| Tue 17 Feb 2004, 17:12 | | INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DEC 03 |
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CAXTON AND CTP PUBLISHERS AND PRINTERS LIMITED - INTERIM RESULTS FOR THE SIX
MONTHS ENDED 31 DECEMBER 2003 AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Caxton and CTP Publishers and Printers Limited
(Formerly CTP Holdings Limited)
and subsidiary companies
(Incorporated in the Republic of South Africa)
(Registration number 1947/026616/06)
Share code CAT: ISIN: ZAE000043345
Preference share code CATP: ISIN: ZAE000043352
("Caxton" or "the Company")
* Turnover up 4.9%
* Diluted headline EPS up 18%
* Cash resources R819 million
* Net profit from operations up 24%
CONSOLIDATED INCOME STATEMENTS
at 31 December 2003
Audited
Unaudited Unaudited for the
6 months to 6 months to year to
31 December 31 December 30 June
2003 2002 2003
R000 R000 R000
Turnover 1 525 979 1 454 204 2 721 998
Operating profit 278 623 243 587 434 334
Depreciation expense (35 776) (48 250) (102 332)
Net profit from operations 242 847 195 337 332 002
Finance Income - net 54 377 62 374 122 495
- interest received 48 473 62 374 122 493
- dividends received 5 904 - 2
Associated companies 3 414 3 168 9 672
Income before amortisation and
impairment 300 638 260 879 464 169
Amortisation and impairment expense (370) (8 016) (16 390)
Income before taxation 300 268 252 863 447 779
Taxation (103 742) (88 280) (153 686)
Income after taxation 196 526 164 583 294 093
Attributable to outside shareholders (2 594) (36 719) (38 436)
Preference dividend (119) - (6)
Earnings attributable to shareholders 193 813 127 864 255 651
Earnings per share (cents) 42.3 34.6 61.4
Diluted earnings per share (cents) 41.6 33.2 59.6
Headline earnings per share (cents) 42.3 36.7 65.6
Diluted headline earnings per share (cents) 41.6 35.2 63.6
Shares in issue at 31 December 2003
(June 2003: Weighted average) 460 570 068 463 440 076 416 293 505
Less: Caxton Publishers and Printers Limited
minority share issue - (92 287 586) -
Own shares acquired by subsidiary (2 068 088) - -
Shares cancelled - (1 679 307) -
Earnings per share based on 458 501 980 369 473 183 416 293 505
Add: Share option outstanding 7 754 828 15 412 750 12 925 450
Diluted earnings per share
based on 466 256 808 384 885 933 429 218 955
Net asset value per share (cents) 486 450 477
Cash resources and equivalents 818 657 910 782 977 839
Capital expenditure 147 761 56 472 206 935
Capital commitments 80 000 80 000 68 000
CONSOLIDATED BALANCE SHEETS
at 31 December 2003
Audited
Unaudited Unaudited for the
year to
31 December 31 December 30 June
2003 2002 2003
R000 R000 R000
Assets
Property, plant, equipment and
intangible assets 1 009 759 821 097 903 544
Investments and loans 57 888 47 885 41 941
1 067 647 868 982 945 485
Current assets 1 855 855 1 929 181 1 918 625
- Inventories 355 926 291 209 403 369
- Accounts receivable 681 272 727 190 537 417
- Bank balance and cash equivalents 818 657 910 782 977 839
Total assets 2 923 502 2 798 163 2 864 110
Equity and liabilities
Shareholders" equity 2 237 824 2 077 711 2 195 594
Preference share capital 100 100 100
Outside shareholders" interest 6 918 5 242 5 459
2 244 842 2 083 053 2 201 153
Deferred taxation 109 356 88 745 89 202
Current liabilities 569 304 626 365 573 755
- Accounts payable 506 561 534 203 446 759
- Taxation 62 743 92 162 126 996
Total equity and liabilities 2 923 502 2 798 163 2 864 110
CONSOLIDATED CASH FLOW STATEMENTS
at 31 December 2003
Audited
Unaudited Unaudited for the
6 months to 6 months to year to
31 December 31 December 30 June
2003 2002 2003
R000 R000 R000
Cash inflow from operating activities 11 992 46 270 256 975
Cash generated by operations 298 373 279 473 461 033
Increase in working capital (53 807) (136 075) (138 400)
Cash generated by operating activities 244 566 143 398 322 633
Less: Taxation (147 836) (65 853) (93 021)
Finance income - net 48 473 62 374 122 491
Dividends received 5 904 - 2
Net cash inflow from operating
activities 151 107 139 919 352 105
Dividends paid (125) (93 649) (95 130)
Capital distribution (138 990) - -
Cash outflow from investing activities (158 436) (86 225) (209 872)
Property, plant and equipment
- additions to maintain and
expand operations (147 761) (56 472) (206 935)
- proceeds from disposals 5 642 1 659 16 729
(142 119) (54 813) (190 206)
Investments and loans (16 317) (31 412) (19 666)
Cash outflow from financing activities (12 738) (367) (20 368)
Shares acquired in cash - (367) (367)
Own shares acquired by subsidiary (12 738) - (2 063)
Cost relating to share buy back and
cancellation - - (2 337)
Share buy back and cancellation - - (15 601)
Net (decrease)/increase in cash
and cash equivalents (159 182) (40 322) 26 735
Cash and cash equivalents at
beginning of period 977 839 951 104 951 104
Cash and cash equivalents at
31 December 2003 818 657 910 782 977 839
STATEMENTS OF CHANGES IN EQUITY
Balance at beginning of period 2 195 594 1 636 702 1 636 702
Dividend paid (119) (74 315) (74 221)
Capital distribution (137 742) - -
Retained income 193 813 127 864 255 651
Foreign currency translation reserve
adjustment (984) - (954)
Minority share of Non-distributable reserves - - 9
Share buy back and cancellation - - (15 601)
Cost relating to share buy back
and cancellation - - (2 337)
Own shares acquired by subsidiary (12 738) - (2 063)
Shares issued for the acquisition
of the minorities of Caxton
Publishers and Printers Limited - 387 827 398 775
Share options exercised - (367) (367)
Balance at end of period 2 237 824 2 077 711 2 195 594
RECONCILIATION OF HEADLINE EARNINGS
Audited
Unaudited Unaudited for the
6 months to 6 months to year to
31 December 31 December 30 June
2003 2002 2003
R000 R000 R000
Earnings attributable to shareholders 193 813 127 864 255 651
Adjusted for:
(Surplus)/Loss on sale less impairment in
value of fixed assets (248) (248) 902
(Surplus)/Loss on realisation of investments(138) - 752
Goodwill impairment 185 4 008 7 819
Goodwill amortisation 185 4 008 7 819
Headline earnings 193 797 135 632 272 943
COMMENT
Good results continue to be achieved by the Company, notwithstanding a difficult
trading period characterised by the volatility in the Rand and the reduction of
5,5% in the Reserve Bank"s repo rate. The anticipated increase in consumer
spending did materialise and retailers traded well during the period under
review. The strengthening of the Rand has meant that prices of certain grades of
paper have reduced and this benefit has wherever possible been passed onto our
customers. Advertising spends improved but the pressure on margins, particularly
in the web printing, packaging and stationery divisions, intensified.
Earnings
Turnover increased from R1,454 million to R1,526 million. This represents a
modest increase of only 4,9%; however after the elimination of inflation and
deflation in certain divisions, real turnover growth remains positive. Operating
profit was up by 14,4% from R243,6 million to R278,6 million once again
reflecting the high level of efficiency of the Company"s numerous operating
facilities. Depreciation is calculated from 1 July 2004, is calculated having
regard to the useful life of major individual assets and their residual values,
amounted to R35,8 million.
Net profit from operations therefore amounted to R242,8 million, which compares
favourably with R195,3 million earned in the corresponding period last year - an
improvement of 24,3% and equates to a margin of 15,9% on turnover. This margin,
on a comparative basis, has been slightly distorted by the change in the
estimate of calculating depreciation.
The reduction in interest rates has had a major impact on finance income, which
decreased from R62,4 million to R54,4 million.
Associated companies performed very much in line with the comparative period
with earnings from these investments amounting to R3,4 million.
Taxation, which includes Secondary Tax on Companies, rose to R103,7 million and,
after providing for earnings attributable to outside shareholders of R2,6
million and the preference dividend, earnings attributable to ordinary
shareholders, amount to R193,8 million.
Earnings per share therefore amounted to 42,3 cents and diluted earnings per
share to 41,6 cents.
Diluted headline earnings per share were 41,6 cents, which compares with 35,2
cents per share achieved during the comparable period last year, which is a
satisfactory improvement of 18,1%.
Divisional performance
The six months under review have been a difficult trading period for the Company
where currency fluctuations have had to be continuously managed. The various
operating divisions have done well to achieve satisfactory results against this
background, which has also been influenced by the fall in inflation. Costs have
been well controlled and remain within budget parameters.
Retailers have generally experienced a buoyant trading period and this
environment has in turn lead to an increase in advertising spent.
Packaged goods manufacturers conversely have had to contend with products being
imported at prices lower than what locally manufactured equivalents were being
sold at.
Newspapers
Excellent profits were once again achieved by this division where market share
growth was experienced. A number of new titles were added to the portfolio.
Magazines
Results have continued to improve in spite of a fiercely contested market where
a number of new titles have been launched or are in the pipeline. A minority
investment was made in a small publishing company and other new launches and
investments remain under consideration.
Academic publishing
Major investments in the new curriculum, which is commencing from 2004,
continued with good success. Market share has been maintained by Maskew Miller
Longman and the excellent products, profile and positioning of this pre-eminent
academic publishing company has once again come to the fore. Good results are
anticipated for the full year, albeit not quite at last year"s level due to the
investment being made in the new curriculum.
Book printing
Whilst this division continues to trade in line with expectations, profits have
been affected by the strength of the Rand, which has impacted negatively on the
export side of the business, as local products are no longer competitive with
the overseas equivalents.
Web printing
Volumes have been maintained but this division in particular, has been subject
to margin pressure as a result of the fluctuations in raw materials and has done
well to show a small growth in revenues and profits.
Packaging
The programme for the investment in new equipment is almost complete with the
commissioning of the last major items of equipment scheduled for the first half
of 2004. This area of activity has been depressed by import replacements that
were referred to earlier and by packaging being imported into South Africa at
highly competitive prices.
Stationery
Here too, margins remain under pressure once again resulting from exchange rate
volatility, which has resulted in a dramatic decrease in selling prices, in a
market, which is showing little if any growth.
Prospects
Whilst the current consumer boom is likely to continue for the year, the
improvement in the value of the Rand and lower inflation, will place pressure on
growing turnover as the selling prices of the majority of the Company"s products
will remain fixed or decrease. This will mean that margins will be squeezed and
the control over expenses will assume even greater prominence. Provided that
advertising spend continues to hold up the Company should be able to improve its
operational profitability. However, the lower level of interest rates prevailing
will mean that less income will be earned by the Company on its substantial cash
resources.
In these circumstances it is anticipated that growth in the second half of the
financial year may slow and may not be up to the same level now being reported.
Director"s resignation
Mr Ron Woulidge resigned as a director on 12 February 2004. We would like to
thank Mr Woulidge for his services as a director over the years. Ron will
continue to be involved in day-to-day operations.
Withdrawal of cautionary
Shareholders are referred to the trading statement and cautionary announcement
published on SENS on 12 February 2004. As these interim results have now been
published, shareholders are advised that caution is no longer required when
dealing in their Caxton shares.
Basis of preparation
The accounting policies used in the preparation of the financial statements for
the period under review are in accordance with South African Statements of
Generally Accepted Accounting Practice and are consistent with those applied in
the prior year.
By order of the board
Dr F van Zyl Slabbert G M Utian T D Moolman
(Chairman) (Managing Director) (Chief Executive Officer)
17 February 2004
Sponsor
SASFIN
Corporate Finance
A Division of Sasfin Bank Limited
Date: 17/02/2004 05:05:18 PM
Produced by the JSE SENS Department
