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Putco Limited - Interim results for the six months ended 31 December 2004
Putco Limited
(Incorporated in the Republic of South Africa)
(Registration number 1945/018672/06)
Share code: PTC ISIN: ZAE000005716
(`Putco`, `the Company` or `the Group`)
Interim results for the six months ended 31 December 2004
Income statement
Six months ended Year ended
31 December Increase/ 30 June
2004 2003 (decrease) 2004
Rm (Reviewed)(Reviewed) % (audited)
Revenue - bus operations 504,0 465,1 8,4 916,8
Cost of operating 454,5 413,3 10,0 834,9
Operating profit before
onerous contracts 49,5 51,8 (4,4) 81,9
Onerous contracts reversal 0,5 3,6 (86,1) 9,1
Operating profit 50,0 55,4 (9,7) 91,0
Net finance costs 6,0 8,3 (27,7) 15,9
Profit before taxation 44,0 47,1 (6,6) 75,1
Taxation 14,1 15,1 (6,6) 21,4
Ordinary earnings 29,9 32,0 (6,6) 53,7
Shares in issue (weighted
number) (million) 26,4 26,4 26,4
Headline earnings per
share (cents) 88,3 127,7 179,1
Adjusted headline earnings
per share (cents) 87,1 118,1 155,1
Ordinary earnings per
share (cents) 113,3 121,2 203,2
Ordinary dividend per
share (cents) - 30,0 50,0
Dividend cover (times) - 4,0 4,1
Determination of headline
earnings
Ordinary earnings 29,9 32,0 53,7
(Profit)/loss on disposal
of assets (6,6) 1,7 (6,4)
Headline earnings 23,3 33,7 47,3
Provision for onerous contracts (0,5) (3,6) (9,0)
Deferred tax effect thereof 0,2 1,1 2,7
Adjusted headline earnings 23,0 31,2 41,0
ACCOUNTING POLICIES
The interim results have been prepared in accordance with South African
Statements of Generally Accepted Accounting Practice. The accounting policies
are consistent with those applied in the last annual report.
Segmental reporting
No segmental information is provided as the Group operates in a single
geographical region and a single line of business.
Balance sheet
31 December 30 June
2004 2003 2004
Rm (Reviewed) (Reviewed) (Audited)
ASSETS
Non - current assets 317,2 349,6 333,3
Property, plant and equipment 317,1 349,5 333,2
Investments 0,1 0,1 0,1
Current assets 204,0 124,2 199,8
Inventory 52,0 49,3 42,6
Trade and other receivables 94,2 59,2 70,8
Cash on call, at bank
and on hand 57,8 15,7 86,4
Total assets 521,2 473,8 533,1
EQUITY AND LIABILITIES
Equity capital and reserves 178,1 137,9 155,4
Ordinary shareholders` interest 178,1 137,9 155,4
Non-current liabilities 132,7 156,4 147,9
Interest-bearing borrowings 72,6 87,5 89,3
Deferred taxation 4,4 2,3 4,4
Long-term provisions 55,7 66,6 54,2
Current liabilities 210,4 179,5 229,8
Provisions 99,8 76,3 112,3
Trade and other payables 71,7 69,5 82,8
Short-term borrowings 31,6 21,8 30,0
Net bank overdraft - - 4,6
Taxation 7,3 11,9 0,1
Total equity and liabilities 521,2 473,8 533,1
CAPITAL EXPENDITURE
- incurred 15,2 59,0 95,2
- contracted for 18,4 23,4 15,7
- authorised but not contracted for 0,0 0,5 0,7
RATIOS
Net asset value per share (cents) 674 522 588
Gearing 1:0,6 1:0,8 1:0,2
Current asset ratio 1:1,1 1:1,5 1:0,9
COMMITMENTS AND
CONTINGENT LIABILITIES
Contingent liabilities
- Performance guarantees 0,1 0,1 2,6
- Pledge of cash on call to secure
open ended guarantees - 0,1 35,4
Bank borrowing facilities of R40 million were available to the company as at
31 December 2004
Cash flow statement
Six months ended Year ended
31 December 30 June
2004 2003 2004
Rm (Reviewed) (Reviewed) (Audited)
Cash (outflow)/inflow from
operating activities (9,0) 17,7 71,4
Net cash generated from operations 11,1 35,9 115,8
Investment income 2,9 2,7 4,6
Finance costs (8,9) (5,5) (11,9)
Taxation paid (6,9) (7,5) (23,9)
Dividends paid (7,2) (7,9) (13,2)
Cash (outflow)/inflow from
investing activities - (61,0) (58,5)
Maintain operations (6,6) (58,2) (95,2)
Proceeds on disposal of
plant, equipment 6,6 1,3 40,7
Increase in investments - (4,1) (4,0)
Cash (outflow)/inflow from
financing activities (15,1) 18,5 28,4
Borrowings (repaid)/raised (15,1) 18,5 28,4
Net cash (outflow)/inflow (24,1) (24,8) 41,3
Net cash at beginning of period 81,9 40,5 40,6
Net cash at end of the period 57,8 15,7 81,9
Statement of changes in equity
Share Non-
capital distri- Distri-
and butable butable
premium reserves reserves Total
Rm Rm Rm Rm
Half year ended
31 December 2004
At 30 June 2004 10,9 12,4 132,1 155,4
Earnings per income statement 29,9 29,9
Dividend paid (7,2) (7,2)
At 31 December 2004 10,9 12,4 154,8 178,1
Half year ended
31 December 2003
At 30 June 2003, as restated 10,9 20,4 91,1 122,4
Earnings per income statement 32,0 32,0
Dividend paid (7,9) (7,9)
Reversal of previous
revaluation of properties (8,6) (8,6)
At 31 December 2003 10,9 11,8 115,2 137,9
Commentary
GENERAL REVIEW
The results for the first six months of this financial year are in line
with our projections.
The sustainability and future growth of the company is dependent
upon certain issues.
The fuel price.
The uncertainty with regard to the month to month contracts.
The empowerment of the company.
The taxi recapitalization process.
Passenger numbers.
Whilst our revenue has increased, our profit before taxation has decreased
marginally. As part of our ongoing strategy we continue to review efficiencies
within the company with a view of improving on them wherever possible. Putco is
also committed to seek other business opportunities which can positively affect
our revenue.
Black Economic Empowerment.
The company is currently in the first phase of implementing an empowerment
transaction which if successful will see the company being de-listed from the
JSE securities exchange. The second phase will be the introduction of broad
based black economic empowerment, in line with the proposed codes of good
practice as outlined by the department of trade and industry.
The Putco board is fully committed to the empowerment of the company in the
shortest possible time, in order for it to be in line with the government`s
objectives.
Department of Transport.
Putco is engaging with the various departments at national and provincial level
on the way forward in the transport industry.
We are fully committed to this process and in fact have a task team involved in
discussions with government.
Integrated Transport Plans (ITP).
The company has set up various task teams on the above plans and is currently
in discussions with the JHB Metro and the Tswane Metro councils on ensuring
that these ITP`s address the requirements of the commuters and stakeholders.
BOARD OF DIRECTORS
The board has undergone various changes during this period.
The changes are listed below.
Mr. A Carleo retired 30 September 2004
Mr E.M Oldham retired 30 September 2004
Mr B.C Carleo resigned 30 September 2004
Mr L.A Carleo resigned 30 September 2004
Mr F.G Pisapia was appointed Managing Director
30 September 2004
Mr B Holford was appointed Financial Director 30 September
2004
Mr M.H Heyns was appointed Corporate Director
30 September 2004
Mr A Sefala was appointed Business Development Director
30 September 2004
Mrs. A Carleo-Novella was appointed non-executive director
30 September 2004
Mr. F.E Stamp was appointed an Executive Director on
19 January 2005.
FUTURE PROSPECTS
The performance of the company is dependent on certain factors
such as:-
Success in the empowerment of the company in line with the
proposed `codes of good practice on broad based black
economic empowerment`.
Future contracts tendered or negotiated being awarded to the
company.
Maintaining effective control measures.
The effects of the oil price/fuel price.
The taxi recapitalization program.
The successful integration of the various modes of transport.
The successful outcome of the Integrated Transport Plans
(ITP`s) for the various municipalities.
Success in discussions with the department of transport on the
way forward on the various contract types in the future.
FINANCIAL RESULTS
The company`s results for the six months to 31 December 2004 are set out above.
Turnover has increased by 8.4% over the corresponding period in
the previous financial year while the cost of operating has increased
by 10%. Ordinary earnings decreased by 6.6% from R32 million to
R29.9 million and headline earnings per share decreased from
127.7 cents per share to 88.3 cents per share, a decrease of 30.9%.
Passenger levels have increased from 36.2 million to 36.3 million.
The operating bus fleet as at the 31st December 2004 was 1 386
compared to 1 375 at 31st December 2003
DIVIDENDS
With the proposed restructuring in terms of the scheme of arrangement under
section 311 of the Companies Act and the forthcoming empowerment introduction
into the company, the directors have considered it prudent not to declare any
interim dividend.
REVIEW OPINION
The results have been reviewed by Putco`s auditors, Ernst & Young Chartered
Accountants (SA) and their review opinion is available for inspection at
Putco`s registered office.
J H De Loor (Chairman)
F G Pisapia (Managing Director)
31 March 2005
Registered office Transfer secretaries
5 Mimosa Way Computershare Investor
Mimosa Park Services Limited
Gallo Manor, Sandton, 2194 70 Marshall Street
(Private Bag 3, Johannesburg, 2001
Wendywood, 2144)
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