| Fri 16 May 2003, 17:06 | | Audited Financial Results |
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Value Group Limited -
Value Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1997/002203/06)
ISIN No: ZAE000016507 Share Code: VLE
VALUE DELIVERS EXCEPTIONAL RESULTS
VALUEGROUPLIMITED
- OPERATING INCOME AFTER DEPRECIATION 119% UP TO R60,6 MILLION
- HEADLINE EARNINGS PER SHARE 264% UP TO 14,2 CENTS PER SHARE
- NET ASSET VALUE PER SHARE 24% UP TO 82,4 CENTS PER SHARE
- CASH FLOWS FROM OPERATING ACTIVITIES 102% UP TO R122,7 MILLION
- DECLARATION OF MAIDEN DIVIDEND
AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2003
CONSOLIDATED INCOME STATEMENT
R000"s R000"s
2003 2002
Revenue 514 039 420 234
Operating income before depreciation,
finance costs and abnormal items 105 302 71 526
Depreciation 44 674 43 836
Operating income 60 628 27 690
Investment income 1 278 421
Finance costs 14 533 14 540
Net income before abnormal items 47 373 13 571
Abnormal items (note 2) 1 631 2 477
Net income before taxation 49 004 16 048
Taxation (note 3) 15 960 5 561
Earnings attributable to ordinary
shareholders 33 044 10 487
Basic earnings per share (cents) 15,9 5,1
Headline earnings per share (cents) 14,2 3,9
Actual number of shares in issue 207 599 040 207 599 040
CONSOLIDATED BALANCE SHEET
Assets
Non-current assets 235 858 250 806
Property, vehicles, plant and equipment 231 265 243 668
Deferred tax 386 4 442
Investments and loans 4 207 2 696
Current assets 115 931 117 757
Inventory 7 348 11 051
Trade and other receivables 68 005 86 178
Taxation in advance 614 3 852
Bank and cash 39 964 16 676
Total assets 351 789 368 563
Equity and liabilities
Capital and reserves 171 185 138 141
Non-current liabilities 83 590 122 675
Interest bearing borrowings 48 729 99 718
Deferred tax 34 861 22 957
Current liabilities 97 014 107 747
Trade and other payables 81 244 73 235
Non-interest bearing borrowings - 5 121
Current portion of interest bearing
borrowings 15 722 27 938
Bank overdraft 48 1 453
Total equity and liabilities 351 789 368 563
Net asset value per share (cents) 82,4 66,5
CONSOLIDATED CASH FLOW STATEMENT
Cash flows from operating activities 122 677 60 665
Cash flows from investing activities (29 658) (10 363)
Cash flows from financing activities (68 326) (34 882)
Net increase in cash and cash equivalents 24 693 15 420
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share capital 208 208
Share premium 41 231 41 231
Accumulated profits 129 746 96 702
Balance at beginning of year 96 702 86 215
Earnings attributable to ordinary
shareholders 33 044 10 487
Total capital and reserves 171 185 138 141
NOTES
1. Accounting policies
The accounting policies adopted for the purpose of this report comply in all
material respects with South African Statements of Generally Accepted Accounting
Practice and are consistent with the policies adopted in the previous year.
2. Abnormal items
Profit on disposal of portion of Port
Elizabeth and East London operations - 4 714
Write-up/(down) of carrying value of
loan to share incentive trust 1 631 (2 237)
1 631 2 477
3. Taxation
Taxation includes a write-down of deferred
tax assets which as a result of the Group
rationalisation no longer meet the
criteria for recognition.
4. Reconciliation between basic and
headline earnings
Basic earnings 33 044 10 487
Abnormal items (note 2 above) (1 631) (2 477)
(Profit)/loss on disposal of property,
vehicles, plant and equipment less
taxation (1 864) 30
Headline earnings 29 549 8 040
COMMENTARY
Introduction
Value Group Limited and its subsidiaries is a total logistics service provider,
encompassing all activities within the supply chain including warehouse and
fleet management and full maintenance leasing. The major operating divisions
comprise breakbulk and chemical distribution, warehousing, materials handling
and commercial vehicle rental and leasing.
1. Financial review
The directors are pleased to report exceptional 2003 year-end results. The
benefit of management"s stated commitment to the full integration of Rent-A-
Bakkie and Fleetrent into the existing infrastructure is now evident from these
results. Revenue grew organically by 22% from R420,2 million to R514 million.
Operating margin before depreciation increased from 17% to 20%. Operating income
after depreciation increased by R32,9 million from R27,7 million to R60,6
million.
In addition, the re-alignment of the fleet in order to maximise utilisations has
contributed to the increase in net income before abnormal items from a
previously reported R13,6 million to R47,4 million for the current year. This is
in line with management"s commitment to control overheads. Headline earnings per
share increased from 3,9 cents per share to 14,2 cents per share.
Cash flows from operating activities doubled to R122,7 million. This was
achieved through the increased profitability and a stricter control of working
capital. In accordance with management"s previously reported intentions, asset
based interest bearing debt has been reduced by R63,3 million from R127,7
million to R64,4 million.
Cash and cash equivalents increased by R24,7 million to R39,9 million during the
year under review.
Net tangible asset value per share increased by 24% to 82,4 cents per share.
2. Review of operations
Globalisation has forced manufacturers and suppliers worldwide to become more
efficient and cost-effective in order to compete on a national and international
basis. This trend has manifested itself in our logistics division, encompassing
warehousing and breakbulk distribution, which experienced significant growth in
critical mass and customer base and as such, contributed meaningfully to the
increase in profitability.
The truck rental division has grown its customer base, which resulted in an
increase in revenue and operating profit.
Although Freightpak was profitable, it did not perform to expectation due to
high maintenance costs. The situation has been rectified through the renewal of
the fleet.
3. Empowerment company
Value Inani (Pty) Ltd, an empowerment company owned by a consortium led by Dr
Mathews Phosa, was formed in the latter half of the 2003 financial year. The
company has tendered for business in empowerment regulated markets.
4. Capital commitments
Costs associated with maintaining older vehicles dictate continual replenishment
of the fleet. Historically, this has always occurred during the first half of
the financial year. Accordingly, subsequent to year-end, the Group committed
itself to capital expenditure amounting to R65,4million for replacement of old
vehicles and expansion of fleet where demand requires. The new fleet will be
financed out of a combination of cash flow and long-term debt.
In addition, R10 million has been budgeted in the 2004 financial year for the
upgrade of the Group"s IT infrastructure.
5. Prospects
The vehicle replacement programme will contribute to reducing variable costs
albeit at the expense of an increased depreciation charge. The new vehicles
should therefore contribute to bottom line earnings particularly for Freightpak
and the truck rental divisions.
The Group will also begin to upgrade its IT systems by implementing an
integrated ERP solution. This implementation will provide benefits to our
customers and ourselves by developing a sound IT base, which will have both the
capacity and capabilities to efficiently handle the future growth and
development of the Group. The implementation is expected to take at least a
year.
Plans for a new state-of-the-art warehouse and distribution facility situated in
Gauteng have been finalised. The facility will be developed for occupation by
the Group. This will enable a consolidation of various warehouses, sortation and
distribution hubs into a single facility. It is anticipated that the new
facility will be completed in approximately 18 months.
The rationalisation of the Group"s subsidiaries into Value Logistics Limited
will reduce administrative costs and yield trade benefits. The Group will
continue to maximise the utilisation of its resources and improve efficiencies
to drive down costs.
In the absence of unforeseen circumstances, management expects growth in
earnings levels to be at least in line with inflation.
6. Audit opinion
Charles Orbach and Company have audited these results. Their unqualified audit
opinion is available for inspection at the company"s registered office.
7. Maiden dividend
Over the past 18 months the Group has demonstrated its ability to optimise cash
flow. The board is confident that the Group"s cash-generating ability will be
both sustainable and sufficient to cover future capital expenditure and debt
repayments. Accordingly, the board has resolved to commence paying dividends and
has declared a maiden dividend of 3cents per ordinary share (number 1). This
dividend will be payable to all ordinary shareholders recorded in the register
on the record date being Friday, 27 June 2003. The last day to trade in order to
be recorded in the register on the record date is Friday, 20 June 2003. Shares
will trade cum dividend to Friday, 20 June 2003 and will commence trading ex
dividend on Monday, 23 June 2003. The dividend will be paid on Monday, 30 June
2003. Share certificates may not be dematerialised or rematerialised between
Monday, 23 June 2003 and Friday, 27 June 2003, both days inclusive.
For and on behalf of the board
C D Stein S D Gottschalk
Chairman Chief Executive Officer
Johannesburg
16 May 2003
Directors: C D Stein* (Chairman), S D Gottschalk (CEO), D C Marais (Deputy CEO),
B E Goldie, C L Sack, G J Igesund, I M Groves*, N M Phosa
*Non-executive director
Date: 16/05/2003 05:04:09 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
