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Masonite (Africa) Limited - Unaudited Interim Report For The Six Months Ending
June 30, 2004
MASONITE (AFRICA) LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1942/015502/06)
Share code: MAS ISIN: ZAE000004289
(`Masonite` or `the company`)
UNAUDITED INTERIM REPORT for the six months ending June 30, 2004
TRADING RESULTS
Group income statement
6 months to 12 months to
June 30, June 30, December 31,
2004 2003 2003
Note (unaudited) (unaudited) (audited)
(R`000) (R`000) (R`000)
Revenue 157 248 148 159 331 564
Cost of sales (121 241) (102 354) (235 903)
Gross profit 36 007 45 805 95 661
Other operating income 4 719 6 824 6 684
Distribution expenses
and allowances (33 368) (33 750) (73 032)
Selling and general
administrative
expenses (10 903) (10 347) (20 990)
Other operating
expenses (1 100) (11 193) (7 087)
Net plantation income 4 036 2 504 5 967
Trading (loss)/income (609) (157) 7 203
Movement in fair
value of standing
timber
and sugar cane as a
result of AC137 2 2 504 13 270 13 270
Profit from operations 1 895 13 113 20 473
Net financing cost (561) (1 236) (1 931)
Profit before taxation 1 334 11 877 18 542
Income tax expense (465) (3 538) (5 506)
Income attributable
to shareholders 869 8 339 13 036
HEADLINE EARNINGS
RECONCILIATION
Income attributable
to shareholders 869 8 339 13 036
Adjusted for:
Profit on sale of
assets (58) (238) (159)
Tax effect of
adjustments 17 71 48
Headline earnings 828 8 172 12 925
Number of shares in
issue 6 849 388 6 819 224 6 832 556
Earnings per share
(cents)
Attributable basis 13c 122c 191c
Headline basis 12c 120c 189c
Fully diluted basis 12c 119c 185c
Group balance sheet
6 months 12 months
June 30, June 30, December 31,
2004 2003 2003
Note (unaudited) (unaudited) (audited)
(R`000) (R`000) (R`000)
ASSETS
Non-current
assets
Property,
plant and
equipment 79 407 76 906 79 008
Biological
assets 2 100 932 98 429 98 429
Investments 948 946 948
Loans
receivable 96 132 114
Total
non-current
assets 181 383 176 413 178 499
Current
assets
Inventories 43 084 43 349 40 367
Trade
accounts
receivables 48 702 46 929 48 757
Other
receivables 10 407 10 080 6 835
Amounts due
from group
companies 4 634 4 942 7 209
Cash and
cash
equivalents 30 3 107 2 148
Total
current
assets 106 857 108 407 105 316
Total assets 288 240 284 820 283 815
EQUITY AND
LIABILITIES
Capital and
reserves
Share capital 3 425 3 410 3 416
Share premium 2 177 2 067 2 116
Non-distributable reserves 700 700 700
Distributable reserves 181 227 175 661 180 358
Total
shareholders`
investment 187 529 181 838 186 590
Non-current
liabilities
Long-term
liabilities - 92 -
Deferred
taxation 28 347 29 108 27 944
Deferred
investment
allowances 24 47 38
Retirement
benefit
obligation 3 16 101 14 208 15 507
Total
non-current
liabilities 44 472 43 455 43 489
Current
liabilities
Trade
accounts and
other
payables 46 706 46 776 47 113
Provisions 4 3 905 3 269 3 700
Short-term
borrowings 5 645 12 417 2 330
Taxation (30) (2 955) 81
Payable to
holding
company 13 20 512
Total
current
liabilities 56 239 59 527 53 736
Total equity
and
liabilities 288 240 284 820 283 815
Group cash flow statement
6 months 12 months
June 30, June 30, December 31,
2004 2003 2003
(unaudited) (unaudited) (audited)
(R`000) (R`000) (R`000)
Cash flows from operating
activities
Operating profit before
working capital changes 5 511 5 047 19 630
Working capital changes (4 360) (26 060) (22 666)
Cash generated/(utilised) by
operations 1 151 (21 013) (3 036)
Interest received 67 193 414
Interest paid (628) (1 429) (2 345)
Taxation paid (187) (4 820) (4 926)
Net cash inflow/(outflow) from
operating activities 403 (27 069) (9 893)
Cash flows from investing
activities
Purchase of property, plant
and equipment
Expansion (531) (2 371) (3 712)
Replacement (5 453) (6 107) (12 885)
Proceeds from disposal of
property, plant and equipment 60 210 302
Increase in investments - - (2)
Decrease in loans receivable 18 13 31
Net cash outflow from
investing activities (5 906) (8 255) (16 266)
Cash flows from financing
activities
Proceeds from issue of
ordinary shares 70 6 61
Decrease in long-term
borrowings - - (92)
Net cash inflow/(outflow) from
financing activities 70 6 (31)
Net decrease in cash and cash
equivalents (5 433) (35 318) (26 190)
Net cash and cash equivalents
at beginning of year (182) 26 008 26 008
Net cash and cash equivalents
at end of year (5 615) (9 310) (182)
Group statement of changes in equity
Non
Share Share distributable
capital premium reserve
(R`000) (R`000) (R`000)
Balance at 31 December 2002 3 409 2 062 700
Issue of share capital 1 5
Net profit for the period - - -
Balance at 30 June 2003 3 410 2 067 700
Issue of share capital 6 49 -
Net profit for the period - - -
Balance at 31 December 2003 3 416 2 116 700
Net profit for the period - - -
Issue of share capital 9 61 -
Balance at 30 June 2004 3 425 2 177 700
Accu-
mulated
profit Total
(R`000) (R`000)
Balance at 31 December 2002 167 322 173 493
Issue of share capital 6
Net profit for the period 8 339 8 339
Balance at 30 June 2003 175 661 181 838
Issue of share capital - 55
Net profit for the period 4 697 4 697
Balance at 31 December 2003 180 358 186 590
Net profit for the period 869 869
Issue of share capital - 70
Balance at 30 June 2004 181 227 187 529
NOTES
1. Accounting policies
This interim financial report has been prepared using the same accounting
policies as those detailed in the December 2003 Annual Report and complies with
the South African Statements of Generally Accepted Accounting Practice.
Comparative figures are regrouped or restated where necessary in accordance
with the current year classification.
2. Biological assets
Biological assets are stated at fair value (market price less harvesting and
transport costs), with any resultant gain or loss recognised in the income
statement. The after tax effect on profits resulting from the change in value
of biological assets was R1.7 million (2003: R9.3 million). The valuation has
been impacted, in the current year, by potential drought losses and increase in
rail and fuel costs, offset partially by timber price increases.
June 30, June 30, December 31,
2004 2003 2003
(R`000) (R`000) (R`000)
Timber and sugar cane plantations -
immature 31 994 29 526 29 526
Timber and sugar cane plantations -
mature 68 938 68 903 68 903
Total 100 932 98 429 98 429
3. Retirement benefit obligation
The group provides post-retirement medical benefits to retired employees. The
liability in respect of post-retirement medical benefit is R16.1 million (2003:
actuarially valued at R15.5 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.
4. Retirement benefits
The group enjoyed a contribution holiday approved by the Financial Services
Board as a result of the surplus residing in Provident Fund No. 2. 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 R3.9 million including interest of
which R3.7 million was provided in 2003.
COMMENTARY
Income attributable to shareholders for the six months to 30 June 2004 is
substantially lower than that for the prior comparative period (2004: R0.9
million, 2003: R8.3 million). This is due mainly to the application of AC137,
Agriculture (see note 2). On a trading basis, the company incurred a loss of
R0.6 million for the period (2003: loss R0.2 million).
Revenue for the period increased by 6.1% from R148.2 million to R157.2 million.
However, margins in both domestic and international markets were negatively
affected by the continued strength of the Rand.
The operating divisions have performed well, and cost reduction continues to be
a major focus.
Seasonal demand during the second half of the year should enhance earnings
during this period.
The directors have not declared a dividend for the period.
For and on behalf of the Board
M J Slater D S Cooper
Managing Director Financial Director
26 August 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 Capital
TRANSFER SECRETARIES: Computershare Investor Services 2004 (Pty) Ltd
PO Box 61051, Marshalltown, 2107
70 Marshall Street, Johannesburg, 2001, Republic of South Africa
Telephone (011) 370 5000
Date: 26/08/2004 05:00:12 PM Produced by the JSE SENS Department
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