| Wed 16 Mar 2005, 18:10 | | Audited Results for the year |
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Metair Investments Limited - Abridged Audited Results for the year ended 31
December 2004
METAIR INVESTMENTS LIMITED
Reg.No. 1948/031013/06
Share code: MTA
ISIN Code: ZAE000004743
Abridged Audited Results for the year ended 31 December 2004
ABRIDGED GROUP INCOME STATEMENT
31 December 31 December
2004 2003
R`000 R`000
Revenue 1,950,244 1,854,208
Cost of sales -1,476,547 -1,412,236
Gross profit 473,697 441,972
Other operating income 16,220 14,543
Distribution, administrative and other -217,583 -216,584
expenses
Operating income 272,334 239,931
Depreciation and amortisation -46,888 -41,195
Net finance 3,165 -8,834
Profit before taxation 228,611 189,902
Taxation -69,969 -59,300
Profit after taxation 158,642 130,602
Share of results of associates 2,451 5,395
Impairment on associates -3,775
Profit after taxation before minority 157,318 135,997
interest
Minority shareholders` interest -594 -191
Net profit for the year 156,724 135,806
Earnings per share
Basic earnings per share (cents) 2,640 2,303
(Profit)/loss on disposal of property, plant 0 -6
and equipment
Impairment of investment in associate company 64
Headline earnings per share (cents) 2,704 2,297
Diluted earnings per share
Basic earnings per share (cents) 2,598 2,252
Headline earnings per share (cents) 2,660 2,246
Dividend per share (cents) 700 500
Number of ordinary shares in issue (`000) 5,949 5,898
Weighted average number of ordinary shares in 5,937 5,898
issue (`000)
ABRIDGED GROUP CASH FLOW STATEMENT
31 December 31 December
2004 2003
R`000 R`000
235,345 203,127
Net cash inflow from operating activities
Net cash outflow from investing activities -115,267 -98,641
Net cash inflow from financing activities -13,255 6,279
Increase in cash and cash equivalents 106,823 110,765
Cash and cash equivalents
At beginning of the year 123,611 12,846
At end of the year (including available for 230,434 123,611
sale investments)
ABRIDGED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Treasury Retained Hedging Non- Total
Capital and shares earnings reserve distri-
premium butable
reserves
R`000 R`000 R`000 R`000 R`000 R`000
Balance at 1 34,165 622,172 -2,864 32,346 685,819
January 2004
Net profit 156,724 156,724
Ordinary shares 984 984
issued
Dividends -41,552 -41,552
Cash flow hedges
- net fair value 4,091 4,091
losses
- deferred tax -1,227 -1,227
Consolidation of -219 404 185
Share Trust
Transfers 12,049 -12,049
Balance at 31 35,149 -219 749,797 20,297 805,024
December 2004
ABRIDGED GROUP BALANCE SHEET
31 December 31 December
2004 2003
R`000 R`000
ASSETS
Non-current assets 471,893 417,461
Property, plant and equipment 397,495 337,940
Intangible assets 3,753 2,528
Investment in associate companies 30,491 34,835
Deferred taxation 4,998 5,861
Other non-current assets 35,156 36,297
Current assets 733,750 610,250
Inventories 262,028 259,607
Receivables and prepayments 241,288 227,032
Available for sale investments 80,781
Cash and cash equivalents 149,653 123,611
Total assets 1,205,643 1,027,711
EQUITY AND LIABILITIES
Capital and reserves 805,024 685,819
Share capital and premium 35,149 34,165
Hedging reserve -2,864
Treasury shares -219
Retained earnings and non-distributable 770,094 654,518
reserves
Minority interests 700 191
Total shareholders` funds 805,724 686,010
Non-current liabilities 105,688 109,499
Interest bearing borrowings 69,248 84,481
Deferred taxation 36,440 25,018
Current liabilities 294,231 232,202
Borrowings 15,503 14,694
Taxation 19,050 16,073
Provisions for liabilities and charges 29,818 26,732
Other current liabilities 229,860 174,703
Total liabilities 399,919 341,701
Total equity and liabilities 1,205,643 1,027,711
Net asset value per share (cents) 13,544 11,631
Capital expenditure 108,121 101,325
Capital commitments
- contracted 26,569 55,051
- authorised but not contracted 24,783 40,721
Notes to the abridged consolidated financial statements
Accounting policies
These consolidated abridged audited financial statements are prepared in
accordance with AC127 Interim Financial Reporting and Statements of Generally
Accepted Accounting Practice in South Africa. The accounting policies used in
the preparation of the abridged audited financial statements are consistent with
those used in the annual financial statements for the year ended December 2003.
Contingencies
The bank and other guarantees given by the Group to third parties amounted to
R45.8 million as at 31 December 2004 (R45,9 million as at 31 December 2003).
Borrowings 31 December 31 December
2004 2003
R`000 R`000
Current 15,503 14,694
Non-current 69,248 84,481
84,751 99,175
The movement in the borrowings can be analysed as follows:
Year ended December 2004
Opening amount -99,175
Repayments 16,228
Amounts raised -1,804
Closing amount -84,751
Fair value adjustments on financial 31 December 31 December
instruments 2004 2003
R`000 R`000
Forward foreign exchange contracts - 0
cash flow hedges -4,091
Forward foreign exchange contracts - -1,085
fair value hedges -889
Total -1,085 -4,980
Annual General Meeting
The annual report will be mailed to shareholders by 31 March 2005 along with the
notice of annual general meeting.
The annual general meeting will be held on 4 May 2005 at 09h00 at Metair
Investments Limited, 10 Anerley Road, Parktown.
Auditors` report
The abridged results of the Group as set out above have been audited by the
Group`s auditors, PricewaterhouseCoopers.
Their report is available for inspection at the Company`s registered office
(address details above).
OPERATING RESULTS
The net profit attributable to shareholders was R156,7 million compared to the
R135,8 million achieved in 2003. Headline earnings per share for the full year
were 2704 cents compared to 2297 cents achieved in the previous year.
Total group turnover increased by 5,2% to R1950,2 million compared to R1854,2
million in 2003. Sales to OE customers increased by 11,1%, exports (direct and
indirect) declined by 4,8%, aftermarket sales increased by 8,1% and non
automotive sales increased by 3,2%.
The 2004 year was characterised by very strong demand in the domestic vehicle
market and more difficult trading conditions in terms of exports. The Rand
strength experienced in 2003 continued throughout 2004 and this together with
marginally lower interest rates resulted in stable vehicle prices and an
increase in domestic vehicle sales to a level last experienced in the 1980`s.
The downside of the stronger Rand was a substantial increase in the numbers of
imported vehicles and severe pressure on export volumes and margins.
Gross profit increased by 7,2% and overall gross margins achieved were 0,5%
higher than 2003 (24,3% compared to 23,8%) resulting from better operating
efficiencies at the higher volumes and cost saving activities. Additional profit
also arose from timing differences on exchange rate movements.
On the Balance Sheet, the increase in the net book value of fixed assets from
R337,9 million to R397,5 million reflects investments made mainly in Land and
Buildings R19,5 million and Plant and Machinery R88,6 million. Current assets
(stock and debtors but excluding cash) increased but at a lesser rate than the
turnover reflecting tight management control. This together with the improved
profitability contributed to the significant improvement in the net cash
position. Financing costs reduced due to the very strong cash flow despite the
capital expenditure incurred during the year. The cash flow generated during the
year resulted in net cash increasing to R145,7 million on the Balance Sheet
compared to R24,4 million in December 2003.
DIVIDEND
A dividend of 850 cents per share was declared on 16 March 2005 in respect of
the 2004 financial year.
POST BALANCE SHEET EVENT
Metair has negotiated the sale of 25% of its shareholding in Smiths
Manufacturing to Denso Corporation. The transaction is dependent on approval by
the Competitions Commission. Smiths have enjoyed a longstanding relationship
with Denso as a licensor and this investment will further strengthen this
relationship and significantly enhance Smiths` ability to service its customers
with world class products.
OUTLOOK
The continued growth expected in the domestic vehicle market in 2005 should have
a positive impact on turnover for the Group. In addition, the launch of three
new passenger vehicles in the first quarter of 2005 will generate further
turnover for the Group when export volumes increase in the second half of the
year. Gross margins on the new contracts will however be lower and cost recovery
on existing OE business will be difficult. Component export margins and volumes
will continue to be negatively influenced by the Rand exchange rate and
profitability in the domestic replacement market will be pressurised by the
growth of imported products.
Investments made during 2004 in training, new facilities and technology will
assist Group companies to meet the expected volume increases and the greater
demands from customers in terms of specification, quality, delivery and cost.
During 2004 significant progress has been made in exploring and defining new
relationships with long standing technical partners and this process will
continue in 2005.
The exchange rate remains a major determining factor in terms of the overall
profitability of the Group and at the current level, despite potential volume
growth, profitability may be lower in 2005.
REGISTRARS
Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street
JOHANNESBURG
2001
Signed on behalf of the board
E LE R BRADLEY - Chairman
A D PLUMMER - Managing Director
JOHANNESBURG, 16 March 2005
EXECUTIVE DIRECTORS : A D Plummer (Managing)*; C I J van der Merwe (Finance)
NON-EXECUTIVE DIRECTORS : E le R Bradley (Chairman); G J Strydom
INDEPENDENT NON-EXECUTIVE DIRECTORS : R S Broadley; L Soanes*
COMPANY SECRETARY : S M Vermaak
* British
