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BEARING MAN LTD - GROUP INTERIM RESULTS AND DIVIDEND ANNOUNCEMENT FOR THE SIX
MONTHS ENDED 30 SEPTEMBER 2004 AND FURTHER CAUTIONARY ANNOUNCEMENT
BEARING MAN LTD
AFRICA S FOREMOST DISTRIBUTOR OF DYNAMIC ENGINEERING CONSUMABLES
Share code: BRM ISIN: ZAE000001137
(Incorporated in the Republic of South Africa)
Registration number 1955/002109/06
GROUP INTERIM RESULTS AND DIVIDEND ANNOUNCEMENT FOR THE SIX MONTHS
ENDED 30 SEPTEMBER 2004 AND FURTHER CAUTIONARY ANNOUNCEMENT
* REVENUE +4%
* PROFIT BEFORE TAX +10%
* EARNINGS +9%
* CASH GENERATED R44 million
Income Statement
Unaudited
Six months ended
30 September
2004 2003
R000 R000
Revenue 517 465 498 130
Operating profit 73 219 73 165
Interest and foreign exchange
costs 5 981 11 852
Profit before taxation 67 238 61 313
Taxation 23 848 21 634
Earnings for the period 43 390 39 679
Determination of headline
earnings
Earnings 43 390 39 679
Adjustments - after tax where
applicable
- Amortisation of goodwill 150 150
- Profit on disposal of fixed
assets (528) (16)
Headline earnings 43 012 39 813
Shares in issue
Weighted average (000`s) 113 155 110 322
At end of period (000`s) 113 155 113 155
Weighted average including
diluted shares (000`s) 114 705 114 891
Earnings per share (cents) 38,3 36,0
Headline earnings per share (cents) 38,0 36,1
Diluted earnings per share (cents) 37,6 34,6
Diluted headline earnings per
share (cents) 37,2 34,7
Dividends per share
Interim (cents) 13,0* 11,0
Final (cents) - -
Income Statement
Audited
Year ended
Inc/ 31 March
(Dec) 2004
% R000
Revenue 4 1 009 305
Operating profit - 148 356
Interest and foreign exchange
costs (50) 20 025
Profit before taxation 10 128 331
Taxation 10 43 270
Earnings for the period 9 85 061
Determination of headline
earnings
Earnings 9 85 061
Adjustments - after tax where
applicable
- Amortisation of goodwill 300
- Profit on disposal of fixed
assets (1 175)
Headline earnings 8 84 186
Shares in issue
Weighted average (000`s) 3 111 739
At end of period (000`s) - 113 155
Weighted average including
diluted shares (000`s) - 114 798
Earnings per share (cents) 7 76,1
Headline earnings per share (cents) 5 75,3
Diluted earnings per share (cents) 9 73,5
Diluted headline earnings per
share (cents) 7 72,7
Dividends per share
Interim (cents) 18 11,0
Final (cents) - 25,0
* An interim dividend for the period ended 30 September 2004 of 13 cents per
share has been declared by the directors on 27 October 2004.
Cash Flow Statement
Unaudited Audited
Six months ended Year ended
30 September 31 March
2004 2003 2004
R000 R000 R000
CASH FLOW FROM OPERATING ACTIVITIES
Cash flows from operating activities 109 198 47 903 148 970
Interest and forward exchange contract
costs paid (5 981) (11 852) (19 961)
Taxation paid (28 792) (38 632) (68 621)
Dividends paid (28 266) (26 410) (38 857)
Net cash inflow/(outflow) from operating
activities 46 159 (28 991) 21 531
CASH FLOW FROM INVESTING ACTIVITIES
Acquisition of property, plant and
equipment to maintain operations (3 861) (12 308) (18 563)
Goodwill arising on business acquired (600) - -
Proceeds on disposal of property, plant
and equipment 4 192 2 723 5 360
Net cash outflow from investing
activities (269) (9 585) (13 203)
CASH FLOW FROM FINANCING ACTIVITIES
Repayment of long-term liabilities (1 810) (1 605) (1 606)
Repayment by participants of Staff
Incentive Scheme Loans - 5 564 7 871
Staff incentive scheme - net transactions (289) 1 839 (737)
Net cash (outflow)/inflow from financing
activities (2 099) 5 798 5 528
NET INCREASE/(DECREASE) IN CASH AND CASH
EQUIVALENTS 43 791 (32 778) 13 856
Cash and cash equivalents at beginning
of period (24 130) (37 986) (37 986)
Cash and cash equivalents at end of
period 19 661 (70 764) (24 130)
Nature of Business
The group is Southern Africa`s largest distributor of a comprehensive range of
ball and roller bearings, seals, power transmission products, geared motors,
belting and related products. Its base of customers covers a broad spectrum of
industry, including mining, steel, paper and pulp, and agriculture.
Financial Review
Earnings for the period increased by 9% to R43,4 million, equivalent to EPS of
38,3 cents per share. Taking into account the tough trading conditions in the
mining and engineering sector, these results are particularly pleasing.
Emphasis was placed on good asset management, resulting in a positive cash flow
of R43, 8 million for the period.
Acquisition of Fastener Business
Subsequent to the period end the group has signed an agreement to acquire the
business of Springset (Pty) Limited, a subsidiary of the listed entity Dawn,
which is subject to certain conditions including the approval of the
Competition Commission. This acquisition together with our newly formed fastener
division immediately creates a meaningful division and provides the necessary
platform for growth.
Black Economic Empowerment and Further Cautionary Announcement
Further to the cautionary announcements dated 2 August 2004 and 13 September
2004, shareholders are advised that negotiations are still in progress
regarding a possible empowerment transaction, which if successfully concluded,
may have a material effect on the price of the company`s securities.
Accordingly, shareholders are advised to continue exercising caution when
dealing in the company`s securities until a further announcement is made.
Accounting Policies
The principal accounting policies, as outlined in the 2004 annual report, have
been consistently applied and comply with South African Statements of
Generally Accepted Accounting Practice.
Balance Sheet
Unaudited Audited
30 September 31 March
2004 2003 2004
R000 R000 R000
ASSETS
Non-current 88 266 99 438 94 349
Property, plant and equipment 76 548 87 693 84 122
Intangible assets 2 325 2 025 1 875
Loan to Staff Incentive
Scheme participants 5 688 5 688 5 688
Deferred tax 3 705 4 032 2 664
Current 434 566 458 274 437 902
Inventories 282 065 323 451 297 860
Trade and other receivables 132 840 134 823 140 042
Bank balances and cash 19 661 - -
522 832 557 712 532 251
EQUITY AND LIABILITIES
Capital and reserves 346 232 298 195 331 131
Non-current liabilities 6 590 9 318 9 005
Long-term borrowings 4 932 7 102 7 058
Debentures 1 658 2 216 1 947
Current liabilities 170 010 250 199 192 115
Bank overdrafts and bankers
acceptances - 70 764 24 130
Short-term borrowings 2 140 1 781 1 824
Trade and other payables 167 870 177 654 166 161
522 832 557 712 532 251
Net debt: equity (%) - 27,5 10,6
Net asset value per share (cents) 306,0 263,5 292,6
Net tangible asset value per
share (cents) 303,9 261,7 291,0
Changes in Equity Statement
Unaudited Audited
Six months ended Year ended
30 September 31 March
2004 2003 2004
R000 R000 R000
Stated capital
Balance at beginning of period 62 742 57 031 57 031
Issued during the period on conversion
of debentures - 5 730 5 730
Share issue expenses - (19) (19)
Balance at end of period 62 742 62 742 62 742
Debentures
Balance at beginning of period 2 828 5 686 5 686
Transfer from debenture liability
portion on conversion - 1 721 1 721
Converted into shares - (5 730) (5 730)
Redeemed - (263) (263)
Issued during the period - 1 414 1 414
Balance at end of period 2 828 2 828 2 828
Retained income
Balance at beginning of period 265 561 219 357 219 357
Earnings for the period 43 390 39 679 85 061
Dividends - prior year final (28 289) (26 410) (26 410)
- current year interim - - (12 447)
Balance at end of period 280 662 232 626 265 561
Total shareholder`s interest 346 232 298 196 331 131
Prospects
We anticipate that earnings growth in the second half of the year will be
similar to that of the first half, resulting in modest but real growth over the
previous financial year.
For and on behalf of the board
DI Samuels LJ Marais
Chairman Managing Director
1 November 2004
Dividends
A final dividend of 25 cents was declared during the period and paid on 14 June
2004. The directors have, subsequent to the half-year end, declared a further
dividend (number 33) of 13 cents per share. The following dates are applicable:
Last date to trade `cum` dividend Friday, 19 November 2004
Date trading commences `ex` dividend Monday, 22 November 2004
Record date Friday, 26 November 2004
Date of payment Monday, 29 November 2004
Shareholders may not dematerialise or rematerialise their shares between
Monday, 22 November 2004 and Friday, 26 November 2004, both days inclusive.
By order of the board
DC Bassett
Company Secretary 1 November 2004
Registered office
Bearing Man Ltd
6 Tetford Circle
Millennium Bridge Business Park
La Lucia Ridge, 4320
South Africa
Auditors
PricewaterhouseCoopers
Transfer secretaries
Computershare Investor Services 2004 (Pty) Ltd
70 Marshall Street
Johannesburg, 2001
Directors
DI Samuels* (Chairman), GJ Till (Vice Chairman), LJ Marais (Managing),
A Bekker (Alternate), A Goldstone*, M Rose-Innes*, RE Sherrell*, WR Taylor
*Non-executive
Company Secretary
DC Bassett
Results are available on:
www.bearingman.co.za
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