| Tue 11 Nov 2003, 13:05 | | Results For The Year Ended 31 August 2003 |
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Set Point Technology Holdings Limited - Reviewed Results For The Year Ended 31
August 2003
SET POINT TECHNOLOGY HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1996/014334/06)
Share code: STO ISIN: ZAE000013629
("Set Point" or "the company")
REVIEWED RESULTS FOR THE YEAR ENDED 31 AUGUST 2003
* HEADLINE EPS FROM CONTINUING OPERATIONS - 15%
* IMPROVED GEARING
* RESUMPTION OF DIVIDEND PAYMENTS
Consolidated income statements
Reviewed Audited
Year ended Year ended
31 August 31 August
2003 2002
R"000 R"000
Revenue 219 293 190 103
Cost of sales (127 714) (116 457)
Gross margin 91 579 73 646
Operating expenses (73 203) (56 275)
Operating profit 18 376 17 371
Foreign exchange gains 842 2 888
Capital items (1 575) 5 884
Profit before finance charges 17 643 26 143
Net finance charges (7 069) (4 473)
Profit before taxation 10 574 21 670
Taxation (4 690) (4 412)
Profit after taxation 5 884 17 258
Minority interests (1 084) -
Profit attributable to ordinary shareholders 4 800 17 258
-
Weighted average number of shares in
issue ("000) 205 377 174 876
Fully diluted weighted average number
of shares in issue ("000) 206 041 175 491
Earnings per share (cents) 2,3 9,7
Headline earnings per share (cents) 3,6 6,7
Fully diluted earnings per share (cents) 2,3 9,7
Fully diluted headline earnings per share (cents) 3,6 6,7
Headline earnings per share from continuing
operations (cents) 4,6 5,4
Fully diluted headline earnings per share from
continuing operations (cents) 4,5 5,4
Headline earnings
Income attributable to shareholders 4 800 17 258
Goodwill amortisation 1 124 400
Capital items 1 575 (5 884)
7 499 11 774
Headline earnings from continuing operations
Headline earnings as above 7 499 11 774
Adjusted for:
Loss from discontinued operations 858 451
Foreign exchange loss/(gain) 1 001 (2 782)
9 358 9 443
Consolidated balance sheets
Reviewed Audited
at 31 August at 31 August
2003 2002
R"000 R"000
Assets
Non-current assets 56 697 29 942
Property, plant and equipment 17 604 14 209
Goodwill 28 774 4 650
Deferred taxation 10 319 11 083
Current assets 91 189 73 474
Inventories 39 695 27 415
Trade and other receivables 51 223 44 680
Taxation receivable - 1 379
Cash resources 271 -
Total assets 147 886 103 416
EQUITY AND LIABILITIES
Equity and reserves 59 388 36 588
Capital and reserves 58 938 36 138
Deferred purchase consideration - shares 450 450
Minority interests 4 978 -
Non-current liabilities 21 534 14 190
Interest bearing liabilities 21 534 14 190
Current liabilities 61 986 52 638
Interest bearing liabilities 15 289 5 973
Net bank overdrafts - 5 665
Trade and other payables 43 554 41 000
Taxation payable 3 143 -
Total equity and liabilities 147 886 103 416
Shares in issue (net of treasury shares) (000"s) 235 376 175 376
Net asset value per share (cents) 25,2 20,9
Tangible net asset value per share (cents) 13,0 18,2
Debt: equity ratio 56,8 70,6
1. Borrowings
Bank overdrafts have been set-off against cash balances on hand where
allowed in terms of bank facility arrangements. Comparative figures at
31 August 2002 have been restated accordingly.
2. Contingent liabilities
Performance guarantees 3 719 11 204
Other guarantees 6 272 5 170
9 991 16 374
3. Capital commitments
There are no material capital commitments at 31 August 2003.
Abridged consolidated cash flow statements
Reviewed Audited
Year ended Year ended
31 August 31 August
2003 2002
R"000 R"000
Cash flows from operating activities 15 314 10 497
Cash flows from investing activities (17 646) 23 296
Cash flows from financing activities 15 041 (16 536)
Net cash generated 12 709 17 257
Overdraft in subsidiary acquired (6 773) -
Cash and cash equivalents at beginning of year (5 665) (22 922)
Cash and cash equivalents at end of year 271 (5 665)
Abridged consolidated statements of changes in equity
Reviewed Audited
Year ended Year ended
31 August 31 August
2003 2002
R"000 R"000
Opening balance as previously reported 38 322 23 348
Change in accounting policy (2 184) (2 534)
Opening balance restated 36 138 20 814
Shares issued 18 000 581
Specific repurchase of shares - (840)
Transfer from non-distributable reserve - (1 675)
Income/(loss) attributable to shareholders 4 800 17 258
Closing balance 58 938 36 138
Segmental information
Year ended 31 August 2003 Net operating Operating
Divisions assets/(liabilities) Revenue
R"000 % R"000 %
Fluid Handling* 17 672 34,5 43 479 19,8
Analytical Services 24 865 48,6 67 507 30,8
Instrumentation 30 734 60,1 108 307 49,4
Central Services (22 108) (43,2) - -
51 163 100,0 219 293 100,0
*Six months only
Segmental information
Year ended 31 August 2003 Operating
income/(loss) Number of employees
R"000 % # %
Fluid Handling 8 533 46,4 75 23,8
Analytical Services 14 199 77,3 130 41,3
Instrumentation 7 102 38,6 91 28,9
Central Services (11 458) (62,3) 19 6,0
18 376 100,0 315 100.0
Commentary
Profile
Set Point is a supplier and operator of specialised industrial, analytical
and allied technological equipment used in a wide range of major industries.
The group supplies medium technology, fluid handling equipment to the
petrochemical and mining industries.
Group Overview
The financial year started well with all divisions, particularly
Instrumentation, performing in line with or above budget for the first six
months. However, trading conditions slowed down markedly during the second
half of the year and the results of the Instrumentation division were below
expectation, which led to a disappointing second six
months.
The Laboratory businesses, however, continued to deliver solid, dependable
results.
The major event of the year was the acquisition of the Flowmax group with
effect from 1 March 2003. The consideration payable was 60 million shares issued
at 30 cents each together with the assumption of debt of approximately R27
million. The
incorporation of Flowmax into the group has been well managed with positive
results for the 6 months to 31 August 2003.
Later in the year, Gastech, the manufacturer of gas detection equipment was
sold.
Financial Results
Revenue for the year to 31 August 2003 increased by 15% to almost
R220 million. Margins improved to 41,8% from 38,7% and operating profit before
foreign exchange gains increased by 5,8%. The groups effective rate of taxation
is approximately 44,4% primarily as a result of the capital losses incurred on
the disposal of operations, which are not allowed for tax purposes. Headline
earnings from continuing operations were R9,4 million but declined at the
headline earnings per share
level to 4,6 cents from 5,4 cents owing to the larger number of shares in
issue.
Cash flow throughout the year has been tightly managed with net debt
increasing by only R10,9 million notwithstanding taking on debt of
approximately R27 million as part of the acquisition of Flowmax. Continuing
tight control and lower interest rates will result in a meaningful reduction
in interest payable in the new year. Gearing at year end was 56,8% against
70,6% previously.
Black Economic Empowerment
Management recognise the need to introduce Black Economic Empowerment into
the group and a sub-committee with Dr Danisa Baloyi as chairperson has been
set up to examine and recommend the best way of implementation.
Prospects
The group is in a good position to take advantage of the anticipated
stronger economic growth flowing from the decline in interest rates. Group
budgets indicate growth in the new year.
Working capital will continue to be tightly managed and further improvements
in the group"s gearing ratio can be expected.
Directorate
The Board records with sadness the tragic death of Vusi Ngubeni this
year. Vusi was one of the original directors of Set Point at the time of its
listing in 1997, and his contribution to the company will be missed.
Dividend Announcement
Notice is hereby given that dividend number 2 of 1 (one) cent per share has
been declared in respect of the year ended 31 August 2003.
This dividend will be paid out of profits as determined by the directors, to
shareholders recorded as such in the register at the close of business on
the record date, Friday, 9 January 2004. The last date to trade, to
participate in the dividend is Friday, 2 January 2004. Shares will commence
trading ex-dividend from Monday, 5 January 2004.
The important dates pertaining to this dividend for shareholders trading
on the JSE Securities Exchange South Africa are as follows:
Last day to trade "CUM" dividend Friday, 2 January 2004
Shares trade "EX" dividend from Monday, 5 January 2004
Record date Friday, 9 January 2004
Payment date Monday, 12 January 2004
Share certificates may not be dematerialised or rematerialised between
Monday, 5 January 2004 and Friday, 9 January 2004, both days inclusive.
Basis of Preparation
The reviewed results have been prepared in accordance with South African
Statements of Generally Accepted Accounting Practice. Other than stated below,
there have been no changes effected to any of the accounting policies during the
year.
Changes in accounting policy
The group changed its accounting policy for the recognition of service revenue
in accordance with South African Statements of Generally Accepted Accounting
Practice AC 111 - Revenue which resulted in an adjustment to retained income at
1 September 2002 and 1 September 2001 of R2,2 million and R2,5 million
respectively.
Earnings and headline earnings for the prior year were restated to reflect this
change.
The adoption of AC 133 - Financial Instruments, Recognition and Measurement did
not have a material impact on the group and consequently no adjustment has been
made to opening retained income.
Review by Independent Auditors
The groups auditors KPMG Inc., have reviewed these year-end results. The review
report, dated 6 November 2003 is available for inspection at the registered
office of the company.
For and on behalf of the Board
B H Kent (Chairman) M J Smith (Chief Executive Officer)
Johannesburg
11 November 2003
Directors: B H Kent (Chairman)*, M J Smith (Chief Executive Officer),
Dr D E Baloyi*, E G Gregor, G J Horsfield, J M Judin*, N D Kennelly,
H Levin*, C S Seabrooke*, M F Saunders
(alternate) (*non-executive)
Registered Office: Pin Mill Farm
Block F
164 Katherine Street
Sandton, 2146
(PO Box 787646, Sandton, 2146)
Transfer Secretaries: Computershare Limited
Ground Floor
70 Marshall Street
Johannesburg 2001
(PO Box 1053, Johannesburg, 2000)
Sponsor: Standard Corporate and Merchant Bank
(a division of The Standard Bank of South Africa Limited)
(Registration number 1962/000738/06)
www.setpoint.co.za
Date: 11/11/2003 12:48:11 PM Produced by the JSE SENS Department
