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Gubb & Inggs Limited - Audited Results For The Year Ended 30 June 2002
Gubb & Inggs Limited
(Incorporated in the Republic of South Africa)
(Registration number 1916/001495/06)
JSE code: GUB ISIN code: ZAE000003208
AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2002
CONSOLIDATED INCOME STATEMENT
Year ended
30 June 2002 30 June 2001
(Audited) (Audited)
R`000 R`000
Revenue 426 203 405 742
Cost of sales 372 100 346 169
Gross profit 54 103 59 573
Other operating income 11 221 6 581
65 324 66 154
Operating expenses 34 323 35 747
Results from operating activities 31 001 30 407
Financing costs 15 427 16 230
Profit before taxation 15 574 14 177
Taxation 3 971 3 681
Profit after taxation 11 603 10 496
Minority interest (660) 648
Net profit for the year 10 943 11 144
Shares issued (`000) 2 031 2 031
Earnings per ordinary share (cents) 538,8 547,8
Headline earnings per share (cents) 538,8 547,8
Dividend per ordinary share (cents) - 50,0
Dividend cover per share (times) - 11
STATEMENT OF CHANGES IN EQUITY
Non-
Share Share distributable Accumulated
capital premium reserves profit Total
R`000 R`000 R`000 R`000 R`000
Balance at 1 July 1 015 277 22 592 71 191 95 075
2001
Net profit for 10 943 10 943
the year
Surplus on 1 890 1 890
translation of
foreign
subsidiaries
Deferred tax (2 393) (2 393)
adjustment
Balance at 30 1 015 277 22 089 82 134 105 515
June 2002
CONSOLIDATED BALANCE SHEET AT
30 June 2002 30 June 2001
(Audited) (Audited)
R`000 R`000
Assets
Non-current assets
Property, plant and equipment 29 534 32 325
Investment properties 13 300 14 512
Unlisted investments 954 954
Loans - 4
Deferred taxation 345 225
44 133 48 020
Current assets
Inventories 128 121 126 354
Trade and other receivables 85 023 78 394
Bank balances 2 478 776
215 622 205 524
Total assets 259 755 253 544
Equity and liabilities
Capital and reserves
Share capital 1 015 1 015
Share premium 277 277
Non-distributable reserves 22 089 22 592
Distributable reserves 82 134 71 191
Ordinary shareholders` interest 105 515 95 075
Outside shareholders` interest 1 082 422
106 597 95 497
Non-current liabilities
Deferred taxation 5 206 1 884
Long-term liabilities 1 134 1 130
6 340 3 014
Current liabilities
Trade and other payables 24 386 24 727
Amount owing to group companies 4 430 4 748
Bank overdrafts 118 002 125 558
146 818 155 033
Total equity and liabilities 259 755 253 544
CONSOLIDATED CASH FLOW STATEMENT
Year ended
30 June 2002 30 June 2001
(Audited) (Audited)
R`000 R`000
Cash flows from operating activities
Operating income before working capital 36 098 34 506
changes
(Increase) Decrease in working capital (8 569) 3 776
Cash generated (utilised) in operations 27 529 38 282
Financing costs (15 427) (16 230)
Taxation paid (2 937) (841)
Dividend paid (711) (1 016)
Net cash inflow from operating 8 454 20 195
activities
Cash flows from investing activities
Purchase of property, plant and (675) (1 351)
equipment
Disposal of (additions to) investment 1 212 (1 212)
properties
Proceeds from sale of property, plant 259 180
and equipment
Net cash inflow (outflow) from 796 (2 383)
investing activities
Long-term liabilities raised 4 444
Loans repaid (advanced) 4 (1)
Net decrease in bank overdrafts and 9 258 18 255
short-term loans
Bank overdrafts and short-term loans at (124 782) (143 037)
beginning of year
Bank overdrafts and short-term loans at (115 524) (124 782)
end of year
BASIS OF PREPARATION
The financial statements of the Group have been prepared in accordance with the
South African Statements of Generally Accepted Accounting Practice, which
policies are consistent with those of the prior year.
Fisher Hoffmann PKF (Port Elizabeth) Inc has audited the annual financial
statements. Their unqualified audit report is available for inspection at the
company`s registered office.
REVIEW OF ACTIVITIES
It has been a roller-coaster season for your Group in the true sense of the word
with the all too familiar ups and downs of commodity and currency trading, all
happening within the 12-month period under review. Very good export demand for
our Group`s products early this financial year on the back of a weakening Rand
and rising raw wool prices turned out to be short lived. The higher wool prices,
instead of increasing confidence and with it demand for wool, in the end, only
resulted in manufacturers postponing their buying or turning away from wool
altogether.
In their half-yearly review, your Directors reported that, due to continuing
reduction of raw wool supply a restructuring and modernisation programme was
underway. This has now been completed and combing capacity has been further
reduced in line with the continuing reduction in raw wool production.
Regrettably this restructuring resulted in a voluntary retrenchment of 122 of
the Group`s workforce. At the same time production efficiencies will be
significantly improved with the rationalisation of combing lines and the
purchase of new machinery. Further investment in carding preparation is
envisaged in the near future and it is hoped that these important investments in
modernisation will better equip your Group to handle the current crises in the
wool combing industry mentioned earlier in this report. In all, capital
expenditure of around R7 million has already been incurred and a further
investment of some R6 million for the improvements to premises required by a
valuable tenant is envisaged in the near future.
Nevertheless, despite the disappointing down-turn in the wool top trade in the
latter part of this financial year, activity in carding wools as well as mohair
remain satisfactory and with support from the weak Rand early in the financial
year your Directors are still able to report a positive result comparable with
the previous year. However, prospects for the coming months are far from
satisfactory in view of the current artificially high supply-driven wool prices
which are unlikely to be accepted by manufacturers and end-users of wool. In
addition, the economic situation in most industrialised countries is hardly
encouraging. Early stage wool processors, to continue keeping machinery running
at reasonable levels, will be forced to accept new business at prices well below
conversion costs. Unfortunately as the negative gap between cost and selling
price of wool increases it may become more cost effective to work short-time
rather than continue buying raw wool, which after combing has to be sold at a
substantial loss.
While the Rand remains weak, wool prices high and high capital expenditure in
the pipeline, bank borrowings and interest costs are also expected to remain
high, even testing previous limits. Your Directors are confident that
shareholders will appreciate the need for any cash generated to be retained in
the business. Therefore, no dividend has been declared.
By order of the Board 20 September 2002
HN Bonner
Company Secretary
Transfer Secretaries: Computershare Investor Services Limited, PO Box 61051,
Marshalltown 2107
Registered Office: Hendrik van Eck Drive, Uitenhage. PO Box 23, Uitenhage 6230
Directors: JP Stucken (Chairman), HN Bonner, CR Haw*, OEW Isenbeck* (German), RA
Kirsten, W MacDonald*, KD Mielke* (German), DJ Van Deemter
* (Non-executive)
Sponsor: The Janus Corporation (Pty) Limited
Date: 20/09/2002 12:57:21 PM Produced by the JSE SENS Department
