| Thu 24 Oct 2002, 17:45 | | Set Point Technology Holdings Limited |
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Set Point Technology Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1996/014334/06)
JSE Share code: STO ISIN: ZAE000013629
("Set Point" or "the company" or "the group")
Audited results for the year ended 31 August 2002
* Headline earnings per share 6,5 cents
* Operating profit R19,76 million
* Borrowings reduced by R37 million
* Net tangible asset value up by 77%
Consolidated income statements
Year ended Year ended
31 August 31 August
2002 2001
R`000 R`000
Revenue 189 603 275 425
Cost of sales (116 457) (187 972)
Gross margin 73 146 87 453
Operating expenses (53 387) (94 697)
Income/(loss) before exceptional items 19 759 (7 244)
Exceptional items* 5 884 (16 804)
Income/(loss) before finance charges 25 643 (24 048)
Net finance charges (4 473) (7 224)
Income/(loss) before taxation 21 170 (31 272)
Taxation (4 262) 8 163
Income/(loss) attributable to shareholders 16 908 (23 109)
Weighted average number of shares in issue (`000) 174 876 187 598
Earnings/(loss) per share (cents) 9,7 (12,3)
Headline earnings/(loss) per share (cents) 6,5 (3,1)
Headline earnings/(loss) 11 424 (5 905)
Income/(loss) attributable to shareholders 16 908 (23 109)
Goodwill amortisation 400 400
Exceptional items* (5 884) 16 804
(Profit)/loss on disposal of operations (5 884) 13 715
Acquisition costs - 1 582
Impairment loss on investments - 1 507
Consolidated balance sheets
At 31 August At 31 August
2002 2001
R`000 R`000
Assets
Non-current assets 29 006 40 116
Property, plant and equipment 14 209 17 962
Intangible assets 4 650 5 050
Investments - 2 252
Deferred tax 10 147 14 852
Current assets 73 684 90 966
Inventories 27 415 27 545
Trade and other receivables 44 680 58 906
Taxation receivable 1 379 1 125
Cash resources 210 3 390
Total assets 102 690 131 082
Equity and liabilities
Capital and reserves 38 772 24 280
Capital and reserves 38 322 23 348
Deferred purchase consideration - shares 450 932
Non-current liabilities 14 190 21 982
Interest bearing liabilities 14 190 19 527
Deferred purchase consideration - cash - 2 455
Current liabilities 49 728 84 820
Interest bearing liabilities 11 848 43 523
Trade and other payables 37 880 41 297
Total equity and liabilities 102 690 131 082
Shares in issue (net of treasury shares) (000`s) 175 376 183 776
Net asset value per share (cents) 22,1 13,2
Tangible net asset value per share (cents) 19,5 10,5
Contingent liability
Set Point is obliged to purchase 2,79 million shares in the company from a
vendor at 72 cents a share, if these shares are tendered to the company in
negotiable form at 28 February 2003. The share purchase will be conditional upon
obtaining specific approval for the repurchase from shareholders before that
date. If shareholder approval is not obtained, Set Point will still be obliged
to settle the liability.
Abridged consolidated cash flow statements
Year ended Year ended
31 August 31 August
2002 2001
R`000 R`000
Cash flows from operating activities 10 497 (4 861)
Cash flows from investing activities 23 296 (12 240)
Cash flows from financing activities (362) (13 320)
Decrease/(increase) in short-term borrowings
net of cash balances 33 431 (30 421)
Balance at beginning of year (39 772) (9 351)
Balance at end of year (6 341) (39 772)
Abridged consolidated statements of changes in equity
Year ended Year ended
31 August 31 August
2002 2001
R`000 R`000
Opening balance as previously reported 23 348 37 752
Change in accounting policy - (519)
Restated opening balance 23 348 37 233
Shares issued 581 9 041
Specific repurchase of shares (840) -
Currency translation difference - 183
Transfer from non-distributable reserve (1 675) -
Income/(loss) attributable to shareholders 16 908 (23 109)
Closing balance 38 322 23 348
Segmental information
Net
operating Operating
Divisions assets/ income/ Number of
(liabilities) Revenue (loss) employees
R`000 % R`000 % R`000 % # %
Set Point
Instruments 21 716 41,7 119 947 63,3 8 309 42,1 98 33,6
Set Point
Laboratories 7 922 15,2 14 846 7,8 6 995 35,4 30 10,3
Set Point
Analytics 10 012 19,2 28 504 15,0 1 310 6,6 79 27,0
Wearcheck 3 003 5,8 26 306 13,9 7 848 39,7 76 26,0
Head Office 9 478 18,2 - - (4 703) (23,8) 9 3,1
52 131 100,0 189 603 100,0 19 759 100,0 292 100,0
Commentary
Profile
Set Point is a manufacturer, supplier and operator of specialised industrial,
analytical and allied technological equipment used by a wide range of major
industries.
Financial results and review of operations
The pleasing results in all areas of operation in the year to 31 August 2002
are the result of the positive turnaround strategies implemented in the latter
half of the previous financial year. This confirms the strong recovery evident
at the interim stage.
On revenue some 31% lower than the previous year, following the disposal
programme, gross margins improved by 22% to 38,6%. The substantially lower
operating expenses, R53,4 million compared to R94,7 million, lifted operating
income to R19,8 million against a loss in the previous year.
After lower interest charges and taxation, headline earnings per share was
6,5 cents against a loss of 3,1 cents in the previous year.
Positive operating cash flow during the year and the sale of Set Point Europe
Limited enabled group borrowings to be reduced from R63 million to R26 million.
The percentage debt to equity declined over the period from 260% to 67%. In
addition, interest cover is now a satisfactory 4,4 times notwithstanding
increased interest rates.
Set Point Laboratories had an impressive year. Revenue more than doubled to
R14,8 million and operating income trebled to almost R7 million.
Set Point Instruments was affected by tough trading conditions and operating
income declined from R9,6 million to R8,3 million.
Wearcheck had a good year and both revenue and operating income increased by
some 10% to R26,3 million and R7,8 million respectively.
The remedial action taken by Set Point Analytics at the commencement of the year
turned the previous year`s loss around to an operating income of R1,3 million.
Directorate
Linsent Martin and Howard St Quintin resigned as directors during the year.
We are grateful for their contribution during their years in office. Graeme
Horsfield was appointed to the Board and Mark Saunders was appointed as an
alternate director to Graeme Horsfield.
Accounting policies
The accounting policies at 31 August 2002 are consistent with those applied
at 31 August 2001, except for a change in accounting policy with regard to
depreciation of owner-occupied buildings. The company now depreciates these
buildings over their estimated useful lives. Comparative amounts have been
appropriately restated. These results have been prepared in accordance with
South African Statements of Generally Accepted Accounting Practice.
Audit report
This announcement has been audited by Fisher Hoffman PKF (Jhb) Inc., and
their unqualified audit report is available for inspection at the company`s
registered office.
Prospects
As reported at the interim stage, the restructuring is complete and the
emphasis has moved to growing the group`s business units both internally and
through external alliances. All divisions remain profitable and generate
positive cash flows.
Headline earnings in the new year are expected to reflect continued
satisfactory real growth. The Board will give consideration to resuming dividend
payments at the conclusion of the 2003 financial year.
Dividends
No dividend has been declared.
Acknowledgements
The Board would like to express its appreciation to management and staff for
their efforts during the year which has been a significant factor in the
successful results achieved by the group.
For and on behalf of the Board
B H Kent (Chairman) M J Smith (Chief Executive Officer)
Johannesburg
24 October 2002
Directors: B H Kent (Chairman)*, M J Smith (Chief Executive Officer),
Dr D E Baloyi*, G J Horsfield, J M Judin*, N D Kennelly, H Levin*,
V T L Ngubeni*, C S Seabrooke*, M F Saunders (alternate)
(*non-executive)
Registered Office: Pin Mill Farm, Block F, 164 Katherine Street, Sandton, 2146,
(PO Box 787646, Sandton, 2146)
Transfer Secretaries: Computershare Investor Services Limited, 9th Floor,
70 Marshall Street, Johannesburg 2000,
(PO Box 1053, Johannesburg, 2000)
Sponsor: Standard Corporate and Merchant Bank
(a division of The Standard Bank of South Africa Limited),
(Registration number 1962/000738/06)
www.setpoint.co.za
Date: 24/10/2002 05:13:00 PM Produced by the JSE SENS Department
