| Mon 10 May 2004, 13:22 | | Audited Financial Results |
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Value Group Limited - Audited Financial Results
Release Date: 10/05/2004 12:35:18 Code(s): VLE
Value Group Limited - Audited Financial Results
Value Group Limited
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER: 1997/002203/06)
SHARE CODE: VLE ISIN: ZAE000016507
("VALUE" OR "THE COMPANY")
THE MEASURABLE LOGISTICS COMPANY
VALUE GROUP LIMITED
- 33% INCREASE IN DIVIDEND
- 26% INCREASE IN HEADLINE EARNINGS PER SHARE
- 20% INCREASE IN NET TANGIBLE ASSET VALUE
R96 MILLION OPERATING CASH FLOW
AUDITED FINANCIAL RESULTS
FOR THE YEAR ENDED 29 FEBRUARY 2004 AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
CONSOLIDATED INCOME STATEMENT
% R000"s R000"s
change 2004 2003
Revenue 8 555 534 514 039
Operating income before
depreciation and finance costs 119 854 105 302
Depreciation (51 844) (44 674)
Operating income 12 68 010 60 628
Investment income 777 1 278
Finance costs (9 331) (14 533)
Net income before taxation 59 456 47 373
Taxation (note 2) (19 693) (15 960)
Earnings attributable to
ordinary shareholders 27 39 763 31 413
Earnings per share
(cents) (note 3)
- Basic 20,4 16,1
- Headline 26 19,2 15,2
- Diluted basic 18,7 14,9
- Diluted headline 17,6 14,0
Dividend per share (cents) 33 4,0 3,0
CONSOLIDATED BALANCE SHEET
Assets
Non-current assets 265 348 231 656
Property, vehicles, plant and equipment 264 730 231 265
Deferred tax 613 386
Investment 5 5
Current assets 142 418 115 883
Inventory 10 514 7 348
Trade and other receivables 90 326 68 005
Taxation in advance - 614
Bank and cash 41 578 39 916
Total assets 407 766 347 539
Equity and liabilities
Capital and reserves 201 338 166 983
Non-current liabilities 75 513 83 590
Interest bearing borrowings 37 038 48 729
Deferred tax 38 475 34 861
Current liabilities 130 915 96 966
Trade and other payables 97 292 81 244
Current portion of interest bearing
borrowings 18 096 15 722
Taxation 15 527 -
Total equity and liabilities 407 766 347 539
Net tangible asset value per share (cents) 103,0 85,8
Return on average equity (%) 21,6 21,4
Debt: Equity ratio (%) 27,4 38,6
CONSOLIDATED CASH FLOW STATEMENT
Cash flows from operating activities 96 072 122 677
Cash flows from investing activities (85 527) (29 658)
Cash flows from financing activities (8 883) (68 326)
Net change in cash and cash equivalents 1 662 24 693
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share capital 208 208
Share premium 41 231 41 231
Accumulated profits 167 846 133 925
Balance at beginning of year 133 925 102 512
Earnings attributable to ordinary
shareholders 39 763 31 413
Dividend paid (5 842) -
Treasury shares (7 947) (8 381)
Total capital and reserves 201 338 166 983
NOTES
1. Accounting policies
The results have been prepared in accordance with South African Statements of
Generally Accepted Accounting Practice.
The accounting policies adopted for this report are consistent with those
applied in the previous year other than the changes stated below.
The JSE Securities Exchange of South Africa ("JSE") issued guidance on the
consolidation of share trusts and the Value Group Share Trust is accordingly
consolidated into the financial statements of the Group. The shares held by the
trust are shown as treasury shares.
This represents a change in accounting policy and in accordance with AC103, the
prior years" figures have been restated.
The Group also adopted AC133 Financial Instruments: Recognition and Measurement
which had no material impact on the current year results.
2. Taxation
Taxation includes secondary taxation on
companies 778 -
3. Earnings per share
3.1 Reconciliation between basic and
headline earnings
Basic earnings 39 763 31 413
Profit on disposal of property, vehicles,
plant and equipment less taxation (2 447) (1 864)
Headline earnings 37 316 29 549
3.2 Number of ordinary shares in issue
- Actual 207 599 040 207 599 040
- Weighted average 194 851 096 194 742 884
- Diluted 212 107 884 210 897 884
COMMENTARY
INTRODUCTION
Value Group Limited and its subsidiaries provide a comprehensive range of
integrated logistics encompassing all activities within the supply chain,
including warehouse and fleet management and full maintenance leasing. The major
operating divisions comprise break bulk and single party distribution, forklift
and commercial vehicle rental and leasing.
FINANCIAL REVIEW
Improved vehicle utilisation and increased critical mass were the major factors
in enabling the Group to achieve these results. Operating margin before
depreciation increased from 20% to 22%. Operating income after depreciation
increased by 12% from R60,6 million to R68 million on an 8% increase in revenue.
The net reduction of R9,3 million in the interest bearing debt coupled with the
fall in prime overdraft rates, has contributed to finance charges reducing from
R14,5million to R9,3million.
The result is a 26% growth in headline earnings from 15,2 cents per share to
19,2 cents per share.
Due to the last day of the reporting period falling on a Sunday, cash flows from
operating activities reduced from R122,7 million to R96,1 million. Nevertheless,
stringent treasury and working capital management contributed to solid cash flow
generation throughout the year.
The favourable interest rate environment and growth in the customer base
motivated the Group to invest R101,5million in new assets of which R15,9million
was financed out of the proceeds on disposals of old vehicles and the balance
out of cash flow. This material investment positions the Group for further
organic growth. The new fleet has continued to save variable costs, albeit at
the expense of an additional depreciation charge.
Net tangible asset value per share increased by 20% to R1,03 per share.
OPERATIONAL REVIEW
The logistics division experienced a 22% growth in revenue as a result of
significant increased demand for our customers" products and growth in our
customer base.
The increased vehicle utilisations of the truck rental division was fuelled
mainly by the market share gains of the logistics division. The ongoing expenses
of the extremely successful rebranding of the fleet were offset by the cost
saving initiatives implemented throughout the year, the result of which is a
meaningful contribution to bottom line earnings.
Organic growth in Freightpak"s turnover and the renewal of its fleet during the
year has contributed to its improved profitability.
CAPITAL COMMITMENTS
Capital expenditure for the recurring replacement of older vehicles and growth
of the business is anticipated to be R75million for the forthcoming year.
PROSPECTS
Construction of the new warehousing and distribution facility comprising a
central distribution hub and two interconnected warehouses totalling
approximately 90 000m2, commenced in February 2004. These leased premises are
scheduled for completion in May 2005. The logistics division currently operates
eight separate warehouses and two hubs in the Gauteng area. Consolidation of
these operations is expected to contribute to significant reductions in current
duplicated costs from the 2006 financial year onwards.
The opening of new branches in Rustenburg and Namibia, as well as a possible
branch in Botswana, will position the Group to provide customers with additional
tailored logistical solutions throughout Southern Africa.
In the absence of any material changes to the economy and operating environment,
and having regard to the additional blue chip customer base secured by the
logistics division prior to and subsequent to the year-end, the Board is
confident that headline earnings for the 2005 financial year will increase at
least in line with current levels of inflation.
AUDIT OPINION
Charles Orbach & Company have audited these results. Their unqualified audit
opinion is available for inspection at the company"s registered office.
DECLARATION OF DIVIDEND (NUMBER 2)
Cash flows in the ensuing year will be adequate to cover operational and capital
expenditure requirements. Accordingly, the Board has resolved to declare a 33%
increase in the dividend to 4 cents per ordinary share. This dividend is covered
4,8 times by earnings and is payable as follows:
Declaration date: Monday, 10 May 2004
Last day to trade cum dividend: Friday, 25 June 2004
Trading ex-dividend commences: Monday, 28 June 2004
Record date: Friday, 2 July 2004
Payment date: Monday, 5 July 2004
Share certificates may not be dematerialised or rematerialised between 28 June
2004 and 2 July 2004, both days inclusive.
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are referred to the cautionary announcement that accompanied the
recent trading update published on SENS on 31 March 2004. With the publication
of these results, the cautionary announcement is withdrawn.
For and on behalf of the Board
C D Stein S D Gottschalk
Chairman Chief Executive Director
Johannesburg
10 May 2004
VALUE GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/002203/06) ISIN: ZAE000016507 Share code: VLE
Directors: C D Stein* (Chairman), S D Gottschalk (CEO), D C Marais, B E Goldie,
C L Sack, G J Igesund, I M Groves*, N M Phosa *Non-executive director
