| Wed 25 Aug 2004, 15:38 | | results for the 16 months ended 30 June 2004 |
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AMAP - Reviewed results for the 16 months ended 30 June 2004
Amalgamated Appliance Holdings Limited
Registration number 1997/004130/06
`AMAP` or `the Group`
ISIN ZAE000012647
Share code AMA
Reviewed results for the 16 months ended 30 June 2004
* 187% profit attributable to ordinary shareholders
* 181% earnings per share
* 179% headline earnings per share
* R192,8 million net cash on hand
* 15 cents dividend
Comments
Economy/Industry
The Stellenbosch Bureau for Economic Research report for the second quarter of
2004 reflects that the consumers` rating of South Africa`s economic prospects,
the outlook for their household finances and the appropriateness of the present
time to buy durables, improved considerably across all population and income
groups. This was well evidenced by the continuing strong demand for home
entertainment products, as well as household electrical appliances.
Group Performance
As a result of the change in year-end, the comments that follows pertains to the
16 month period ended 30 June 2004. Revenues rose to R2,0 billion and
operating profits to R140 million. Profit after tax and interest grew to R91,4
million with cash on hand of R192,8 million with the Group remaining ungeared at
the end of the reporting period. Headline earnings of 45,2 cents were achieved.
The rise in stock levels was planned to minimise the effects of the worldwide
shortage of both containers and shipping facilities, as well as supply
bottlenecks in the East.
A like for like period comparison for the 12 months ended June 2003 and June
2004 is provided below. The 12 months ended June 2003 is prior to AC133
adoption.
% Change Unaudited Unaudited
12 months 12 months
R`000 30 June 2004 30 June
2003
Revenue 35 1 594 130 1 181 478
Operating profit 188 131 486 45 606
Nett interest paid (2 907) (6 510)
Profit before tax 229 128 579 39 096
Taxation (40 752) (12 002)
Profit attributable to
ordinary shareholders 224 87 827 27 094
Operations
Manufacturing, marketing, distribution and service divisions continued to
function extremely well and contributed meaningfully to Amap`s growing market
share, in spite of increased levels of competition, and a proliferation of cheap
imports. State of the art equipment and significant support from our world
leading principals enabled the Group to introduce new, high quality products at
true `value for money` levels, extending its brands` presence across an
extensive dealer network.
Dividends
The board of directors declared a dividend of 15 cents per share, 3 times
covered, for the 16 months period ended 30 June 2004.
Year-end
Since the year-end has been changed to June, an interim report will be issued
for the 6 months period ending December 2004.
Board
During the period under review, no Board changes have taken place.
Social responsibility and labour relations
Labour relations throughout the Group, particularly with the relevant Unions,
are well managed, which has a positive effect on employee morale. Labour
turnover is insignificant and scarce skills are retained. Whilst a focussed
effort is directed at serious diseases, including Aids, the Group`s productivity
and personnel base to date has not been affected. The correct management of
labour legislation remains a priority, with special attention given to equity
and skills regulations. Improvements to our social investment profile are
being made on an ongoing basis, with specific attention directed at improving
education, lowering crime levels and the general upliftment of quality of life
of the poor. The Group is also aware of the potential benefits which can be
derived from BEE opportunities, and these are being pursued.
Corporate governance:
The Group at all levels subscribes to the spirit of good corporate governance as
set out in the King Report and accepts the need to conduct the enterprise with
integrity, transparency and equal opportunity.
Segmental reporting:
The Group predominantly markets and distributes household electrical durables
(HED) and therefore the directors consider the disclosure of segmental
information in terms of AC115 not to be meaningful.
Dividend Declaration
Notice is hereby given that on the 25th August 2004, the board of directors
declared a dividend of 15 cents per share (2003 : 3.75 cents) for the 16 month
period ended 30 June 2004. This dividend will be paid to ordinary shareholders
recorded as such in the register at the close of business on Friday, 1st October
2004. The last day to trade to participate in this dividend is Thursday, 23rd
September, 2004. The shares will commence trading ex-dividend from Monday, 27th
September 2004.
Important dates pertaining to this dividend are as follows :
Last day to trade `cum: dividend Thursday, 23rd September 2004
Shares trade `ex` dividend Monday, 27th September 2004
Record date Friday, 1st October 2004
Payment date Monday, 4th October 2004
Share certificates may not be dematerialised or rematerialised from Monday, 27
September to Friday, 1 October 2004.
Outlook
Enhanced disposable income driven by low inflation and interest rates should see
real household consumption expenditure remain at a high level. Catering to
the full spectrum of the population, and with a strong year-end order book in
hand, the Group is soundly positioned to benefit from these conditions.
Provided a stable currency environment prevails, a satisfactory operating
performance is anticipated for the next reporting period.
For and on behalf of the Board
J Cohen Chairman
B G Drummond Company Secretary
25 August 2004
Directors
J Cohen (Chairman) L Dreimann* (Deputy Chairman)
J M Kahn* J P Kieser* S G Bernhardt M C Berzack* S Cohen* S A Levitt*
A Nossel S Scafidas W B Rue*
Alternates
S Green* E G W Janssen van den Doornmalen*
*Non-executive
Transfer secretaries
Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street Johannesburg 2001 PO Box 61051 Marshalltown 2107
Registered office
29 Heronmere Road Reuven 2091 PO Box 39186 Booysens 2016
Telephone (011) 490-9000
Sponsor
Bridge Capital Services (Pty) Limited
1st Floor Building 22A The Woodlands Woodlands Drive Woodmead
Abridged Group Income Statement
For The Period Ended 30 June 2004
Restated
Change Reviewed Audited
16 Months 16 Months 12 Months
30 June 2004 28 Feb 2003
R`000 R`000
Revenue 82% 2,002 340 1 100 777
Operating profit 171% 139 990 51 675
Net Interest paid (5 863) (5 613)
Profit before tax 191% 134 127 46 062
Taxation (42 731) (14 250 )
Profit attributable to
ordinary shareholders 187% 91 396 31 812
Dividend - proposed 300% 30 767 7 449
Basic earnings per share-(cents) 181% 45,0 16
Headline earnings per
share -(cents) 179% 45,2 16,2
Diluted basic earnings
per share-(cents) 180% 44,4 15,9
Diluted headline earnings
per share-(cents) 177% 44,6 16,1
Dividend per share 300% 15,0 3,75
Note: A 12 month like for like comparison is included in the comments section.
Abridged Group Balance Sheet as at 30 June 2004
Restated
Reviewed Audited
30 June 2004 28 Feb 2003
R`000 R`000
Assets
Non-Current Assets
Property, Plant And Equipment 31 077 29 812
Goodwill 1 170 1 796
Trademarks 9 572 10 482
Other Financial Assets 24 433 26 561
Deferred Tax 10 243 6 132
Current Assets 697 335 491 884
Inventory 273 186 208 788
Trade And Other Receivables 231 323 167 245
Bank And Cash On Hand 192 826 115 851
Total Assets 773 830 566 667
EQUITY AND LIABILITIES
Capital And Reserves 322,935 240 248
Long Term Borrowings 3 581 4 560
Current Liabilities 447 314 321 859
Trade And Other Payables 399 670 313 817
Derivative Financial Liability 46 850 -
Interest Bearing
Bank Overdraft - 7 459
Short-Term Portion Of Long-Term Liability 794 583
Total Equity And Liabilities 773 830 566 667
Reviewed Audited Abridged Group Cash Flow Statement
For The Period Ended 30 June 2004
Restated
Reviewed Audited
16 Months 12 Months
30 June 2004 28 Feb
2003
R`000 R`000
Cash flow from operating activities 101 025 57 611
Cash generated by trading 175 024 61 496
Working capital changes (60 671) 4 570
Cash generated by operations 114 353 66 066
Net interest paid (5 863) (5 613)
Taxation paid (4 950) (393)
Dividends paid (2 515) (2 449)
Cash flow from investing activities (14 945) (21 210)
Additions property, plant and equipment (17 518) (16 868)
Proceeds on disposal of property
plant and equipment 570 313
Acquisition of subsidiary - (81)
Decrease/(increase) in other
financial assets 2 003 (4 574)
Cash flow from financing activities (1646) 4 032
Net movement in treasury shares (878) -
(Decrease)/increase in long term borrowings (768) 4 032
Net increase in cash 84 434 40 433
Cash surplus beginning of period 108 392 67 959
Cash resources at the end of the period 192 826 108 392
Statement Of Changes In Equity
For The Period Ended 30 June 2004
Fair
Treasury value
Share Share share adjustment
capital premium reserve
R`000 R`000 R`000 R`000
Balance at 1 March 2002 as
previously stated 2 042 154 905 - -
Consolidation of share
incentive trust - - (5 977) -
Balance at 1 March 2002
restated 2 042 154 905 (5 977) -
Net profit for the period - - - -
Dividends - - - -
- less treasury shares - - - -
Dividend settled
- cash election - - - -
- Issue of share capital 32 2 624 (104) -
2 074 157 529 (6 081) -
AC133 openeing balance adjustment - - - 1 397
Restated balance at 1 March 2003 2 074 157 529 (6 081) 1 397
Net profit for the period - - - -
Dividend settled - cash election - - -
-
Issue of share capital 48 5 212 (326) -
Net treasury movement - - (878) -
Fair value movement - - - 909
Balance at 29 February 2004 2 122 162 741 (7 285) 2 306
Net profit for the period - - - -
Dividends - - - -
Fair value movement - - - (112)
Balance at 30 June 2004 2 122 162 741 (7 285) 2 194
Statement Of Changes In Equity
For The Period Ended 30 June 2004 Cont.
Share-
Accumu- holder
lated for
profits dividend Total
R`000 R`000 R`000
Balance at 1 March 2002 as
previously stated 53 109 5 105 215 161
Consolidation of
share incentive trust 1 805 (104) (4 276)
Balance at 1 March 2002
restated 54 914 5 001 210 885
Net profit for the period 31 812 - 31 812
Dividends (7 775) 7 775 -
- less treasury shares 326 (326) -
Dividend settled
- cash election - (2 449) (2 449)
Issue of share capital - (2 552) -
79 277 7 449 240 248
AC133 openeing balance adjustment (7 510) - (6 113)
Restated balance at 1 March 2003 71 767 7 449 234 135
Net profit for the period 70 404 - 70 404
Dividend settled
- cash election - (2 515) (2 515)
Issue of share capital - (4 934) -
Net treasury movement - - (878)
Fair value movement - - 909
Balance at 29 February 2004 142 171 - 302 055
Net profit for the period 20 992 - 20 992
Dividends (30 767) 30 767 -
Fair value movement - - (112)
Balance at 30 June 2004 132 396 30 767 322 935
Supplementary Information For The Period Ended 30 June 2004
Reviewed Restated
Reviewed Audited
Change 16 Months 12 Months
16 Months 30 June 2004 28 Feb 2003
R`000 R`000
Shares in issue (000`s) 212 190 207 340
Shares in issue -
weighted (000`s) 203 226 198 787
Diluted number of shares (000`s) 205 797 200 344
Net assets value per share (cents) 31% 152 116
Cost of sales (R`000) 1 514 820 907 736
Interest received (R`000) 12 978 4 664
Interest paid (R`000) (18 841) (10 277)
Capital expenditure (R`000) 17 518 16 868
Capital commitments (R`000) 374 358
Depreciation and amortisation
charge (R`000) 17 529 9 143
Finance and operating lease
commitments (R`000) 33 448 38 427
Headline earnings 185% 91 803 32 241
Goodwill amortised 624 468
Profit on disposal of property,
plant and equipment (net of tax) (217) (39)
Profit attributable to
ordinary shareholders 187% 91 396 31 812
*Previous year comparatives have been restated refer to notes.
Accounting policies
The accounting policies used in the preparation of the results for the 16 months
ended 30 June 2004 are consistent with those applied in the previous period
other than the changes reflected below.
These results have been prepared in accordance with the South African Statements
of Generally Accepted Accounting Practice AC127 applicable to interim financial
reporting and the listing requirements of the JSE Securities Exchange South
Africa and Schedule 4 of the South African Companies Act.During the year the
Group changed its accounting policy relating to financial instruments in line
with AC133 : Financial Instruments : Recognition and Measurement.
AC133 has introduced a comprehensive framework for accounting for all financial
instruments.The principal effect of the adoption of the standard,has been the
recognition of derivative financial instruments on balance sheet at fair value
which is effective for the Group from 1 March 2003. In terms of the statement
comparative years have not been restated, however, the closing balances of
financial instruments from the previous year have been revalued and processed
against opening retained earnings
The Group, in the past, adopted a policy of hedging purchase transactions but,
the qualifying criteria for hedging in respect of AC133, now adopted,precludes
the Group applying hedge accounting to transactions entered into after 1 March
2003. The impact of this is
that gains or losses on derivative financial instrument cannot be capitalised
into the purchased asset. The transitional provisions state that previously
designated hedges that do not meet the conditions for an effective hedge should
not be changed retrospectively and no changes have thus been made to the opening
retained earnings in this regard.
The effects on opening retained earnings and current period net income are
summarised as follows :
Gross Taxation Net
R`000 R`000 R`000
Opening retained
earnings(net decrease)
Fair value of unmatched
derivative instruments (10 730) 3 220 (7 510)
Current year
profit (net decrease)
Movement in unmatched
derivative instruments (36 120) 10 886 (25 234)
Fair value adjustments to
financial assets
(included in interest received) 1 673 (502) 1 171
(34 447) 10 384 (24 063)
The effect on the balance sheet due to the adoption of AC133 and related
adjustments to the comparative balance sheet not reflected in retained earnings
can be summarised as follows :
Other
financial Deferred Reserves
assets tax
R`000
Fair value adjustments to
opening balance on available
for sale shares 1 644 (247) 1 397
Current period fair value
adjustments on available
for sale assets 937 (140) 797
2 581 (387) 2 194
Restatement of comparatives
A recent ruling given by the GAAP Monitoring Panel has provided more clairty
regarding the consolidation of share incentive scheme trusts.
Consequently the Group has changed its accounting policy in respect of its share
incentive scheme trust (`share trust`). The share trust is now consolidated to
the extent that the Group issued share capital is under the control of the
Group. These shares are shown as treasury shares.The prior year comparatives,
have been restated as follows:(losses and profits on dealings in these shares
are directly reflected under treasury shares.)
As
previously
stated Adjustment Restated
R`000
Balance sheet
Other financial assets
(Share incentive scheme
loan receivable) 30 837 (4 276) 26 561
Treasury shares - 6 081 6 081
Accumulated profits (opening) 77 146 2 131 79 277
Shareholders for dividend 7 775 (326) 7 449
There was no effect on the
income statement in either year.
Number of shares
Shares in issue-weighted (`000) 206 292 (7 505) 198 787
Diluted number of shares
- weighted (`000) 206 292 (5 948) 200 344
Earnings per share
Basic earnings per share (cents) 15,4 0,6 16,0
Diluted basic earnings
per share (cents) 15,4 0,5 15,9
Headline earnings
per share (cents) 15,6 0,6 16,2
Diluted headline earnings
per share (cents) 15,6 0,5 16,1
Net asset value
per share (cents) 117,9 (2,0) 115,9
Movement in share incentive scheme trust shares
The movement in shares in the share incentive scheme trust for the period under
review can be summarised as follows :
30 June 2004 28 Feb 2003
000 000
Opening balance 8 680 4 173
Purchases 1 596 4 436
Shares exercised (774) -
Capitalisation award 234 71
Salton Inc. Minority offer (2 656) -
Closing balance 7 080 8 680
Related party transactions
The company entered into various related party transactions These transactions
are no less favorable than those arranged with third parties.
Subsequent events
With effect from the 1st July 2004 the banking consortium agreed to release all
securities previously held.
No other events material to the understanding of the report have occurred in the
period between the period end date and the date of this report.
Major shareholder
During the last sixteen months SaltonInc. increased their shareholding to 52 %.
Review by independent auditors
The financial information has been reviewed but not audited by Deloitte
& Touche whose unqualified review report is available for inspection at the
company`s registered office.
www.amap.co.za
