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Argent Industrial Limited
(Reg no 1993/002054/06)
(Incorporated in the Republic of South Africa)
("The Group" or "The Company"))
Share code :ART ISINcode : ZAE000019188
AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2003
REVENUE UP 67%
ATTRIBUTABLE EARNINGS UP 90%
HEADLINE EARNINGS UP 87%
HEADLINE EARNINGS per share UP 63%
ABRIDGED CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2003
Audited at Audited at
31 March 31 March
2003 2002
R000
ASSETS
Non-current assets
Property, plant and equipment 134 609 94 719
Intangibles 25 843 3 455
Employee share incentive scheme 1 325 695
161 777 98 869
Current assets
Inventories 112 403 60 944
Trade and other receivables 156 381 101 378
Bank balance and cash 6 599 10 493
275 383 172 815
Total assets 437 160 271 684
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 106 566 73 559
Reserves 24 045 24 045
Accumulated profits 73 302 35 514
Ordinary shareholders" funds 203 913 133 118
Minority interest 4 722 3 824
Total shareholders" funds 208 635 136 942
Non-current liabilities
Interest-bearing borrowings 30 608 18 416
Deferred taxation 6 583 3 624
37 191 22 040
Current liabilities
Trade and other payables 165 200 98 255
Taxation 5 490 3 902
Shareholders for dividends 3 108
Current portion of interest-bearing
borrowings 20 644 7 437
191 334 112 702
Total equity and liabilities 437 160 271 684
Net asset value per share (cents) 349,7 299,8
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2003
Reserve on
Share Share Revaluation subsidiary Accumulated
capital premium reserve acquisition profits Total
R000
Balance at
31 March
2001 2 024 66 435 2 804 23 209 19 851 114 323
Shares
issued 196 4 904 5 100
Reversal
of
revaluation
of
properties (1 968) (1 968)
Profit for
the year
ended
31 March
2002 22 116 22 116
Dividends
- interim
and final (6 453) (6 453)
Balance at
31 March
2002 2 220 71 339 836 23 209 35 514 133 118
Shares
issued 695 32 312 33 007
Profit for
the year
ended
31 March
2003 42 000 42 000
Dividends
- interim (4 212) (4 212)
Balance at
31 March
2003 2 915 103 651 836 23 209 73 302 203 913
ABRIDGED CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 MARCH 2003
Audited Audited
year ended year ended
31 March 31 March
2003 2002
R000
Revenue 621 381 371 644
Operating profit before financing costs 63 759 35 486
Financing costs 9 089 8 267
Profit before taxation 54 670 27 219
Taxation 11 772 4 502
Profit after taxation 42 898 22 717
Earnings attributable to outside
shareholders 898 601
Earnings attributable to
ordinary shareholders 42 000 22 116
Attributable earnings per share (cents) 83,0 50,2
Headline earnings per share (cents) 83,6 51,3
Dividends per share (cents)* 17,0 14,0
Interim 8,0 7,0
Final 9,0 7,0
*In accordance with AC107, the final dividend of 9 cents per share proposed by
the directors has not been reflected in the annual financial statements
Shares in issue (000)
- at end of period 58 308 44 409
- weighted average for the year 50 580 44 082
Calculation of Headline Earnings (R000)
Attributable earnings 42 000 22 116
Adjustments for:
Attributable earnings 42 000 22 116
Goodwill amortisation 579 150
Profit on disposal of property,
plant and equipment (538) (780)
Loss on disposal of property,
plant and equipment 268 1 126
Headline adjustments 309 496
Headline earnings 42 309 22 612
ABRIDGED CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH 2003
Audited Audited
year ended year ended
31 March 31 March
2003 2002
R000
Cash generated from operations 41 714 30 470
Interest paid (9 089) (8 267)
Interest received 3 455 3 626
Dividends paid (7 320) (5 774)
Taxation paid (5 993) (62)
Cash flows from operating activities 22 767 19 993
Cash flows from investing activities (84 740) (15 322)
Cash flows from financing activities 58 079 5 464
Net (decrease)/increase in cash and
cash equivalents (3 894) 10 135
Cash and cash equivalents at
beginning of year 10 493 358
Cash and cash equivalents at end of year 6 599 10 493
SEGMENT REPORT
FOR THE YEAR ENDED 31 MARCH 2003
BUSINESS SEGMENTS Revenue Results Revenue Results
audited audited audited audited
31 March 31 March 31 March 31 March
2003 2003 2002 2002
R000
Steel & Steel
Related Products 377 013 50 513 262 870 26 174
Project Management
& Materials Handling 243 975 3 896 108 097 1 799
Properties 393 261 677 (754)
Total 621 381 54 670 371 644 27 219
COMMENTARY
CHIEF EXECUTIVE"S REVIEW
On behalf of the board of directors of Argent Industrial Limited , the audited
results for the year ended 31 March 2003 are hereby presented. The Group has
achieved excellent results and evidence of this success can be found in almost
every part of our business. The Group continues to achieve its strategy to
deliver outstanding shareholder value.
SALIENT FEATURES
- Attributable earnings increased by 90% to R42 million (2002 - R22,1 million)
- Headline earnings per share increased by 63% to 83,6 cents per share (2002 -
51,3 cents per share)
- Revenue increased by 67% to R 621 million (2002 - R 371 million)
- Gearing increased to 24,6% (2002 - 18,6%)
DIVISIONAL PERFORMANCE
STEEL AND STEEL RELATED PRODUCTS
The Group"s Steel companies had an excellent year.
The upward trend of the local steel prices increased the Group"s turnover, and
with the strength of the local economy enabled them to maintain their margins.
The local prices have now started decreasing. However, our acquisition of a tube
mill in January 2003 should enable the steel and steel related products
companies to maintain turnover levels and margins.
The Group is reaping the export fruits of the Jetmaster acquisition. Having a
recognized brand name on board has proved to be of great value. The steel and
manufacturing businesses in the Group have benefited from this acquisition as
the supply of steel and manufactured components were previously sourced
elsewhere by Jetmaster. Jetmaster has enormous potential both locally and
internationally and will play a major role in the Group"s future success.
Jetmaster"s contributions to the period"s results were turnover of R29,1 million
and net profit before tax of R6,4 million. (acquired with effect from 16 August
2002.) Jetmaster is a seasonal business and therefore the Group will benefit
from the winter season for the first time during the first six months of the
2004 financial year.
Bavarian Metal Industries had an exceptional year and with the current order
book should continue the trend into 2004. Giflo Engineering has a full order
book and has now expanded into the manufacturing of seat frames for the
automotive market. New Joules Engineering North America had an excellent year,
but the downturn in the American economy has adversely affected the first two
months of the 2004 financial year. The company has a record number of tenders
awaiting adjudication and expects to catch up the slow start to the year.
The increased steel prices had a negative effect on Hendor Mining Supplies"
margins. However, non-contractual price increases from its customers and Hendor
is back on track to produce a solid set of results for 2004.
During the period the Group acquired 100% of Excalibur Vehicle Accessories (Pty)
Ltd. (effective 31 January 2003) The fair value of the assets acquired and
liabilities assumed were as follows:
R000
Current assets 4 877
Non-current assets 2 936
Current liabilities (2 600)
Non-current liabilities (393)
Goodwill 13 680
Total purchase price 18 500
Deduct bank balance on acquisition (483)
Cash flow on acquisition net of cash acquired 18 017
Excalibur has fitted in very well with the Group and will benefit from Giflo
Engineering"s marketing, quality and tooling expertise. Excalibur has already
secured additional work from Delta Motor Corporation and Toyota South Africa.
Excalibur"s contribution to the period"s results were turnover of R4,6 million
and net profit before tax of R1,7 million.
PROJECT MANAGEMENT AND MATERIALS HANDLING
Megamix and Villiersdorp Quarries have performed admirably in a very competitive
industry. Megamix, the concrete supplier, has greatly increased its market share
and has become a major player in its industry. Villiersdorp Quarries has proved
itself to be a viable business and is generating consistent returns. Both
businesses are weather dependent and hope to maintain their turnover levels
during the wet winter months.
Barker Flynn Associates continued to encounter difficulties with completing the
Ticor Reductant and Slag Treatment Plants at Empangeni. A beneficial occupation
certificate and commencement of the defects liability period certificate
backdated to the 01/12/2002 have, however, been issued by the client for the
Reductant Pant. Hot commissioning and performance tests have commenced on the
Slag Treatment Plant. Handover of this plant is expected shortly.
The claims for extra costs on both projects submitted to the client are
currently under evaluation by the client and negotiations to resolve the
outstanding financial issues are in progress. All costs relating to the contract
have been written off in the current period. The construction of the rock
phosphate handling project for Navitrade is nearing completion with
commissioning and beneficial handover to be achieved by the end of July 2003.
This project is within budget and on schedule.
Barker Flynn Associates is in the process of consolidating its resources and
refocusing its marketing and project management activities towards existing and
niche market clients with emphasis on the supply of materials handling equipment
and related services.
APPOINTMENT OF DIRECTOR
Mr Peter Hector Lawson has been appointed to the board of Argent Industrial
Limited. Mr Lawson brings to the Company 36 years of experience in the steel
industry.
PROSPECTS
The Group"s focus will continue to be on the various export markets. The Group
is geared to deliver above average returns on shareholders funds and has a
strong platform for future growth.
DIVIDEND
Final dividend of 9 cents per share has been declared, payable on Monday 18
August 2003 to shareholders recorded in the register at the close of business on
Friday 15 August 2003, being the record date in order to participate in such
dividend. The last day to trade cum div is Friday 8 August 2003. The share will
trade ex div on Monday 11 August 2003.
Share certificates may not be dematerialised or rematerialised between Monday 11
August 2003 and Friday 15 August 2003, both days inclusive.
ACCOUNTING POLICIES
The financial statements for the year under review are prepared in accordance
with South African Statements of Generally Accepted Accounting Practice and
incorporates accounting policies which are consistent with those of the previous
year.
AUDIT OPINION
Our Auditors, Etchells, James Kruger & Associates 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.
On behalf of the board
T.R. HENDRY CA(SA) Germiston
Chief Executive Officer 2 June 2003
Directors: T. Scharrighuisen (Chairman), T.R. Hendry (Chief Executive Officer),
Ms. S.J. Cox (Financial), P.A. Day (Executive), M.J. Antonic (New Business
Development), G.K. Youngman (Alt. Executive), D. Smith (Alt. New Business
Development)
REGISTERED OFFICE:
13 Jack Pienaar Road
Germiston South
Extension 7
Germiston
1411
Tel:(011) 876-4000
(PO Box 14461, Wadeville 1422)
TRANSFER SECRETARIES:
Ultra Registrars
Ground Floor
11 Diagonal Street
Johannesburg, 2001
(PO Box 4844, Johannesburg 2000)
Company Secretary: Mrs N Glover
AUDITOR:
Etchells James Kruger
&Associates Inc.
SPONSOR:
LPC Manhattan
LPC Manhattan Sponsors (Pty) Ltd
(Registration number 1999/024792/07)
Website: www.argent.co.za e-mail: argent3@argent.co.za
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