| Mon 24 Mar 2003, 7:56 | | Interim Results for the six months ended 31 Decemb |
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Putco Limited
(Incorporated in the Republic of South Africa)
(Registration number 1945/018672/06)
Share code:PTC ISIN:ZAE000005716
("Putco" or "the Company")
Interim Results for the six months ended 31 December 2002
Income statement
Six months ended Year ended
31 December 30 June
2002 2001 Increase 2002
Rm (unaudited) (unaudited) % (audited)
Revenue - bus operations 433,9 408,8 6,1 827,1
Cost of operating 398,1 378,2 5,3 759,5
Operating profit before
onerous contracts 35,8 30,6 17,0 67,6
Onerous contracts
reversal/(cost) 3,3 - (23,5)
Operating profit 39,1 30,6 27,8 44,1
Net finance costs 10,0 6,1 14,0
Profit before taxation 29,1 24,5 18,8 30,1
Taxation 9,7 8,8 10,7
Ordinary earnings 19,4 15,7 23,6 19,4
Shares in issue (weighted
average number) (millions) 26,4 26,4 26,4
Headline earnings
per share (cents) 77,6 59,8 29,8 84,8
Adjusted headline earnings
per share (cents) 68,9 59,8 15,2 147,0
Ordinary earnings
per share (cents) 73,4 59,4 23,6 73,5
Ordinary dividend
per share (cents) 30,0 20,0 50,0
Dividend cover (times) 2,4 3,0 1,5
Determination of
headline earnings
Ordinary earnings 19,4 15,7 19,4
Profit on disposal of assets
(other than buses) (0,7) (0,7) (0,6)
Provision for retrenchments 2,5 1,2 5,1
Deferred tax effect thereof (0,7) (0,4) (1,5)
Headline earnings 20,5 15,8 22,4
Provision for onerous
contracts (3,3) - 23,5
Deferred tax effect thereof 1,0 - (7,1)
Adjusted headline earnings 18,2 15,8 38,8
Notes:
1. Changes in accounting policies
The interim results have been prepared in accordance with South African
Statements of Generally Accepted Accounting Practice. The accounting policies
are consistent with those applied in the last annual report. The following
accounting policy was implemented after the previous interim reports were
distributed:
Post-retirement medical aid contributions
AC 116 (revised) - Employee benefits - which is effective for the Company
from 1 July 2001, requires Putco to recognise post-retirement medical aid
benefit liability. As at the previous interim period the obligation was being
actuarially determined and the related liability had not been recognised in the
accounts. The adoption of AC 116 (revised) has resulted in the Group restating
the comparative figures for six months to 31 December 2001. The change had the
effect of decreasing reported profit for the period by R2,2 million and
decreasing the opening balance of distributable reserves at 1 July 2001 by R50,2
million.
Balance sheet
31 December 30 June
2002 2001 2002
Rm (unaudited) (unaudited) (audited)
ASSETS
Non-current assets 310,9 236,2 268,4
Property, plant and equipment 305,3 236,1 259,3
Investments 3,0 4,7 5,1
Deferred taxation 2,6 (4,6) 4,0
Current assets 100,2 93,7 118,6
Inventory 59,1 48,4 56,2
Trade and other receivables 41,1 45,3 30,0
Cash on call, at bank and
on hand - - 32,4
Total assets 411,1 329,9 387,0
EQUITY AND LIABILITIES
Equity capital and reserves 105,9 95,9 94,4
Ordinary shareholders"
interest 105,9 95,9 94,4
Non-current liabilities 143,6 106,3 108,0
Interest bearing borrowings 71,6 32,6 35,7
Long-term provisions 72,0 73,7 72,3
Current liabilities 161,6 127,7 184,6
Trade and other payables 133,4 102,7 164,2
Short-term borrowings 12,8 6,1 8,2
Taxation 4,0 - 11,4
Net bank overdraft 11,4 18,9 0,8
Total equity and liabilities 411,1 329,9 387,0
CAPITAL EXPENDITURE
- incurred 57,0 48,8 85,6
- contracted for 37,9 1,3 46,8
authorised but not
contracted for 2,6 22,4 2,8
COMMITMENTS AND CONTINGENT
LIABILITIES
Contingent liabilities
- Recourse Agreement for
the purchase of buses by
joint venture partners 3,0 3,0 3,0
- Performance guarantees 2,6 4,9 5,1
- Pledge of cash on call
to secure
open ended guarantees 2,5 2,5 2,5
Bank borrowing facilities of R40 million were available to the Company at 31
December 2002
RATIOS
Net asset value per share
(cents) 401 363 357
Gearing ratio 1:0,9 1:1,0 1:0,5
Current asset ratio 1:1,6 1:0,6 1:1,6
Cash flow statement
Six months ended Year ended
31 December 30 June
2002 2001 2002
Rm (unaudited) (unaudited) (audited)
Cash inflow from
operating
activities (29,0) 35,6 117,1
Net cash generated from
operations 5,8 50,4 143,8
Investment income 1,0 - 1,3
Finance costs (12,2) (1,7) (4,8)
Taxation paid (15,7) (5,2) (10,0)
Dividends paid (7,9) (7,9) (13,2)
Cash outflow from investing
Activities (54,6) (48,3) (84,7)
Maintain operations (57,0) (48,8) (85,6)
Proceeds on disposal of plant,
Equipment 0,4 2,1 2,9
Decrease/(Increase) in
Investments 2,0 (1,6) (2,0)
Financing activities 40,6 38,5 43,9
Borrowings raised 40,6 38,5 43,9
Net cash (outflow)/inflow (43,0) 25,8 76,3
Net bank overdraft at
beginning of period 31,6 (44,7) (44,7)
Net bank overdraft at end
of period (11,4) (18,9) 31,6
Statement of changes in equity
Share Non-
capital and distributable Distributable
premium reserves reserves Total
Rm Rm Rm Rm
Half-year ended
31 December 2002
At 30 June 2002 10,9 22,9 60,6 94,4
Earnings per income statement 19,4 19,4
Dividend paid (7,9) (7,9)
At 31 December 2002 10,9 22,9 72,1 105,9
Half-year ended
31 December 2001
At 30 June 2001, as restated 10,9 8,6 53,9 73,4
Revaluation of properties 21,0 21,0
Deferred tax on revaluation (6,3) (6,3)
Revaluation reserve realised
through depreciation (0,2) 0,2 -
Earnings per income statement 15,7 15,7
Dividend paid (7,9) (7,9)
At 31 December 2001 as
restated 10,9 23,1 61,9 95,9
Commentary
GENERAL REVIEW
Our results for the first six months of this financial year are favourable.
Many of the Strategic Business Units (SBUs) have performed well due to continued
savings in expenditure and increased passenger growth in certain areas. Under
present trading conditions we expect the profitability of the Company to
continue for the second half of the financial year.
In order to keep our stakeholders informed we again highlight some of the
current important issues that may affect the ongoing performance of the
Company. Management is addressing these issues on an ongoing basis.
Black empowerment
Negotiations regarding the introduction of a substantial black empowerment
partner are at an advanced stage. A number of cautionary notices have appeared
in the media. Every effort is being made by all the parties to finalise the
transaction.
Our Joint Venture operations continue to operate successfully, including our
recent agreement in the Lekoa/Vaal area with our Valuader partners (Ipelegeng)
and Alton Coaches.
We continue to pursue our sub-contracting initiatives to assist SMMEs to
enter the mainstream transport industry in a viable and sustainable manner.
Tendered/Negotiated contracts
This matter is still unresolved. Towards the end of 2002 there was a strong
indication from Government that their preference was leaning towards negotiated
contracts. However, despite a number of meetings and follow-ups, we have not
received any official notification of the specific direction that the Gauteng
Department of Transport will decide upon. This continues to affect decisions
regarding asset replacement and forward planning.
PASSENGER LEVELS and FINANCIAL
RESULTS
Passenger levels are marginally down by 0,5% as compared with the first six
months of last year, from 38,4 million to 38,2 million. The bus fleet at
31 December 2002 has decreased from 1 526 buses to 1 477 buses, down by 3,2%.
Revenue increased from R408,8 million to R433,9 million for the six months, an
increase of 6,1%. The cost of operating increased from R378,2 million to R398,1
million, an increase of 5,3%. Operating profit before interest and tax increased
from R30,6 million to R39,1 million, an increase of 27,8%.
OTHER RESULTS
Soweto special payment
The Department of Transport"s agreement to partly assist with the losses being
incurred in our Soweto operation because of the tender delay has been extended
to March 2003.
Change in gearing policy
As previously communicated, the purchase of new buses is no longer being
funded out of short-term funding, mainly at overdraft rates. Instead, it is
being funded out of long-term facilities at more attractive rates.
Cash flow
The negative cash flow reflected for the period is due to a timing problem
and of a temporary nature. The reported overdraft is partly due to the early
payment of some major creditors in December, so as to take advantage of special
discounts offered by them, as well as to a late payment by the Gauteng
Government, which was received early in January 2003. The Company is currently
operating in a positive cash position.
OPERATING FLEET
The bus programme for the current financial year ending 30 June 2003 will
cost approximately R103,3 million (2002: R74,4million).
FUTURE PROSPECTS
Introduction of new buses in period under review
We introduced a further 66 new buses into our Tswane/Mpumalanga (Pretoria) fleet
in the first six months of this financial year. This is in line with our plan to
introduce new improved technology buses into our fleet on an ongoing basis and
to cater for future tender requirements and planned growth. The bus bodies
were built at our Dubigeon factory, in Brits, in accordance with SABS standards.
Bus plan
We will introduce a further 16 new buses into our fleet during the first half
of 2003. In addition, we will refurbish/rebuild approximately 60 of our existing
fleet during the same period. We are continuing with the project to replace
mobile ticket-selling buses and will introduce a further 10 units in this
financial year, to improve these facilities for our passengers.
DIVIDEND DECLARATION
Notice is hereby given that an interim dividend of 20 cents (31 December
2001: 20 cents) per share has been declared in respect of the six months ended
31 December 2002, payable on 22 April 2003. The last day to trade to participate
in the dividend will be Thursday, 10 April 2003 and the shares will commence
trading ex-dividend from the start of business on Friday, 11 April 2003 and the
record date will be Thursday, 17 April 2003.
Shareholders may not dematerialise or rematerialise their shares between
Friday, 11 April 2003 and Thursday, 17 April 2003, both dates inclusive.
A Carleo (Chairman)
E M R L Oldham (Chief Executive Officer)
N A Khena (Managing Director)
24 March 2003
Registered office Transfer secretaries
5 Mimosa Way Computershare Investor
Mimosa Park Services Limited
Gallo Manor, Sandton, 2194 70 Marshall Street
(Private Bag 3, Johannesburg, 2001
Wendywood, 2144)
