| Wed 30 Oct 2002, 17:48 | | Mettle Limited - Interim Results For The Six Mont |
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Mettle Limited - Interim Results for the six months ended 30 September 2002
Mettle Limited
(Incorporated in the Republic of South Africa)
(Registration number 1996/010795/06)
JSE Share code: MEL ISIN: ZAE000028569
Mettle Interim Results for the six months ended 30 September 2002
* Annualised return on equity - 24.8%
* Net asset value per share - 62.3 cents
* Headline earnings per share up 2.3%
* Dividend per share - 2 cents
MANAGING DIRECTOR`S REPORT
Financial Results
Having historically enjoyed solid growth year on year, our results for the six
months to September 2002 are uncharacteristically subdued. Headline earnings
amounted to R40.3 million, which translates into headline earnings per share of
7.08 cents. Annualised return on equity for the period is a gratifying 24.8%.
The decline in operating revenue is primarily attributable to two factors. The
first of these factors is the disposal of our London brokerage business. The
loss of revenue attributable to the disposal of the London business is more than
matched by a corresponding decline in operating costs. The second factor
involves an adjustment to fair value of our treasury trading book. We have
commenced a process of valuing our treasury trading book in line with the new
accounting standards required for our next financial year and this has resulted
in a significant negative adjustment to the fair value thereof. Due to the new
illiquid markets, we have decided to significantly reduce our exposure to the
capital markets so as to reduce the volatility of our earnings going forward in
light of the new accounting standards. This should result in the cash invested
in the book substantially being released within the foreseeable future.
If one ignores the impact of these two factors, one would see that the core
business has performed very well. Our core debt origination and structuring
business continues to perform well and the repositioning of our equity team,
which now has a focus on leveraged equity deals, has already borne fruit.
Share Buyback Programme
During the period we bought back 30.7 million Mettle shares, and are on track to
continue the buyback programme in the second half of the year.
Empowerment
In light of our empowerment focus I am pleased to report that as a result of the
latest share buybacks, the holding of our empowerment shareholder Hosken
Consolidated Investments (HCI) has increased to 41.2%, up from 39.1%. This gives
Mettle an even more significant empowerment stakeholder, and has spurred us to
re-commit to transforming the company into a substantial empowerment player. We
have adopted a holistic approach to empowerment that, in addition to our
shareholding, encompasses management development and operational programmes such
as an aggressive recruitment drive, and the implementation of an empowerment
procurement policy. We are also in the process of setting up a new and exciting
black empowerment financial services player of substance where we will take a
49% stake.
Dividend Declaration
Notice is hereby given that the board has declared an interim dividend of 2
cents per ordinary share in respect of the six months ended 30 September 2002.
The dividend will be paid on Monday, 25 November 2002.
To comply with the procedures of STRATE the last day to trade in the shares for
purposes of entitlement to the interim dividend is Friday, 15 November 2002. The
shares will commence trading ex-dividend on Monday, 18 November 2002 and the
record date will be Friday, 22 November 2002.
Shareholders may not dematerialise or re-materialise their shares between
Monday, 18 November 2002 and Friday, 22 November 2002 (both days inclusive).
Looking forward
In light of adjustments made in the past few months we expect to post solid
results by year end.
I have every confidence that Mettle will continue to gain market share as it
moves further and further towards its goal of becoming South Africa`s premier
empowerment financial services company.
GM OConnor
Managing Director
25 October 2002
Telephone no. (011)446 9200, (021)915 3300
Website. www.mettle.net
ISIN Code: ZAE000028569
Share Code: MEL
Registration no. 1996/010795/06
METTLE LIMITED AND ITS SUBSIDIARIES
Abridged Balance Sheets as at 30 September 2002
Unaudited Unaudited Audited
30/09/2002 30/09/2001 31/03/2002
R`000 R`000 R`000
ASSETS
Non-current assets
Fixed assets 12,518 17,699 11,571
Investments and loans 64,052 39,701 54,588
Deferred tax 52,874 3,408 21,978
Current assets
Trading assets 3,488,176 1,516,130 3,221,491
Short term receivables 76,876 51,991 90,617
Cash and cash equivalents 244,122 249,909 293,058
Total assets 3,938,618 1,878,838 3,693,303
EQUITY AND LIABILITIES
Capital and reserves
Total shareholders` funds 337,523 310,078 331,759
Non-current liabilities
Net financial liabilities 55,863 107,295 69,805
Deferred tax 11,813 4,183 10,484
Current liabilities
Short term payables 65,753 25,457 49,847
Trading liabilities 3,457,969 1,420,202 3,227,515
Taxation 9,697 11,623 3,893
Total equity and liabilities 3,938,618 1,878,838 3,693,303
Income Statements for the 6 months ended 30 September 2002
Unaudited for the Unaudited for the Audited for the
six months ended six months ended year ended
30/09/2002 30/09/2001 31/03/2002
R`000 R`000 R`000
Revenue 62,023 106,724 208,080
Operating income 50,023 99,028 179,710
Net financing income 8,908 6,903 25,392
Income from investments 3,092 793 2,978
Less : Operating expenses 39,318 61,425 123,118
Profit from normal
operations 22,705 45,299 84,962
Income from associated
companies 2,712 - -
Profit before exceptional
item and taxation 25,417 45,299 84,962
Exceptional item (4,143) (4,583) 1,116
Profit before taxation 21,274 40,716 86,078
Taxation (14,861) 3,287 (6,409)
Profit for the period 36,135 37,429 92,487
Exceptional item 4,143 4,583 (1,116)
Profit on the sale of fixed
assets (net of taxation) - 618 247
Headline earnings 40,278 42,630 91,618
Earnings per share (cents)
- profit 6.35 6.07 14.63
- headline 7.08 6.92 14.49
Dividends per share (cents)
- interim - - 1.40
- prior year final 2.74 1.22 1.22
Number of shares (million)
- in issue (treasury
shares deducted) 541.6 599.3 568.8
- weighted average 568.8 616.1 632.2
Abridged Cash Flow Statements for the 6 months ended 30 September 2002
Unaudited for the Unaudited for the Audited for the
six months ended six months ended year ended
30/09/2002 30/09/2001 31/03/2002
R`000 R`000 R`000
Net cash flow (utilised
in) / generated by
operating activities (44,278) 19,664 115,847
Net cash flow released
by operations 46,513 72,575 130,363
Cash flow (utilised in) /
Released from treasury
trading activities (65,594) (45,216) 17,023
Interest paid - - (10,545)
Dividends (16,295) (8,067) (16,067)
Taxation (8,902) 372 (4,927)
Net cash flow (utilised
in) / generated by
investing activities (4,648) 4,156 (17,146)
Net cash flow utilised
in financing activities (10) (22,192) (53,924)
Net (decrease) / increase
in cash and cash
equivalents (48,936) 1,628 44,777
Cash and cash equivalents
at beginning of period 293,058 248,281 248,281
Cash and cash equivalents
at end of period 244,122 249,909 293,058
Abridged Statements of Changes in Equity for the 6 months ended 30 September
2002
Unaudited for the Unaudited for the Audited for the
six months ended six months ended year ended
30/09/2002 30/09/2001 31/03/2002
R`000 R`000 R`000
Equity at beginning
of period 331,759 309,405 298,168
Change in share capital
And share premium (15,623) (35,414) (51,583)
Change in non-distributable
reserves 839 6,725 9,474
Net profit attributable
to ordinary shareholders 36,135 37,429 92,487
Ordinary dividends (15,587) (8,067) (16,787)
Equity at end of period 337,523 310,078 331,759
Abridged Segment Analysis for the 6 months ended 30 September 2002
Revenue Results
R`000 R`000
Funding and investment services 97,871 83,797
Equity group 3,989 4,871
Treasury and cash management operations (39,117) (50,813)
Other (720) (1,720)
62,023 36,135
NOTES
1. The accounting policies used, are consistent with those used in the previous
year and those disclosed in the group`s most recent annual financial statements.
These interim results have been prepared in accordance with South African
Statements of Generally Accepted Accounting Practice.
2. The exceptional item is due to the sale of a subsidiary of the Mettle group.
3. With reference to the announcement issued by Mettle Limited on 3 October
2002, the group repurchased 30 730 000 shares for a consideration of R17 551
100. 27 230 000 of these shares were bought in the market for R15 613 166.
4. Headline earnings per share and earnings per share are calculated by dividing
headline earnings and earnings after tax by the weighted average number of
shares in issue during the period.
5. The income from associates, which are accounted for using the equity
accounting method, represents a 50% shareholding in Johnson Crane Hire, acquired
28 June 2002 and 40% in Mettle LLC, a company incorporated in the USA.
Date: 30/10/2002 05:30:00 PM Produced by the JSE SENS Department
