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Combined Motor Holdings Limited - Interim Report
Combined Motor Holdings Limited
(Registration number 1965/000270/06)
(Share Code: CMH ISIN number: ZAE000001541)
Interim report for the six months ended 31 August 2002
-32% increase in attributable earnings
-25% increase in headline earnings
-17% increase in interim dividend
-25% increase in net asset value
-Six-year earnings growth exceeds 20% per annum
GROUP FINANCIAL HIGHLIGHTS
6 months 6 months 12 months
31 Aug 31 Aug Incr 28 Feb
2002 2001 % 2002
Turnover (R`000) 1 237 458 1 039 054 19 2 647 535
Operating income
before interest (R`000) 27 041 22 348 21 83 216
Weighted average
number of shares
in issue (`000) 20 386 20 386 - 20 386
Headline earnings
per ordinary share (cents) 75,3 60,0 25 233,4
Attributable earnings
per share (cents) 60,0 45,4 32 202,9
Interim dividend
per ordinary share (cents) 14,0 12,0 17 59,0
Total assets (R`000) 558 586 488 681 14 543 098
Net tangible asset
value per share (cents) 863 691 25 852
GROUP INCOME STATEMENT
Unaudited Unaudited Audited
6 months 6 months 12 months
31 Aug 31 Aug 28 Feb
2002 2001 Incr 2002
R`000 R`000 % R`000
Turnover 1 237 458 1 039 054 19 2 647 535
Operating income 27 041 22 348 21 83 216
Net interest paid (4 518) (4 050) 12 (12 636)
Taxation (7 162) (5 819) 23 (26 335)
Minority shareholders`
share of income (20) (240) (92) 3 338
Headline earnings 15 341 12 239 25 47 583
Amortisation of goodwill (3 110) (2 970) 5 (9 715)
Capital profit on sale
of business - - - 3 500
Earnings attributable
to shareholders 12 231 9 269 32 41 368
Reconciliation of earnings
per share
Headline earnings per share 75,3 60,0 25 233,4
Amortisation of goodwill (15,3) (14,6) 5 (47,7)
Capital profit on
sale of business - - - 17,2
Attributable earnings per share 60,0 45,4 32 202,9
GROUP STATEMENT OF CHANGES
IN SHARE CAPITAL AND RESERVES
Unaudited Unaudited Audited
6 months 6 month 12 months
31 Aug 31 Aug 28 Feb
2002 2001 2002
R`000 R`000 R`000
At beginning of period 189 197 159 857 159 857
Earnings attributable
to shareholders 12 231 9 269 41 368
Dividend paid - final 2002 (11 008) (9 581) (12 028)
At end of period 190 420 159 545 189 197
GROUP CASH FLOW STATEMENT
Unaudited Unaudited Audited
6 months 6 months 12 months
31 Aug 31 Aug 28 Feb
2002 2001 Incr 2002
R`000 R`000 % R`000
Cash flow from operating
activities 6 247 5 158 21 96 765
Cash flow from investing
activities (16 415) (27 217) (40) (43 295)
Cash flow from financing
activities (6 714) (3 286) 104 (2 627)
Net cash flow for period (16 882) (25 345) (33) 50 843
Cash and cash equivalents at
beginning of period 122 952 72 109 72 109
Cash and cash equivalents at
end of period 106 070 46 764 122 952
GROUP BALANCE SHEET
Unaudited Unaudited Audited
31 Aug 31 Aug 28 Feb
2002 2001 2002
R`000 R`000 R`000
Long-term assets
Fixed assets 20 704 22 113 18 551
Amount owing by share trust 2 691 3 184 3 184
Intangible assets 14 499 18 740 15 609
Deferred taxation 4 560 6 455 5 360
42 454 50 492 42 704
Current assets 516 132 438 189 500 394
Total assets 558 586 488 681 543 098
Equity and liabilities
Total share capital and reserves 190 420 159 545 189 197
Minority shareholders` interest 260 936 240
Total shareholders` funding 190 680 160 481 189 437
Current liabilities 367 906 328 200 353 661
558 586 488 681 543 098
SEGMENTAL ANALYSIS
Car hire/
Retail financial
Total motor services
R`000 R`000 R`000
Turnover 1 237 458 1 194 256 43 202
Operating income before taxation 22 523 20 201 2 322
Total assets 558 586 465 717 92 869
Total liabilities 367 906 286 792 81 114
COMMENTS ON RESULTS
1. Earnings for the six months ended 31 August 2002 were in line with budget and
the directors are pleased to record a 25% increase in headline earnings per
share. The period was characterised by declining demand for new vehicle dealer
sales as the prime overdraft rate increased from 14% in February to its present
17%. New vehicle prices increased by an average of 20% during the first nine
months of calendar 2002.
2. Particularly pleasing was the improved return from the National/Alamo car
hire division which reversed its loss during the previous year and generated a
positive contribution. The Group`s interest in Euro Sport Exhaust, a
manufacturing business, was disposed of during the period and the net investment
in its micro-lending division has been reduced from R9 million in February 2002
to below R6 million.
3. Talks with a UK-based motor retail group have been terminated. The collapse
of the local currency and the consequent increase in funding requirements would
have exposed the Group to a gearing level beyond that which the directors
believed to be prudent. However, other opportunities in the local market are
being explored and shareholders will be advised accordingly.
4. The directors believe that trading conditions during the second half of the
financial year will be challenging. The new vehicle national dealer market is
expected to decline by 6% and interest rates are predicted to remain at the
present high levels. To an extent the tougher new vehicle trading is expected to
be offset by improved used vehicle sales and the continued stability of the
Group`s service and parts departments. During the period under review the Group
acquired an additional Nissan dealership, in Midrand, and before the end of the
year will complete the construction of a replacement BMW facility, and new
Peugeot and Honda dealerships, all in Menlyn, Pretoria. The new dealerships are
not expected to make a meaningful contribution to earnings until calendar 2003.
Revenue from National/Alamo car hire is expected to increase significantly
during the summer season and the division will show continued growth in
earnings.
5. An interim dividend (dividend number 31) of 14 cents per share will be paid
on 17 December 2002 to members reflected in the share register of the Company at
the close of business on the record date (13 December 2002). Last day to trade
"cum" dividend is 6 December 2002. First day to trade "ex" dividend is 9
December 2002. Share certificates may not be dematerialised or rematerialised
between 9 December 2002 and 13 December 2002, both days inclusive.
6. The interim report has been compiled in accordance with South African
Statements of Generally Accepted Accounting Practices, and the accounting
policies are consistent with those used in previous years.
By order of the Board of Directors
SK Jackson BCom (Hons) (Tax Law), CA(SA)
Secretary
9 October 2002
Registered office
1st Floor
CMH Building
206 West Street
Durban, 4001
Transfer secretaries
Computershare Investor Services Limited
PO Box 61051
Marshalltown, 2107
Sponsor
PricewaterhouseCoopers
Corporate Finance (Pty) Limited
Private Bag X36
Sunninghill, 2157
Directors: M Zimmerman (Chairman), JD McIntosh (Managing),
MPD Conway, SK Jackson, RTAC Nethercott, CL Odendaal,
A Rogoff
Date: 08/10/2002 02:07:35 PM Produced by the JSE SENS Department
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