| Wed 3 Sep 2003, 12:32 | | AUDITED GROUP RESULTS AS AT 30 JUNE 2003 |
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TIGER WHEELS LIMITED - AUDITED GROUP RESULTS AS AT 30 JUNE 2003
TIGER WHEELS LIMITED
("TIWHEEL")
Registration No. 1970/0011662/06
(Incorporated in the Republic of South Africa)
Share Code: TIW / ISIN code ZAE000007407
TIGER WHEELS LIMITED As at Restated
30 June 2003 As at
30 June 2002
ABRIDGED BALANCE SHEET R"000 R"000
----------------------
ASSETS
Non-current assets 799,145 782,902
--------- --------
Property, plant and equipment 774,447 718,872
Goodwill 4,528 6,059
Investment in associates 6,333 4,555
Deferred taxation 2,405 0
Financial assets 11,432 53,416
Current assets 988,863 1,118,966
--------- --------
Inventories 424,565 460,449
Trade and other receivables 494,851 616,991
Bank and cash balances 69,447 41,526
--------- ---------
TOTAL ASSETS 1,788,008 1,901,868
--------- ---------
EQUITY AND LIABILITIES
Shareholders" equity 736,238 752,371
--------- ---------
Shareholders" funds 643,286 673,305
Minority interest 92,952 79,066
Interest-bearing debt 367,657 424,725
--------- ---------
Long-term debt 259,744 282,952
Current portion of long-term debt 85,014 115,337
Short-term borrowings 22,899 26,436
Interest-free liabilities 684,113 724,772
--------- ---------
Trade and other payables 684,113 718,873
Deferred taxation 0 5,899
--------- ---------
Total equity and liabilities 1,788,008 1,901,868
--------- ---------
Net tangible asset value per share (cents) 1,075 1,114
% As at Restated
Change 30 June 2003 As at
30 June 2002
ABRIDGED INCOME STATEMENT R"000 R"000
-------------------------
Revenue 17% 2,952,523 2,530,994
--------- ---------
Operating income 45% 219,064 151,135
Net financing costs (52,656) (43,440)
(Loss)/income from associates (272) 91
--------- ---------
Profit before taxation 166,136 107,786
Taxation (15,072) (8,282)
--------- ---------
Profit after taxation 151,064 99,504
Minority interest (36,158) (17,776)
--------- ---------
Earnings attributable to ordinary
shareholders 41% 114,906 81,728
--------- ---------
Reconciliation of headline earnings
per share (cents)
Attributable earnings per share 192.6 137.5
Adjusted for :
- Goodwill amortised (2.1) 3.0
- Write-down of investments/loans 11.1 24.9
- Impairment of fixed assets 18.3 0
- Sale of investments (4.7) 0
----- -----
Headline earnings per share (cents) 30% 215.2 165.4
----- -----
Number of shares in issue (`000)
- At end of year (net of treasury
shares) 59,416 59,882
- Weighted average 59,648 59,438
ABRIDGED SEGMENTAL Restated
ANALYSIS Year ended Year ended
------------------ 30 June 2003 30 June 2002
ATS Balance Total ATS Balance Total
group of group of
group group
Rm Rm Rm Rm Rm Rm
Revenue
Manufacturing 1,999 495 2,494 1,674 382 2,056
Wholesale 94 197 291 172 183 355
Retail 0 368 368 0 338 338
Group services
and inter-group
eliminations (47) (153) (200) (53) (166) (219)
----- ----- ----- ----- ----- -----
Total revenue 2,046 907 2,953 1,793 737 2,530
----- ----- ----- ----- ----- -----
Operating income
Manufacturing 172 42 214 134 38 172
Wholesale (9) 6 (3) (36) 4 (32)
Retail 0 32 32 0 34 34
Group services
and inter-group
eliminations (15) (9) (24) (8) (15) (23)
----- ----- ----- ----- ----- -----
Total operating
income 148 71 219 90 61 151
----- ----- ----- ----- ----- -----
Net financing costs 17 36 53 17 26 43
Interest-bearing 248 120 368 264 161 425
debt
Capital expenditure 241 98 339 137 29 166
Depreciation 82 42 124 84 45 129
Future capital
commitments approved 175 16 191 299 47 346
ABRIDGED STATEMENT OF CHANGES IN EQUITY
--------------------------------------- As at Restated
30 June 2003 As at
30 June 2002
R"000 R"000
Equity at beginning of year
As previously stated 675,194 487,135
Change in accounting policy (1,889) (1,713)
--------- ---------
Restated equity at beginning of year 673,305 485,422
Changes in
Share capital, premium and reserves (10,931) 14,024
Non-distributable reserves (112,717) 114,529
--------- ---------
Movement in foreign currency
translation (98,095) 112,252
reserve
Change in accounting policy 0 2,107
---------- ---------
(98,095) 114,359
Hedging reserve (AC133) (14,350) 0
Loss / (profit) from associates (272) 91
Other 0 79
Accumulated profit 93,629 59,330
--------- ---------
Earnings attributable to ordinary
shareholders 114,906 84,011
Change in accounting policy 0 (2,283)
--------- ---------
114,906 81,728
Capitalisation award and dividend (21,549) (22,307)
Associated companies 272 (91)
--------- --------
Equity at end of year 643,286 673,305
--------- ---------
ABRIDGED CASH FLOW STATEMENT
---------------------------- As at Restated
30 June 2003 As at
30 June 2002
R"000 R"000
Cash flows from
Operating activities 381,995 102,477
Investing activities (292,484) (166,108)
Financing activities (58,053) 202,042
-------- ---------
Movement in cash resources 31,458 138,411
Cash resources at beginning of year 15,090 (123,321)
--------- ---------
Cash resources at end of year 46,548 15,090
--------- ---------
Comprising :
Bank and cash balances 69,447 41,526
Short-term borrowings (22,899) (26,436)
--------- ---------
46,548 15,090
FOREIGN EXCHANGE RATES
---------------------- As at Restated
30 June 2003 As at
30 June 2002
Rand / Euro
End of period rate (balance sheet) 8.44 10.23
Average rate (income statement) 9.11 8.95
Zloty / Euro
End of period rate (balance sheet) 4.46 4.00
Average rate (income statement) 4.17 3.70
COMMENTS
--------
Nature of business
Tiger Wheels Limited ("Tiwheel") is a group of companies focused on the
automotive aluminium wheel and passenger car tyre industries. The group
operates internationally, with wheel manufacturing plants in Germany, Poland,
South Africa and the USA, wholesale wheel distribution in Europe and South
Africa, and tyre distribution in the United Kingdom and South Africa.
The group"s 35 Tiger Wheel & Tyre retail stores in Southern Africa (27 owned and
8 franchised) cover all major centres and hold a significant share of the
replacement passenger tyre and wheel business in the region.
Results
Tiwheel achieved a 30% increase in headline earnings per share and a 17% rise in
revenue for the year to 30 June 2003 compared with the previous year. Earnings
attributable to ordinary shareholders were up from R81.7 million to R114.9
million. The results are particularly pleasing, as they represent a higher
margin on sales.
Volatility of currencies continues to mask the true performance of the business
- to the extent that, in the year under review, currency movements reduced group
operating income by R31,2 million. Start-up losses of R14 million at the new
wheel plant in the USA have also affected operating income, while interest has
been burdened by a once-off cost of R17 million incurred in restructuring the
Babelegi and other property obligations.
In spite of capex of R339 million during the year, the balance sheet is sound
and group positive cash flow from operations reflects a pleasing R382 million.
Group gearing shows a major improvement - especially if cash is set off against
debt - with a net debt equity ratio of 41% at year-end, compared with 51% a year
earlier. Capex for the current year is budgeted at R191 million.
The group"s equity has been reduced by R98 million as a result of a foreign
currency translation adjustment due to the strong Rand at year-end.
General comments
The greater portion of the group"s revenue is derived from sales of aluminium
wheels to international car manufacturers ("OEM"s"). In the face of a volatile
and tough economy internationally, the group has maintained a full order book
and, in some instances, was under pressure to meet demand. During the year, the
group also achieved its various expansion plans as previously announced and
budgeted for. These are commented on in more detail below.
The ATS group (which is 74% owned by Tiwheel) showed an increase in revenue,
profits and return on sales. Much of this success was achieved through
expansion of the Polish plant and further optimisation of the German plant.
The new aluminium wheel manufacturing plant currently being commissioned in
Alabama, USA, is scheduled to start initial production in a few weeks.
The ATS aftermarket businesses have been shrunk and now comprise only 5% of ATS"
revenues.
The 100% owned TSW Manufacturing (Pty) Ltd ("TSWM") Babelegi, again had a steady
year, successfully focusing on product quality improvement, tight asset
management, and greater all-round business efficiency. As a result, a 29%
increase in revenue was achieved.
The South African wholesale business, Yokohama Southern Africa ("YSA"), improved
in both sales and profitability. These results were reduced for the purpose of
segmental reporting by the poor results of Tiwheel"s German TSW wholesale wheel
distribution business, for which a write-off has been made at the year-end for
the probable losses on its closure.
Although impacted by the ultra competitive state of the tyre market, as well as
an element of price deflation, the South African Tiger Wheel & Tyre retail
business was in line with budget - producing excellent results, albeit not quite
as good as the previous year. Three additional stores were opened.
Future prospects
The ATS group is budgeting for a further increase in sales and profits derived
from the German and Polish plants. Although the prospects of the new USA plant
are positive, it is not expected to show a profit in its first year because of
start-up losses. The ATS aftermarket businesses are forecasting a small profit
based on further reduced turnover.
TSWM is budgeting for a modest increase in sales but profits should be somewhat
lower because of the impact on the business of the current Rand exchange rate,
which has forced management to focus even more sharply on productivity
improvements, efficiencies and margins. It is disturbing that some South
African authorities contend that the Rand is not strong enough and yet they
expect an export led economy with further new investment and employment.
The Tiger Wheel & Tyre retail group, which plans to open an additional three new
stores, expects greater sales and profitability, whilst YSA is budgeting for a
slight increase in revenue and income.
Notwithstanding the full order book in all group operations, forecasting future
earnings is hazardous given international uncertainty, the general world
economic slowdown and, especially, currency volatility. If the strength of the
Rand endures, profit increases in the current year will only be moderate.
Cautionary announcement
Shareholders are referred to the cautionary announcement published on SENS on 7
August 2003 and in the press on 8 August 2003, and are advised to continue
exercising caution when dealing in Tiwheel shares until a further announcement
is made.
Accounting policies
The results for the year have been prepared in accordance with South African
statements of Generally Accepted Accounting Practice. The accounting policies
used are consistent with those used in the financial statements for the year
ended 30 June 2002, except for the group now consolidating previously
unconsolidated ATS subsidiaries, and the adoption of AC 133: Financial
Instruments: recognition and measurement. Consolidating the previously
unconsolidated ATS subsidiaries increases the attributable and headline earnings
by 2,0 cents per share (2002: 3,8 cents per share decrease). In terms of the
transitional arrangements of AC 133, figures in respect of previous years are
not restated. The impact of the application of AC 133 is that reserves were
reduced by R14,3 million, outside shareholder"s interest by R4,8 million, while
accounts payable were increased by R19,1 million.
Audit report
The consolidated results for the year have been audited by Fisher Hoffman PKF
(Jhb) Inc. and their unqualified audit report is available for inspection at the
company"s registered office.
Declaration of dividend
Notice is hereby given that the board has declared an annual dividend of 50
cents per ordinary share for the year to 30 June 2003, payable to shareholders
recorded in the register of the company on Friday, 26 September 2003.
Shareholders are advised that the last day to trade "CUM" the dividend will be
Thursday, 18 September 2003. The shares will trade "EX" the dividend as from
Friday, 19 September 2003 and the record date will be Friday, 26 September 2003.
Share certificates may not be dematerialised or rematerialised during the period
Friday, 19 September 2003, to Friday, 26 September 2003, both days inclusive.
Payment will be made on Monday, 29 September 2003.
On behalf of the board
Eddie Keizan Martin Glatt
Joint chairman and CEO Joint chairman
Johannesburg
3 September 2003
Directors: Eddie Keizan (Joint chairman & CEO), Martin Glatt*(Joint chairman),
Rainer Hagemann** (German), Josh Loots, Mike Groves**, Keith Rivers, Siegfried
Teichert (German)
* Non-executive
** Independent non-executive
Company secretary: Diane Cousins (dianec@tsw.co.za)
Registered office: Cnr Old Pretoria Road and K101, Midrand 1685, Telephone (011)
256 4500, Fax (011) 256 4515
Transfer secretaries:
Computershare Limited
Registration number 2000/006082/06
70 Marshall Street
Marshalltown 2001
PO Box 61051
Marshalltown 2107
Telephone (011) 370 5000
Sponsor:
Sasfin Corporate Finance
A division of Sasfin Bank Limited
Registration number 1951/002280/06
www.tiwheel.co.za
Date: 03/09/2003 12:24:12 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
