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ARGENT INDUSTRIAL LIMITED - UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED
30 SEPTEMBER 2003
ARGENT INDUSTRIAL LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1993/002054/06)
(Share code: ART
ISIN: ZAE000019188)
("The Group" or "The Company")
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2003
Financial Highlights
REVENUE UP 1.2%
ATTRIBUTABLE EARNINGS UP 37.6%
ATTRIBUTABLE EARNINGS PER SHARE UP 6.4%
HEADLINE EARNINGS UP 37.4%
HEADLINE EARNINGS PER SHARE UP 6.2%
GEARING 24.5%
ABRIDGED CONSOLIDATED BALANCE SHEET FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2003
Unaudited Unaudited Audited
at at year ended
R 000 30 Sept 30 Sept 31 Mar 2003
2003 2002
ASSETS
Property, plant and 147 715 108 296 134 609
equipment
Intangibles 25 169 12 570 25 843
Employee share incentive 1 570 1 360 1 325
scheme
Non-current assets 174 454 122 226 161 777
Inventories 104 208 82 196 112 403
Trade and other receivables 88 249 133 619 156 381
Bank balance and cash 67 25 127 6 599
Current assets 192 524 240 942 275 383
TOTAL ASSETS 366 978 363 168 437 160
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 106 566 89 309 106 566
Reserves 24 045 24 045 24 045
Accumulated profits 97 835 52 949 73 302
Ordinary shareholders" 228 446 166 303 203 913
funds
Minority interest 5 820 4 744 4 722
Total shareholders" funds 234 266 171 047 208 635
Interest-bearing borrowings 44 412 28 879 30 608
Deferred taxation 7 539 3 867 6 583
Non-current liabilities 51 951 32 746 37 191
Trade and other payables 61 836 139 578 165 200
Taxation 4 549 1 761 5 490
Dividend payable 4 212
Bank overdraft 1 277
Current portion of interest- 13 099 13 824 20 644
bearing borrowings
Current liabilities 80 761 159 375 191 334
TOTAL EQUITY AND 366 978 363 168 437 160
LIABILITIES
Net asset value per share 391.8 315.8 349.7
(cents)
STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2003
Share Share Revaluation Reserve on Accumulated Total
capital premium reserve subsidiary profits
R 000 acquisition
Balance at 30 2 632 86 677 836 23 209 52 949 166 303
September
2002
Issue of 283 16 974 17 257
share capital
Net profit 20 353 20 353
for the
period
Balance at 31 2 915 103 651 836 23 209 73 302 203 913
March 2003
Net profit 29 781 29 781
for the
period
Dividends (5 248) (5 248)
Balance at 30 2 915 103 651 836 23 209 97 835 228 446
September
2003
ABRIDGED CONSOLIDATED INCOME STATEMENT FOR THE SIX MONTHS ENDED
30 SEPTEMBER 2003
Unaudited Unaudited Audited
six months six months year ended
R 000 30 Sept 2003 30 Sept 2002 31 Mar 2003
REVENUE 331 897 327 946 621 381
OPERATING PROFIT 45 353 30 221 63 759
before financing
costs
FINANCING COSTS 6 093 3 552 9 089
PROFIT before 39 260 26 669 54 670
taxation
TAXATION 8 381 4 102 11 772
PROFIT after taxation 30 879 22 567 42 898
MINORITY INTEREST 1 098 920 898
NET PROFIT for the 29 781 21 647 42 000
period
Basic earnings per 51.1 48.0 83.0
share (cents)
Headline earnings per 51.8 48.8 83.6
share (cents)
Dividends per share 9.0 7.0 17.0
(cents)
Shares in issue (000)
- at end of period 58 308 52 655 58 308
- weighted average 58 308 45 096 50 580
Reconciliation of
Headline Earnings
Unaudited Unaudited Audited
six months six months year ended
R 000 30 Sept 2003 30 Sept 2002 31 Mar 2003
Net profit for the 29 781 21 647 42 000
period
Goodwill amortisation 651 311 579
Profit on disposal of (262) (538)
property plant and
equipment
Loss on disposal of 55 47 268
property, plant and
equipment
Headline earnings 30 225 22 005 42 309
ABRIDGED CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED
30 SEPTEMBER 2003
Unaudited Unaudited Audited
six months six months year ended
R 000 30 Sept 2003 30 Sept 2002 31 Mar 2003
Cash generated from 22 714 31 384 41 714
operations
Interest paid (6 093) (3 552) (9 089)
Interest received 2 198 1 194 3 455
Dividends paid (5 248) (3 108) (7 320)
Taxation paid (8 366) (4 933) (5 993)
Cash flows from 5 205 20 985 22 767
operating activities
Cash flows from (19 273) (38 951) (84 740)
investing activities
Cash flows from 6 259 32 600 58 079
financing activities
Net (decrease)/ (7 809) 14 634 (3 894)
increase in cash and
cash equivalents
Cash and cash 6 599 10 493 10 493
equivalents at
beginning of period
Cash and cash (1 210) 25 127 6 599
equivalents at end of
period
SEGMENT REPORT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2003
Revenue Results Revenue Results
unaudited unaudited unaudited unaudited
Business Segments 6 months 6 months ended 6 months 6 months
ended ended ended
R 000 30 Sept 30 Sept 2003 30 Sept 30 Sept
2003 2002 2002
Steel & Steel Related 279 959 35 761 206 25
Products 636 782
Project Management & 51 874 3 103 120
Materials Handling 981 654
Properties 64 396
329 233
Total 331 897 39 260 327 26
946 669
Commentary
Chief Executive Officer"s Review
On behalf of the Board of Directors of Argent Industrial Limited, the unaudited
results for the six months ended 30 September 2003 are hereby presented.
Salient Review
* Revenue increased by 1.2% to R331,9 million (2002 - R327,9 million)
* Attributable earnings increased by 37,6% to R29,8 million
* Attributable earnings per share increased by 6,4% to 51,1 cents per share
(2002 - 48 cents per share)
* Headline earnings increased by 37,4% to R30,2 million (2002 - R22 million)
* Headline earnings per share increased by 6,2% to 51,8 cents per share (2002
48,8 cents per share)
* Gearing decreased to 24,5% (2002 - 25%)
Group Performance
The Group experienced a difficult first six months as a result of the stronger
Rand, the lower demand for steel and the downsizing of the project management
division.
DIVISIONAL PERFORMANCE
Steel and Steel Related Products
The Group"s steel companies produced very mixed results for the six months ended
30 September 2003.
The steel trading companies under Phoenix Steel had to endure a very competitive
and contracted market which has resulted in their contribution to attributable
earnings reducing by 30% when compared to the first six months of the previous
financial year.
Hendor Mining had a very good first six months but is however starting to feel
the effects of the declining Rand. Hendor"s main customers, the country"s
platinum producers have been hard hit by the strengthening rand and therefore
are currently running their scraper stocks at the absolute minimum level.
Bavarian Metal Industries enjoyed an improved first six months on the back of a
number of completed export contracts into the S.A.D.C. region and has an
acceptable order book for the next six months.
Kochs Cut and Supply have had a better than expected first six months of the
financial year. Turnover during the first portion of the second six months has
improved substantially. We expect this trend to continue.
Giflo Engineering has a full local and export order book. The company"s margin
on foreign exports have been reduced by the stronger Rand. However, the company
does benefit from the Department of Trade and Industry"s Motor Industry
Development Programme (MIDP). This has at least ensured that the nett overall
export margins are at least acceptable.
Excalibur Vehicle Accessories, a company acquired during the 2003 financial
year, has had an exceptional first six months and has bedded down well with the
Group. The company"s current and anticipated future order books will ensure an
above average growth trend for the next two years.
New Joules Engineering North America had a very slow start to the 2004 financial
year but currently has a full order book and will be a major contributor to the
Group"s results for the second six months. The company has tenders in the market
place awaiting adjudication amounting to USD 4.2 million. New Joules specialises
in systems that control railroad yard speed, which is becoming an important
issue in the United States of America. By controlling speed in a railway yard,
limited damage is caused to goods during the shunting phase. The American
railroad industry is facing problems as only approximately 30% of the railway
yards have the correct speed control systems. The situation is further
compounded by the fact that goods not damaged in a yard with a speed control
system may subsequently be damaged as the wagons pass through another yard
without a speed control system. The need for complete speed control will place
New Joules in a strong position for the future.
Jetmaster which was acquired during the 2003 financial year, has been a solid
contributor to the Group"s performance. The Group invested R3,2 million in
Jetmaster over the first six months of the year. These funds have been utilised
to increase the company"s production, research development and logistic
capabilities. The restructuring should result in Jetmaster"s turnover increasing
by a third over the next six months. The growth opportunities, both locally and
internationally, for Jetmaster is astounding and Argent will continue to grow
this area of the Group until the company"s full potential is reached.
The Group will by March 2004, have expanded into the Port Elizabeth area. The
new facility will incorporate a steel merchant business under Phoenix Steel, a
Jetmaster warehousing facility, an Excalibur fitment centre and a logistics
centre for both Excalibur and Giflo Engineering to supply the Delta Motor
Corporation"s 2004 Isuzu project.
Project Management and Materials Handling
Megamix and Villiersdorp Quarries have had an exceptional first six months, and
given the current order book, should have a better than expected year.
Barker Flynn Associates continued to encounter difficulties with final handover
of the Reductant and Slag Treatment Plants at Ticor SA in Empangeni. Beneficial
occupation certificates have been received for both plants, which are currently
in full production. Claims for extra costs on both projects have been submitted
to the client for consideration and an answer is expected in due course. All
costs on the projects were written off in the 2003 financial year.
Dividend
A final Dividend of 9 cents per share in respect of the year ended 31 March 2003
was paid during the period.
An interim dividend of 9 cents per share has been declared, subsequent to
30 September 2003 payable on Monday 26 January 2004 to shareholders recorded in
the register at close of business on Friday 23 January 2004, being the record
date in order to participate in such dividend. The last day to trade cum-div is
Friday 16 January 2004. The share will trade ex-div on Monday 19 January 2004.
Share certificates may not be dematerialised/rematerialised between Monday
19 Janaury 2004 and Friday 23 January 2004, both days inclusive.
In accordance with Generally Accepted Accounting Practice Statement AC107, the
interim dividend of 9 cents per share proposed by the Directors has not been
reflected in the interim financial statements.
Accounting Policies
The financial statements for the period under review are prepared in accordance
with South African Statements of Generally Accepted Accounting Practice and
incorporates Accounting Policies which are consistent with those applied in the
preparation of the audited financial results for the previous period.
On behalf of the Board
T.R. Hendry CA (SA)
Chief Executive Officer
Maraisburg
13 November 2003
Registered Office:
1316 Clubhouse Street
Maraisburg
Roodepoort 1724
Tel: (011) 474-2100
Auditor:
Etchells James Kruger
& Associates Inc.
Transfer Secretaries:
Ultra Registrars
5th Floor
11 Diagonal Street
Johannesburg, 2001
(PO Box 4844, Johannesburg 2000)
Company Secretary:
Mrs N Glover
Sponsor:
LPC MANHATTAN
Directors:
T. Scharrighuisen (Chairman), T.R. Hendry (Chief Executive Officer),
Ms. S.J. Cox (Financial Director), P.A. Day (Executive), M.J. Antonic (New
Business Development), P.H. Lawson, G.K. Youngman (Alt. Executive), D. Smith
(Alt. New Business Development)
Date: 12/11/2003 04:37:08 PM Produced by the JSE SENS Department
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