| Fri 11 Oct 2002, 10:33 | | ELB Group Limited - Reviewed results and dividend |
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ELB Group Limited - Reviewed results and dividend announcement
ELB Group Limited
(Formerly Edward L Bateman Limited)
Incorporated in the Republic of South Africa
Registration number
1930/002553/06
Share code: ELR
ISIN code: ZAE000035101
Share code: ELRP
ISIN code: ZAE000035333
(ELB)
Preliminary Report
Reviewed results and dividend announcement
For the year ended 30 June 2002
Group Income statement
Reviewed Audited
Year ended Year ended
30 June 02 30 June 01
R000 R000
Sales revenue 2 382 126 2 937 537
Net operating costs excluding
depreciation and amortisation (2 336 846) (2 845 959)
Operating profit before depreciation,
amortisation and abnormal items 45 280 91 578
Depreciation and amortisation (35 486) (36 568)
Operating profit before abnormal items 9 794 55 010
Abnormal items: net income/(expense) 64 448 (2 143)
Profit from operations 74 242 52 867
Net treasury income not related to projects 46 346 25 547
Income/(loss) from associates 1 039 (6 960)
Profit before tax 121 627 71 454
Income tax expense (50 811) (14 438)
Profit after tax 70 816 57 016
Preference dividends - (1)
Minority interest 9 156 (16 037)
Net profit for the year 79 972 40 978
Weighted average number of shares on
which basic earnings per share are
based (000`s) 30 322 30 020
Headline earnings per ordinary
share of continuing operations (cents)
- basic 88,4 75,1
- fully diluted 87,2 72,9
Headline earnings per ordinary share
(cents) - basic 68,8 135,9
- fully diluted 67,9 131,8
Earnings per ordinary share (cents) - basic 263,7 136,5
- fully diluted 260,1 132,3
Dividends declared for the year per
ordinary share (cents) 45,0 50,0
Special dividend per ordinary share (cents) 600,0 -
ABNORMAL ITEMS
Capital items
Surplus on disposal of interest in Bateman
Project Holdings Limited 83 793 -
Impairment of interest in Safbin Systems
(Pty) Limited (20 867) -
Impairment of property (287) (509)
Net surplus on disposal of property 349 -
(Deficit)/surplus on disposal of
interest in joint venture (30) 1 613
Surplus on disposal of interest in
equipment licence - 858
Accrual for possible patent infringement - (2 000)
Net capital items: income/(expense) 62 958 (38)
Abnormal trading items
Loss before tax of share investment and
share dealing operations (155) (548)
Impairment of inventories and debtors - (5 659)
Reversal of inventory impairment 1 487 3 000
Reversal of accumulated depreciation
on non investment property 158 -
Accruals for disputes relating to
goods supplied and services rendered - (2 398)
Insurance refund for legal expenses - 3 500
Net abnormal trading items: income/(expense) 1 490 (2 105)
Net abnormal items: income/(expense) 64 448 (2 143)
RECONCILIATION OF HEADLINE EARNINGS
Net profit for the year as above 79 972 40 978
Deduct: Capital items as below: 59 104 172
- capital items before tax as detailed above 62 958 (38)
- income tax expense on capital items above (214) (429)
- (deficit)/surplus on disposal of plant
and equipment included in operating
profit before abnormal items (3 562) 914
- income tax effect on disposal of
plant and equipment (78) (275)
Headline earnings 20 868 40 806
Deduct: Headline (loss)/earnings of
discontinued operations (5 944) 18 248
Headline earnings of continuing operations 26 812 22 558
Notes
1. Net treasury income includes interest
paid amounting to (9 179) (9 192)
2. Income tax expense includes secondary
tax on companies (STC) on the special
dividend of 600 cents per share paid
in June 2002. The STC amounts to (16 590) -
SEGMENTAL ANALYSIS
Year ended Year ended
30 June 02 30 June 01
R000 R000
Sales revenue
Continuing operations
ELB Equipment 220 605 192 876
ELB McWade 56 806 49 009
ELB Timber Products 54 270 81 864
ELB Timber Manufacturing 26 861 58 582
Safbin Systems (Safbin) 27 409 23 282
ELB Treasury 338 -
Total continuing operations 332 019 323 749
Discontinued operations
Bateman Project Holdings (Batepro) 2 047 714 2 605 612
Other 2 393 8 176
Total 2 382 126 2 937 537
HEADLINE EARNINGS - PROFIT/(LOSS)
Continuing operations
ELB Equipment 9 214 6 947
ELB McWade 5 250 4 350
ELB Timber Products (18 254) (4 475)
ELB Timber Manufacturing (931) 1 285
Safbin (17 323) (5 760)
ELB Treasury 30 602 15 736
Total continuing operations 26 812 22 558
Discontinued operations
Batepro 10 477 21 530
STC (secondary tax on companies)
on the special dividend (16 590) -
Other 169 (3 282)
Headline earnings for the year 20 868 40 806
Capital items
Continuing operations
(Deficit)/surplus on disposal
of plant and equipment (3 632) 154
Income tax effect of disposal of
plant and equipment (57) (47)
Impairment of interest in Safbin (20 867) -
Discontinued operations
Surplus on disposal of plant and equipment 70 760
Income tax effect of disposal
of plant and equipment (21) (228)
Surplus on disposal of interest in Batepro 83 793 -
Capital gains tax on disposal
of interest in Batepro (214) -
Impairment of property (287) (509)
Surplus on disposal of property 349 -
(Deficit)/surplus on disposal of
interest in joint venture (30) 1 613
Tax on disposal of interest in joint venture - (429)
Accrual for possible patent infringement - (2 000)
Surplus on disposal of interest
in equipment licence - 858
Net profit for the year 79 972 40 978
Group balance sheet
Audited
Pro forma
Reviewed (see note) Audited
30 June 02 30 June 01 30 June 01
R000 R000 R000
Assets
Non current assets 79 567 97 452 260 642
Property, plant and equipment 66 475 80 939 165 686
Intangible assets 244 479 12 958
Investment in associates - 1 147 17 375
Other investments - - 27 185
Non current debtors 6 259 4 386 11 888
Deferred tax assets 6 589 10 501 25 550
Current assets 328 657 458 002 1 476 382
Other 155 934 323 577 562 789
Cash and cash equivalents 172 723 134 425 913 593
Total assets 408 224 555 454 1 737 024
EQUITY AND LIABILITIES
Capital and reserves 164 983 388 698 293 552
Issued capital 9 954 7 923 7 923
Reserves 1 843 2 130 2 130
Accumulated profit 153 186 378 645 283 499
Preference shares 8 13 13
Minority interest 55 523 42 497 89 672
Minority interest in capital
and reserves of subsidiaries 6 462 23 749 70 924
Interest bearing minority
loans to subsidiary 60 311 29 500 29 500
Current portion of loans
included in current liabilities (11 250) (10 752) (10 752)
Non current liabilities 19 047 4 245 5 697
Interest bearing borrowings 1 197 292 292
Non interest bearing liabilities - - 806
Deferred tax liabilities 17 850 3 953 4 599
Current liabilities 168 663 120 001 1 348 090
Non interest bearing 104 984 77 036 1 233 422
Interest bearing - other 44 937 40 429 40 429
Short term borrowings
and bank overdrafts 18 742 2 536 74 239
Total equity and liabilities 408 224 555 454 1 737 024
Ordinary shares in issue (000`s) 30 760 30 257 30 257
Net asset value per share (cents) 536 1 285 970
Notes
1. The pro forma balance sheet at 30 June 2001 excludes Bateman Project Holdings
Limited (Batepro), and includes the consideration of R182,7 million on the
disposal of Batepro as an amount receivable in other current assets. The amount
was received on 4 February 2002.
2. In accordance with AC 107 (revised) the proposed final dividend amounting to
R4 614 000 has not been accrued at 30 June 2002. The comparative non interest
bearing current liabilities at 30 June 2001 has been restated to remove the
accrual of the proposed final dividend at that date which amounted to R9 985
000. In addition the minority interest of R2 683 000 at 30 June 2001 in the
final dividend payable by Batepro has been reallocated back to minority interest
from current liabilities in compliance with the AC.
3. At 30 June 2002 there was a capital commitment, amounting to R8 million, for
the acquisition of a business making electrical connectors. There were no
commitments at 30 June 2001.
Group cash flow statement
Reviewed Audited
Year ended Year ended
30 June 02 30 June 01
R000 R000
Cash flows from operating activities
Profit before abnormal items 9 794 55 010
Non cash adjustments 37 258 39 155
Abnormal items:
Loss before tax of share investment
and share dealing operations (155) (548)
Insurance refund for legal fees - 3 500
Net treasury income not related to projects 46 346 25 547
Changes in working capital 615 971 357 595
Income tax paid (16 833) (6 887)
Cash inflow from operating activities
before dividends paid 692 381 473 372
Dividends paid:
Ordinary shareholders - normal dividends (19 058) (9 959)
- special dividend (184 560) -
Preference shareholders - (1)
Minority shareholders (2 711) (19 999)
Cash inflow from operating activities 486 052 443 413
Cash flows from investment activities
Acquisitions of property (1 725) (3 478)
Disposals of property 3 735 1 584
Additions to plant and equipment
to expand operations (17 086) (20 279)
Replacement of plant and equipment (19 298) (33 157)
Intangible assets developed and acquired (3 212) (10 233)
Disposal of interest in Bateman
Project Holdings Limited (Batepro):
Proceeds 182 665 -
Expenses incurred (848) -
Capital gains tax (214) -
Disposal of interest in joint venture (30) 12 000
Disposal of interest in equipment licence - 858
Increase in investment in associates (200) (12 767)
Disposals of associates 1 312 -
Increase in other non current investments (6 089) (27 185)
Cash inflow before financing activities 625 062 350 756
Cash flows from financing activities
(Increase)/decrease in non current debtors (2 002) 535
Increase in minority non current
loans to subsidiary 30 313 18 748
Increase/(decrease) in non current liabilities 99 (1 474)
Increase/(decrease) in shareholder funding:
Ordinary shareholders 2 031 (647)
Preference shareholders (12) -
Minority shareholders 900 (16)
Increase in cash and cash equivalents 656 391 367 902
Cash and cash equivalents at the
beginning of the year 839 354 473 544
Proportionate share of cash in joint
venture on disposal - (2 092)
Net cash of Batepro on disposal (1 341 764) -
Cash and cash equivalents at
the end of the year 153 981 839 354
Reconciliation to balance sheet
Current assets: cash and cash equivalents 172 723 913 593
Current liabilities: short term
borrowings and bank overdrafts (18 742) (74 239)
Net cash and cash equivalents 153 981 839 354
Note
The cash inflow of Batepro for the six months ended 31 December 2001 included
working capital net inflow of R617 846 000. Within the working capital inflow
was an increase in construction contract liabilities of R762 643 000.
GROUP STATEMENT OF CHANGES IN CAPITAL AND RESERVES
Reviewed Audited
Issued Accumulated Total Total
capital Reserves profit 2002 2001
R000 R000 R000 R000 R000
Balance at the
beginning of
the year
As previously
stated 7 923 2 130 273 514 283 567 258 391
Prior year
adjustment
Dividends proposed
but declared after
the balance sheet
date no longer
permitted to be
accrued in terms
of Accounting
Statement AC 107
(revised) 9 985 9 985 4 779
As restated 7 923 2 130 283 499 293 552 263 170
Movement in
issued capital
Shares issued
under the share
incentive schemes 2 721 2 721 4 168
Share repurchased
in terms of the
share repurchase
programme (690) (690) (4 815)
Movement in reserves
Reserve for
redemption of
preference shares
Transfer to capital
redemption reserve
following the
redemption of
preference shares (5) (5) -
Capital redemption
reserve
Transfer from
reserve for
redemption of
preference shares 5 5 -
Movement between
reserves and
accumulated profit
Reduction in property
revaluation reserve
following the
reduction of the
carrying amount of
property in a
subsidiary to the
amount realised
subsequent to
30 June 2002 (287) 287 - -
Movement in
accumulated profit
Net profit for
the year 79 972 79 972 40 978
Premium on redemption
of preference shares (7) (7) -
Minority equity
adjustments following
the issue of shares
by subsidiaries (6 947) (6 947) 10
Final dividend of
the previous year (9 985) (9 985) (4 779)
Final dividend under accrued (7) (7) -
Interim dividend for
the current year (9 066) (9 066) (5 180)
Special dividend for
the current year (184 560) (184 560) -
Balance at
the end of
the year 9 954 1 843 153 186 164 983 293 552
COMMENTS
INTRODUCTION
Following the disposal by ELB of its 66% interest in Bateman Project Holdings
Limited (Batepro) ELB has been restructured with effect from 1 July 2002. There
are now four trading segments namely ELB Equipment, ELB McWade, ELB Timber
Products and ELB Treasury all of which comprise what is referred to as
continuing operations.
FINANCIAL RESULTS
The results for the 12 months to 30 June 2002 are characterised by the abnormal
profit of R83,6 million after tax realised on the disposal of ELB`s 66% interest
in Batepro, the R30,6 million of ELB Treasury income (attributable largely to
the significant fall in the value of the Rand during the year), the loss of
R18,3 million attributable to ELB Timber Products and the special dividend paid
of 600 cents per ELB share.
ELB Equipment and ELB McWade produced highly satisfactory results for the year.
ELB Timber Products, which comprises ELB Timber Manufacturing and Safbin,
produced disappointing results. Safbin continues to achieve market penetration
in its leasing business but at levels considerably below expectations. The
results for the manufacturing division are down on the previous year due to a
lack of any significant orders.
The financial results for Batepro for the six months to 31 December 2001 are
shown as part of discontinued operations in the segmental analysis.
PROSPECTS
ELB Equipment and ELB McWade are expected to show similar results for the year
ahead.
ELB Timber Products` ability to reduce losses for the coming year will depend
entirely on improved rental income in Safbin and additional orders for ELB
Timber Manufacturing. Due to the seasonal nature of the business, ELB Timber
Products is not expected to be profitable during the first half of the year.
ELB Treasury`s prospects are linked to the outlook for the Rand as well as
prevailing interest rates.
EMPOWERMENT
ELB has decided to embrace the issues of empowerment at the highest level. It
will therefore be addressing, in the coming year, at both Board and shareholder
level the changes necessary to ensure that ELB has the correct empowerment
credentials.
CHANGES IN DIRECTORATE
Mr RER Falls resigned from the Board on 5 February 2002 and Messrs PJ Blunden
and MA Hindle were appointed to the Board on 18 July 2002.
ACCOUNTING POLICIES
This preliminary report has been prepared in accordance with the South African
Companies Act and complies with South African Statements of Generally Accepted
Accounting Practice. Proposed dividends are no longer accrued in terms of AC 107
(revised). Apart from this change the same accounting policies outlined in the
2001 annual report apply to this report.
REVIEW BY THE INDEPENDENT AUDITORS
The financial information set out in this preliminary report has been reviewed,
but not audited, by KPMG Inc. Their unqualified review report is available for
inspection at the company`s registered office.
DIVIDENDS
The final dividend has been reduced from 33 cents in 2001 to 15 cents in 2002
reflecting the reduced capital base following the payment of the 600 cents
special dividend.
It is also expected that the interim dividend for the first half of the coming
year will be reduced for the same reason.
On behalf of the Board
AG Fletcher WGL Bateman
Chairman Deputy Chairman
Sandton
18 September 2002
Declaration of dividends
PREFERENCE DIVIDEND NUMBER 103
The directors of ELB Group Limited (`ELB`) have declared a preference dividend
for the half year ended 30 June 2002 at the rate of 6% per annum on the 6% fixed
cumulative redeemable preference shares of R2 each equivalent to 6 cents per
share. The last day to trade `cum` the dividend will be Friday, 11 October
2002. The preference shares will commence trading `ex` the dividend from the
commencement of business on Monday, 14 October 2002, and the record date will be
Friday, 18 October 2002. Payment will be made on Monday, 21 October 2002.
Preference shares may not be dematerialised or rematerialised from Monday, 14
October 2002 until Friday, 18 October 2002, both dates inclusive.
ORDINARY DIVIDEND NUMBER 109
The directors of ELB Group Limited (`ELB`) have declared a dividend number 109
of 15 cents per ordinary share, being the final dividend for the year ended 30
June 2002. The last day to trade `cum` the dividend will be Friday, 11 October
2002. The ordinary shares of ELB will commence trading `ex` the dividend from
the commencement of business on Monday, 14 October 2002 and the record date will
be Friday, 18 October 2002. Payment will be made on Monday, 21 October 2002.
Ordinary shares may not be dematerialised or rematerialised from Monday, 14
October 2002 until Friday, 18 October 2002, both dates inclusive.
By order of the Board
HAC Poole
Secretary
Boksburg
18 September 2002
Share transfer secretaries
Computershare Investor Services Limited
70 Marshall Street
Johannesburg 2001
(PO Box 1053, Johannesburg 2000)
Sponsor
Rand Merchant Bank Corporate Finance
A division of FirstRand Bank Limited
One Merchant Place
Cnr Fredman Drive & Rivonia Road
Sandton 2196
Auditors
KPMG Inc
KPMG Crescent
85 Empire Road
Parktown 2193
Date: 27/09/2002 11:42:06 AM Produced by the JSE SENS Department
