| Tue 27 May 2003, 15:24 | | Group Results for the Year ended 31 March 2003 |
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Dorbyl Limited -
DORBYL LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(COMPANY REGISTRATION 1911/001510/06)
Share code: DLV ISIN: ZAE000002184
("Dorbyl")
GROUP RESULTS FOR THE YEAR ENDED 31 MARCH 2003
Income statement
Audited Audited
year to year to %
March March
2003 2002
R000 R000 Change
Revenue 2 927 4 410 682 (34)
750
- continuing operations 2 468 2 011 664 23
670
- discontinued operations 459 080 2 399 018
Operating income 143 785 170 024 (15)
- continuing operations 120 705 76 964 57
- discontinued operations 23 080 93 060
Finance income/(cost) 26 088 (22 848)
Income - associates 7 695 27 014
Profit before exceptional items 177 568 174 190 2
Exceptional items 133 695 (33 307)
Profit before taxation 311 263 140 883 121
Taxation (69 731) (36 577)
Profit after taxation 241 532 104 306 132
Minority interest (12 339) (16 950)
Preference dividends (212) 212)
Earnings attributable to ordinary 228 981 87 144 163
shareholders
Earnings per share (cents)
Earnings per share 692.0 258.9 167
Headline earnings per share 289.4 334.2 (13)
Headline earnings per share
adjusted for Secondary
Tax on Companies (STC) 356.4 334.2 7
relating to special dividends
Dividends paid per ordinary share 658 140 370
(cents)
Final - year ended 31 March 2002 80 70
(2001)
Interim - period ended 30 50 70
September 2002 (2001)
Special - 26 August 2002 and 13 528 -
January 2003
Dividend cover - headline 2.2 2.4
earnings/normal dividends (times)
Dividends declared per ordinary 50 80
share - final (cents)
Share capital repaid 26 August 2002 472
per ordinary share (cents)
Audited Audited
year to year to %
March 2003 March
2002
R000 R000 Change
Exceptional items before taxation 133 695 (33 307)
Profit/(loss) on 128 504 (26 742)
disposal/discontinuation of
businesses
Net profit on disposal of fixed 7 554 373
property
Impairment of assets (2 363) (6 938)
Tax (charge)/relief attributable to (832) 7 158
exceptional items
Headline earnings reconciliation
Earnings per the income statement 228 981 87 144
Adjusted for : (133 199) 25 354
Exceptional items (133 695) 33,307
Amortisation of goodwill - 416
Surplus on sale of other fixed (483) (1 784)
assets
Tax charge/(relief) attributable to 977 (6 623)
adjustments
Attributable to minority 2 38
shareholders
Headline earnings 95 782 112 498
STC relating to special dividends 22 145 -
Headline earnings after STC 117 927 112 498
adjustment
Diluted earnings per share
Dilution shares (000) 1 408 1 956
Earnings adjustment 1 703 2 209
Diluted earnings per share (cents) 668.7 250.9
Diluted headline earnings per share 282.6 322.0
(cents)
Operating income to net operating 25 19
assets (%)
Earnings to ordinary shareholders" 34 10
funds (%)
Additional financial information
Depreciation 65 171 76 548
Net write down of inventory to 10 971 6 702
realisable value
Finance income/(cost) 26 088 (22 848)
Interest received 60 046 12 094
Interest paid (33 958) (34 942)
Balance sheet
Audited Audited
March March
2003 2002
R000 R000
EQUITY AND LIABILITIES
Capital and reserves 719 316 914 709
Ordinary shareholders" funds 676 471 831 423
Preference share capital 3 980 3 980
Minority interest 38 865 79 306
Non-current liabilities 196 390 363 525
Deferred tax liabilities 5 468 4 973
Post retirement medical aid 45 998 45 439
obligations
Long term borrowings 144 924 313 113
Current liabilities 472 505 761 174
Trade and other payables 400 043 697 477
Short term borrowings 72 462 63 697
Total equity and liabilities 1 388 211 2 039 408
ASSETS
Non-current assets 437 544 523 148
Fixed and intangible assets 393 790 412 017
Investments and advances - 660 49 871
associates
Deferred tax assets 39 460 52 034
Other non-interest bearing advances 3 634 9 226
Current assets 950 667 1 516 260
Inventories 249 539 482 920
Trade and other receivables 294 662 563 839
Cash and cash equivalents 406 466 469 501
Total assets 1 388 211 2 039 408
Additional financial information
Cash and cash equivalents 406 466 469 501
Cash at bank, on deposit and on 351 466 288 553
hand
Interest bearing short term 55 000 180 948
advances
Audited Audited
March March
2003 2002
R000 R000
Net cash 189 080 92 691
Long term borrowings (144 924) (313 113)
Short term borrowings (72 462) (63 697)
Cash and cash equivalents 406 466 469 501
Net operating assets 581 702 872 430
Total assets 1 388 211 2 039 408
Trade and other payables (400 043) (697 477)
Cash and cash equivalents (406 466) (469 501)
Capital commitments authorised 9 417 10 877
Contracted for 9 249 9 653
Not contracted for 168 1 224
Contingent liabilities 12 427 15 540
Debtors discounted with recourse 4 025 5 178
Operating lease guarantees 5 903 3 413
Other 2 499 6 949
Repurchase commitment on sale contracts where underlying
securities exceed the outstanding
commitment amounted to R22 million at 31 March
2003 (2002 - R36 million)
Operating lease commitments 143 261 424 506
Operating lease receivables 154 956 174 290
Investments and advances to associates
at valuation 1 500 124 065
Net asset value per share (cents) 2 041 2 520
Capital expenditure
Expansion 118 700 57 319
Replacement 45 819 42 196
Ordinary shares (000)
Issued 33 151 32 998
Weighted average 33 091 33 664
Cash flow statement
Audited Audited
year to year to
March March
2003 2002
R000 R000
Net cash (utilised by)/retained from (41 260) 110 404
operations
Operating cash flow 193 390 212 525
Movement in working capital 18 559 (1 198)
Finance income/(cost) 26 088 (22 848)
Taxation paid (61 074) (30 273)
Dividends paid (218 223) (47 802)
Net cash effect from investing 231 494 120 868
activities
Capital expenditure (164 519) (99 515)
Disposals of fixed assets 18 327 21 450
Disposals and acquisitions of 374 987 197 722
businesses
Decrease in advances 2 699 1 211
Net cash effect from financing (222 287) (59 738)
activities
Decrease in minority interest (4 642) (6 703)
Net repayment of long/short term (63 433) (34 791)
borrowings
Decrease in stated capital (154 212) (18 244)
Net cash (outflow)/inflow (32 053) 171 534
Foreign currency translation effect (30 982) 39 871
(Decrease)/increase in cash and cash (63 035) 211 405
equivalents
Cash and cash equivalents at 469 501 258 096
beginning of year
Cash and cash equivalents at end of 406 466 469 501
year
Statement of changes in equity
Balance at beginning of year 831 423 804 198
Movement in translation reserves (11 710) 5 915
Attributable earnings for the year 228 981 87 144
Dividends (218 011) (47 590)
Share capital repaid/purchased by (156 444) (18 486)
subsidiary
Shares issued 2 232 242
Balance at end of year 676 471 831 423
Segmental analysis
Audited Audited
year to year to
March March
2003 2002
R000 R000
Revenue
Business Segment
Automotive manufacturing 1 086 330 911 451
Midas 175 197 985 592
Metals trading - 747 103
Building products 1 405 137 1 216 519
Engineering and water products 269 227 607 711
Corporate and consolidation (8 141) (57 694)
Total Revenue 2 927 750 4 410 682
Geographical Location
South African operations - local 1 355 864 2 974 198
South African operations - export 440 412 396 717
International operations 1 131 474 1 039 767
Total Revenue 2 927 750 4 410 682
Operating income
Business Segment
Automotive manufacturing 45 220 18 787
Midas 4 957 29 684
Metals trading - 23 000
Building products 94 753 63 522
Engineering and water products 22 115 36 545
Corporate and consolidation (23 260) (1 514)
Total operating income 143 785 170 024
Geographical Location
South African operations (including 72 767 126 998
exports)
International operations 71 018 43 026
Total operating income 143 785 170 024
PRELIMINARY PROFIT STATEMENT
The past year has seen material structural change for Dorbyl. The core focus of
the Group has been considerably narrowed, and to this end a significant number
of disposals have been made. The strategy being pursued enabled the Group to :-
simplify a relatively complex spread of activities;
release shareholder value against the history of a poorly performing share
price;
facilitate empowerment shareholding where strategically required.
In line with this strategy, the Group disposed of its interest in parts
distributor, Midas Limited, to a management consortium with effect from 1 June
2002 for R113M. In addition, Dorbyl Engineering was sold to a management
consortium with a Black Empowerment partner effective August/September, 2002 for
a consideration of R271M. Whilst the disposals resulted in a reduction of
earnings (marginal other than in the case of Dorbyl Engineering), net asset
value and cash resources were enhanced. This has enabled the Group to release
cash to its shareholders through share capital repayments and special dividends
totalling R10 per share during the year, thus enhancing shareholder value.
Subsequent to 31 March 2003, the Group disposed of its local Global Roofing
Solutions division for R107M, again to a consortium which is to incorporate an
empowerment investor. This disposal is however still subject to certain
conditions precedent.
Dorbyl is now able to concentrate its focus on the two remaining operating
divisions, Dorbyl Automotive Technologies based in South Africa and Alpine based
in the USA.
RESULTS
Due to the significant disposals referred to above, turnover declined 34% to
R2,9 billion and operating income decreased by 15% to R143,8M. The continuing
operations, however, reflected significantly higher operating profits for the
year when compared to those of the previous year (Automotive Manufacturing -
141% up on the previous year and Alpine and Global Roofing Solutions - up 54%
and 37% respectively).
The Automotive division benefited significantly in the earlier part of the year
from the weak Rand, but of concern is the Rand"s current strength, coupled with
the high cost increases experienced last year, which resulted in materially
reduced margins (steel, the major cost component, increased in price by
approximately 30% between 1 January 2002 and 31 March 2003).
The improvement in the operating profit of Alpine was mainly due to a 48%
increase in Dollar profits, but also benefited from the weaker Rand in the
earlier part of the financial year (the average weighted conversion rate for
Alpine"s profits for the year was R9,96 to the Dollar).
Interest earned on the disposal proceeds resulted in a R49M improvement in
interest, from R23M paid in the previous year to a net inflow in the current
year of R26M.
The tax charge of R70M was up 91% on last year, mainly as a result of an
abnormal STC charge of R22M in respect of the special dividends funded out of
the proceeds of the major business disposals.
The 72% decline in associate attributable earnings to R8M was directly related
to disposals. The only continuing associate contributed R0,5M to this amount.
Attributable earnings of outside shareholders declined by R4,6M to R12,3M in
2002/3 mainly due to the sale of the Group"s 74% stake in Midas Limited.
Headline earnings, as a result of the above, declined 13% to 289 cents per
share. This is, however, after taking to account the STC of R22M paid on the
special dividends noted above, which reduced earnings by 67 cents per share. If
this abnormal charge was added back, headline earnings would have been 356 cents
per share, a 7% improvement on last year"s 334 cents per share.
Exceptional profits, after taxation, amounted to R133M, mainly due to profits on
business disposals. This compares to the R26M loss in the prior year.
CASH ON HAND/BORROWINGS
The net cash position of the Group improved by R96M to R189M at 31 March 2003.
This is mainly as a result of net business sale proceeds of R375M, funds derived
from operations (before dividends) of R177M and translation variances arising
from the improved Rand/Dollar exchange rate (R64M) offset by share capital
repayments of R156M, dividends paid of R218M (including special dividends of
R175M) and capital expenditure (R165M, of which R119M was expansionary).
The cash position at 31 March 2003, can be analysed as follows:
March March 2002
2003
Net cash held by South African R350,0M R367,5M
operations
Less : Alpine net borrowings (SA Rand) (R160,9M) (R274,8M)
Net cash R189,1M R92,7M
Alpine net borrowings (US Dollars) $20,4M $24,3M
ACCOUNTING POLICIES AND AUDIT OPINION
The abridged financial statements have been prepared using accounting policies
which are in accordance with South African Statements of Generally Accepted
Accounting Practice. These policies are consistent with those applied in the
previous year.
The abridged financial statements have been audited by KPMG Inc., the auditors
of the Company, whose unqualified audit opinion is available for inspection at
the registered office of the Company.
DIVISIONAL REVIEW
Automotive Manufacturing
The division consists of Dorbyl Automotive Technologies (Guestro) and Dorbyl
Transport Products. The Automotive division achieved much improved results,
largely from high export activity at good margins due to the weak Rand for a
major part of the year. Capital expenditure amounted to R66M, mainly in support
of that export growth which is now threatened as a result of the strong Rand.
Local automotive manufacturing activity was generally subdued, apart from growth
relative to the export programmes of the major motor assemblers.
Building Products
The low interest rates in the USA maintained activity in the USA housing market
for a major part of the year although some softening has been noted in the past
few months. Alpine improved its profitability overall both in Dollar and Rand
terms and there has been a notable revival in its equipment sales following the
launch last year of a market leading " linear saw".
The local Global Roofing Solutions operations improved operating profits by 37%
compared to the previous year. As indicated above, this operation is in the
process of being sold, effective 1 April 2003.
PROSPECTS
In reviewing prospects for the forthcoming year, the factors that have to be
taken into consideration are, firstly, the downsizing of the group and the
distribution of a significant amount of the funds generated by the disposals.
In this regard, the earnings relative to the divisions sold and the cash
distributed during the current year represented approximately 100 cents per
share of the current year"s adjusted headline earnings of 356 cents.
The second factor is the depressed USA and world economies, and the third, the
impact that the unexpectedly strong Rand will have on both the conversion of the
USA Dollar results and South African exports.
While the Group is soundly based for growth under more favourable economic
circumstances, unless the abovementioned factors improve materially in the
month"s ahead, profitability will be adversely affected in this financial year.
FINAL DIVIDEND NO. 107
A final dividend of 50 cents per ordinary share has been declared. The last
date to trade "cum" the final dividend in order to participate in the final
dividend mentioned above will be 20 June 2003. The shares of Dorbyl will
commence trading "ex" the final dividend from the commencement of business on
Monday, 23 June 2003 and the record date will be Friday, 27 June 2003. The
final dividend is payable on Monday, 30 June 2003
No dematerialisation or rematerialisation of share certificates may take place
between Monday, 23 June 2003 and Friday, 27 June 2003, both days inclusive.
On behalf of the board
N Phillips (Chairman)
W W Cooper (Group Chief Executive)
27 May 2003
Directors:
N Phillips WW Cooper (Group Chief WE Bhrmann*
(Chairman)* Executive)
RC Duff JB Magwaza* D Orwin
EJ Vorster T van Wyk* * Non-executive
Transfer secretaries: Company Secretary and
Computershare Investor Services Registered office:
Limited B D Bhikha
70 Marshall Street, Dorbyl Ridge
16 Jan Smuts Avenue
Johannesburg 2001 Parktown, 2193
(P O Box 1053, Johannesburg
2000)
Date: 27/05/2003 03:18:21 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
