credit and minority interests - 2.5
Headline Earnings 502.5 364.2 38
Headline earnings per ordinary 1 157.9 101.1 56
share - cents
Diluted headline earnings per
ordinary share - cents 2 156.1 99.8 56
Earnings per ordinary share -
cents 1 160.1 109.3 46
Dividend per ordinary share 53,0 38.0 39%
declared - cents
Notes:
1 Earnings and headline earnings per ordinary share are calculated on a
weighted average of 318,250,725 (2001: 360,401,964) ordinary shares in
issue.
2 Diluted headline earnings per ordinary share are calculated on a
weighted average of 321,946,953 (2001: 364,947,759) ordinary shares,
after taking account of the account of the relevant number of share
options currently in issue.
Group Balance Sheets
Audited
30 June
2002 2001
Rm Rm
ASSETS
Non-current assets
Property, plant and equipment 1,732.7 1,537.4
Intangible assets 108.8 25.1
Associated companies 23.9 27.8
Joint venture companies 201.6 127.5
Other investments 241.1 73.4
Deferred taxation 105.6 89.2
2,413.7 1,880.4
Current assets
Inventories 744.7 670.9
Trade and other receivables 1,219.9 998.6
Cash and cash equivalents 850.3 685.6
2,814.9 2,355.1
TOTAL ASSETS 5,228.6 4,235.5
EQUITY AND LIABILITIES
Capital and reserves
Share capital - ordinary 15.9 15.9
Share premium 164.3 162.7
Non-distributable reserves 168.7 114.8
Distributable reserves 2,397.8 2,162.4
Total shareholders` funds 2,746.7 2,455.8
Minority interests 526.6 357.0
Non-current liabilities
Interest-bearing borrowings 56.5 59.2
Deferred taxation 78.7 139.7
Post retirement medical aid provision 287.9 -
Other provisions 29.0 9.0
452.1 207.9
Current liabilities
Trade and other payables 1,243.6 1,093.1
Corporate taxation 194.9 81.1
Short-term borrowings 64.7 40.6
1,503.2 1,214.8
TOTAL EQUITY AND LIABILITIES 5,228.6 4,235.5
Group Cashflow Statements
Audited
Year ended 30 June
2002 2001
Rm Rm
Cash retained from operating activities 623.2 777.7
Cash generated by operations 1,022.5 767.1
Income from investments 48.5 87.6
(Increase)/decrease in working capital (185.9) 112.0
Cash generated by operating activities 885.1 966.7
Interest paid (17.9) (27.5)
Taxation paid (104.6) (33.9)
Cash available from operating activities 762.6 905.3
Dividends paid (139.4) (127.6)
Investing activities (472.0) (264.6)
Property plant and equipment purchased
- to maintain operations (270.5) (240.6)
- to expand operations (61.9) (34.0)
(332.4) 274.6
Proceeds from disposals 46.4 32.1
Net investment in property, plant and
equipment (286.0) (242.5)
Investments - net acquisitions (186.0) (22.1)
- subsidiaries and businesses (65.5) (20.5)
- associated companies and other
investments (120.5) (1.6)
Financing activities (10.6) (604.4)
Net increase/(decrease) in
shareholder funding 1.0 (593.6)
Long-term borrowings - net (11.6) (10.8)
- raised 12.4 0.6
- repaid (24.0) (11.4)
Net increase/(decrease) in cash and
cash equivalents 140.6 (91.3)
Net cash and cash equivalents at
beginning of year 645.0 736.3
Net cash and cash equivalents at
end of year 785.6 645.0
Short-term borrowings 64.7 40.6
Cash and cash equivalents 850.3 685.6
Group statements of changes in equity
Audited
Year ended 30 June 2002
Share Non-
capital and distributable Distributable
premium Reserves Reserves Total
Rm Rm Rm Rm
Balance at
beginning of
year, as
previously
reported 178.6 114.8 2,036.4 2,329.8
Adjusted for
changes in
accounting
policies as
detailed
below:
Accounting for
dividends
payable in
accordance 126.0 126.0
with AC107
(revised)
Balance at
beginning of
year, as 178.6 114.8 2,162.4 2,455.8
restated
Provision for
post-
retirement
medical aid in
accordance (164.9) (164.9)
with AC116
(revised)
178.6 114.8 1,997.5 2,290.9
Movements
recognised
through the
income
statement:
Earnings for
the year,
before 509.5 509.5
dividends
Ordinary
dividends paid
during the (121.0) (121.0)
year
388.5 388.5
Movements not
recognised
through the
income
statement:
Issue of
ordinary 7.8 - - 7.8
shares
Foreign
currency
translation 65.7 65.7
differences
Own ordinary
shares (6.2) (6.2)
acquired
Inter-reserve
transfer
arising on
sale to (11.8) 11.8 -
minority
interests
1.6 53.9 11.8 67.3
Balance at end
of year 180.2 168.7 2,397.8 2,746.7
Group statements of changes in equity
Audited
Year ended 30 June 2001
Share Non- Distributa Automatically Total
capital distribut ble convertible Rm
and able reserves subordinated
premium Reserves Rm debentures
Rm Rm Rm
Balance at 522.4 110.9 1,767.9 210.5 2,611.7
beginning
of year, as
previously
reported.
Adjusted
for change
in
accounting
policy, as
detailed
below:
Accounting 104.2 104.2
for
dividends
payable in
accordance
with AC107
(revised)
Balance at 522.4 110.9 1,872.1 210.5 2,715.9
beginning
of year, as
restated
Movements
recognised
through the
income
statement:
Earnings 397.7 397.7
for the
year,
before
dividends
Dividends (104.9) (104.9)
paid during
the year
292.8 292.8
Movements
not
recognised
through the
income
statement:
Automatic 209.9 (210.5) (0.6)
conversion
of
debentures
into
ordinary
shares, net
of costs
Own (93.2) (93.2)
ordinary
shares
acquired
Own (403.9) (2.2) (406.1)
ordinary
shares
purchased
and
cancelled
Issue of 7.9 7.9
ordinary
shares
Redemption (64.5) (64.5)
of variable
rate
cumulative
redeemable
preference
shares
Foreign 4.8 4.8
currency
translation
differences
Inter- 2.5 (2.5) -
reserve
transfer
Other (1.2) (1.2)
direct
movement
(343.8) 3.9 (2.5) (210.5) (552.9)
Balance at 178.6 114.8 2,162.4 - 2,455.8
the end of
year
Changes in Accounting Policies
The results have been prepared in accordance with South African Statements
of Generally Accepted Accounting Practice. Other than as stated below, there
have been no changes effected to any accounting policies during the year.
Provision for dividend
South African Statement of Generally Accepted Accounting Practice AC107
(revised) - Events after the balance sheet date - precludes the raising of a
provision for any dividends declared after the balance sheet date.
Dividends, including any applicable Secondary Tax on Companies charge, will
now be accounted for as and when declared. The adoption of AC107 (revised)
has resulted in the Group adjusting the opening balances of distributable
reserves at 1 July 2001 and 1 July 2000 by R126,0 million and R104,2 million
respectively and restating the earnings and headline earnings for the prior
year to reflect an increase of R1,3 million, after accounting for the
applicable minority interests.
Post-retirement medical aid contributions
In accordance with the requirements of South African Statement of Generally
Accepted Accounting Practice - AC116 (revised) - Employee benefits - the
Group has recognised its obligation to fund certain post-retirement benefits.
These were previously accounted for on a cash paid basis. The adoption of
AC116 (revised) has resulted in the Group recognising a charge of R261,3
million as at 1 July 2001, being an actuarially calculated liability of
R284,9 million net of a pre-funding asset of R23,6 million. This change has
been accounted for by reducing the distributable reserves at 1 July 2001 by
R164,9 million after deferred taxation of R78,4 million and accounting for
minority interests of R18,0 million. The charge to Group headline earnings
in the year ended 30 June 2002 as a result of the change in accounting policy
amounts to R10,5 million. Prior year comparatives have not been restated as
it was not considered practicable.
Exceptional and capital items
Year ended 30 June
2002 2001
Rm Rm
Net surplus on disposal and write-down of
investments, properties, vessels and plant
and equipment 59.1 1.3
Provision for an onerous operating lease
contact (24.7) -
Rationalisation and restructuring costs (9.9) (24.2)
Goodwill amortisation (6.3) (6.2)
Impairment of property, plant and equipment
of a subsidiary company (4.4) (40.0)
13.8 (69.1)
Attributable taxation (2001:credit) (1.8) 3.6
Attributable to minority interests
(2001:credit) (5.0) 1.9
Net credit/(charge) 7.0 (63.6)
Report of the independent auditors
The unqualified report of KPMG Inc., independent auditors, dated 3
September 2002 is available for inspection at the registered office of the
Company.
Annual Report
The annual financial statements for the year ended 30 June 2002 will be
posted to shareholders on or about Friday 13 September 2002. The financial
statements will include the notice of the Annual General Meeting of
shareholders to be convened on or about Wednesday 16 October 2002.
Date: 04/09/2002 08:50:00 AM Produced by the JSE SENS Department
