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Winecorp - Audited Group Financial Results
WINECORP LIMITED
Registration Number 1997/012032/06
Share code: WNE
ISIN: ZAE000027710
AUDITED GROUP FINANCIAL RESULTS FOR THE YEAR ENDED 31 JULY
2002
Financial results
The financial results of the Winecorp group for the year
ended 31 July 2002 are set out below. The annual financial
statements have been prepared on the historical cost basis
in accordance with South African Statements of Generally
Accepted Accounting Practice. Accounting policies which
have been applied are consistent with those applied in the
previous year, with the exception of the provision for
depreciation on owner occupied buildings. The results have
been audited by the group`s auditors, PricewaterhouseCoopers
Inc. and their unqualified audit opinion is available for
inspection at the company`s registered office.
Review of results
Winecorp did well to achieve R8.4 million headline earnings
in the current year, translating to 16.98 cents per share
(prior year R2.5 million and 5.52 cents per share). Revenue
increased by 5% and the group enjoyed exchange gains of R3.9
million, due to its 80% export sales mix and the
depreciation of the rand during the year. Winecorp`s return
on equity based on disclosed headline earnings was 32%, up
from 12% in the prior year.
At the beginning of the year the group disposed of its
investment in Vineyards Direct (Pty) Ltd realizing a profit
of R575 000. The exceptional item represents a provision
against the loan to the Winecorp employee share incentive
scheme of R3.1 million as fully disclosed in the half year
results.
Strategic initiatives
During the year the group was involved in and identified a
number of strategic initiatives. These include:
- The increase in the production capacity to over a
million cases per annum at a cost in excess of R5
million to enable the growth of sales while maintaining
flexibility to accommodate shorter production runs;
- PLB Group Ltd increased its shareholding in the company
from 8.7% to over 10%, endorsing the close working
relationship between the companies;
- Locally the Fruitango cooler range was successfully
launched, resources were added to the customer services
department and a number of new products for the
international market are being developed;
- Winecorp was the first wine company in South Africa to
receive ISO9001 2000 accreditation to add to the
required UK retailer accreditation attained previously;
- The development and enhancement of our relationships
with our suppliers and customers remain key to our
business.
Prospects
The dramatic decline in the exchange rate of the rand
resulted in a short-term window of financial gains for most
South African exporters. The increase in cost of production
and business in general will soon catch up and is already
evident in the year on year increase of 15.4% in the PPI and
2.5% increase in the prime overdraft rate. Given this and
the delicate demand/supply equilibrium for wine it is
difficult to make any predictions for the coming year.
However the group is cautiously optimistic that it will
succeed in its endeavours to explore new business and
investment opportunities.
Changes in directorate
Adrian Garforth resigned on 28 March 2002. Gerrie Wagener
was appointed as non-executive director on 1 May 2002 and
Christie Kruger was appointed as financial director on 17
October 2002.
WINECORP LIMITED
ABRIDGED BALANCE SHEET
Year ended Year ended
31-Jul-02 31-Jul-01
Audited Audited
R`000 R`000
ASSETS
Property, plant and equipment 14,944 10,825
Goodwill and intangibles 2,406 2,552
Investments and associates 694 505
Long-term loans 902 3,965
Deferred tax 650 -
Current assets 50,894 48,166
70,490 66,013
EQUITY AND LIABILITIES
Shareholders funds 26,391 21,179
Long-term liabilities 5,628 5,526
Related party loans 1,536 4,396
Current liabilities 36,935 34,912
70,490 66,013
49 49
53.55 42.88
ABRIDGED INCOME STATEMENT
Revenue 85,221 81,449
Other income 4,263 612
Operating expenses -77,982 -77,355
Net operating profit 11,502 4,706
Net finance costs -2,587 -2,672
Share of net income from associates 60 225
Profit on disposal of non-current 575 357
assets
Net operating profit before 9,550 2,616
exceptional items
Exceptional items -3,063 -
Net profit before taxation 6,487 2,616
Taxation -1,239 -23
Net profit for the year 5,248 2,593
Weighted average number of shares in
issue (millions) 49 46
Earnings per share (cents) 10.63 5.67
Headline earnings per share (cents) 16.98 5.52
RECONCILIATION BETWEEN HEADLINE
PROFIT AND NET PROFIT
Headline profit 8,380 2,525
Exceptional items -3,063 -
Goodwill amortisation -270 -272
Impairment of property -415 -
Profit/(loss) on disposal of plant 41 -17
and equipment
Profit on disposal of non-current 575 357
assets
Net profit 5,248 2,593
ABRIDGED STATEMENT OF CHANGES IN OWNERS` EQUITY
Equity at beginning of the year 21,258 16,318
Change in accounting policy -79
-
Equity opening balance 21,179 16,318
Ordinary shares issued - 5,384
Set off against share premium - -16
Net effect of shares acquired by -36 -3,000
subsidiary company
Net profit for the year 5,248 2,593
Equity at end of the year 26,391 21,179
ABRIDGED CASH FLOW STATEMENT
Cash inflow/(outflow) from operating 13,909 -16,332
activities
Cash (outflow)/inflow from investing -5,289 -1,134
activities
Cash (outflow)/inflow from financing -4,419 17,397
activities
Net increase/(decrease) in cash and 4,201 -69
cash equivalents
Cash and cash equivalents at -1,113 -1,044
beginning of year
Cash and cash equivalents at end of 3,088 -1,113
year
C/O Winecorp, Annandale Road, Stellenbosch, 7600;
P O Box 99, Lynedoch, 7603
Directors:
Executive J Van Reenen (CEO), AC Kruger (Financial)
Non Executive:
FJ Rahmatallah (British), GJ Knox (Australian), BS
Barraclough (British), AE Jacobs, GN Wagener
Alternate: P McMahon (British)
Secretary: ML Potgieter (British)
Date: 30/10/2002 02:09:30 PM Produced by the JSE SENS Department
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