| Tue 20 May 2003, 9:56 | | Bearing Man Limited - Group Audited Results And Di |
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Bearing Man Limited - Group Audited Results And Dividend Announcement For The
Year Ended 31 March 2003
Bearing Man Limited
Share code BRM
ISIN: ZAE000001137
(Registration number 1955/002109/06
Africa"s foremost distributor of dynamic engineering consumables
Highlights
Revenue +33%
Operating profit +65%
Headline earnings +66%
Dividends +71%
GROUP AUDITED RESULTS AND DIVIDEND ANNOUNCEMENT FOR THE YEAR ENDED 31 MARCH 2003
Income Statement
Audited Audited
Year ended Year ended
31 March 31 March Inc/
2003 2002 (Dec)
R000 R000 %
Revenue 1 001 787 756 002 33
Operating profit 168 112 101 616 65
Interest and foreign exchange costs 28 173 17 909 57
Profit before taxation 139 939 83 707 67
Taxation 44 486 26 398 69
Earnings for the year 95 453 57 309 67
Determination of headline earnings
Earnings 95 453 57 309 67
Adjustments - after tax
where applicable
- Amortisation of goodwill 300 300
- Profit on disposal of property,
plant and equipment (111) (32)
Headline earnings 95 642 57 577 66
Shares in issue
Weighted average (000"s) 105 641 105 641
At end of year (000"s) 105 641 105 641
Weighted average
including diluted shares (000"s) 114 336 113 648
Headline earnings per share (cents) 90,5 54,5 66
Earnings per share (cents) 90,4 54,2 67
Diluted headline earnings
per share (cents) 83,7 50,9 64
Diluted earnings per share (cents) 83,5 50,7 65
Dividends per share* 36,0 21,0 71
Interim (cents) 11,0 6,0 83
Final (cents) 25,0 15,0 67
*In accordance with Generally Accounting Practice Statement AC 107 the final
dividend of 25 cents per share proposed by the directors has not been reflected
in the financial statements.
Balance Sheet
Audited Audited
31 March 31 March
2003 2002
R000 R000
ASSETS
Non-current 102 632 73 855
Property, plant and equipment 86 165 60 544
Intangible assets 2 199 2 583
Deferred tax asset 3 016 1 882
Staff incentive scheme loan 11 252 8 408
Long-term receivable - 438
Current 451 247 412 818
Inventories 304 943 286 390
Accounts receivable 146 304 126 428
553 879 486 673
EQUITY AND LIABILITIES
Shareholders" interest 282 074 212 674
Non-current liabilities 12 120 13 289
Unsecured loans 8 891 10 405
Debentures 3 229 2 884
Current liabilities 259 685 260 710
Bank borrowings 37 986 63 249
Short-term borrowings 1 597 1 489
Other payables 220 102 195 972
553 879 486 673
Debt : equity (%) 18 37
Net asset value per share (cents) 267 201
Net tangible asset value per share (cents) 265 199
Cash Flow Statement
Audited Audited
Year ended Year ended
31 March 31 March
2003 2002
R000 R000
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from customers 1 125 410 838 072
Cash paid to suppliers and employees 967 938 757 715
Cash flows from operating activities 157 472 80 357
Interest paid (28 003) (18 429)
Taxation paid (34 775) (14 752)
Dividends paid (27 467) (13 734)
Net cash generated by operating activities 67 227 33 442
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and
equipment to maintain operations (43 511) (25 845)
Proceeds on disposal of property,
plant and equipment 3 600 2 703
Net repayment by non-current receivable 438 309
Business acquisition - (2 362)
Net cash utilised in investing activities (39 473) (25 195)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of unsecured loans (1 406) (2 011)
Debenture - net transactions (1 085) (1 252)
Repayment from share trust - 358
Net cash utilised in financing activities (2 491) (2 905)
NET INCREASE IN CASH AND CASH EQUIVALENTS 25 263 5 342
Bank borrowings at beginning of year (63 249) (68 591)
Bank borrowings at end of year (37 986) (63 249)
Changes in Equity Statement
Audited Audited
Year ended Year ended
31 March 31 March
2003 2002
R000 R000
Stated capital
Balance at beginning and end of year 57 031 57 031
Retained income
Balance at beginning of year 151 371 107 796
Earnings for the year 95 453 57 309
Dividends - prior year final (15 846) (7 396)
- current year interim (11 621) (6 338)
Balance at end of year 219 357 151 371
Compulsorily convertible debentures
Balance at beginning of year 4 272 4 272
Issued during year 1 414 -
Balance at end of year 5 686 4 272
Total shareholders" interest 282 074 212 674
*In accordance with Generally Accounting Practice Statement AC 107 the final
dividend of 25 cents per share proposed by the directors has not been reflected
in the financial statements.
Comments
The group has continued to extend its position as the foremost supplier of
dynamic engineering consumables to industry in Southern Africa. All the product
divisions, viz Bearings, Seals, Drive Belts, Ironware, Chain, Power Drives and
Belting Solutions, reported positive growth for the year under review.
Financial review
A significant milestone in the history of the company was achieved during the
current financial year with turnover exceeding R1 billion for the first time.
The group had set itself a goal of achieving turnover in excess of R1 billion
over a three-year time period commencing at the beginning of the current
financial year. To have achieved this target within a year is fantastic and our
sincere congratulations and thanks is extended to all our staff, customers and
suppliers without whom this would not have been possible.
The growth in revenue year-on-year was 33%. A similar gross margin to that
achieved in the prior year together with significant operating efficiencies
resulted in operating profit increasing by 65% to R168 million. Operating
margins improved to 16,8% from 13,4%. Interest and foreign exchange costs
increased by 57% in the main attributable to forward exchange contract costs.
Net interest paid on borrowings only increased by 5% despite the increases in
borrowing rates during the year. This was as a result of a reduction in
borrowings of R25 million during the year.
Headline earnings per share are 90,5 cents, an increase of 66% on 2002. Over the
last five years headline earnings per share have increased by an average annual
compound growth rate
of 34%.
The debt to equity ratio more than halved during the current year to 18%. This
was achieved despite the funding of the construction of the group"s new head
office and warehouse in Umhlanga Ridge amounting to approximately R19,5 million
in the current year. This ratio is down from 85% in 1999.
Dividend cover has been maintained at two and a half times resulting in a total
dividend for the year of 36 cents, which is 71% up on the prior year.
Operational review
During the year a further six branches were opened within South Africa, one
further branch within Namibia, while operations were commenced in Mozambique and
Zambia. This brings the total number of branches within the group to 90. This is
in line with the group"s strategy of expanding to service our customers where
they need us. During the forthcoming year the network of branches will be
further expanded both within South and Southern Africa.
The Power Drives division introduced the Fenner Motoline range of electric
motors to its product offering during the current year. The motors have been
awarded SABS certification. Only the last quarter of the current financial year
was favourably impacted by the inclusion of electric motors in the product
offering. We expect to make significant inroads in this market during the
ensuing financial year.
The group has embarked on a programme to attain ISO 9000:2001 accreditation. A
quality control manager has been appointed to drive the process through the
business and external consultants have been contracted to assist. It is
envisaged that head office, the main distribution warehouses as well as some of
the branches will be accredited during the coming financial year.
The construction of the group"s new head office and warehouse in Umhlanga Ridge
is complete and head office staff are excited about the move to this new
building. The group is confident that synergies will be achieved as a result of
the consolidation of various divisions within Durban into one building. The land
and buildings will have cost approximately R30 million on completion, all of
which will have been funded from internal resources.
Directorate
The Board was further enhanced by the appointment of Wayne Taylor as Financial
Director on 1 June 2002 and Louis Marais as Operations Director on 18 December
2002. Abe Bekker was appointed alternate director to Reg Sherrell on 18 December
2002.
Accounting policies
The principal accounting policies, as outlined in the 2002 annual report, have
been consistently applied and comply with South African Statements of Generally
Accepted Accounting Practice.
Audit opinion
Our auditors, PricewaterhouseCoopers Inc, have issued their opinion on the
group"s financial statements for the year ended 31 March 2003. A copy of their
unqualified report is available for inspection at the company"s registered
office.
Prospects
Growth opportunities will arise from the introduction of the Fenner Motoline
range of electric motors. In addition, the group will be establishing a
Fasteners division, aptly named Fast Bolt. The division will be the first
national distributor of fasteners in South Africa. The roll out of this division
is expected to take two to three years. In addition the group will be further
expanding its branch network in South and Southern Africa.
The substantial strengthening and continual fluctuation of the Rand makes
forecasting very difficult. To the extent that the strong Rand has a negative
impact on the economy, the markets that we serve will come under intensified
pressure. Should the current Rand strength continue, we anticipate earnings in
the new year are unlikely to reach those achieved in 2003.
Annual financial statements
The annual financial statements will be posted to shareholders on or about 25
June 2003.
For and on behalf of the board
DI Samuels GJ Till
Chairman Managing Director
20 May 2003
Dividends
An interim dividend of 11 cents was declared during the period and paid on 25
November 2002. The directors have subsequent to year end declared a further
dividend (number 30) of 25 cents per share payable to shareholders recorded in
the books of the company at the close of business on the record date of Friday,
13 June 2003. Last date to trade "cum" dividend will be Friday, 6 June 2003.
Shares will trade "ex" dividend from Monday, 9 June 2003. Dividends will be paid
to members on Tuesday, 17 June 2003.
Shares certificates may not be dematerialised or rematerialised between Monday,
9 June 2003 and Friday, 13 June 2003, both days inclusive.
By order of the board
DC Bassett
Company Secretary 20 May 2003
Registered office
Bearing Man House, 105 West Street, Durban 4001
Auditors
PricewaterhouseCoopers
Transfer secretaries
Computershare Investor Services Limited, 70 Marshall Street, Johannesburg 2001
Directors
DI Samuels* (Chairman), GJ Till (Managing), A Bekker (Alternate),
A Goldstone*, LJ Marais, M Rose-Innes*, RE Sherrell*, WR Taylor* (Non-executive
directors)
Company Secretary
DC Bassett
Results are available on: www.bearingman.co.za
Date: 20/05/2003 09:00:12 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
