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AMALGAMATED APPLIANCE HOLDINGS LIMITED - UNAUDITED INTERIM RESULTS FOR THE SIX
MONTH PERIOD ENDED 31 DECEMBER 2004
AMALGAMATED APPLIANCE HOLDINGS LIMITED
Registration number 1997/004130/06
(`Amap` or `the Group`)
ISIN: ZAE000012647
Share code: AMA
UNAUDITED INTERIM RESULTS FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2004
COMMENTS
Operations
All divisions performed at high levels of efficiency enabling Amap to provide
its extensive dealer network and the public with goods and services representing
exceptional value for money. The flow of new and innovative products from our
leading international suppliers in electronic and household appliances, combined
with outstanding local manufacturing facilities, ensured continuation of the
Group`s dominant presence in the market. The strength of the rand relative to
the dollar, however, rendered us uncompetitive in export markets.
Group performance
As a result of our change in year-end, the 6 month period ended 31 December 2004
is compared with the 6 month period ended February 2004. What follows is a like-
for-like comparison for the 6 months ended December 2003 and December 2004 which
reflects that revenues rose by 24% from R869,3 million to R1 076,0 million
despite deflation estimated at over 15%. Profit attributable to ordinary
shareholders grew by 44% from R50,9 million to R73,3 million whilst headline
earnings per share of 35,8 cents was achieved (25,2 cents - December 2003). Cash
on hand rose from R8,2 million at end December 2003 to R102,0 million at end
December 2004.
Unaudited Unaudited
6 months 6 months
31 December 31 December
Change 2004 2003
6 months R`000 R`000
Revenue 24% 1 075 996 869 292
Operating profit 53% 116 817 76 427
Net interest paid (6 556) (3 512)
Profit before tax 110 261 72 915
Taxation (36 918) (21 944)
Profit attributable to
ordinary shareholders 44% 73 343 50 971
Basic earnings per share
(cents) 42% 35,7 25,1
Headline earnings per share
(cents) 42% 35,8 25,2
Board
No changes have taken place in the composition of the Board, which comprises
seven non-executive directors and four executive directors.
Social responsibility and labour relations
Labour and trade union relations are excellent with insignificant labour
turnover. Special attention continues to be given to equity and skills
regulations, coupled with an ongoing commitment to improved education and the
upliftment of the quality of life of poor people, as well as the development of
our own employee potential.
Corporate governance
Operations at all levels subscribe to the spirit of good corporate governance as
set out in the King report and Amap 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.
Dividends
The directors have resolved to continue the policy of a single annual dividend
declared at the end of each financial year. Accordingly, a dividend will be paid
for the 12 month period ended 30 June 2005.
Outlook
Projecting the fourth quarter of 2004, the Stellenbosch Bureau for Economic
Research indicated that the majority of consumers, with a bias to the higher
income groups, were optimistic and considered it an appropriate time to buy
durable goods. This was reflected in strong demand for home entertainment and
household electrical products in the last quarter of 2004, although significant
price deflation capped turnover growth.
Whilst retail sales are expected to ease from the very high levels experienced
in the last quarter of 2004, low inflation and interest rates coupled with high
consumer confidence and the growth in the spending power of the emerging black
middle class, should continue to underpin demand. Accordingly, provided a stable
currency environment prevails, improved operating results should be achieved in
the next reporting period even off this high base.
For and on behalf of the Board
J Cohen B G Drummond
Chairman Company Secretary
9 February 2005
Abridged Group Income Statement
for the period ended 31 December 2004
Unaudited Unaudited Audited
6 months 6 months 16 months
Change 31 December 29 February 30 June
6 months 2004 2004 2004
% R`000 R`000 R`000
Revenue 36 1 075 996 789 443 2 002 340
Operating profit 54 116 817 75 813 139 990
Net interest paid (6 556) (562) (5 863)
Profit before tax 47 110 261 75 251 134 127
Taxation (36 918) (23 646) (42 731)
Profit attributable
to ordinary
shareholders 42 73 343 51 605 91 396
Basic earnings per
share - (cents) 42 35,7 25,2 45,0
Headline earnings
per share - (cents) 42 35,8 25,3 45,2
Diluted basic
earnings per share
- (cents) 42 35,1 24,8 44,4
Diluted headline
earnings per share
- (cents) 41 35,1 24,9 44,6
Abridged Group Balance Sheet as at 31 December 2004
Unaudited Reviewed Audited
31 December 29 February 30 June
2004 2004 2004
R`000 R`000 R`000
ASSETS
Non-current assets
Property, plant and equipment 29 188 27 475 31 077
Goodwill 936 1 328 1 170
Trademarks 9 230 9 799 9 572
Other financial assets 25 834 26 823 24 433
Deferred tax 9 475 7 399 10 243
Current assets 828 050 634 888 697 335
Inventory 343 735 255 895 273 186
Trade and other receivables 382 315 178 365 231 323
Bank and cash on hand 102 000 200 628 192 826
Total assets 902 713 707 712 773 830
EQUITY AND LIABILITIES
Capital and reserves 363 220 302 089 322 935
Long-term borrowings 10 511 3 967 3 581
Current liabilities 528 982 401 656 447 314
Trade and other payables 505 786 383 355 399 670
Derivative financial liability 22 721 17 695 46 850
Interest bearing :
Short-term portion of
long-term liability 475 606 794
Total equity and liabilities 902 713 707 712 773 830
Abridged Group Cash Flow Statement
for the period ended 31 December 2004
Unaudited Unaudited Audited
6 months 6 months 16 months
31 December 29 February 30 June
2004 2004 2004
R`000 R`000 R`000
Cash flow from operating
activities (91 825) 98 302 101 024
Cash generated by trading 90 096 79 383 175 024
Working capital changes (95 255) 23 941 (60 671)
Cash generated by operations (5 159) 103 324 114 353
Net interest paid (6 556) (562) (5 863)
Taxation paid (49 343) (4 460) (4 951)
Dividends paid (30 767) - (2 515)
Cash flow from investing
activities (2 830) (2 242) (14 944)
Additions property, plant
and equipment (3 071) (2 226) (17 518)
Proceeds on disposal of
property, plant and equipment 241 70 570
(Increase)/decrease in other
financial assets - (86) 2 004
Cash flow from financing
activities 3 829 (1 217) (1 646)
Net movement in treasury
shares (2 782) (844) (878)
Increase/(decrease) in
long-term borrowings 6 611 (373) (768)
Net (decrease)/ increase
in cash (90 826) 94 843 84 434
Cash surplus beginning of
period 192 826 105 785 108 392
Cash resources at the end
of the period 102 000 200 628 192 826
Statement of changes in equity
for the period ended 31 December 2004
Fair value
adjust-
Share Share Treasury ment
capital premium shares reserve
Unaudited R`000 R`000 R`000 R`000
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) -
Balance at
31 August 2003 2 122 162 741 (6 407) 1 397
Net profit for the
period - - - -
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
Net profit for the
period - - - -
Dividend settled
- cash election - - - -
Net treasury movement - - (2 782) -
Fair value movement - - - 491
Balance at
31 December 2004 2 122 162 741 (10 067) 2 685
Statement of changes in equity
for the period ended 31 December 2004
Share-
Accumu- holder
lated for
profits dividend Total
Unaudited R`000 R`000 R`000
Balance at 1 March 2003 71 767 7 449 234 135
Net profit for the period 18 799 - 18 799
Dividend settled
- cash election - (2 515) (2 515)
- issue of share capital - (4 934) -
Balance at 31 August 2003 90 566 - 250 419
Net profit for the period 51 605 - 51 605
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
Net profit for the period 73 343 - 73 343
Dividend settled
- cash election - (30 767) (30 767)
Net treasury movement - - (2 782)
Fair value movement - - 491
Balance at 31 December 2004 205 739 - 363 220
Supplementary Information for the period ended 31 December 2004
Unaudited Unaudited Audited
6 months 6 months 16 months
31 December 29 February 30 June
2004 2004 2004
Shares in issue (000`s) 212 190 212 190 212 190
Shares in issue - weighted
(000`s) 205 283 204 915* 203 226
Diluted number of shares -
weighted (000`s) 208 964 208 377* 205 797
Net asset value per share (cents) 171 142 152
Cost of sales (R`000) 818 985 609 988 1 514 820
Interest received (R`000) 2 039 3 635 12 978
Interest paid (R`000) (8 595) (4 197) (18 841)
Capital expenditure (R`000) 3 072 2 226 17 518
Capital commitments (R`000) 516 7 408 374
Depreciation and amortisation
charge (R`000) 5 498 6 163 17 529
Finance and operating lease
commitments (R`000) 39 765 32 706 31 730
Headline earnings (R`000) 73 433 51 827 91 803
Goodwill amortised (R`000) 234 234 624
Profit on disposal of property,
plant and equipment
(net of tax) (R`000) (144) (12) (217)
Profit attributable to ordinary
shareholders (R`000) 73 343 51 605 91 396
*revised for six months weighting
Accounting policies
The accounting policies used in the preparation of the six months` results
announcement are consistent with those applied in the previous period. These
results are compiled in accordance with the South African Statements of
Generally Accepted Accounting Practice AC 127 applicable to interim financial
reporting, the Listings Requirements of the JSE Securities Exchange South Africa
and Schedule 4 of the South African Companies Act.
Related party transactions
The company entered into various related party transactions. These transactions
are no less favourable than those arranged with third parties.
Subsequent events
No events material to the understanding of the report have occurred in the
period between the period-end date and the date of this report.
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
These results are also available on our website
www.amapholdin
Date: 09/02/2005 01:19:58 PM
Produced by the JSE SENS Department
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