| Mon 23 Feb 2004, 16:00 | | PROVISIONAL RESULTS FOR YEAR TO 31 DECEMBER 2003 |
|
MASONITE (AFRICA) LIMITED - PROVISIONAL RESULTS FOR YEAR TO 31 DECEMBER 2003
MASONITE (AFRICA) LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1942/015502/06)
Share code: MAS ISIN: ZAE000004289
("Masonite" or "the company")
PROVISIONAL RESULTS FOR YEAR TO 31 DECEMBER 2003
GROUP INCOME STATEMENT
Year to December 31
2003 2002
Note (R"000) (R"000)
Revenue 331 564 347 882
Cost of sales (235 903) (222 015)
Gross profit 95 661 125 867
Other operating income 6 684 3 025
Distribution expenses and allowances (73 032) (82 206)
Selling and general administrative expenses (20 990) (22 754)
Other operating expenses (7 087) (8 957)
Net plantation income 5 967 4 190
Trading income 7 203 19 165
Movement in fair value of standing timber
and sugar cane as a result of AC 137 13 270 2 836
Profit from operations 20 473 22 001
Net financing cost (1 931) (340)
Profit before taxation 18 542 21 661
Income tax expense (5 506) (6 394)
Net profit after tax 13 036 15 267
Headline earnings reconciliation
Total net profit 13 036 15 267
Adjusted for:
Profit on sale of assets (159) (140)
Tax effect of adjustments 48 42
Headline earnings 12 925 15 169
Number of shares in issue 6 832 556 6 817 558
Earnings per share(cents)
Attributable basis 191 224
Headline basis 189 222
Fully diluted basis 185 218
Group balance sheet
ASSETS
Non-current assets
Property, plant and equipment 3 177 437 158 847
Investments 948 946
Loans receivable 114 145
Total non-current assets 178 499 159 938
Current assets
Inventories 40 367 32 868
Trade accounts receivables 48 757 43 390
Other receivables 6 835 5 241
Amounts due from group companies 7 209 6 689
Cash and cash equivalents 2 148 26 008
Total current assets 105 316 114 196
Total assets 283 815 274 134
EQUITY AND LIABILITIES
Capital and reserves
Share capital 3 416 3 409
Share premium 2 116 2 062
Non-distributable reserves 700 700
Distributable reserves 180 357 167 322
Total shareholders" investment 186 589 173 493
Non-current liabilities
Long-term liabilities - 92
Deferred taxation 27 944 25 622
Deferred investment allowances 38 73
Retirement benefit obligation 4 15 507 14 055
Total non-current liabilities 43 489 39 842
Current liabilities
Trade accounts and other payables 47 114 56 847
Provisions 5 3 700 2 164
Short-term borrowings 2 330 -
Taxation 81 1 788
Payable to holding company 512 -
Shareholders for dividends - -
Total current liabilities 53 737 60 799
Total equity and liabilities 283 815 274 134
GROUP STATEMENT OF CHANGES IN EQUITY
Non
butable Accu-
Share Share distri mulated
capital premium reserve profit Total
R"000 R"000 R"000 R"000 R"000
Balance at 31 December 2001 3 409 2 062 700 152 055 158 226
Balance as previously reported 102 676
Prior year adjustment 49 379
Net profit for period 15 267 15 267
Balance at 31 December 2002 3 409 2 062 700 167 322 173 493
Balance as previously reported 115 957
Prior year adjustment 51 365
Net profit for the period 13 036 13 036
Issue share capital 7 54 0 61
Balance at 31 December 2003 3 416 2 116 700 180 358 186 590
GROUP CASH FLOW STATEMENT
2003 2002
(R"000) (R"000)
Cash flows from operating activities
Operating profit before working capital changes 32 902 32 969
Working capital changes (22 668) 16 896
Cash generated by operations 10 234 49 865
Interest received 414 895
Interest paid (2 345) (1 235)
Taxation paid (4 926) (9 744)
Dividends paid - (2 113)
Net cash inflow from operating activities 3 377 37 668
Cash flows from investing activities
Purchase of property, plant and equipment
Expansion (3 712) (6 245)
Replacement (26 154) (11 637)
Proceeds from disposal of property, plant
and equipment 301 538
Increase in investments (2) (56)
Decrease in loans receivable 31 25
Net cash outflow from investing activities (29 536) (17 375)
Cash flows from financing activities
Proceeds from issue of ordinary shares 61 -
Decrease in long-term borrowings (92) (253)
Net cash outflow from financing activities (31) (253)
Net (decrease)/increase in cash
and cash equivalents (26 190) 20 040
Net cash and cash equivalents at beginning of year 26 008 5 968
Net cash and cash equivalents at end of year (182) 26 008
NOTES
1. Accounting policies
The financial information provided above has been prepared in accordance with
South African Statements of Generally Accepted Accounting Practice and is
consistent with those of the previous financial year, except for the adoption of
AC 137 Agriculture, as detailed in note 2 below.
2. Changes in accounting policy
The group has adopted AC 137 Agriculture , which requires that timber and sugar
cane be measured at fair value (market value less harvesting and felling costs),
and these values are set out below:-
Timber and Sugar Cane Plantations - immature 29 526 23 935
Timber and Sugar Cane Plantations - mature 68 903 61 224
Total 98 429 85 159
Less previously capitalised book value of Timber
and Sugar Cane Plantations (11 779) (11 779)
Prior year adjustment (Impact of AC 137) 86 650 73 380
The after-tax effect of the change in accounting policy is
an increase in net profit of R 9,3 million (2002 : R1,9 million).
3. Non -current assets
Property, plant and equipment as reported previously 90 787 85 467
Prior year adjustment (Impact of AC 137) 86 650 73 380
177 437 158 847
4. Retirement benefit obligation
The group provides post-retirement medical benefits to retired employees. The
liability in respect of the post-retirement medical benefit has been actuarially
valued at R15,5 million (2002 : R14,1 million). Actuarial gains or losses in
respect of post-retirement medical benefits are recognised as income or expense
if the net cumulative unrecognised actuarial gains or losses at the end of the
previous reporting period exceed 10% of the present value of the post-retirement
medical benefit at that date.
5. Retirement benefits
The group at present enjoys a Contribution Holiday approved by the Financial
Services Board as a result of the surplus residing in Provident Fund No 2.This
has reduced the current cost of retirement funding by R1,2 million before
taxation (2002 : R2,1 million). However in terms of the Pension Fund Second
Amendment Act, 2001 promulgated in December 2001, any surplus residing in this
fund may need to be renegotiated . In order to be prudent, the company has a
provision of R3,7 million including interest of which R2,2 million was
provided in 2002.
COMMENTARY
As indicated in our trading update of 22 January 2004, headline earnings for
the year ended December 2003 were lower than that of the prior year (R12,9
million vs R15,2 million). Before adjustments resulting from the application of
AC 137, Agriculture, trading income amounted to R7,2 million (2002 : R19,2
million).
The 4,7% reduction in revenue between 2003 and 2002 was the direct result of
the continuing strength of the Rand against major currencies. As commodity
prices were mostly US dollar denominated in export served markets, there was
little scope for price adjustment. In the local market, imported products have
become more competitive, and placed greater pressure on margins.
Local demand increased in the latter part of 2003, and this, together with
good performances from the operating divisions, contributed to an improved
second half of the year. This, however, was not enough to match the 2002
performance, and trading income fell significantly. As a result of the lower
earnings and the continuing uncertainty of the value of the Rand, the Directors
have decided not to declare a dividend. KPMG Inc., Registered Accountants and
Auditors have issued an unmodified review report on the financial information
contained in this provisional report. The review report is available for
inspection at the company"s registered office.
For and on behalf of the Board
M J Slater D S Cooper
Managing Director Financial Director
24 February 2004
DIRECTORS: A H Wilson (Chairman), M J Slater **(Managing), P A Bernards***, W P
Coetzee, D S Cooper, D G Ellis*, J U Morrison*, K M P Spencer,
R V Tubbesing*, A G Venton *USA ** British ***Canadian
Company Secretary: B van Maarseveen
Investment Bank and Sponsor: Nedbank Corporate
TRANSFER SECRETARIES: Computershare Limited
PO Box 61051, Marshalltown, 2107
70 Marshall Street,
Johannesburg, 2001,
Republic of South Africa
Telephone (011) 370 5000
Date: 23/02/2004 03:48:54 PM Produced by the JSE SENS Department
