| Thu 5 Dec 2002, 10:20 | | Dorbyl Limited - Interim Group Results For The Six |
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DORBYL LIMITED - INTERIM GROUP RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER
2002
Dorbyl Limited
(Incorporated in the Republic of South Africa)
(Registration number 1911/001510/06)
Share code: DLV ISIN: ZAE000002184
INTERIM GROUP RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2002
Group income statement
Unaudited Unaudited Audited
6 months 6 months 12 months
to to to
September September % March
2002 2001 Change 2002
R000 R000 R000
Revenue 1 768 814 2 239 295 (21) 4 410 682
- continuing operations 1 324 390 954 928 39 2 029 497
- discontinued operations 444 424 1 284 367 2 381 185
Operating income 103 437 73 568 41 170 024
- continuing operations 76 182 27 970 172 79 098
- discontinued operations 27 255 45 598 90 926
Finance income/(cost) 8 723 (13 169) (22 848)
Income - associates 7 436 15 301 27 014
Profit before exceptional items 119 596 75 700 58 174 190
Exceptional items 125 974 (4 712) (33 307)
Profit before taxation 245 570 70 988 246 140 883
Taxation (36 302) (17 096) (36 577)
Profit after taxation 209 268 53 892 288 104 306
Minority interest (8 265) (6 665) (16 950)
Preference dividends (106) (106) (212)
Earnings attributable to ordinary
shareholders 200 897 47 121 326 87 144
Earnings per share (cents)
Earnings per share 608,0 138,6 339 258,9
Headline earnings per share 234,3 148,8 57 334,2
Dividends per share (cents) 108 70 54 140
Final - year ended 31 March 2002 (2001) 80 70 70
Interim - period ended 30 September 2001 70
Special income distribution 2 August 2002 28
Dividend cover - headline earnings/ordinary
dividends (times) 2,2 2,1 2,4
Dividends declared per share (cents) 50 70 80
Share capital repayment 2 August 2002
per share (cents) 472
Exceptional items before taxation 125 974 (4 712) (33 307)
Profit/(loss) on the disposal
and discontinuation of businesses 134 156 (4 464) (25 009)
Translation reserve released
on disposal of foreign operations 2 698 - (1 733)
Arising on repurchase and
cancellation by Dorbyl Limited
of own shares (13 750) - -
Impairment of assets (1 922) - (6 938)
Profit/(loss) on disposal of
fixed property 4 792 (248) 373
Tax (charge)/relief attributable
to exceptional items (2 724) 334 7 158
Headline earnings reconciliation
Earnings per the income statement 200 897 47 121 87 144
Adjusted for: (123 486) 3 437 25 354
Exceptional items (125 974) 4 712 33 307
Amortisation of goodwill - 249 416
Surplus on sale of other fixed assets ( 341) (1 700) (1 784)
(126 315) 3 261 31 939
Tax charge/(relief) attributable
to adjustments 2 826 176 (6 623)
Attributable to minority shareholders 3 - 38
Headline earnings 77 411 50 558 112 498
Diluted earnings per share
Dilution shares (000) 1 694 2 136 1 956
Earnings adjustment 1 018 1 315 2 209
Diluted earnings per share (cents) 581,3 134,1 250,9
Diluted headline earnings
per share (cents) 225,8 143,6 322,0
Operating income to net operating
assets (%) 38 17 21
Earnings to ordinary
shareholders` funds (%) 47 11 10
Additional financial information
Depreciation 34 749 36 551 76 548
Finance income/(cost) 8 723 (13 169) (22 848)
Interest received 37 233 4 721 12 094
Interest paid (28 510) (17 890) (34 942)
Group abridged balance sheet
Unaudited Unaudited Audited
September September March
2002 2001 2002
R000 R000 R000
EQUITY AND LIABILITIES
Capital and reserves 897 300 912 108 914 709
Ordinary shareholders` funds 856 829 834 913 831 423
Preference share capital 3 980 3 980 3 980
Minority interest 36 491 73 215 79 306
Non-current liabilities 341 224 314 768 363 525
Deferred tax liabilities 5 157 14 504 4 973
Retirement benefit obligation 45 439 50 500 45 439
Long term borrowings 290 628 249 764 313 113
Current liabilities 457 476 838 087 761 174
Trade and other payables 457 476 749 139 697 477
Short term borrowings - 88 948 63 697
Total equity and liabilities 1 696 000 2 064 963 2 039 408
ASSETS
Non-current assets 435 166 520 423 523 148
Fixed and intangible assets 391 478 420 811 412 017
Investments and advances - associates 554 41 372 49 871
Deferred tax assets 37 755 51 284 52 034
Other non-interest bearing advances 5 379 6 956 9 226
Current assets 1 260 834 1 544 540 1 516 260
Inventories 247 704 540 966 482 920
Trade and other receivables 363 608 630 021 563 839
Cash and cash equivalents 649 522 373 553 469 501
Total assets 1 696 000 2 064 963 2 039 408
Additional financial information
Net cash 358 894 34 841 92 691
Cash at bank, on deposit and on hand 304 697 321 558 288 553
Interest bearing short-term advances 344 825 51 995 180 948
Cash and cash equivalents 649 522 373 553 469 501
Long term borrowings (290 628) (249 764) (313 113)
Short term borrowings - (88 948) (63 697)
Net operating assets 551 247 890 987 820 396
Total assets 1 696 000 2 064 963 2 039 408
Trade and other payables (457 476) (749 139) (697 477)
Deferred tax assets (37 755) (51 284) (52 034)
Cash and cash equivalents (649 522) (373 553) (469 501)
Capital commitments authorised 67 398 26 580 10 877
Contracted for 29 126 23 903 9 653
Not contracted for 38 272 2 677 1 224
Contingent liabilities 14 552 45 464 84 445
Debtors discounted with recourse 6 487 4 781 5 178
Operating lease guarantees 6 756 27 562 62 110
Other 1 309 13 121 17 157
Repurchase commitments of debtors
discounted with recourse, where the
underlying securities exceed the
outstanding debt, amounted to
R29 million at 30 September 2002
(31 March 2002 - R36 million).
Operating lease commitments 130 981 463 747 250 216
Investments and advances
to associates - at valuation 554 88 673 124 065
Net asset value per share (cents) 2 585 2 456 2 520
Capital expenditure
Replacement 20 224 24 049 42 196
Expansion 71 116 27 296 57 319
Ordinary shares (000)
Issued 33 145 33 994 32 998
Weighted average 33 042 33 986 33 664
Group cash flow statement
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
September September March
2002 2001 2002
R000 R000 R000
Net cash inflow from
operating activities 105 763 118 021 110 404
Operating cash flow 113 490 105 155 212 525
Movement in working capital 40 588 63 392 (1 198)
Finance income/(cost) 8 723 (13 169) (22 848)
Taxation paid (21 248) (13 459) (30 273)
Dividends paid (35 790) (23 898) (47 802)
Net cash effect from
investing activities 291 517 (14 963) 120 868
Capital expenditure (91 340) (51 345) (99 515)
Disposals of fixed assets 10 293 8 370 21 450
Disposals and acquisitions
of businesses 371 291 25 506 197 722
Decrease in advances 1 273 2 506 1 211
Net cash effect from financing
activities (207 799) (4 004) (59 738)
Decrease in minority interest (3 815) (2 485) (6 703)
Net repayment of long/short term
borrowings (63 434) (1 755) (34 791)
(Decrease)/increase in stated capital (140 550) 236 (18 244)
Net cash inflow 189 481 99 054 171 534
Foreign currency translation effect (9 460) 16 403 39 871
Increase in cash and cash equivalents 180 021 115 457 211 405
Cash and cash equivalents
at beginning of period 469 501 258 096 258 096
Cash and cash equivalents
at end of period 649 522 373 553 469 501
Statement of changes in equity
Unaudited Unaudited Audited
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
September September March
2002 2001 2002
R000 R000 R000
Balance at beginning of period 831 423 804 198 804 198
Movement in translation reserves 743 7 152 5 915
Attributable earnings for the period 200 897 47 121 87 144
Dividends (35 684) (23 794) (47 590)
Share capital repaid/purchased
by subsidiary (142 726) - (18 486)
Increase in stated capital 2 176 236 242
Balance at end of period 856 829 834 913 831 423
Segmental analysis
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
September September March
2002 2001 2002
R000 R000 R000
Revenue
Business Segment
Automotive Manufacturing 555 519 431 742 911 451
Midas 175 197 465 399 985 592
Metals Trading - 473 004 747 103
Building Products 778 720 586 971 1 216 519
Engineering and Water Products 269 227 316 892 607 711
Corporate and consolidation (9 849) (34 713) (57 694)
Total revenue 1 768 814 2 239 295 4 410 682
Geographical Location
South African operations - local 840 579 1 597 268 2 974 198
South African operations - export 261 617 155 914 396 717
International operations 666 618 486 113 1 039 767
Total revenue 1 768 814 2 239 295 4 410 682
Operating income
Business Segment
Automotive Manufacturing 32 933 (2 797) 18 787
Midas 4 957 10 835 29 684
Metals Trading - 17 068 23 000
Building Products 61 503 31 378 63 522
Engineering and Water Products 22 298 19 918 36 545
Corporate and consolidation (18 254) (2 834) (1 514)
Total operating income 103 437 73 568 170 024
Geographical Location
South African operations
(including exports) 54 208 53 327 126 998
International operations 49 229 20 241 43 026
Total operating income 103 437 73 568 170 024
Accounting Policies
The group interim financial statements have been prepared in accordance with
AC127 - Interim Financial Reporting. The principal accounting as set out in the
Group`s 2002 annual report have been consistently applied in the period under
review. September 2001 comparatives have been adjusted for the effects of
accounting policy changes adopted at March 2002. The effects on attributable
earnings for the period are not material.
COMMENTARY
Basis of Preparation
The accounts have been prepared on the basis that the Engineering Products
and Services division ("Dorbyl Engineering") had been disposed of ("the
disposal"). At the date of this announcement, the disposal is still subject to
the approval by the Competition Authorities. The Board is of the opinion that
the disposal will in all likelihood be approved by the Competition Authorities.
Results
The Group has disposed of a number of significant divisions (namely Dorbyl
Engineering, Midas, Metals Trading and Dorbyl Water) ("the disposals") during
the course of the past 12 months. As a result, turnover for the six-month period
to September 2002 has declined by 21% compared to the same period last year. The
remaining divisions have, however, experienced increased activity and the
turnover of continuing operations increased by 39%.
Despite the reduction in the size of the Group, operating profits have
improved, mainly as a result of better results reported by Alpine in the USA and
the automotive division locally. Interest generated locally on the cash realised
from the disposal of the abovementioned divisions exceeded the interest charge
on the offshore Alpine loan, resulting in net interest received of R9 million
compared to R13 million paid in the corresponding period last year.
As a consequence of the above, the half year headline earnings increased by
57% to 234 cents per share. Attributable earnings per share improved by a more
substantial 339%, due to the significant profit on the disposal of Dorbyl
Engineering.
Disposals
The disposal of the Dorbyl Engineering division for a consideration of R271
million has been finalised, subject to the approval of the disposal by the
Competition Authorities. The Group also realised its 74,4% interest in Midas and
its 40% interest in Johnson Controls during this six-month period.
Cash on Hand/Borrowings
The cash position can be analysed as follows:
September 2002 March 2002
Alpine net offshore borrowings $19,8 million $24,3 million
Alpine (converted to rand) R208,8 million R274,8 million
Less : Net cash held by
South African operations (R567,7 million) (R367,5 million)
Net cash (R358,9 million) (R92,7 million)
In August, the Group returned cash of R165 million to shareholders. Of the
net cash surplus, an amount of R160 million has been pledged to ABSA Bank
Limited as security for the US$28 million loan that ABSA UK has advanced to
Alpine USA.
Divisional Review
Automotive Manufacturing
This segment of the Group consists of Dorbyl Automotive Technologies and
Dorbyl Transport Products.
The results of Dorbyl Automotive Technologies were much improved on those for
the corresponding six months of the previous year as that period had been
adversely affected by strikes in the industry. Export activity continues to
increase and capital expenditure of R58,4 million has recently been approved to
facilitate that growth further.
Building Products
The lower interest rates in the USA helped to maintain activity in the
housing market and Alpine performed well, improving profitability and reducing
borrowings. The local Global Roofing Solutions operations also achieved improved
profitability on increased turnover following success in marketing product into
Africa.
Prospects
Whilst the Group has benefited from a healthy order book during the past six
months, it is difficult to predict whether that situation will continue,
especially in the USA where recovery prospects are still in the balance. In
addition, the disposal of Dorbyl Engineering and Midas, and the distribution of
cash to shareholders have reduced the Group`s earnings potential. These factors,
together with the fact that Dorbyl`s second half earnings are traditionally
lower than the first half due to the Christmas shut down and the American
winter, mean that the current six month`s level of profitability will not be
sustained in the second half year. It should also be noted that compared to the
final six months of last year, where the improved export proceeds were
favourably impacted by the sharp depreciation of the Rand during that period,
this exceptional benefit is not expected to recur.
The intended special dividend, whilst still subject to the approval by the
Competition Authorities of the disposal of Dorbyl Engineering, will incur an
abnormal STC charge. This will further depress earnings in the second half.
Accordingly headline earnings for the full year will be below those of the
previous year despite the operational over-achievement in the first six months.
Dividends
Special Dividend
Subject to the sale of Dorbyl Engineering being approved by the Competition
Authorities, the Group will have funds in excess of its future requirements and
accordingly intends to declare a special dividend of R5,00 per ordinary share.
Together with the distribution of share capital of R4,72 per share and a special
dividend of 28 cents per share declared on 2 August 2002, a total of R10,00 per
share will have been returned to shareholders.
Interim Dividend No. 105
In view of the disposals and resultant loss of future earnings and the return
of shareholders` funds of R330 million, it is considered prudent to reduce the
interim dividend. Accordingly, a dividend of 50 cents per ordinary share has
been declared ("the interim dividend").
Salient Dates
The last date to trade "cum" the interim dividend in order to participate in
the interim dividend mentioned above will be 3 January 2003. The shares of
Dorbyl will commence trading "ex" the interim dividend from the commencement of
business on Monday 6 January 2003 and the record date will be Friday, 10 January
2003. The interim dividend is payable on or about Monday 13 January 2003.
No dematerialisation or rematerialisation of share certificates may take place
between Friday 3 January 2003 and Friday 10 January 2003, both days inclusive.
On behalf of the board
N Phillips (Chairman)
W W Cooper (Group Chief Executive)
4 December 2002
Directors: N Phillips (Chairman)*, W W Cooper (Group Chief Executive),
W E Bhrmann*, R C Duff, J B Magwaza*, D Orwin, E J Vorster,
T van Wyk*
*Non-executive
Transfer secretaries: Company Secretary and
Registered office:
Computershare Investor Services Limited B D Bhikha,
70 Marshall Street, Johannesburg 2001 Dorbyl Ridge
(P O Box 1053, Johannesburg 2000) 16 Jan Smuts Avenue
Parktown, 2193
Date: 05/12/2002 07:17:23 AM Produced by the JSE SENS Department
