| Wed 9 Apr 2003, 11:08 | | Combined Motor Holdings Limited - Profit announcem |
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Combined Motor Holdings Limited
(Registration number 1965/000270/06)
(Share Code: CMH ISIN number: ZAE000001541)
Profit announcement for the year ended 28 February 2003
- Six consecutive years of earnings growth
- Headline earnings increase - 21%
- Dividend of 64 cents per share declared
- Total assets increase 34% to R725 million
- Cash resources exceed R149 million
GROUP FINANCIAL HIGHLIGHTS
2003 2002 % Change
Total assets (R"000) 725 264 543 098 +33,5
Net tangible asset value
per share (cents) 1 055 851 +24,0
Revenue (R"000) 2 591 397 2 647 535 -2,1
Operating income before
finance costs (R"000) 95 347 83 216 +14,6
Headline earnings (R"000) 57 651 47 583 +21,2
Attributable earnings (R"000) 50 165 41 368 +21,3
Operating income on average
ordinary shareholders"
interest (%) 46,0 47,7 -3,6
Earnings per ordinary share (cents) 246,1 202,9 +21,3
Headline earnings per
ordinary share (cents) 282,8 233,4 +21,2
Dividends per
ordinary share* (cents) 68,0 59,0 +15,3
*In accordance with the provisions of Generally Accepted Accounting
Standards Statement AC130, the dividend proposed, of 64,0 (2002: 54,0)
cents per share, has not been reflected in the financial statements.
GROUP INCOME STATEMENT
2003 2002
R"000 R"000
Revenue 2 591 397 2 647 535
Cost of sales (2 082 791) (2 162 622)
Gross profit 508 606 484 913
Selling and operating expenses (413 259) (401 697)
Operating income 95 347 83 216
Operating income to turnover (%) 3,7 3,1
Finance costs (10 097) (12 636)
Operating income before taxation 85 250 70 580
Taxation (27 588) (26 335)
57 662 44 245
Minority shareholders" interest (11) 3 338
Headline earnings 57 651 47 583
Goodwill written off (7 486) (9 715)
Capital profit on sale of business - 3 500
Attributable earnings 50 165 41 368
Dividend paid (13 862) (12 028)
Retained income 36 303 29 340
GROUP BALANCE SHEET
2003 2002
R"000 R"000
ASSETS
Long-term assets
Fixed assets 18 266 18 551
Amount owing by share trust 2 834 3 184
Intangible assets 10 391 15 609
Deferred taxation 4 876 5 360
Current assets 688 897 500 394
Total assets 725 264 543 098
EQUITY AND LIABILITIES
Capital and reserves
Share capital and reserves 225 500 189 197
Minority shareholders" interest 437 240
Interest-bearing debt 12 532 9 375
Other current liabilities 486 795 344 286
725 264 543 098
GROUP CASH FLOW STATEMENT
2003 2002
R"000 R"000
Cash flows from operating activities 34 181 96 765
Cash flows from investing activities (11 119) (43 295)
Cash flows from financing activities 3 157 (2 627)
Net movement in cash resources 26 219 50 843
Cash resources at beginning of year 122 952 72 109
Cash resources at end of year 149 171 122 952
Comments on results
1. During the year under review the Group achieved an increase in headline
earnings of 21%. 2003 represents the sixth consecutive year during which the
Group has reflected an earnings increase well ahead of the level of inflation.
The ratio of operating income to turnover improved from 3,1% to 3,7% largely as
a result of the improved results from the Group"s used vehicle, parts and
service departments, as well as the car hire and financial services divisions.
Despite an almost R100 million increase in the value of the car hire fleet the
current asset ratio remained steady at 1,4:1. The Group ended the year with cash
resources of R149 million.
2. The results achieved are commendable given the difficult and changing
economic climate that prevailed. Three interest rate hikes moved the prime
overdraft rate to 17%, its highest level since 1999. The year began with the
South African currency at an all time low when compared with our major trading
partners and that obviously had a negative impact on vehicle pricing. During the
last quarter, however, our currency has strengthened considerably and this
should ease the pressure.
3. The results of the Group"s retail motor division were on a par with those of
2002 despite reduced new vehicle sales volumes, particularly in certain luxury
model segments. The car hire division, boosted by improved penetration in the
local market and the marked increase in foreign tourist numbers, reported good
results in its third year of operation. The financial services division, which
comprises principally annuity income from the sale of insurance products, also
produced greatly improved results. The consistent nature of this income stream
serves to shield Group earnings during periods of economic decline.
4. The war in Iraq has created an atmosphere of volatility and uncertainty in
economic markets with consequent hesitation amongst business leaders to make
investment decisions. Trading conditions are tough at present and are expected
to prevail at least until mid-2003 when the anticipated decline in interest
rates will bring some relief.
5. A dividend (dividend no 32) of 64,0 cents per share will be paid on 23 June
2003 to members reflected in the share register of the Company at the close of
business on the record date 20 June 2003. Last day to trade "cum" dividend is 12
June 2003. First day to trade "ex" dividend is 13 June 2003. Share certificates
may not be dematerialized or rematerialized from 13 June 2003 to 20 June 2003,
both days inclusive.
6. This profit announcement has been compiled in accordance with South African
Statements of Generally Accepted Accounting Practices, and the accounting
policies are consistent with those used in previous years.
The attached financial statements have been audited by PricewaterhouseCoopers
Inc. A copy of their report is available for inspection at the Company"s
registered office.
By order of the Board of Directors
SK Jackson BCom (Hons) (Tax Law), CA(SA)
Secretary
9 April 2003
Registered office Transfer secretaries
1st Floor Computershare Investor
CMH Building Services Limited
206 West Street PO Box 61051
Durban, 4001 Marshalltown, 2107
SEGMENT INFORMATION
Total Retail motor
2003 2002 2003 2002
R"000 % R"000 % R"000 % R"000 %
Revenue 2 591 397 100 2 647 535 100 2 480 151 95 2 556 074 97
Operating income
before
finance costs 95 347 100 83 216 100 86 270 90 101 989 122
Finance costs (10 097) 100 (12 636) 100 (18 630) (184) (17 818) (141)
Operating income
before taxation 85 250 100 70 580 100 67 640 79 84 171 119
Total assets 725 264 100 543 098 100 381 754 52 299 820 55
Total liabilities 499 764 100 353 901 100 285 352 57 240 359 68
SEGMENT INFORMATION
Car hire Financial services Corporate services/other
2003 2002 2003 2002 2003 2002
R"000 % R"000 % R"000 % R"000 % R"000 % R"000 %
Revenue 68 862 3 36 780 1 19 568 1 23 970 1 22 816 1 30 711 1
Operating
income before
finance
costs 8 156 9 (3 330) (4) 5 412 6 (388) (0) (4 491) (5)(15 055)(18)
Finance
costs 0 0 0 0 3 066 30 2 388 19 5 467 54 2 794 22
Operating
income before
taxation 8 156 9 (3 330) (5) 8 478 10 2 000 3 976 1 12 261)(17)
Total
assets 80 390 25 78 897 15 36 120 5 32 126 6 127 000 18 132 255 24
Total
liabi-
lities 179 384 36 78 932 23 18 186 4 15 409 4 16 842 3 19 201 5
Directors: M Zimmerman (Chairman), JD McIntosh (Managing), MPD Conway, JTM
Edwards, SK Jackson, RTAC Nethercott, CL Odendaal, A Rogoff
