| Wed 3 Sep 2003, 8:35 | | AUDITED RESULTS for the year ended 30 June 2003 |
|
GENCOR - CONSOLIDATED AUDITED RESULTS for the year ended 30 June 2003
GENCOR LIMITED
Incorporated in the Republic of South Africa
Registration number 1895/001232/06
Share code: GMF
ISIN code: ZAE 000013066
INCOME STATEMENT
30 June 30 June
2003 2002
(Rm) Notes Audited Audited
Ordinary dividends from Implats 1 1 071.2 1 065.1
Share of Implats" income net of dividends 1 1 389.2 2 039.8
and adjustments
Equity accounted income 2 460.4 3 104.9
Net interest income 46.9 38.9
Net corporate costs (12.5) (18.5)
Operating income 2 494.8 3 125.3
Other income 0.4 89.4
Corporate activities (16.0) (1.2)
Asbestos settlement (460.5) -
Income before taxation 2 018.7 3 213.5
Taxation on equity earnings (890.4) (987.7)
Ordinary taxation on company (12.8) (9.8)
Attributable income 1 115.5 2 216.0
Earnings per share (cents)
Earnings per share is calculated on the 348.6 348.6
weighted average number of shares in issue
(m)
and is based on attributable income of (Rm) 1 115.5 2 216.0
and after adding back corporate activities 476.5 1.2
and the asbestos settlement (Rm)
for the calculation of headline earnings 1 592.0 2 127.2
(Rm)
Basic and diluted earnings (cents) 320 636
Headline earnings (cents) 457 636
Dividends declared and paid per share 264 306
(cents)
BALANCE SHEET
30 June 30 June
2003 2002
(Rm) Notes Audited Audited
Investment in Implats 1 - 4 269.8
Other non-current assets 0.2 0.5
Current assets 103.5 416.9
Total assets 103.7 4 687.2
Capital and reserves 72.7 4 646.1
Current liabilities and provisions 31.0 41.1
Total equity and liabilities 103.7 4 687.2
STATEMENT OF CHANGES IN EQUITY
30 June 30 June
2003 2002
(Rm) Notes Audited Audited
Opening balance 4 646.1 3 377.5
Attributable income 1 115.5 2 216.0
Total ordinary dividends for year (920.3) (1 066.7)
Dividends in specie (4 535.6) -
Equity portion of investments revalued by (233.0) 119.8
Implats
Redemption of preference share capital - (0.5)
Total shareholders" equity 72.7 4 646.1
CASH FLOW STATEMENT
30 June 30 June
2003 2002
(Rm) Notes Audited Audited
Operating cash flows 18.7 (34.2)
Dividends received 1 071.2 1 065.1
Dividends (paid) (920.3) (1 066.7)
Net cash from operating activities 169.6 (35.8)
Other activities (476.1) 74.8
Repayment of loan and surpluses earned by - 9.8
Share Incentive Trust
Net increase in cash (306.5) 48.8
Closing cash balance 102.5 409.0
VALUATION OF INVESTMENTS
30 June 30 June
2003 2002
(Rm) Notes Audited Audited
Market value of investment in Implats (Rm) - 17 501
Interest in Implats (%) - 46.0
Number of Gencor shares in issue (m) 348.6 348.6
Ruling share price on the JSE at year-end 11 4 500
(cents)
Gencor"s market capitalisation (Rm) 38 15 687
Gencor"s discount to market value of listed - 10.0
investments (%)
Net asset value per share (cents) 21 1 333
NOTES TO THE FINANCIAL STATEMENTS
1. Implats was equity accounted for the full financial year.
2. The company gave certain limited warranties and an indemnity, for five years
and capped at an aggregate amount of US$220 million, to Billiton Plc in relation
to the businesses that were transferred to it in July 1997, that expired at the
end of July 2002. No claims or liabilities arose against those warranties.
3. Gencor also has certain obligations relating to the closure of the Prima
Lirang gold mine in Indonesia that expired in 2002. Negotiations are in progress
with the authorities on the issue of the appropriate closure certificate. The
directors believe that amounts provided are sufficient to meet its commitments.
4. The accounting policies used by the group are in accordance with statements
of South African Generally Accepted Accounting Practice and are consistent with
those used of the previous year. Where necessary, comparative figures have been
adjusted to conform to changes in presentation in the current year. These
annual financial statements have been audited by PriceWaterhouseCoopers Inc.,
and their unqualified auditor"s report is available for inspection at the
company"s registered office.
COMMENTARY
1. Unbundling: The shares that Gencor held in Impala Platinum Holdings Limited
("Implats") represented the major portion of Gencor"s value and were held as a
passive investment with no value being actively added by Gencor.
The directors proposed that this entire interest be distributed to ordinary
shareholders by way of an unbundling which was approved by shareholders at the
general meeting that took place on 25 April 2003.
This distribution afforded the company"s shareholders the opportunity of a
direct interest (and a concomitant benefit) in Implats and unlocked shareholder
value by eliminating the discount at which Gencor shares traditionally traded
relative to the value of the company"s underlying investments.
The distribution of the 30.6 million Implats shares was finalised on 18 June
2003 and was effected by way of a reduction in the share premium account and a
dividend in specie.
2. Settlements: Two settlement agreements were reached with potential claimants
for compensation for asbestos-related diseases that arose or that may arise as a
result of exposure to asbestos from mines operated by companies in which Gencor
had previously had an interest. Without any admission of liability, and in full
and final settlement, Gencor paid an amount of R378 million into the Asbestos
Relief Trust and an amount of R42.5 million into a trust account kept by United
Kingdom lawyers representing a defined group of claimants. In addition Gencor
paid R40 million into its lawyers trust account to cover any potential
rehabilitation claims that may be made over the next three years, after which
any residual amount will revert to the Asbestos Relief Trust. Payment of the
settlement amounts was contingent on the successful unbundling in every respect
of Gencor"s entire investment in Implats.
Subsequent to the conclusion of the two settlement agreements, Gencor also
concluded an agreement with the Government. In terms of this latter agreement
Gencor will, subject to the approval of the trustees of the Asbestos Relief
Trust and without any admission of liability, transfer R35 million of the R40
million set aside for rehabilitation claims to a separate trust to be
administered by the Department of Mineral and Energy Affairs ("the Department"),
in full and final settlement of any rehabilitation claims that the Government
may have against Gencor.
Gencor (and others) have also received a claim for rehabilitation (either to
rehabilitate certain areas of land or to pay R64.3 million therefore) from a
tribal authority and an environmental group. The directors do not believe that
Gencor is liable for this claim but, to facilitate the unbundling, Gencor
reached an agreement with those claimants and has set aside an amount of R35
million of its cash resources by way of security. Summons was received for this
claim on 16 July 2003 and it is being dealt with in the ordinary course.
3. Cash: Subsequent to the unbundling and the settlement Gencor"s major asset
comprises cash of R104 million, of which R35 million has been set aside by way
of security for a rehabilitation claim (see above). Current liabilities and
provisions (amounting to R31 million at year-end) will be funded from the
company"s cash resources.
4. Results: Due to the R460.5 million settlement as well as the downturn in the
rand prices of platinum group metals that affected the equity accounted income
earned from Implats, Gencor"s attributable income for the financial year ended
30 June 2003 amounted to R1 116 million, a decrease of 50% on the R2 216 million
reported in the previous financial year.
Ordinary dividend income from Implats amounted to R1 071 million, in contrast to
the R1 065 million received in 2002. In 2003 Gencor earned R499 million net
equity accounted income after tax from Implats, which comprises Gencor"s
proportionate share of Implats" earnings for its 2003 financial year.
Net interest receipts totalled R47 million compared to the R39 million posted
last year and net corporate costs of R13 million were recorded for the twelve-
month period (R19 million in 2002). R16 million (2002: R1 million) was spent on
corporate restructuring activities which comprised the unbundling costs and the
legal costs of the settlement.
5. The Way Ahead: The JSE may delist the company within six months of the
unbundling. The Board is in process of finalising the affairs of the company. In
due course shareholders will be advised of the next steps.
6. Dividends: No final dividend is proposed pending Gencor"s next steps.
For and on behalf of the Board
A S du Plessis W E Buhrmann
Chairman Director
28 August 2003
Registered office
KPMG Crescent, North Wing, First Floor, 85 Empire Road, Parktown 2193
Postal address
Postnet Suite 222, Private Bag X30500, Houghton 2041
Company secretary
J Marais
Registrars
Computershare Limited, 70 Marshall Street, Johannesburg, 2001 PO Box 61051,
Marshalltown, 2107
JSE Sponsor
Investec Bank Limited
UK shareholder administration
Project Consultants Limited, Walnut House, Walnut GardensClaydon, Banbury, Oxon
OX17 1NA
Sponsor
Investec
The Annual Report will be mailed to shareholders on or about 4 September 2003
and copies may be obtained from:
Registrars: Computershare Limited, PO Box 61051, Marshalltown 2107.
Tel: (011) 370-5000. Fax: (011) 370-5271/2
UK Shareholder Administrators: Project Consultants Limited, Walnut House,
Walnut Gardens, Claydon, Banbury, Oxon OX17 1NA.
Tel: +44 (01295) 690180. Fax: +44 (01295) 690181/2
Date: 03/09/2003 08:00:05 AM
Produced by the JSE SENS Department
