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ELB GROUP LIMITED (ELB)
(Registration number 1930/002553/06)
Share codes: ELR & ELRP
ISIN: ZAE000035101 & ZAE000035333
INTERIM REPORT AND DIVIDEND ANNOUNCEMENT
for the six months ended 31 December 2002
GROUP INCOME STATEMENT
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31/12/02 31/12/01 30/06/02
R000 R000 R000
Sales revenue 246 026 2 201 433 2 382 126
Net operating costs
excluding depreciation
and amortisation (244 003) (2 159 431) (2 336 846)
Operating profit before
depreciation, amortisation
and abnormal items 2 023 42 002 45 280
Depreciation and amortisation (7 517) (29 008) (35 486)
Operating (loss)/profit
before abnormal items (5 494) 12 994 9 794
Abnormal items: income - 84 288 64 448
(Loss)/profit from operations (5 494) 97 282 74 242
Net treasury (expense)/income (14 171) 70 470 46 346
Income from associates - 1 039 1 039
(Loss)/profit before tax (19 665) 168 791 121 627
Income tax credit/(expense) 22 399 (34 838) (50 811)
Profit after tax 2 734 133 953 70 816
Minority interest 6 631 (6 365) 9 156
Net profit for the period 9 365 127 588 79 972
Weighted average number of
shares on which basic earnings
per share are based (000"s) 30 760 30 257 30 322
Headline earnings per ordinary
share (cents) - basic 32,0 156,0 62,6
- fully diluted 32,0 153,7 61,7
Earnings per ordinary
share (cents) - basic 30,4 421,7 263,7
- fully diluted 30,4 415,5 260,1
Dividends per ordinary share (cents) 10,0 30,0 45,0
ABNORMAL ITEMS
Surplus on disposal of interest in
Bateman Project Holdings Limited
(Batepro) - 83 836 83 793
Impairment of interest in
Safbin Systems (Pty) Limited - - (20 867)
Other - 452 1 522
Net abnormal items: income - 84 288 64 448
RECONCILIATION OF HEADLINE EARNINGS
Net profit for the period as above 9 365 127 588 79 972
Deduct: Headline earnings
adjustments as below: (480) 80 380 60 994
- capital items after tax - 80 266 62 744
- (deficit)/surplus after tax on
disposal of plant and equipment (272) 131 (3 640)
- goodwill amortisation (271) - -
- minority interest in headline
earnings adjustments 63 (17) 1 890
Headline earnings 9 845 47 208 18 978
Note
Income tax credit/(expense)
includes a reversal of deferred
tax accrued on foreign reserves
amounting to 28 064 - -
GROUP BALANCE SHEET
Unaudited Unaudited Audited
31/12/02 31/12/01 30/06/02
R000 R000 R000
ASSETS
Non current assets 85 119 112 435 79 567
Property, plant and equipment 60 973 90 826 66 475
Intangible assets 5 681 326 244
Non current debtors 5 607 4 386 6 259
Deferred tax assets 12 858 16 897 6 589
Current assets 321 483 489 605 328 657
Inventories 94 171 83 776 85 976
Debtors and prepayments 41 153 220 660 69 958
Cash and cash equivalents 186 159 185 169 172 723
Total assets 406 602 602 040 408 224
EQUITY AND LIABILITIES
Capital and reserves 169 734 402 881 164 983
Preference shares 8 8 8
Minority interest 1 204 21 516 6 462
Minority long term loans
to subsidiary 49 148 48 622 53 748
Non current liabilities 1 421 25 517 19 047
Interest bearing liabilities 1 421 360 1 197
Deferred tax liabilities - 25 157 17 850
Current liabilities 185 087 103 496 163 976
Creditors - non interest bearing 115 856 64 086 104 984
- interest bearing 47 538 39 103 40 250
Bank and other short term
borrowings 21 693 307 18 742
Total equity and liabilities 406 602 602 040 408 224
GROUP CASH FLOW STATEMENT
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31/12/02 31/12/01 30/06/02
R000 R000 R000
Cash inflow from operating
activities before
dividends paid 21 913 703 366 686 010
Dividends paid (4 737) (10 020) (206 329)
Cash inflow from operating
activities 17 176 693 346 479 681
Cash (outflow)/inflow from
investment activities (7 567) (35 322) 140 657
Cash inflow from financing
activities 876 29 211 36 016
Increase in net cash and
cash equivalents 10 485 687 235 656 354
Net cash and cash equivalents
at the beginning of the period 153 981 839 354 839 354
Net cash of Batepro at disposal - (1 341 764) (1 341 764)
Proportionate share of cash
borrowing in joint venture
on disposal - 37 37
Net cash and cash equivalents
at the end of the period 164 466 184 862 153 981
SEGMENT ANALYSIS
Six months Six months Year
ended ended ended
31/12/02 31/12/01 30/06/02
R000 R000 R000
Sales revenue
Continuing operations
ELB Equipment 173 967 98 633 220 605
ELB McWade 34 123 28 533 56 806
ELB Timber 37 884 24 323 54 270
ELB Timber Products 26 504 10 931 26 861
Safbin Systems (Safbin) 11 380 13 392 27 409
ELB Treasury 52 - 338
Total continuing operations 246 026 151 489 332 019
Discontinued operations - 2 049 944 2 050 107
Total 246 026 2 201 433 2 382 126
Headline earnings - profit/(loss)
Continuing operations
ELB Equipment 8 307 2 638 9 214
ELB McWade 2 934 2 691 5 250
ELB Timber (5 847) (7 031) (20 161)
ELB Timber Products 2 116 (77) (931)
Safbin (7 963) (6 954) (19 230)
ELB Treasury 4 451 38 491 30 602
Total continuing operations 9 845 36 789 24 905
Discontinued operations - 10 419 (5 927)
Headline earnings for the period 9 845 47 208 18 978
Items excluded from headline earnings
Continuing operations (480) 82 (22 649)
Discontinued operations - 80 298 83 643
Net profit for the period 9 365 127 588 79 972
GROUP STATEMENT OF CHANGES IN CAPITAL AND RESERVES
Unaudited Unaudited Audited
Total Total Total
31/12/02 31/12/01 30/06/02
R000 R000 R000
Balance at the beginning
of the period 164 983 293 552 293 552
Movement in issued capital
Shares issued under the
share incentive scheme - 82 2 721
Shares repurchased in terms of
the share repurchase programme - (366) (690)
Movement in accumulated profit
Net profit for the period 9 365 127 588 79 972
Premium on redemption of
preference shares - (7) (7)
Minority equity adjustments - (7 976) (6 947)
Ordinary dividends (4 614) (9 992) (19 058)
Special dividend - - (184 560)
Balance at the end of the period 169 734 402 881 164 983
DECLARATION OF DIVIDENDS
PREFERENCE DIVIDEND NO 104
Notice is hereby given that the directors of ELB Group Limited ("ELB") have
declared a preference dividend for the half year ended 31 December 2002, at the
rate of 6% per annum on the 6% fixed cumulative redeemable preference shares of
R2 each equivalent to 6 cents per share. The last day to trade "cum" the
dividend will be Thursday, 10 April 2003. The preference shares will commence
trading "ex" the dividend from the commencement of business on Friday, 11 April
2003, and the record date will be Thursday, 17 April 2003. Payment will be made
on Tuesday, 22 April 2003. Preference share certificates may not be
dematerialised or rematerialised from Friday, 11 April 2003 until Thursday, 17
April 2003, both dates inclusive.
ORDINARY DIVIDEND NO 110
The directors of ELB Group Limited ("ELB") have declared a dividend, no 110 of
10 cents per share, being the interim dividend for the half year ended 31
December 2002. The last day to trade "cum" the dividend will be Thursday, 10
April 2003. The ordinary shares of ELB will commence trading "ex" the dividend
from the commencement of business on Friday, 11 April 2003 and the record date
will be Thursday, 17 April 2003. Payment will be made on Tuesday, 22 April
2003. Ordinary share certificates may not be dematerialised or rematerialised
from Friday, 11 April 2003 until Thursday, 17 April 2003, both dates inclusive.
By order of the Board
DG Jones
Secretary
Boksburg
26 March 2003
COMMENTS
RESULTS
ELB Equipment enjoyed a significant improvement in turnover and after tax profit
for the period.
ELB McWade also had a good six months showing a small increase in profitability
after minority interest. During the reporting period a manufacturing operation
was purchased from CCL Bimetal Connector Manufacturers (Pty) Limited for R8
million, giving rise to goodwill of R2,7 million which will be amortised over
five years. A cash payment of R5 million was made in July 2002 and a further
cash payment of R3 million will be made in July 2003, in settlement of the
purchase consideration. The operation makes high voltage compression fittings
for use on transmission and distribution overhead lines and complements ELB
McWade"s range of high voltage electrical equipment and fittings.
ELB Timber Products, a new division, traded profitably for the six months and
provided there is an adequate supply of timber logs can achieve meaningful
growth into the future. A veneer slicing and peeling business has been acquired
from Decor Boards (Pty) Limited for a cash consideration of R4,9 million. A
payment of R2,7 million was made in January 2003 and a further payment of R2,2
million will be made in July 2003 in settlement of the consideration. The
acquisition is effective from 1 January 2003 and allows entry into the veneer
slicing market and expands the existing veneer peeling operations.
Safbin has not met expectations and the shareholders of Safbin still have to
decide what the future of this business will be. As a result losses can be
expected for the second six months of the year.
ELB Treasury was affected by the strengthening Rand on the one hand but
benefited on the other from the recent announcement that foreign dividends will
no longer attract tax. This resulted in a reversal of a deferred tax accrual on
foreign reserves. As a result this division was profitable for the period.
PROSPECTS
ELB Equipment, ELB McWade and ELB Timber Products are expected to remain
profitable for the second six months.
Safbin"s losses are not expected to materially exceed the losses for the first
six months.
ELB Treasury"s prospects are linked to the outlook for the Rand as well as to
prevailing interest rates.
CHANGE IN DIRECTORATE
Mr EG Gregor resigned from the Board on 4 November 2002 and the Board thanks him
for his contribution to the Group.
ACCOUNTING POLICIES
This interim report has been prepared in accordance with South African
Statements of Generally Accepted Accounting Practice, including AC 127 on
Interim Financial Reporting, and is consistent with the accounting policies
published in the 2002 annual report.
DIVIDENDS
ELB has declared an interim dividend of 10 cents per share (2001: 30 cents per
share).
The final dividend is expected to be similar to last year"s final dividend of 15
cents per share.
On behalf of the Board
AG Fletcher WGL Bateman
Chairman Deputy chairman
Boksburg
26 March 2003
Share transfer secretaries
Computershare Investor Services Limited
70 Marshall Street
Johannesburg 2001
Sponsor
Rand Merchant Bank Corporate Finance
A division of FirstRand Bank Limited
1 Merchant Place
Cnr Fredman Drive & Rivonia Road
Sandton 2196
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