| Fri 11 Jul 2003, 12:24 | | Unaudited interim group results for the six months |
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Hudaco Industries Limited -
Hudaco Industries Limited
Reg no 1985/004617/06
Share code HDC ISIN code ZAE000003273
Unaudited interim group results for the six months ended 31 May 2003
These results are available on the Internet at www.hudaco.co.za
- Sales increase to R700 million
- Headline EPS up 23% to 116 cents
- Interim dividend up 10% to 32 cents
Bearings and transmission products
ABES Technoseal - Importer and distributor of world-class oilseals, hydraulic,
pneumatic and rotary shaft seals.
Bearings International - The distribution of leading international brands of
anti-friction bearings, geared motors, belting, chain, hydraulics, pneumatics,
seals and valves to the manufacturing, mining, agricultural and automotive after
markets.
Belting Supply Services - Specialist suppliers of conveyor belting, power
transmission products and industrial hoses.
Bestobell South Africa - Supplies internationally branded products and systems
for the control and monitoring of flow, temperature1, pressure and moisture.
Bosworth - Market leaders in design and manufacture of conveyor pulleys, forge,
heat treatment and plate rolling.
Ernest Lowe - Quality automation solutions using world-class pneumatic and
hydraulic products.
Mather+Platt - Distributors of Viking, Lowara and Mather + Platt pumps and
spares.
Valard Bearings - specialising in repair and manufacture of whitemetal bearings.
Vivian Regina - Manufactures glass-fibre tissues for the glass-reinforced
plastics, waterproofing, lead acid battery and pipeline protection markets.
Powered products
Deutz Dieselpower - Marketing and servicing of Deutz diesel engines and spares.
Rutherford - Sole distributor of Makita industrial power tools, Mercury and
Mariner outboard engines and accessories and survey and GPS equipment.
Security products
Elvey Security Technologies - Africa"s leading service provider of electronic
security systems to the security industry, through distribution, training and
technical support.
Vision Line - Distributor of closed-circuit television, access control, fire
detection and fibre-optic equipment.
Automotive products
Angus-Hawken - Manufacturer of rotary shaft and pneumatic seals in NBR, Viton
and Silicone compounds.
Hudaco Friction - Manufacturers and distributors of quality passenger and
commercial vehicle disc pads and linings to vehicle manufacturers, replacement
and export markets.
PHC Clutch - Distributes the Valeo brand of light and medium-duty clutches.
RESULTS
Activity in the manufacturing and mining sectors served by our bearings,
transmission and powered products businesses and which account for the major
part of Hudaco"s sales, continued to be buoyant in the opening months of 2003.
However, the stronger Rand weakened demand in these areas in April and May.
These businesses, together with automotive products, increased sales by 10%
compared with last year. The security products division experienced a 19%
decline in sales but increased operating profit as a consequence of focusing on
value rather than volume.
Group operating profit margins improved from 6,8% last year to 7,9% this year
and operating profit increased by 22% to R55,7 million. Net financing costs
reduced from R4,7 million to R1 million this year mainly as a result of the cash
inflow from the sale of the group"s shareholding in Midas Limited in the second
half of last year. Net cash on hand amounts to R10 million and the balance sheet
is therefore ungeared.
Headline earnings rose 25% to R33,2 million whilst headline earnings per share
are up 23% to 116 cents. The interim dividend has been increased by 10% to 32
cents per share.
PROSPECTS
The South African economy is expected to remain weak for the remainder of 2003 -
the positive impact of interest rate reductions on economic activity is only
likely to be felt in the 2004 financial year. Together with the stronger Rand
this may lead to a fall in sales levels in the second half of the financial year
compared with last year, which would be accompanied by a reduction in the
investment in inventories.
Hudaco"s industrial parts businesses, which account for 75% of our activity, are
in good shape and will benefit from the expected resumed growth in manufacturing
and mining production next year. Our security and automotive parts businesses
tend to be more dependent on consumer spending which should also pick up in
2004. As it is not clear when the impact of the interest rate reduction will be
felt or for how long the Rand will retain its recent strength it is difficult to
forecast Hudaco"s financial performance for the full 2003 year. We nevertheless
remain reasonably confident that headline earnings per share for the full year
will increase ahead of the inflation rate.
DIVIDEND
Notice is hereby given that interim dividend No. 32 of 32 cents per share has
been declared in respect of the six months ended 31 May 2003 ("the dividend").
The last day to trade in order to participate in the dividend ("cum" the
dividend), will be Friday, 8 August 2003. The shares will commence trading "ex"
the dividend from the commencement of business on Monday, 11 August 2003 and the
record date will be Friday, 15 August 2003. The dividend will be paid on Monday,
18 August 2003. Share certificates may not be dematerialised between Monday, 11
August 2003 and Friday, 15 August 2003, both days inclusive.
For and on behalf of the Board
PL Campbell (Chairman)
SJ Connelly (Chief Executive)
10 July 2003
Transfer secretaries
Computershare Investor Services Limited PO Box 61051 Marshalltown 2107
Registered office
Hudaco Park 190 Barbara Road Elandsfontein 1406
Tel +27 11 345 8200 Fax +27 11 392 2740 E-mail info@hudaco.co.za
Directors
PL Campbell# (Chairman) SJ Connelly (Chief Executive) GE Gardiner
JB Gibbon# MS Jolly PG Joubert# YKN Molefi# PM Poole #Non-executive
Secretary
RGL Arnestad
Income statement
Year
Six months ended ended
Unaudited 31 May % 31 May 30 Nov
R million 2003 change 2002 2002*
Turnover 701,2 4 672,2 1 451,3
Cost of sales 457,2 458,6 958,2
Gross profit 244,0 213,6 493,1
Operating expenses 181,1 161,5 338,5
EBITDA 62,9 21 52,1 154,6
Depreciation 7,2 6,4 12,5
Operating profit 55,7 22 45,7 142,1
Capital items written off 2,1 4,3 5,2
Profit before interest 53,6 41,4 136,9
Net finance costs 1,0 4,7 7,5
Profit before taxation 52,6 36,7 129,4
Taxation 19,4 13,3 43,8
Profit after taxation 33,2 23,4 85,6
Share of associate company profits 2,0 2,0
Attributable to outside shareholders (2,2) (3,2) (3,6)
Profit attributable to shareholders 31,0 22,2 84,0
Reconciliation to headline earnings
Profit attributable to shareholders 31,0 22,2 84,0
Add back capital items written off 2,1 4,3 5,2
Headline earnings 33,1 25 26,5 89,2
Headline earnings per share (cents) 115,6 23 94,2 315,7
Basic earnings per share (cents) 108,3 78,9 297,1
Diluted earnings per share (cents) 106,2 77,1 291,3
Distributions to shareholders
per share (cents) 32,0 10 29,0 105,0
amount (Rm) 9,2 8,2 29,9
Shares in issue (000) 28,868 28,332 28,490
Total 31,376 30,840 30,998
Held by subsidiary (2,508) (2,508) (2,508)
Weighted average shares in issue
Basic (000) 28,621 28,144 28,264
Diluted (000) 29,199 28,810 28,835
Balance Sheet
Unaudited 31 May 31 May 30 Nov
R million 2003 2002 2002*
ASSETS
Non-current assets 104,5 119,7 108,9
Property, plant and equipment 45,6 44,4 45,0
Deferred taxation - net 14,2 3,9 17,0
Investment in associate 23,7
Goodwill 44,7 47,7 46,9
Current assets 599,3 668,2 672,9
Inventories 322,2 322,9 315,0
Accounts receivable 215,6 248,4 250,9
Bank deposits and balances 61,5 96,9 107,0
TOTAL ASSETS 703,8 787,9 781,8
EQUITY AND LIABILITIES
Equity 420,6 381,7 416,4
Shareholders" equity 398,0 340,3 396,0
Outside shareholders" interest 22,6 41,4 20,4
Non-current liabilities 69,8 70,1 69,8
Interest bearing debt 50,6 50,9 50,6
Amounts due to vendors 19,2 19,2 19,2
Current liabilities 213,4 336,1 295,6
Accounts payable 194,7 244,8 249,9
Taxation 18,7 20,5 45,7
Interest bearing debt 70,8
TOTAL EQUITY AND LIABILITIES 703,8 787,9 781,8
Cash flow statement
Six months Year
ended ended
Unaudited 31 May 31 May 30 Nov
R million 2003 2002 2002*
Cash generated from trading 62,9 53,2 160,3
Cash applied to working capital (33,4) (66,2) (56,4)
Cash generated from operating activities 29,5 (13,0) 103,9
Net finance costs (1,0) (4,7) (7,5)
Taxation paid (43,6) (23,6) (41,6)
Cash consumed by operations (15,1) (41,3) 54,8
Cash dividends and capital repayments (22,0) (14,9) (44,6)
Net cash utilised (37,1) (56,2) 10,2
Investment in new operations - net (22,4) (2,6)
Investment in plant and equipment (7,7) (10,4) (17,5)
Net cash invested (7,7) (32,8) (20,1)
CASH UTILISED (44,8) (89,0) (9,9)
Shareholder funding 1,8 1,3 1,8
Foreign currency translation effect (2,5) (0,9) 0,7
DECREASE IN NET CASH (45,5) (88,6) (7,4)
Statement of Changes in Equity
Six months Year
ended ended
Unaudited 31 May 31 May 30 Nov
R million 2003 2002 2002*
Equity at beginning of period 396,0 332,6 332,6
Application of AC133 at 1 December 2002 (6,9)
Attributable profit for the period 31,0 22,2 84,0
Deferred gain on hedging instruments 0,6
Loss on translation of foreign entities (2,5) (0,9) 0,6
Capital transactions with and
payments to shareholders (20,2) (13,6) (21,2)
Share issues 1,8 1,3 2,0
Dividends and capital repayments (22,0) (14,9) (23,2)
Equity at the end of the period 398,0 340,3 396,0
Supplementary Information
These results were prepared applying accounting policies which conform with
South African Statements of Generally Accepted Accounting Practice and are
consistent with those applied in the most recent annual financial statements,
except for changes resulting from the mandatory application of the following
new accounting statement:
AC 133, "Financial Instruments: Recognition and measurement" which requires
financial instruments to be recorded at fair value. The resultant marked-to-
market gain or loss is taken to income except for gains or losses
on designated cash flow hedging instruments which are deferred in equity.
The application of this statement resulted in a write-off against opening
retained income of R6,9 million in respect of the cost of forward cover relating
to inventory which was deferred at 30 November 2002. The application of AC 133
has had no material effect on the earnings of the six months.
Unaudited 31 May 31 May 30 Nov
R million 2003 2002 2002*
Average net operating assets (Rm) 424,3 362,9 376,1
Operating profit margin (%) 7,9 6,8 9,8
Average NOA turn (times - annualised) 3,3 3,7 3,9
Return on average NOA (% - annualised) 26,3 25,2 37,8
Interest covered by operating profit (times) 55,7 9,7 18,9
Gearing - net (%) nil 7,3 nil
Net asset value per share (cents) 1 379 1 200 1 390
Capital expenditure
spent during the year (Rm) 7,9 10,4 19,0
budgeted for second half of the year (Rm) 11,2 11,4
Net cash (borrowings) comprises (Rm) 10,9 (24,8) 56,4
Bank call deposits and balances 61,5 96,9 107,0
Interest bearing debt - Non-current (50,6) (50,9) (50,6)
Interest bearing debt - Current (70,8)
Operating lease commitments - property (Rm) 30,8 26,8 35,4
Capital items written off (Rm) 2,1 4,3 5,2
Amortisation of goodwill 2,1 2,0 4,6
Loss on disposal of investment in associate 2,3 2,3
Release of provision against loans (1,7)
SEGMENT ANALYSIS
Turnover
Unaudited 31 May % 31 May 30 Nov
R million 2003 change 2002 2002*
Bearings and Transmission Products 370,8 9 340,5 728,1
Powered Products 146,7 8 135,5 303,0
Security Equipment 111,5 (19) 138,0 276,7
Automotive Products 73,1 22 59,8 148,4
Internal/Head office (0,9) (1,6) (4,9)
Total Group 701,2 4 672,2 1 451,3
Operating profit
Unaudited 31 May % 31 May 30 Nov
R million 2003 change 2002 2002*
Bearings and Transmission Products 35,3 13 31,2 82,1
Powered Products 17,0 62 10,5 35,4
Security Equipment 8,2 22 6,7 13,3
Automotive Products 1,9 46 1,3 10,3
Internal/Head office (6,7) (4,0) 1,0
Total Group 55,7 22 45,7 142,1
Average net operating assets
Unaudited 31 May % 31 May 30 Nov
R million 2003 change 2002 2002*
Bearings and Transmission Products 209,3 8 194,0 192,2
Powered Products 74,1 27 58,4 61,2
Security Equipment 94,4 36 69,6 84,4
Automotive Products 59,6 3 57,7 57,4
Internal/Head office (13,1) (16,8) (19,1)
Total Group 424,3 17 362,9 376,1
*Audited
value-added distribution
Date: 11/07/2003 12:00:11 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
