| Wed 23 Oct 2002, 14:55 | | Amap - Interim Results For The Six Months Ended 31 |
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Amap - Interim results for the six months ended 31 august 2002
Amalgamated appliance holdings limited
Registration number 1997/004130/06
("AMAP" or "the group")
ISIN number: ZAE000012647
Share code number: AMA
www.amap.co.za
INTERIM results for the six months ended 31 august 2002
AMALGAMATED APPLIANCE HOLDINGS LIMITED
FINANCIAL HIGHLIGHTS
Revenue 32%
Profit before tax 71%
Headline earnings 62%
Earnings per share 61%
Comments
It is particularly gratifying to record that the optimism expressed in the
Group`s annual report has been realised in its strong performance over the past
six months, which exceeded forecast expectations. Although growth in durable
sales tended to wane in the first half of 2002, as reported by the Bureau of
Economic Research, the local television market was buoyed by the highly
successful soccer World Cup. Furthermore, a pattern of improved overall
penetration by AMAP has continued beyond the tournament with all AMAP trading
divisions expanding their market share.
Financial performance
For the first time in the Group`s history, revenue for the six months exceeded
R500 million, reflecting a 32% growth to the comparative period last year. This
revenue yielded a 42% increase in operating income to R19,2 million. Basic
earnings per share increased by 61% to 5,0 cents (2001: 3,1 cents) compared with
the same period last year. In spite of a weak rand and the funding of
substantial revenue growth, tight working capital control resulted in a decline
of 13% in finance costs. Interest cover rose from 2,9 to 4,8 and AMAP was in a
net ungeared position at the end of the reporting period, with cash in the bank
of R46 million.
Operations
The balance provided by the Group`s multi-brand strategic initiative permits a
relatively stable trading performance regardless of demographic shifts or
changes in expenditure patterns. The continuous introduction of new product
lines, embracing technological advances, ensures the sustainability of AMAP`s
competitive position in the local market place.
Furthermore, the spirit of trust and co-operation in our dealings with
suppliers, retailers and original equipment manufacture customers has
strengthened and consolidated our position both locally and internationally.
Market share gains have been entrenched by all operating divisions.
The transfer and commissioning of certain plant, tooling and equipment from
Salton Europe to our Pinetown factory is expected to be completed by the end of
October, and will result in a boost in exports to the UK. R6 million has been
spent in upgrading our TV factory in Atlantis, in order to both improve
productivity and extend manufacturing capabilities beyond television and audio.
The Board
During the interim period, Frank Thompson resigned from the Board and Leon
Dreimann, chief executive of Salton Inc., USA, was appointed as non-executive
deputy chairman. Our Board was further strengthened by the appointment on 1
August 2002 of Joe Kieser as a non-executive director. Mr Kieser is acknowledged
internationally as an expert on brand-building and his skills will further
enhance our efforts in this direction. Our Board now comprises seven non-
executive directors and four executive directors.
Empowerment and Social Responsibility
Sincere efforts are being made in developing existing staff and supporting
facilities that seek to empower disadvantaged youth by providing post-
matriculation education and training.
Corporate Governance
The Group at all levels subscribes to the values of good corporate governance as
set out in both the King Report and the JSE requirements, and accept the need to
conduct the enterprise with integrity, transparency and equal opportunity.
Segmental Reporting
The Group predominantly markets and distributes Household Electrical Durables
(HED), therefore the disclosure of segmental information in terms of AC115 would
not be meaningful.
Dividends
The directors have resolved to continue the policy of a single annual dividend
to be declared at the end of the financial year.
Outlook
A successful and focused strategy, together with strong commitments from the
retail trade for the year-end seasonal peak, underpin prospects for the second
half of the year. Despite the recent hike of 100 basis points in interest
rates, and provided the economy suffers no serious setbacks, a good result for
the full year is anticipated.
For and on behalf of the Board
J Cohen B G Drummond
Chairman Company secretary
23 October 2002
Directors
J Cohen (Chairman) L Dreimann* (Deputy Chairman) J M Kahn* J P
Kieser* S G Bernhardt M C Berzack* S Cohen* S A Levitt* A Nossel
S Scafidas W B Rue*
AlternateS
S Green* EGW Janssen van den Doornmalen* *Non-executive
transfer secretaries
Computershare Investor Services Limited
70 Marshall Street Johannesburg 2001
PO Box 61051 Marshalltown 2107
REGISTERED OFFICE
29 Heronmere Road Reuven 2091 PO Box 39186 Booysens 2016
Telephone (011) 490 9000
Abridged group income statement
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Aug 31 Aug 28 Feb
change 2002 2001 2002
6 months R`000 R`000 R`000
Revenue 32% 531 420 402 590 862,338
Operating income 42% 19 217 13 515 33 165
Net Interest paid (13%) (3 983) (4 588) (5 907)
Profit before tax 71% 15 234 8 927 27 258
Taxation 5 067 2 695 9 002
Profit attributable to
ordinary shareholders 63% 10 167 6 232 18 256
Basic earnings per
share (cents) 61% 5,0 3,1 9,0
Headline earnings
per share (cents) 59% 5,1 3,2 10,0
Diluted earnings
per share - weighted
(cents) 61% 5,0 3,1 9,9
Diluted headline
earnings per share -
weighted (cents) 59% 5,1 3,2 8,9
Abridged group cash flow statement
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Aug 31 Aug 28 Feb
2002 2001 2002
R`000 R`000 R`000
Cash flows from operating
activities (9 789) 26 852 102 008
Cash generated by operations 19 250 12 350 34 137
Working capital changes (26 197) 15 442 68 813
Cash (utilised in)/available
from operations (6 947) 27 792 102 950
Taxation paid (393) (104) (105)
Cash (utilised in)/available
from operations (7 340) 27 688 102 845
Dividends paid (2 449) (836) (837)
Cash flows from investing
activities (12 604) (83) (10 143)
Additions of property,
plant and equipment (8 369) (2 366) (7 902)
Proceeds on disposal of
property, plant and equipment 97 405 1 067
(Increase)/decrease in loans (4 332) 1 878 (3 308)
Cash flows from financing
activities 97 433 578
Increase in long-term borrowings 97 433 578
Net (decrease)/increase in cash (22 296) 27 202 92 443
Cash surplus/(borrowings)
beginning of period 67 959 (24 484) (24 484)
Cash resources end of period 45 663 2 718 67 959
Statement of changes in equity
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Aug 31 Aug 28 Feb
2002 2001 2002
R`000 R`000 R`0000
Balance at start of period 217 428 200 009 200 009
Issue of share capital 30 55 55
Share premium 2 623 3 083 3 082
Attributable earnings 10 167 6 232 18 256
Dividends settled:
- cash election (2 449) (837) (837)
- capitalisation shares (2 656) (3 137) (3 137)
Balance at end of period 225 143 205 405 217 428
Abridged group balance sheet
Unaudited Unaudited Audited
31 Aug 31 Aug 28 Feb
2002 2001 2002
R`000 R`000 R`000
Assets
Non-current assets
Property, plant and equipment 28 305 20 723 23 474
Trademarks and goodwill 12 856 14 263 13 432
Loans 33 562 24 538 29 230
Deferred tax 8 491 19 354 13 167
Current assets 420 653 391 001 403 697
Inventory 198 075 174 643 155 249
Trade and other receivable 176 851 187 149 155 764
Bank and cash on hand 45 727 29 209 92 684
Total assets 503 867 469 879 483 000
EQUITY AND LIABILITIES
Capital and reserves 225 143 205 405 217 428
Long-term borrowings 913 827 816
Current liabilities 277 811 263 647 264 756
Trade and other payables 277 747 237 156 240 031
Bank overdraft and short-term
borrowings 64 26 491 24 725
Total equity and liabilities 503 867 469 879 483 000
Supplementary information
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Aug 31 Aug 28 Feb
2002 2001 2002
R`000 R`000 R`0000
Shares in issue (000`s) 207 340 204 198 204 198
Shares in issue - weighted
(000`s) 205 245 200 530 202 364
Diluted number of shares (000`s) 207 340 204 198 204 198
Diluted number of shares
- weighted (000`s) 205 245 200 530 204 943
Net asset value per share
(cents) 109 101 106
Cost of sales (R`000) 421 450 322 841 697 988
Interest received (R`000) 802 4 890 3 722
Interest paid (R`000) (4 785) (9 478) (9 629)
Capital expenditure (R`000) 8 369 2 366 7 902
Capital expenditure not yet
contracted (R`000) 1 000 2 820 5 435
Depreciation and amortisation
charge (R`000) 4 038 2 922 6 720
Operating lease commitments
(R`000) 33 174 4 899 34 982
Headline earnings 62% 10 380 6 395 20 190
Goodwill amortised 234 250 469
Profit on disposal of
property, plant and
equipment (21) (87) (236)
Provision for write-down
of share trust loan - - 1 701
Profit attributable to
ordinary shareholders 63% 10 167 6 232 18 256
Accounting policies
The income statement, balance sheet and statement of changes in equity for
August 2001 have been restated to take cognisance of additional disclosure
in the period. The accounting policies used in the preparation of the
interim results announcement are consistent with those applied in the
previous period (February 2002). The interim results have been prepared in
accordance with the requirements of AC127.
Related party transactions
The company entered into various related party transactions. These
transactions are no less favourable than those arranged with third parties.
Loans
The directors have reviewed the securities held, and have satisfied themselves
that the loans are fully recoverable.
Subsequent events
No events material to the understanding of the report have occurred in the
period between the interim date and the date of this report.
Date: 23/10/2002 12:45:00 PM Produced by the JSE SENS Department
