| Mon 4 Nov 2002, 16:38 | | Value Group Limited - Interim Report To 31 August |
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Value Group Limited - Interim Report To 31 August 2002
Value Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1997/002203/06)
ISIN No: ZAE000016507 Share code: VLE
- 7% increase in turnover
- 69% INCREASE IN OPERATING INCOME BEFORE DEPRECIATION
- 19% INCREASE IN NET ASSET VALUE
- R37,9 MILLION OPERATING CASH FLOW
INTERIM REPORT TO 31 AUGUST 2002
CONSOLIDATEDINCOMESTATEMENT
Unaudited Unaudited Audited
6 months 6 months 12 months
August August February
Figures in R`000s 2002 2001 2002
Revenue 222 938 208 588 420 234
Operating income before
depreciation finance costs
and abnormal items 43 357 25 710 71 526
Depreciation (21 881) (22 437) (43 836)
Operating income 21 476 3 273 27 690
Investment income 342 14 421
Finance costs (8 478) (7 817) (14 540)
Net income/(loss) before
abnormal items 13 340 (4 530) 13 571
Abnormal items - - 2 477
Net income/(loss) before
taxation 13 340 (4 530) 16 048
Taxation (note 2) (4 984) 136 (5 561)
Earnings/(loss) attributable
to ordinary shareholders 8 356 (4 394) 10 487
Basic earnings/(loss) per
share (cents) 4,0 (2,1) 5,1
Headline earnings/(loss) per
share (cents) 3,9 (2,3) 3,9
CONSOLIDATED BALANCE SHEET
Assets
Non-current assets 243 370 272 432 250 806
Property, vehicles, plant
and equipment 240 336 261 923 243 668
Deferred tax 338 5 712 4 442
Investments and loans 2 696 4 797 2 696
Current assets 119 533 115 999 117 757
Total assets 362 903 388 431 368 563
Equity and liabilities
Capital and reserves 146 497 123 260 138 141
Non-current liabilities 111 903 161 104 122 675
Interest-bearing 88 394 83 393 99 718
Non-interest-bearing - 57 754 -
Deferred tax 23 509 19 957 22 957
Current liabilities 104 503 104 067 107 747
Interest-bearing 26 243 21 327 29 391
Non-interest-bearing 78 260 82 740 78 356
Total equity and liabilities 362 903 388 431 368 563
Actual number of shares
in issue 207 599 040 207 599 040 207 599 040
Net asset value per share
(cents) 70,6 59,4 66,5
CONSOLIDATED CASH FLOW STATEMENT
Cash flows from operating
activities 37 856 23 745 60 665
Cash flows from investing
activities (15 428) (11 678) (10 363)
Cash flows from financing
activities (18 247) 2 185 (34 882)
Net increase in cash and
cash equivalents 4 181 14 252 15 420
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share capital 208 208 208
Share premium 41 231 41 231 41 231
Accumulated profits 105 058 81 821 96 702
Balance at beginning of year 96 702 86 215 86 215
Earnings/(loss) attributable
to ordinary shareholders 8 356 (4 394) 10 487
Total capital and reserves 146 497 123 260 138 141
NOTES
1. Accounting policies
The accounting policies adopted for the purpose of this report comply in all
material respects with South African statements of Generally Accepted Accounting
Practice and are consistent with the policies adopted in the previous period.
2. Taxation
Taxation includes a once-off write-down of previously recognised deferred tax
assets which, as a result of the Group`s rationalisation, do now not meet the
criteria for recognition.
3. Reconciliation between basic and headline earnings/(loss)
Basic earnings/(loss) 8,356 (4 394) 10 487
Abnormal items - - (2 477)
(Profit)/loss on disposal of
property, vehicles, plant and
equipment less taxation (341) (381) 30
Headline earnings/(loss) 8 015 (4 775) 8 040
COMMENTARY
Value Group Limited and its subsidiaries ("the Group") has developed into a
total logistics service provider, encompassing supply chain management,
transport, specialised warehousing as well as full maintenance leasing and fleet
management.
1. Financial review
Management`s commitment and focus on returning the Group to profitability by
reducing costs and synergising efficiencies is evident in the results achieved
for the past six months when compared to the prior period. Operating income
after depreciation increased from R3,3 million to R21,5 million. Net income
before tax increased from a previously reported loss of R4,5 million to a profit
of R13,3 million. Renewed profitability was achieved on an inflationary increase
of only 7% in turnover, a direct consequence of the termination of unprofitable
contracts and the continued alignment of the fleet to maximise utilisations.
The improvement in results is clear, following the successful integration of the
major acquisitions of Fleetrent Holdings (Pty) Limited and Rent-A-Bakkie. Basic
earnings per share increased to 4 cents, from a previously reported loss of 2,1
cents per share. Headline earnings per share increased to 3,9 cents and net
asset value increased by 19%, to 70,6 cents per share.
R37,9 million positive cash flow was generated by operations. Net increase in
cash and cash equivalents amounted to R4,2 million compared to R14,2 million
reported at August 2001, the decrease being a direct consequence of the
settlement of interest-bearing debt in addition to funding contract and
replacement fleet. Subsequent to the reporting period, the Group was committed
to capital expenditure amounting to R11million for new fleet. In line with
management`s previously reported intentions of decreasing borrowings, debt has
been substantially reduced by R47,8 million over the past 12 months given that
R57,8 million of long-term debt became interest-bearing from 1 January 2002.
Management remains committed to reducing the level of debt further in view of
the recent increases in prime overdraft rates.
2. Review of business
- Operations
The Group has successfully implemented a linehaul function to Malawi, Zambia,
Zimbabwe, Mozambique and Namibia which services both local and cross- border
customers.
The Group`s re-branding of its corporate image has met with considerable success
in converting market perception of Value being a truck rental company to that of
a fully integrated logistics provider.
All divisions have contributed meaningfully to the Group`s return to
profitability. In particular, Value Logistics has delivered excellent returns as
a result of additional critical mass and customer requirements for warehousing
facilities.
- New appointments
The board is pleased to announce the appointment of Mr Ian Michael Groves as an
independent non-executive director, effective 20 August 2002 and Dr Nakedi
Mathews Phosa as an executive director, effective 29 October 2002.
3. Rationalisation
In terms of section 39 of the Taxation Laws Amendment Act 20 of 1994, the Group
was granted approval by SARS to rationalise the activities of its subsidiaries.
As a result, all businesses have been consolidated into Value Logistics Limited.
This has, and will enable the Group to realise administrative advantages, trade
benefits and operational savings.
4. Empowerment company
The Group is pleased to announce the ground-breaking formation of an empowerment
company, Value Inani (Pty) Limited, which is 51% owned by a consortium led by Dr
Mathews Phosa, with Value Group allocated the remaining 49%. Value Inani will
facilitate entry into empowerment regulated markets.
5. Prospects
All acquisitions have been successfully bedded down. The Group is now well
positioned to grow revenue organically and to further extend its range of
services to customers.
Historically, seasonal demand for the Group`s services has been greater in the
remaining six months of the financial year. The board is confident that, in the
absence of unforeseen circumstances, current performance levels will be
sustained.
6. Dividends
Although the board is not adverse to declaring a dividend, it will only consider
paying dividends once the level of the Group`s debt has been further reduced. No
interim dividend has been declared.
For and on behalf of the board
C D Stein S D Gottschalk
Chairman Chief Executive Officer
Johannesburg
4 November 2002
VALUE GROUP LIMITED
(Incorporated in the Republic of South Africa) (Registration number
1997/002203/06) ISINNo: ZAE000016507 Share code: VLE
Directors: C D Stein* (Chairman), S D Gottschalk (CEO), D C Marais (Deputy CEO),
B E Goldie,C L Sack, G J Igesund, I M Groves*, N M Phosa * Non-executive
director
Date: 04/11/2002 04:19:00 PM Produced by the JSE SENS Department
