| Wed 22 Oct 2003, 13:54 | | UNAUDITED INTERIM results for the six months ende |
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AMAP -
AMALGAMATED APPLIANCE HOLDINGS LIMITED
Registration number 1997/004130/06
("AMAP" or "the Group")
ISIN: ZAE000012647
Share code: AMA
FINANCIAL HIGHLIGHTS
85% in profit after tax
76% Headline earnings per share
19% revenue increase
R106 m net cash on hand
Comments
Growth
Shareholders were advised in the February 2003 annual report that "better days
lie ahead" and management"s optimism was well founded, with the Group
maintaining the excellent growth rate achieved in 2002 during the six-month
period under review. Despite the Rand"s strength permitting substantial price
reductions, revenue continued to rise in all areas except export sales, where
the stronger Rand inhibits profitable sales to international customers.
Financial performance
Escalating demand for DVD, Home Theatre and TVs and the successful launch of the
Russell Hobbs and George Foreman ranges saw revenues rise by R102 million in the
first six-months to R633 million (2002: R531 million). With tight control from
operating costs, profit after tax increasing by 85% to R18,8 million (2002:
R10,2 million). Headline earnings per share increased by 76% to 9,0 cents (2002:
5,1 cents) compared with the same period last year. Efficient working capital
control saw inventories at the previous year"s level in spite of the revenue
growth, leaving the Group in a net ungeared position at the end of the reporting
period, with net cash on hand of R106 million
(2002: R46 million), and interest cover rising from 4,8 to
8,3 times.
Operations
The introduction of updated automatic insertion and surface mount device
equipment at the end of last year allowed the television factory to cater for
the increased demand in this category. The close links established with key
international suppliers ensured that the product line-up in both the electronics
and appliance sectors remained aligned with world standards and developments,
whilst simultaneously cementing the Group"s competitiveness. New product
offerings in both fields are anticipated in the first half of calendar year
2004.
Salton
During the period under review, Salton Inc increased its stake in the Group
from 31% to 52% by an offer to minorities. The Group"s year-end will
consequently change to June to match that of Salton. A report will, however, be
published covering the 12 months" results through to end of February 2004.
Board
No changes have taken place during the interim period to the composition of the
Board, which comprises seven non-executive directors and four executive
directors.
Social responsibility and labour relations
Our ongoing involvement with Cida City Campus, a unique and highly acclaimed
tertiary institution, represents Amap"s contribution to the much-needed macro
base for the country. Equity compliance and training inside the Group is
improving the quality of life of our employees and has assisted in maintaining
good labour and trade union relations.
Corporate governance
The Group at all levels subscribes to the values of good corporate governance as
set out in the King Report and accepts the need to conduct the enterprise with
integrity, transparency and equal opportunity.
Segmental reporting
The Group predominantly markets and distributes household electrical durables
(HED) and therefore the directors consider the disclosure of segmental
information in terms of AC115 not to be meaningful.
Dividends
The directors have resolved to continue the policy of a single annual dividend
to be declared at the end of each financial year.
Outlook
The order book for the year-end seasonal peak is at its highest level ever. With
consumers enjoying greater disposable income as a result of the significant
interest rate decline, coupled with the favourable prices allowed by the
stronger Rand, the prospects for the full year remain promising, provided the
economy suffers no unexpected setbacks.
For and on behalf of the Board
J Cohen B G Drummond
Chairman Company secretary
22 October 2003
Directors
J Cohen (Chairman) L Dreimann* (Deputy Chairman)
J M Kahn* JPKieser* S G Bernhardt
M C Berzack* S Cohen* SALevitt* A Nossel S Scafidas
W B Rue*
AlternateS
S Green* E G W Janssen van den Doornmalen*
*Non-executive
Transfer secretaries
Computershare Limited
70 Marshall Street Johannesburg 2001
PO Box 61051 Marshalltown 2107
REGISTEREDOFFICE
29 Heronmere Road Reuven 2091
PO Box 39186 Booysens 2016
Telephone (011) 490 9000
SPONSOR
Bridge Capital Services (Pty)Limited
Abridged group income statement
Unaudited Unaudited Audited
6 months 6 months 12 months
31 Aug 31 Aug 28 Feb
Change 2003 2002 2003
6 months R"000 R"000 R"000
Revenue 19% 633 036 531 420 1 100 777
Operating profit 62% 31 157 19 217 51 675
Net interest paid (6%) (3 753) (3 983) (5 613)
Profit before tax 80% 27 404 15 234 46 062
Taxation 8 606 5 067 14 250
Profit attributable to
ordinary shareholders 85% 18 799 10 167 31 812
-
Basic earnings per
share - (cents) 80% 9,0 5,0 15,4
Headline earnings per
share - (cents) 76% 9,0 5,1 15,6
Diluted basic earnings per
share - (cents) 80% 9,0 5,0 15,4
Diluted headline earnings per
share - (cents) 76% 9,0 5,1 15,6
Abridged group balance sheet
Unaudited Unaudited Audited
31 Aug 31 Aug 28 Feb
2003 2002 2003
R"000 R"000 R"000
ASSETS
Non-current assets
Property, plant and equipment 30 888 28 305 29 812
Goodwill 1 561 2 030 1 796
Trademarks 10 142 10 826 10 482
Other financial assets 28 827 33 562 30 837
Deferred tax 8 181 8 491 6 132
Current assets 541 135 420 653 491 884
Inventory 198 264 198 075 208 788
Trade and other receivables 237 151 176 851 167 245
Bank and cash on hand 105 720 45 727 115 851
Total assets 620 734 503 867 570 943
EQUITY AND LIABILITIES
Capital and reserves 253 298 225 143 244 524
Long term borrowings 4 200 913 4 560
Current liabilities 363 236 277 811 321 859
Trade and other payables 363 059 277 747 314 400
Bank overdraft 177 64 7 459
Total equity and liabilities 620 734 503 867 570 943
Group income statement Statement of changes in equity
Unaudited Unaudited Audited
6 months 6 months 12 months
31 Aug 31 Aug 28 Feb
2003 2002 2003
R"000 R"000 R"0000
Balance at start of the period as previously stated 244 524
217 428 215 161 Adjustment to opening balance on the adoption of AC 133
(7 510) - -
Restated balance at start of
period 237 014 217 428 215 161
Issue of share capital 48 30 32
Share premium on issue of share
capital 5 212 2 623 2 624
Attributable earnings 18 799 10 167 31 812
Dividends settled
- cash election (2 515) (2 449) (2 449)
- capitalisation shares (5 260) (2 656) (2 656)
Balance at end of the period 253 298 225 143 244 524
Abridged group cash flow statement
Unaudited Unaudited Audited
6 months 6 months 12 months
31 Aug 31 Aug 28 Feb
2003 2002 2003
R"000 R"000 R"000
Cash flow from operating
activities 591 (9 789) 57 611
Cash generated by trading 33 378 23 233 61 496
Working capital changes (26 205) (26 197) 4 570
Cash generated by operations 7 173 (2 964) 66 066
Net interest paid (3 753) (3 983) (5 613)
Taxation paid (314) (393) (393)
Dividends paid (2 515) (2 449) (2 449)
Cash flow from investing
activities (3 080) (12 604) (21 210)
Additions to property, plant and
equipment (5 400) (8 369) (16 868)
Proceeds on disposal of property,
plant and equipment 310 97 313
Acquisition of subsidiary - - (81)
Decrease/(increase) in other
financial assets 2 010 (4 332) (4 574)
Cash flow from financing
activities (360) 97 4 032
(Decrease)/increase in long term
borrowings (360) 97 4 032
Net (decrease)/increase in cash (2 849) (22 296) 40 433
Cash resources at beginning of
the period 108 392 67 959 67 959
Cash resources at the end
of the period 105 543 45 663 108 392
Supplementary information
Unaudited Unaudited Audited
6 months 6 months 12 months
31 Aug 31 Aug 28 Feb
Change 2003 2002 2003
6 months R"000 R"000 R"0000
Shares in issue (000"s) 212 190 207 340 207 340
Shares in issue
- weighted (000"s) 209 361 205 245 206 292
Diluted number of
shares (000"s) 212 190 207 340 207 340
Diluted number of shares
- weighted (000"s) 209 361 205 245 206 292
Net assets value per
share (cents) 119 109 118
Cost of sales (R"000) 503 181 421 450 907 736
Interest received (R"000) 3 286 802 4 664
Interest paid (R"000) (7 039) (4 785) (10 277)
Capital expenditure (R"000) 5 400 8 369 16 868
Capital commitments (R"000) 1 010 1 000 358
Depreciation and amortisation
charge (R"000) 4 738 4 038 9 143
Finance and operating lease
commitments (R"000) 34 499 33 174 38 427
Headline earnings 82% 18 929 10 380 32 241
Goodwill amortised 234 234 468
Profit on disposal of
property, plant and
equipment (net of tax) (104) (21) (39)
Profit attributable to
ordinary shareholders 85% 18 799 10 167 31 812
Accounting policies
The accounting policies used in the preparation of the interim results
announcement are consistent with those applied in the previous period other than
the changes shown below. The interim results have been prepared in accordance
with the South African Statement of GENERALLY ACCEPTED ACCOUNTING PRATICE for
Interim Reporting (AC127). During the year the Group adopted AC133: Financial
Instrument: Recognition and Measurement.
AC133 has introduced a comprehensive framework of accounting for all financial
instruments. The principle effect of the adoption of the standard, has been the
recognition of derivative financial instruments on balance sheet at fair value
with effect from 1 March 2003. In terms of the statement comparative years have
not been restated, however, the closing balances of financial instruments from
the previous year have been revalued.
The Group, in the past, adopted a policy of hedging purchase transactions but,
the qualifying criteria for hedging in respect of AC133, now adopted, precludes
the Group from applying hedge accounting to transactions entered into after 1
March 2003. The impact of this is that gains or losses on derivative financial
instruments cannot be capitalised to the purchased asset. The transitional
provisions state that previously designated hedges that do not meet the
conditions for an effective hedge should not be changed retrospectively and thus
no changes have been made to the opening retained earnings in this regard.
The effects on opening retained income and current year net income are
summarised as follows :
Gross Taxation Net
R"000 R"000 R"000
Opening retained earnings
(net decrease)
Fair value of unmatched derivative
instruments (10 730) 3 220 (7 510)
Current year profit (net decrease)
Movement in unmatched derivative
instruments 2 369 (710) 1 659
Impact on inventory hedging
purchases (10 027) 3 008 (7 019)
(7 658) 2 298 (5 360)
Related party transactions
The company entered into various related party transactions. These transactions
are no less favorable than those arranged with third parties.
Subsequent events
No events material to the understanding of the report have occurred in the
period between the interim date and the date of this report.
Amalgamated appliance
holdings limited
www.amap.co.za
Registration number 1997/004130/06
("AMAP" or "the Group")
ISIN: ZAE000012647
Share code: AMA
Date: 22/10/2003 12:37:58 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
