| Wed 13 Apr 2005, 11:47 | | Results for the year ended 28 February 2005 |
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Combined Motor Holdings - Audited results for the year ended 28 February 2005
Combined Motor Holdings Limited
(Registration number 1965/000270/06)
(Share code: CMH ISIN: ZAE000001541)
(`the Company` or `the Group`)
www.cmh.co.za
Audited results for the year ended 28 February 2005
- Headline earnings per share increase by 64,1%
- Earnings per share increase by 80,2%
- 26% increase in compound headline earnings over eight years
- Dividend of 145 cents per share proposed - 77% up on last year
- Total assets increase 33% to R1 141 million
- Cash resources exceed R280 million
GROUP FINANCIAL HIGHLIGHTS
2005 2004 Increase %
Total assets (R`000) 1 140 834 857 484 +33,0
Net asset value
per share (cents) 1 754 1 323 +32,6
Revenue (R`000) 4 454 213 3 220 632 +38,3
Operating profit before
finance costs (R`000) 172 450 108 739 +58,6
Headline earnings (R`000) 115 868 69 747 +66,1
Net profit (R`000) 112 757 61 865 +82,3
Return on
shareholders` funds (%) 35,4 24,9 +42,2
Earnings per share (cents) 546,1 303,2 +80,1
Headline earnings
per share (cents) 561,1 341,9 +64,1
Dividends per share (cents) 105,0 79,4 +32,2
GROUP INCOME STATEMENT
2005 2004
R`000 R`000
Revenue 4 454 213 3 220 632
Operating profit to revenue (%) 3,9 3,4
Operating profit before finance costs 172 450 108 739
Finance costs (2 902) (6 372)
Operating profit 169 548 102 367
Non-trading items (2 950) (7 882)
Taxation (53 547) (32 376)
Profit after taxation 113 051 62 109
Minority shareholders` share of profits (294) (244)
Net profit 112 757 61 865
Dividends (21 657) (16 186)
Retained earnings 91 100 45 679
Reconciliation of headline earnings
Net profit 112 757 61 865
Non-trading items
- goodwill written off 5 450 7 882
- capital profit on sale of branch, after taxation (2 339) -
Headline earnings 115 868 69 747
Cents Cents
Earnings per share 546,1 303,2
Diluted earnings per share 526,4 296,2
Headline earnings per share 561,1 341,9
Diluted headline earnings per share 540,9 334,0
Dividends per share 105,0 79,4
STATEMENT OF CHANGES IN EQUITY
Share Non-distri- Distri-
butable butable
Total capital reserve reserve
R`000 R`000 R`000 R`000
Balance at
28 February 2003 225 500 10 020 5 896 209 584
Issue of shares 1 123 1 123 - -
Net profit for year 61 865 - - 61 865
Dividends paid (16 186) - - (16 186)
Balance at
29 February 2004 272 302 11 143 5 896 255 263
Issue of shares 1 251 1 251 - -
Net profit for year 112 757 - - 112 757
Dividends paid (21 657) - - (21 657)
Balance at
28 February 2005 364 653 12 394 5 896 346 363
GROUP CASH FLOW STATEMENT
2005 2004
R`000 R`000
Cash flows from operating activities 137 365 66 645
Cash flows from investing activities (47 396) (16 565)
Cash flows from financing activities 1 296 (7 625)
Net movement in cash resources 91 265 42 455
Cash resources at beginning of year 191 626 149 171
Cash resources at end of year 282 891 191 626
GROUP BALANCE SHEET
2005 2004
R`000 R`000
Assets
Plant and equipment 25 856 19 481
Investments 488 1 242
Deferred taxation 7 324 7 159
Goodwill 24 500 7 450
Current assets 1 082 666 822 152
Total assets 1 140 834 857 484
Equity and liabilities
Share capital and reserves 364 653 272 302
Minority shareholders` interest 928 627
Interest-bearing debt 2 434 3 784
Life assurance funds 21 987 16 829
Other current liabilities 750 832 563 942
Total equity and liabilities 1 140 834 857 484
EXTRACTS FROM THE ANNUAL REPORT
1. A strong and dedicated management team and staff, supported by a buoyant
economy, have combined to yield financial results which have broken
previous records in every department. For the eighth successive year the
Group has achieved growth well in excess of the local rate of inflation,
this year recording a remarkable 64% increase in headline earnings.
2. Relatively low inflation and interest rates, high levels of consumer
confidence, and a stable currency exchange rate have produced economic
growth not experienced in South Africa in the last decade. There is
consensus that the fundamentals of the economy are sound and, not having
been artificially stimulated by fiscal manipulation, are sustainable in the
medium term.
3. Driven by positive economic factors, the motor industry experienced a
record year. Over the past two years real new car prices (after taking
inflation into account) have fallen after the rand`s strong recovery. Used
vehicle prices have decreased in sympathy, with the result that both
markets have become more affordable.
4. The Group`s segment report details pleasing growth in all sectors. Whilst
the retail motor sector once again dominated both revenue and operating
profit, it is notable that car hire achieved a 103% increase in operating
profit and financial services improved 35%. Both of these are relative
newcomers to the Group and it is gratifying to see that they are making a
meaningful contribution.
5. Cash flow has always been an area of intense focus, and the cash flow
statement for the year reflects the success which the Group has achieved.
Positive cash flows from operating activities increased by 106%, to R137
million. Of this, R39 million was invested in the acquisition of new
dealerships and R13 million in the replacement and refurbishment of plant
and equipment. The Group ended the year with cash resources of R283
million, up from R192 million last year, and is thus well positioned to
take advantage of further acquisitions opportunities that may arise.
6. The Group`s balance sheet reflects a strong cash position, no long-term
borrowings, share capital and reserves at 32% of total assets, and a
healthy current assets: liabilities ratio.
7. I believe that, in the absence of an unforseen adverse change in economic
conditions, the Group has the potential to continue to yield above-average
returns.
DIVIDEND
A dividend (dividend No 36) of 145 cents per share will be paid on Monday, 20
June 2005 to members reflected in the share register of the Company at the close
of business on the record date Friday, 17 June 2005. Last date to trade `cum`
dividend is Thursday, 9 June 2005. First date to trade `ex` dividend is Friday,
10 June 2005. Share certificates may not be dematerialised or rematerialised
from 10 June 2005 to 17 June 2005, both days inclusive.
This dividend is 77% above the 82 cents per share declared at the end of last
year.
ACCOUNTING POLICIES and AUDIT REPORT
The results have been compiled in accordance with South African Statements of
Generally Accepted Accounting Practices. The accounting policy for goodwill has
been amended in accordance with statement AC 140: Business Combinations, in
respect of business combinations arising on or after 31 March 2004. Such
goodwill is reflected at original cost and is not amortised. At each balance
sheet date the value is tested for impairment. To the extent that the
recoverable value of the goodwill is less than its carrying amount, an
impairment write-down is made. Except for the foregoing, the accounting policies
are consistent with those used in previous years.
The financial statements have been audited by PricewaterhouseCoopers. A copy of
their unqualified opinion is available for inspection at the Company`s
registered office.
By order of the Board of Directors
SK Jackson BCom (Hons) (Tax Law), CA(SA)
Secretary
12 April 2005
Registered office
1st Floor, CMH Building
206 West Street
Durban, 4001
Transfer secretaries
Computershare Investor Services 2004 (Pty) Limited
PO Box 61051
Marshalltown, 2107
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Limited
Private Bag X36, Sunninghill, 2157
SEGMENT INFORMATION
TOTAL
2005 2004
R`000 % R`000 %
Revenue 4 454 213 100 3 220 632 100
Operating profit before finance
costs 172 450 100 108 739 100
Finance costs (2 902) 100 (6 372) 100
Operating profit before taxation
and non-trading items 169 548 100 102 367 100
Total assets 1 140 834 100 857 484 100
Total liabilities 776 181 100 585 182 100
Number of employees 1 842 100 1 584 100
Expenditure on plant and equipment 15 804 100 9 551 100
RETAIL MOTOR
2005 2004
R`000 % R`000 %
Revenue 4 283 883 96 3 096 676 96
Operating profit before finance
costs 139 962 81 97 934 90
Finance costs (19 500) 672 (16 522) 259
Operating profit before taxation
and non-trading items 120 462 71 81 412 80
Total assets 533 393 47 428 015 50
Total liabilities 398 579 51 325 204 56
Number of employees 1 606 87 1 377 87
Expenditure on plant and equipment 14 144 90 8 122 85
CAR HIRE
2005 2004
R`000 % R`000 %
Revenue 125 739 3 90 871 3
Operating profit before finance costs 15 877 9 8 445 8
Finance costs (2 620) 90 (1 928) 30
Operating profit before taxation
and non-trading items 13 257 8 6 517 6
Total assets 319 811 28 228 416 27
Total liabilities 333 382 43 225 946 39
Number of employees 181 10 154 10
Expenditure on plant and equipment 1 301 8 843 9
FINANCIAL SERVICES
2005 2004
R`000 % R`000 %
Revenue 20 120 - 19 806 1
Operating profit before finance costs 15 195 9 9 262 8
Finance costs 1 755 (60) 3 320 (52)
Operating profit before taxation
and non-trading items 16 950 10 12 582 12
Total assets 33 632 3 32 131 3
Total liabilities 24 698 3 21 711 3
Number of employees 3 - 3 -
Expenditure on plant and equipment - - - -
CORPORATE SERVICES/OTHER
2005 2004
R`000 % R`000 %
Revenue 24 471 1 13 279 -
Operating profit before finance
costs 1 416 1 (6 902) (6)
Finance costs 17 463 (602) 8 758 (137)
Operating profit before taxation
and non-trading items 18 879 11 1 856 2
Total assets 253 998 22 168 922 20
Total liabilities 19 522 3 12 321 2
Number of employees 52 3 50 3
Expenditure on plant and equipment 359 2 586 6
Directors: M Zimmerman (Chairman), JD McIntosh (Managing), MPD Conway,
JTM Edwards, SK Jackson, RTAC Nethercott, CL Odendaal, A Rogoff
