| Mon 3 Mar 2003, 14:44 | | Seardel Investment Corporation Limited - Group Int |
|
Seardel Investment Corporation Limited - Group Interim Report for the six months
ended 31 December 2002
Seardel Investment Corporation Limited
(Incorporated in the Republic of South Africa)
Registration No. 1968/011249/06
Share code: SER SRN
ISIN: ZAE000029815 ZAE000030144
Financial Highlights
%Change
Revenue R2187,4 million + 22,4
Profit from operations R104,5 million + 33,1
Income before taxation and
negative goodwill R45,3 million + 106,3
Income before taxation R62,9 million + 57,6
Retained income R53,5 million + 52,6
Earnings per share 50,0 cents + 52,6
Headline earnings per share 33,6 cents + 109,7
Capital and reserves including
negative goodwill R1047,4 million + 5,8
The unaudited consolidated financial statements of the group for the six months
ended 31 December 2002 with comparative figures for the corresponding period
last year, together with the audited financial statements for the financial year
ended 30 June 2002 are set out below.
Income Statement
SIX MONTHS ENDED 1 DECEMBE Year Ended 30 JUNE
2002 2001 % Change 2002
Rand thousands (unaudited) (unaudited) (audited)
Revenue R2 187 397 R1 786 435 +22,4 R3 564 173
Profit from operations 104 463 78 514 +33,1 218 949
Amortisation of
negative goodwill 17 568 17 935 35 135
Income before
finance charges 122 031 96 449 +26,5 254 084
Net finance charges (59 164) (56 560) (111 908)
Income before taxation 62 867 39 889 +57,6 142 176
Taxation (9 345) (4 807) (24 020)
Income after
taxation - retained R53 522 R35 082 +52,6 R118 156
Statistics Per Share
Weighted average
number of shares
in issue (000) 107 134 107 134 107 134
Weighted average
number of diluted
shares in issue (000) * 120 324 127 428 110 076
Earnings per
share - cents 50,0 32,7 +52,6 110,3c
Headline earnings
per share - cents 33,6 16,0 +109,7 75,9c
Diluted earnings
per share - cents * 44,5 27,5 +61,8 107,3c
Diluted headline
earnings per
share - cents * 29,9 13,5 +121,3 73,9c
Distribution-annual - - - 15,0c
Distribution
cover - headline earnings - - -5,1
See note 1
Balance Sheet
SIX MONTHS ENDED 31 December Year Ended 30 JUNE
2002 2001 2002
Rand thousands (unaudited) (unaudited) (audited)
ASSETS
Non-current assets 573 623 567 497 543 122
Fixed assets 846 142 861 240 842 839
Goodwill (351 362) (394 576) (368 930)
Investments 40 421 40 682 40 421
Long-term receivables 19 173 31 550 9 543
Deferred taxation 19 249 28 601 19 249
Current assets 1 701 763 1 466 382 1 657 667
Inventory 737 916 674 468 745 691
Accounts receivable 836 426 707 886 790 740
Cash and cash equivalents 127 421 84 028 121 236
TOTAL ASSETS R2 275 386 R2 033 879 R2 200 789
EQUITY AND LIABILITIES
Capital and reserves 696 011 595 687 658 559
Share capital 6 974 6 974 6 974
Reserves 688 923 588 599 651 471
Shareholders` interest 695 897 595 573 658 445
Outside shareholders` interest 114 114 114
Non-current liabilities 595 726 665 919 619 356
Interest-bearing liabilities 448 510 538 218 477 657
Deferred liabilities 147 216 127 701 141 699
Current liabilities 983 649 772 273 922 874
Interest-bearing loans 177 319 113 686 155 143
Accounts payable 698 517 529 574 730 427
Bank overdrafts 107 700 128 809 37 184
Distribution to shareholders 113 204 120
TOTAL EQUITY AND LIABILITIES R2 275 386 R2 033 879 R2 200 789
Tangible net asset value R1 047 259 R990 149 R1 027 375
Tangible net asset value
per share - cents 978 924 959
Ratios
Profitability
Profit from operations as
percentage of revenue 4,8% 4,4% 6,1%
Income before taxation as
percentage of revenue 2,9% 2,2% 4,0%
Income after taxation as
percentage of revenue 2,4% 2,0% 3,3%
Return on total tangible
assets excluding cash 9,9% 7,0% 9,0%
Return on shareholders` interest 8,9% 5,6% 8,1%
Leverage
Ratio of debt to capital
and reserves 125% 124% 125%
Ratio of borrowings to capital
and reserves 58% 70% 53%
Liquidity
Current ratio 1,7 1,9 1,8
Net finance charges cover 2,1 1,7 2,3
Consolidated Abridged Cash Flow
SIX MONTHS ENDED 31 DECEMBER Year Ended 30
June
2002 2001 2002
Rand thousands (unaudited) (unaudited) (audited)
Internal cash flow 84 593 44 892 304 611
Interest and taxation paid (59 348) (81 914) (137 074)
Transactions with shareholders (16 077) (4 821) (4 905)
Cash retained (utilised)
from operating activities 9 168 (41 843) 162 632
Investment and financing activities (66 528) (35 043) (91 582)
(Increase)decrease
in net borrowings (R57 360) (R76 886) R71 050
Changes in Equity Statement
FOR THE 6 months ended 31 DECEMBER 2002
Share Non- Retained Total
Capital Distributable Earnings
Reserves
Rand thousands
Balance 31 December 2001 6 974 83 568 505 031 595 573
Change in accounting policy (18 697) (18 697)
Net gains and losses
not recognised in the
income statement (49 377) 47 872 (1 505)
Revaluation of interest in
associated companies (47 872) 47 872 -
Foreign currency translation
reserve (1 505) - (1 505)
Net income for the period 83 074 83 074
Balance 30 June 2002 6 974 34 191 617 280 658 445
Net income for the period 53 522 53 522
Distribution (16 070) (16 070)
Balance 31 December 2002 R6 974 R34 191 R654 732 R695 897
Composition of
Non-Distributable Reserves 2002 2001
Foreign currency translation reserve - 1 505
Capital redemption reserve fund 440 440
Surplus on disposal of
subsidiary and associated companies 664 664
Surplus on revaluation
of land and buildings 33 087 33 087
Revaluation of interest
in associated companies - 47 872
R34 191 R83 568
Segmented analysis
Office automation & Nonwoven
Segment Textiles Apparel consumer electronics Toys textiles
2002 2001 2002 2001 2002 2001 2002 2001 2002 2001
Revenue % 45 43 42 43 6 7 4 4 3 3
Operating
income % 63 66 19 19 9 10 5 5 4 -
Total
assets % 58 58 30 30 7 7 2 2 3 3
COMMENT ON RESULTS
It is pleasing to report a substantial increase in revenue and pre-tax profit in
all five business areas of operation as detailed in the segmented analysis
above. Revenue increased to R2187,4 million from R1786,4 million, an increase of
22,4%. Pre-tax profit, prior to the amortisation of negative goodwill, increased
to R45,3 million (R22 million last year), an increase of 106,3%. After the
amortisation of negative goodwill pre-tax income increased to R62,9 million
(R39,9 million last year), an increase of 57,6%.
Income after taxation increased to R53,5 million (R35,1 million last year), an
increase of 52,6%.
Headline earnings per share amounted to 33,6 cents, an increase of 109,7% from
last year`s level of 16 cents.
The number of shares in issue at 31 December 2002 remained unchanged at 107,1
million. On 3 January 2003 the consortium exercised its option and a further
26,8 million
N ordinary shares were issued and listed on the JSE Securities Exchange. The
amount of R52,7 million which was received in respect thereof was utilised to
reduce borrowings. Subsequent to the above the total issued share capital
amounts to 133,917,855, consisting of 27,097,743 ordinary shares of 25 cents
each and 106,820,112 N ordinary shares of 0,25 cents each.
Tangible net asset value is 978 cents per share (924 cents last year).
Exports have grown dramatically, totalling R254 million for the period under
review.
Of this amount, apparel exports amounted to R196 million (R120 million last
year), an increase of 63%. This represents 21% of apparel turnover, compared to
15,2% last year. Textile exports increased to R58 million (R40 million last
year), an increase of 45%.
The five-year Duty Credit Certificate scheme for exports is in place until March
2005, being well managed by the Board of Tariffs and Trade.
The second annual meeting of the U S Sub-Saharan Africa Trade and Economic
Co-operation Forum (AGOA Forum) was held in Mauritius during the week of
13-17 January 2003. President Bush addressed the Forum by videolink. During his
remarks the President declared his support for extending AGOA beyond its current
expiration date of 30 September 2008.
Commentary
Retailers reported buoyant trading conditions during the period under review.
Hopefully this augurs well for trading conditions in 2003, as retailers re-
stock. We foresee relatively stable pricing conditions due to the strengthening
of the Rand.
The Department of Customs continues to show strength in combating illegal
imports and under-invoicing.
The Department of Trade and Industry needs to make more progress in implementing
Country of Origin labelling, which would be of major importance in combating
illegal imports and helping the consumer identify local product for the Proudly
South African campaign.
OUTLOOK TO JUNE 2003
The veil of uncertainty surrounding the anticipated war against Iraq is
impacting on consumer and investment behaviour in international markets.
The recent dramatic appreciation in the Rand against the currencies of South
Africa`s major trading partners is well documented. The impact thereof, together
with the current high level of interest rates, will become apparent during the
next six months trading period and may result in local volumes decreasing
because of increased imports. It is anticipated however that export activity to
the USA and EuroLand economies will, to a certain extent, make up for lower
local production levels.
DISTRIBUTION ANNOUNCEMENT
In keeping with past practice, a single distribution will be considered at the
end of the financial year.
NOTES
1. Accounting policies
The unaudited consolidated financial statements of the group have been prepared
on the historical cost basis, except for land and buildings which are
periodically revalued, using the accounting policies detailed in the annual
report for the year ended 30 June 2002 and in terms of AC127. Diluted earnings
are provided for in terms of AC104.
2. Capital expenditure and commitments
Net capital expenditure during the period under review amounted to R56,9 million
(2001: R34 million). Commitments in respect of contracted capital expenditure as
at 31 December 2002 amounted to approximately R75,0 million (2001: R47,2
million). These commitments will be financed from internal cash resources.
3. Contingent liabilities
There are contingent liabilities in respect of guarantees furnished by the
company and/or its subsidiaries for mortgage bonds, surety bonds, housing loans,
bank facilities, leases and normal business commitments of subsidiary companies.
Signed for and on behalf of the board in Cape Town
DR A SEARLL D.B.A. A D JACOBSON C.A.(S.A.)
Chairman Financial Director
3 MARCH 2003
The company`s shares are listed under the Cyclical Consumer Goods - Household
Goods and Textiles Sector of the JSE Securities Exchange, South Africa.
Directors A Searll (Chairman), K A G Blumberg**, T Eboka**, A D Jacobson, N N
Lazarus**, M C Ramaphosa**, W Simeoni. (** indicates non-executive)
Secretary and Registered office L A Clohessy, 2nd Floor, Seardel House, Alphen
Park, Constantia Main Road, Constantia 7806, Cape Town
Transfer secretaries Computershare, 70 Marshall Street,
Johannesburg 2001 (P O Box 1053 Johannesburg 2000)
Date: 03/03/2003 01:19:00 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
