| Fri 4 Mar 2005, 8:53 | | African & Overseas - Profit Announcement For The S |
|
African & Overseas - Profit Announcement For The Six Months Ended 31 December
2004
African & Overseas Enterprises Limited
Registration number 1947/027461/06
Share codes: AOO - AON - AOVP
ISIN: ZAE000000485 - ZAE000009718 - ZAE000000493
PROFIT ANNOUNCEMENT FOR THE SIX MONTHS ENDED 31 DECEMBER 2004
INCOME STATEMENT
Consolidated (R`000)
Six months ended Year ended
December 31 June 30
2004 2003 2004
(Unaudited) (Unaudited) (Audited)
Revenue 193 279 196 961 373 612
Net operating income 13 980 9 387 4 674
Net interest received 2 317 1 475 2 956
Net income 16 297 10 862 7 630
Income from associated
company 26 417 551
Income before taxation 16 323 11 279 8 181
Taxation 5 722 4 017 3 510
Income after taxation 10 601 7 262 4 671
Attributable to outside
shareholders in subsidiaries 4 728 3 282 2 140
5 873 3 980 2 531
Preference dividends 126 151 151
Net income attributable to
ordinary and `N` ordinary
shareholders 5 747 3 829 2 380
Earnings/headline earnings
per share (cents) 50.5 33.6 20.9
Weighted average number of
equity
shares on which earnings per
share is based (000) 11 387 11 387 11 387
Number of equity shares in
Issue (000) 11 387 11 387 11 387
BALANCE SHEET
Assets
Non-current assets 43 095 37 169 41 362
Fixed assets 39 767 33 604 36 512
Investments (unlisted) 2 226 2 347 2 182
Deferred taxation 1 102 1 218 2 668
Current assets 154 369 160 032 166 666
Inventory 59 657 94 412 73 626
Debtors 30 991 35 309 28 338
Cash 63 721 30 311 64 702
Total assets 197 464 197 201 208 028
Equity and liabilities
Capital and reserves 100 927 100 460 98 829
Share capital 1 200 1 200 1 200
Share premium 6 616 6 616 6 616
Non-distributable reserves 2 332 2 484 2 319
Distributable reserves 90 779 90 160 88 694
Minority interest 79 820 78 140 76 857
Current liabilities 16 717 18 601 32 342
Accounts payable 15 156 17 383 30 918
Taxation 1 561 1 218 1 424
Total equity and liabilities 197 464 197 201 208 028
ABRIDGED CASH FLOW STATEMENT
Cash generated by operations 19 813 14 362 15 242
Working capital changes (4 121) 7 825 49 468
Interest received (net) 2 317 1 475 2 956
Taxation (4 344) (4 309) (5 400)
Dividends paid (5 543) (5 560) (5 585)
Net cash inflow from operations 8 122 13 793 56 681
Net cash outflows from investing
activities including additions to
fixed assets (9 116) (7 702) (15 899)
Net decrease in cash (994) 6 091 40 782
Cash at the beginning of the period 64 702 24 202 24 202
Effect of foreign exchange rate
changes 13 18 (282)
Cash at the end of the period 63 721 30 311 64 702
OTHER INFORMATION
Capital expenditure 9 685 7 646 17 067
Capital commitments
Contracted for 1 571 4 408 1 065
Authorised - not contracted for 2 034 2 010 8 476
Current ratio 9.2 8.6 5.2
SEGMENTAL ANALYSIS
Revenue
Manufacturing 121 698 138 941 244 613
Less: Intersegment sales (76 969) (81 037) (153 140)
External sales 44 729 57 904 91 473
Retail 148 550 139 057 282 139
Total 193 279 196 961 373 612
Net operating income/(loss)
Manufacturing
- Rex Trueform Salt River (3 581) (2 560) (13 146)
- Rex Trueform Atlantis 1 983 1 560 2 908
Retail 13 774 8 981 13 635
Consolidation adjustment 1 804 1 406 1 277
Total 13 980 9 387 4 674
Depreciation included in net
operating income
Manufacturing 1 834 1 797 3 829
Retail 4 110 3 047 6 474
Total 5 944 4 844 10 303
Total segment assets (excl cash)
Manufacturing 65 956 109 539 106 783
Retail 45 297 80 295 65 623
Consolidation adjustment (20 605) (26 509) (33 930)
Total 90 648 163 325 138 476
Total segment liabilities
Manufacturing (10 240) (9 339) (24 444)
Retail (20 998) (26 549) (32 705)
Consolidation adjustment 16 082 18 505 26 231
Total (15 156) (17 383) (30 918)
Capital expenditure
Manufacturing 996 2 810 3 536
Retail 8 689 4 836 13 531
Total 9 685 7 646 17 067
STATEMENT OF CHANGES IN EQUITY
Consolidated (R`000)
Six months ended Year ended
December 31 June 30
2004 2003 2004
(Unaudited) (Unaudited) (Audited)
Share capital 1 200 1 200 1 200
Share premium 6 616 6 616 6 616
Non-distributable reserves
Opening balance 2 319 2 475 2 475
Foreign exchange rate changes 13 9 (156)
2 332 2 484 2 319
Distributable reserves
Opening balance 88 694 89 975 89 975
Profit after taxation 5 873 3 980 2 531
Dividends (3 788) (3 795) (3 812)
90 779 90 160 88 694
Notes
1. Basis of preparation
This report complies with the requirements of AC127, the South African
Statement of Generally Accepted Accounting Practice, governing interim
financial reporting.
The information presented in this report has neither been audited nor
reviewed by the external auditors.
2. Accounting policies
This report has been prepared on the historical cost basis and in accordance
with the accounting policies which were applied in the preparation of the
group`s annual financial statements for the year ended 30 June 2004.
3. Preference dividend
A dividend on the 6% participating preference shares for the six months ended
31 December 2004 in the amount of R16 500 was declared in November 2004 and
paid on 28 December 2004.
COMMENT
The principal operating subsidiary Rex Trueform Clothing Company Limited
reports as follows:
Group Results
Results for the half year to December 2004 reflect a complex and challenging
business environment.
Net operating income improved to R13,949 million from R9,587 million last year,
an increase of 45,5%. Headline earnings improved to 53,2 cents per share from
37,1 cents per share last year, an increase of 43,4%.
Significant losses in manufacturing operations were compensated for by the
sound performance of Queenspark.
Clothing Manufacturing
In the 2004 year-end report shareholders were advised that the company`s
manufacturing operations had also suffered the problems experienced world-wide
by the clothing and textile industry in competing against clothing produced in
the Far East.
Since then there has been a further strengthening of the rand against the US
dollar, which together with the local wage structure and high raw material
input costs, has favoured the importation into South Africa of clothing
produced in Far Eastern countries. It has also mitigated against the export of
clothing manufactured in this country to the USA and elsewhere.
Historically, the core of Rex Trueform`s manufacturing operations has been the
tailoring of men`s suits, jackets and trousers at the Salt River plant. The
strong rand and the general shift in consumer preferences towards casual wear
have severely affected this production, contributing to consistent losses in
the manufacturing division.
Management has made determined and exhaustive efforts to generate production
volumes to sustain the Salt River manufacturing operation. Unfortunately,
further deterioration in the business environment in the recent past has
compelled the company to consult with labour representatives regarding
rationalisation. One option being considered is the possible closure of the
Salt River tailoring facility.
The Rex Trueform Atlantis manufacturing plant is mainly geared toward producing
unstructured garments for Queenspark.
In spite of cost pressures, it continues to operate efficiently and is expected
to be profitable at the year-end.
Retail Operations
Queenspark remains a major customer of Rex Trueform manufacturing but was
nonetheless obliged to continue purchases of fashionable imported clothing to
remain competitive in the retail field.
A 6,8% year on year growth in turnover was accompanied by a meaningful
improvement in margins. Costs remained under firm control. This resulted in an
improvement in operating income to R13,628 million, 51,7% higher than last
year.
New stores were opened during the period at Clearwater Mall - Johannesburg,
Musgrave - Durban and La Lucia - Durban all of which are trading successfully.
Improved performance has also been achieved through the relocation of the
Centurion Mall store and the expansion of the Sandton City Shopping Centre
store.
Prospects
Queenspark is enjoying considerable success with the launch of its
winter 2005 range. Current indications are that trading performance will remain
favourable. Subject to no deterioration in trading conditions, Queenspark is
expected to deliver a net operating profit of approximately R9,6 million in the
second half of the financial year.
The manufacturing division is expected to incur a net operating loss of
approximately R6,4 million in the traditionally weaker second half of the year.
Neither of the above forecasts for retail or manufacturing operations have been
reviewed nor reported on by Rex Trueform`s external auditors.
Notwithstanding the challenges in the manufacturing environment, future
prospects for the group are positive, underpinned by a growing and successful
retail business and a refocused manufacturing operation.
Signed on behalf of the Board:
G M Thomas P E Shub
(Chairman) (Chief Executive Officer)
Cape Town
3 March 2005
Transfer Secretaries Registered Office
Computershare Investor Rex Buildings
Services 2004 (Pty) Ltd 263 Victoria Road
70 Marshall Street Salt River
Johannesburg, 2001 Cape, 7925
Directors: G M Thomas (Chairman), M L Krawitz (Deputy Chairman),
P E Shub (Chief Executive Officer), CEA Radowsky Secretary: A A Hodgkinson
Date: 04/03/2005 07:21:15 AM
Produced by the JSE SENS Department
