| Wed 11 May 2005, 8:31 | | Results for the six months ended 31 March 2005 |
|
Barloworld Limited - Reviewed interim results for the six months ended 31 March
2005
Barloworld Limited
(Incorporated in the Republic of South Africa)
(Registration number 1918/000095/06)
(Share code: BAW)
(ISIN: ZAE000026639)
(Share code: BAWP)
(ISIN: ZAE000026647)
(`Barloworld`)
Reviewed interim results for the six months ended 31 March 2005
- Excellent operating performance
- Growth in southern Africa: revenues up 7% to R18 792 million (1H`04: R17
532 million)
- Operating profits before goodwill up 25% to R1 545 million (1H`04: R1 235
million)
- Operating margin rises to 8.2% (1H`04: 7.0%)
- Strong operating cash flows of R1 466 million (1H`04: R1 472 million)
- Headline earnings per share 372 cents (1H`04: 374 cents) impacted by
non-recurrence of pension provision write back in 2004
- STC on higher PPC special dividend
increase in weighted average shares in issue
- Dividend increased 13% to 130 cents per share
Tony Phillips, CEO of Barloworld, said:
`Our operating result has benefited from our Value Based Management approach to
doing business and a particularly strong performance in southern Africa. The
outlook is favourable and we look forward to reporting continued strength in
the southern African and Iberian regions and improving contributions from our
operations in the United States and the United Kingdom. Overall we expect to
report further progress for the full year.`
11 May 2005
Enquiries
Barloworld Limited: Rowan Goeller Tel +27 11 445 1300, e-mail
rowang@barloworld.com
For background information visit www.barloworld.com
Chairman`s and Chief Executive`s Report
An excellent operating performance
Revenues grew 7% in stronger trading environments. Operating profit before
goodwill rose 25%, boosted by the inclusion of 100% of Avis in the first half,
and by improvements in the quality of our business through our philosophy of
Value Based Management. The group operating margin increased from 7.0% to 8.2%
for the period under review. Our businesses within southern Africa accounted
for 83% of total operating profit after fair value adjustments (1H`04: 71%).
Headline earnings per share of 372 cents (1H`04: 374 cents) were impacted by
the non-recurrence of an exceptional pension fund closure provision write back
in the prior period, higher STC charges due to the PPC special dividend and an
increased number of shares in issue. A 13% increase in the interim dividend to
130 cents was declared, reflecting the strength of the cash flows and the
underlying operating performance of the company.
Aided by healthy consumer spend, lower interest rates and growth in
infrastructure investment, the southern African operations experienced good
growth. The equipment business performed well on the back of improved internal
efficiencies and the better outcome managing financial instruments. The
strength of cement demand in South Africa resulted in a higher profit
contribution from PPC and our motor business benefited from continued high new
vehicle sales and the acquisition of Avis. The coatings division also improved
its margins.
The Iberian equipment business continued its high activity levels, largely
maintaining revenue and profit in local currency terms. The industrial
distribution division produced a good result in the US handling operations, and
the changed senior management at Truck Center are starting to impact positively
on the business. Handling UK was impacted by lower sales and restructuring
costs. The scientific division was negatively affected by provisions for site
rationalisations which will benefit results in the future. Market conditions
in Australia remained difficult for the coatings business, but the motor
operations posted an improved performance.
Strategic focus unchanged
We continually improve the quality of our existing operations with the goal of
generating strong cash flows and sustainable higher margins and profits. From
this foundation our growth strategy remains to expand both organically and
through incremental acquisitions as we work to create a growing global
organisation producing value for all stakeholders. In the period under review
our energies were concentrated on maximising the benefits of the Avis
acquisition. In addition, we invested R124m in new acquisitions, notably in
coatings and industrial distribution.
Black Economic Empowerment (BEE)
A key to South Africa`s future is that all South Africans participate fully in
every aspect of the economy. Our focus is to ensure that whatever we do in this
area creates long term sustainable value for all our stakeholders. As part of
this systematic structured approach, in November 2004 Barloworld published a
formal BEE policy. The full details appear in our 2004 annual report. It is our
intention to ensure our South African business units achieve a minimum of 65%
in terms of the balanced scorecard of the Department of Trade and Industry to
enable Barloworld to be classified as a good contributor to BEE. A detailed
assessment of our BEE performance will be incorporated in our annual report but
in the interim we can report satisfactory progress in all areas.
Board and Management changes
Mr M. (Martin) Laubscher, CEO of Barloworld Motor, was appointed to the board
as an executive director on 9 May 2005. As previously announced, in February
2005 Mr S.A.M. (Selby) Baqwa was appointed as an independent non-executive
director. Mr Baqwa was admitted as an attorney of the Supreme Court of South
Africa in 1976 and was called to the Bar in 1988. In 1995 he was appointed as
the Public Protector of the Republic of South Africa. Both of these new
directors will make valuable contributions to the board.
Mr S. (Sibani) Mngomezulu was appointed company secretary designate on 1 May
2005. He will succeed Mr M.J. (Mike) Barnett, who retires on 30 June 2005.
Good prospects for the full year
In southern Africa demand for cement, motor vehicles and coatings remains
strong and we expect further progress across all these sectors. The southern
African equipment division is also expected to continue its good performance,
with a strong order book.
With regards to the general South African economy, the recent Reserve Bank
decision to cut interest rates is a positive contribution to improved
competitiveness in the global environment and therefore higher growth rates.
The group is well positioned to benefit from a sustained increase in public and
private infrastructural spend in the region.
Trading conditions are expected to remain positive in Iberia. Order books
remain strong.
With strong order books at the end of the reported period, the handling
businesses in the UK and the US are expected to post an improved second half.
Our US Freightliner dealerships should benefit from the recent management
changes which have resulted in an intensive focus on costs.
The scientific business is expected to make a higher profit contribution in the
second half as the restructurings start to deliver improved results. An
overall strategic analysis is nearing completion and is expected to lead to
further changes in the business.
A key uncertainty for the short term remains currency volatility. A strong rand
will continue to affect earnings through lower export volumes and/or margins,
the translation impact on offshore profits and fair value adjustments on
financial instruments. This remains difficult to forecast.
Against this background we anticipate a continued strong operating performance
in South Africa in the second half. With the southern African and Iberian
operations performing well, we look forward to a recovery from the other
international operations. Overall we remain positive regarding the financial
year to September 2005.
WAM Clewlow AJ Phillips
Chairman Chief Executive Officer
GROUP FINANCIAL REVIEW
Revenues increased by 7% to R18.8 billion with the majority of the growth
coming from southern Africa, boosted by strong cement and new vehicle sales and
the benefits of 100% of Avis which was acquired on 29 March 2004.
Operating profit before goodwill amortisation rose by 25% to R1 545 million.
The trend of increasing profit margins continued with the group margin rising
to 8.2% (1H`04: 7.0%).
Following the adoption of IFRS 3 (Business Combinations) in the current
accounting period, goodwill is no longer amortised but is subject to annual
impairment testing. No significant goodwill impairments were required in the
period under review.
The lower volatility of the rand against the US dollar in the six months
contributed to a reduction in the charge for fair value adjustments on
financial instruments to R45 million (1H`04: R57 million).
Increased finance costs of R213 million (1H`04: R184 million) were mainly
attributable to the acquisition of Avis last year.
Income from investments declined due to lower interest received following the
sale of the Equipment leasing business at the end of the previous financial
year.
The taxation charge (before STC) of R401 million represents an effective tax
rate of 29.2% (1H`04: 31%), excluding prior year taxation and taxation on
exceptional items. The decline is largely driven by the increased proportion
of profit earned in lower taxed regions and the reduction in the South African
normal taxation rate from 30% to 29%. The increase in the STC charge to R104
million is mainly attributable to the significantly higher special dividend
paid by PPC in January 2005.
Headline earnings per share at 372 cents is in line with the prior period and
does not reflect the strong underlying operating performance, mainly due to:
- the prior period earnings benefiting from the R100 million (R70 million
after tax) reversal of a pension fund closure provision;
- the increased STC charge on the higher PPC special dividend; and
- a higher number of shares in issue following the Avis acquisition and the
exercise of share options.
Total assets employed in the business of R28.1 billion are marginally up on
September 2004 (R27.8 billion).
Interest bearing debt of R8 487 million represents a group debt-to-equity ratio
of 70% (September 2004: 65%). The group remains within its target gearing
ranges for its Trading, Leasing and Car Rental segments.
Interest cover has improved from 4.5 times for the full 2004 financial year to
5.5 times in the six months under review.
Cash generated from operations remained strong at R1 466 million (1H`04: R1 472
million). Net cash applied to investing activities of R1 324 million includes
the acquisition of businesses for R124 million; property, plant and equipment
for R660 million; and further investment of R598 million in rental assets and
hire vehicles.
CB Thomson
Finance Director
Dividend Declaration
Notice is hereby given that an interim ordinary dividend (No. 152) of 130 cents
per ordinary share (2004: 115 cents per ordinary share) has been declared by
the directors for the half-year ended 31 March 2005. In compliance with the
requirements of the electronic settlement system of the JSE Securities Exchange
South Africa, the following dates are applicable:
Last day to trade `Cum` Friday, 3 June 2005
dividend
Shares trade `Ex` dividend Monday, 6 June 2005
Record date Friday, 10 June 2005
Payment date Monday, 13 June 2005
Share certificates may not be dematerialised or rematerialised between Monday,
6 June 2005 and Friday, 10 June 2005, both days inclusive.
On behalf of the Board, M J Barnett, Secretary
SEGMENTAL REVIEW
The operating profit including fair value adjustments disclosed in the
segmental review is stated before goodwill amortisation to facilitate prior
period comparison. In the case of the leasing businesses, operating profit is
net of interest paid.
Net operating assets comprise total assets (excluding current and deferred tax
assets), less non-interest bearing liabilities (excluding current and deferred
tax liabilities) and cash. In terms of IFRS 3 goodwill previously retained at
corporate level has been allocated to the net assets of the respective segments
and comparatives have been adjusted accordingly.
Comparative numbers have been restated as per note 14.
The commentaries in the segmental reviews reflect performance in the relevant
local currencies
Equipment
Revenue Operating profit Net
including fair operating
value adjustments assets
R million 6 months Year 6 months Year
ended ended ended ended
31 31 30 31 31 30 31 30
Mar Mar Sep Mar Mar Sep Mar Sep
05 04 04 05 04 04 05 04
Europe 2 608 2 599 5 117 238 251 475 2 206 2 103
Southern 2 314 2 237 4 939 176 128 406 2 113 1 830
Africa
Trading 4 922 4 836 10 414 379 881 4 319 3 933
056
Leasing
South Africa - 92 180 - 20 28 - -
4 922 4 928 10 414 399 909 4 319 3 933
236
Share of (1) - 3
associate
income after
tax
The business in this segment arises mainly from our long standing relationship
with Caterpillar Inc. as their dealer and partner in 17 countries.
Revenue in Iberia maintained recent high levels and the order book remains
strong. Construction confidence indicators in Spain are positive, and public
infrastructure spend is expected to continue in the medium term.
The southern African business (South Africa and the rest of Africa) achieved
another solid result with especially pleasing turnover growth in our Smart
Partner MARC contracts. Internal efficiencies and the better outcome managing
financial instruments further improved results. Negative fair value adjustments
on financial instruments of R42 million were lower than the R77m raised in the
comparable period.
Our Siberian business has been sold into a joint venture with Wagner
International of Denver, Colorado and is now reflected as part of income from
associates. This joint venture business operates in a significantly expanded
Siberian geography with good growth prospects.
The division had a strong order book of R1 930 million at 31 March 2005 (30
September 2004: R1 425 million). Long lead times are being experienced for the
delivery of Caterpillar machines due to high demand and raw material shortages,
notably tyres. This is an industry wide phenomenon which has to date not
affected business results.
Industrial Distribution
Revenue Operating profit Net
including fair operating
value adjustments assets
R million 6 months Year 6 months Year
ended ended ended ended
31 31 30 31 31 30 31 30
Mar Mar Sep Mar Mar Sep Mar Sep
05 04 04 05 04 04 05 04
Europe 977 959 1 888 22 32 77 561 388
North 1 810 2 038 4 300 20 25 50 1 051 990
America
Trading 2 787 2 997 6 188 42 57 127 1 612 1 378
Europe 184 201 386 24 24 55 1 857 1 853
North 48 49 99 (1) (12) (6) 731 813
America
Leasing 232 250 485 23 12 49 2 588 2 666
3 019 3 247 6 673 65 69 176 4 200 4 044
Share of - (2) (1)
associate
income after
tax
In Europe, lower new equipment sales in the UK and restructuring costs in the
service arena resulted in lower operating profits. The order book, however, is
strong at 2 164 units (30 September 2004: 1 530 units) and second half
deliveries will improve. The new acquisitions in Northern Ireland and Holland
performed ahead of expectations.
In the US, the lift truck market remained strong and the order book on 30 March
2005 was 1 102 units (30 September 2004: 1 140 units). While the Truck Center
Freightliner business was impacted by lower fleet activity in the first half,
the order book remains strong at 2 615 units (30 September 2004: 2 616 units).
The Truck Center senior management team has been restructured and with expense
reduction programs underway an improvement is expected in the second half.
Ditch Witch continues to perform well.
The leasing operations were negatively affected by the collapse of MG Rover in
Europe and further provisions against Freightliner used trucks in the US.
During the second half of the year improved margins on increased business
volumes and cost containment should result in a higher contribution.
Motor
Revenue Operating profit Net
including fair operating
value adjustments assets
R million 6 months Year 6 months Year
ended ended ended ended
31 31 30 31 31 30 31 30
Mar Mar Sep Mar Mar Sep Mar Sep
05 04 04 05 04 04 05 04
Southern Africa 4 275 3 767 7 501 80 49 107 846 561
Australia 728 698 1 331 4 3 4 399 337
Trading 5 003 4 465 8 832 84 52 111 1 245 898
Leasing South 299 - 295 43 - 51 1 196 1 190
Africa
Southern Africa 470 - 369 124 - 87 2 116 1 956
Europe 213 - 246 16 - 47 1 233 1 119
Car rental - 615 140 - 134 3 349 3 075
683
5 985 4 465 9 742 267 52 296 5 790 5
163
Share of 11 47 59
associate
income after
tax
The South African motor retail operations performed strongly on the back of a
record-breaking new car market. Used car volumes, however, were flat and
margins in the market were under pressure. Overall revenues increased by 13%
and the strong new car sales and cost controls resulted in a much improved
performance. In Australia, the new car market continued to grow marginally to
new record levels. Our expansion of the Volkswagen network in Melbourne and
Sydney has produced satisfactory results, while dealership renovation and end-
of-model sales have held back the performance of our other dealerships.
Avis Rent-a-Car Southern Africa had a solid performance - the season started
quietly, but in the second quarter stronger than anticipated inbound and local
demand resulted in the operation being unable to capitalise on all
opportunities. Operating margins were under pressure, but good asset control
and lower financing rates produced a sound improvement in profit before tax.
In Scandinavia, the operations performed well despite the mild winter
conditions adversely affecting demand in the replacement market. Fleet Services
continued to grow its non-financed book. However, the combined effect of lower
margins from financing and the used car market impacted financial performance.
Associate income now excludes Avis, but includes a strong performance from our
DaimlerChrysler BEE joint venture in KwaZulu-Natal.
The outlook for the second half of the year is positive.
Cement & Lime
Revenue Operating profit Net
including fair operating
value adjustments assets*
R million 6 months Year 6 months Year
ended ended ended ended
31 31 30 31 31 30 31 30
Mar Mar Sep Mar Mar Sep Mar Sep
05 04 04 05 04 04 05 04
Southern 1 813 1 630 3 440 643 516 1 172 2 534 2 499
Africa
Share of 2 5 11
associate
income after
tax
*Net operating assets include goodwill arising on PPC shares purchased by
Barloworld.
The results reflect the continued improvement in cement demand arising from the
upswing in residential construction driven by low interest rates and the
increased impetus of investment on infrastructural projects. Revenue improved
11% to R1.8 billion following increased South African cement sales volumes.
Export volumes were lower, curtailed by the sustained strength of the rand, but
the strong growth in the local market more than compensated for these reduced
volumes.
Increased sales volumes, price adjustments, together with cost reductions and
improved operational efficiencies, resulted in operating profit increasing by
25% to R643 million with all divisions reporting improved margins and
profitability.
South African cement volumes increased by 10% over the comparable period last
year with all provinces showing good growth, other than the Eastern Cape
reflecting the anticipated tapering off of volumes supplied to the Ngqura
harbour project. The Lime operation benefited from increased volumes due to
good demand from customers in the local steel sector.
The PPC board has approved the R50 million recommissioning of the 550 000 ton
per annum Jupiter plant in Germiston. This will provide the market with
additional security of supply over the two and a half year construction and
commissioning period of the proposed 1 million ton inland expansion project.
The renewed optimism in the construction industry, mainly driven by
Government`s commitment to increase infrastructural investment, together with
buoyant economic forecasts and business confidence, will continue to positively
influence cement demand. However cement growth may be tempered by shortages of
other building materials and skills within the industry, but nonetheless is now
expected to range between 8% and 10% for the financial year. The strong demand
from local steel producers is likely to have a beneficial impact on lime sales
volumes.
With the strong performance in the first half, and the positive outlook for
demand, the division is expected to report increased operating results for the
full year.
Coatings
Revenue Operating profit Net operating
including fair value assets
adjustments
R million 6 months ended Year 6 months ended Year
ended ended
31 Mar 31 Mar 30 31 Mar 31 Mar 30 Sep 31 Mar 30 Sep
05 04 Sep 05 04 04 05 04
04
Southern 809 729 1 374 151 113 215 504 407
Africa
Australia 471 540 1 034 (16) 21 23 284 266
& Asia
1 280 1 269 2 408 135 134 238 788 673
Share of associate 9 13 27
income after tax
In southern Africa, the coatings business performed well and experienced good
trading conditions, with the automotive segment in particular experiencing
higher revenue and improved margins. The business remains well placed to take
advantage of market conditions.
The results of the Australian business reflects the weak industry conditions
experienced in lower retail sales, which declined 12%, and a de-stocking
exercise by the largest customer, Bunnings. The trade market was weakened by
lower building activity, which also served to increase competitive pressures.
The business managed to improve market share slightly.
The outlook for coatings remains positive as continued strength in southern
Africa and an improved performance in Australia should boost the second half
result.
Scientific
Revenue Operating profit Net operating
including fair value assets
adjustments
R million 6 months Year 6 months Year
ended ended ended ended
31 31 30 31 Mar 31 30 Sep 31 Mar 30 Sep
Mar Mar Sep 05 Mar 04 05 04
05 04 04 04
Europe 501 521 928 7 18 40 720 734
North 178 206 536 (8) - 5 369 327
America
Asia 70 69 159 3 2 5 92 81
749 796 1 623 2 20 50 1 181 1 142
The laboratory business in Europe was negatively affected by costs relating to
the relocation of the Techne business and provisions for the closure of three
warehouses. This consolidation of distribution within the laboratory group lays
a solid foundation for the future. Large increases in the price of polystyrene
raw material for plastic laboratory products also reduced margins in the first
quarter.
In the US, a continued downturn in the semi-conductor market is negatively
affecting the Melles Griot optics business, more than offsetting the reduction
in fixed costs. However, sales of lasers, and particularly the new DPSS laser
products, are showing good growth.
The scientific business is expected to make a higher profit contribution in the
second half reflecting reduced restructuring provisions. An overall strategic
analysis for the business is nearing completion and implementation has
commenced.
Steel Tube
Revenue Operating profit Net
including fair operating
value adjustments assets
R million 6 months Year 6 months Year
ended ended ended ended
31 Mar 31 30 31 31 30 31 30
05 Mar Sep Mar Mar Sep Mar Sep
04 04 05 04 04 05 04
Southern 777 819 1 739 25 16 52 545 480
Africa
Share of associate 3 3 8
income after tax
Improved efficiencies helped to improve margins in an environment where demand
from the major sectors declined. The mining industry and export market continue
to be depressed, but demand was stronger in other sectors of the market,
particularly the automobile, retail and construction sectors. The stainless
steel operation has been downsized as a result of the loss of the export
market.
The outlook for the business in the second half is dependant on the
international steel price cycle, which looks to have peaked. A drop in prices
will impact negatively on the second half result.
Corporate and Other
Revenue Operating profit Net
including fair operating
value adjustments assets
R million 6 months 6 months Year
ended Year ended ended
ended
31 Mar 31 30 Sep 31 Mar 31 30 31 Mar 30
05 Mar 04 05 Mar Sep 05 Sep
04 04 04 04
Southern 153 134 312 (2) (6) (3) 922 832
Africa
Europe 94 244 500 (49) (22) (10) (11) 85
247 378 812 (51) (28) (13) 911 917
The corporate operations are primarily the corporate offices in South Africa
and the United Kingdom, and include shared services such as treasury, risk
management and information technology.
In Europe the drop in revenue is due to the sale of the Henry Cooke paper
business last year. The operating loss, which includes a charge in respect of
UK pension fund deficits of R28 million (1H`04: R35 million), has increased
mainly due to lower favourable fair value adjustments on financial instruments
and the absence of profit from the paper business.
The logistics businesses in Spain and South Africa continued to develop
satisfactorily. In South Africa, a number of new contracts should contribute
positively in the second half of the year as start up costs decline.
Group income statement
Six months ended Year
ended
31 March 31 March % 30 Sept
2005 2004 Change 2004
Reviewed Reviewed Audited
R million Notes Restated Restated
Revenue 18 792 17 532 7 36 673
Operating profit before 1 545 1 235 25 2 987
goodwill amortisation
Goodwill amortisation (55) (148)
Operating profit 2 1 545 1 180 31 2 839
Fair value adjustments on 3 (45) (57) (107)
financial instruments
Finance costs 4 (213) (184) (474)
Income from investments 71 103 259
Profit before exceptional 1 358 1 042 30 2 517
items
Exceptional items 5 15 159 40
Profit before taxation 1 373 1 201 2 557
Taxation 6 (401) (367) (838)
STC on dividends paid (104) (60) (52)
Profit after taxation 868 774 12 1 667
Income from associates and 24 66 107
joint ventures
Net profit 892 840 6 1 774
Attributable to:
Minority shareholders 117 101 258
Barloworld Limited shareholders 775 739 5 1 516
892 840 1 774
Net profit per share*
(cents)
- basic 375.8 375.8 0 760.4
- fully diluted 366.4 366.9 0 742.4
* Refer note 1 for details
of headline earnings per
share calculation
Group balance sheet
31 March 31 March 30 Sept
2005 2004 2004
Reviewed Reviewed Audited
R million Notes Restated Restated
Assets
Non-current assets 14 024 14 302 13 932
Property, plant and equipment 7 774 7 616 7 710
Other non-current assets 8 1 147 1 059 1 096
Goodwill and intangible assets 2 736 2 611 2 674
Investment in associates and 9 328 185 319
joint ventures
Finance lease receivables 1 542 2 311 1 631
Deferred tax assets 497 520 502
Current assets 14 119 14 526 13 896
Inventories 5 102 5 085 5 134
Vehicle rental fleet 2 163 1 881 2 006
Trade and other receivables 5 854 5 923 5 313
Cash and cash equivalents 1 000 1 637 1 443
Total assets 28 143 28 828 27 828
Equity and Liabilities
Capital and reserves
Share capital and premium 1 385 1 091 1 209
Other reserves 1 982 1 616 1 957
Retained income 8 196 7 547 7 979
Equity portion of convertible 30
bond
Interest of shareholders of 11 563 10 284 11 145
Barloworld Limited
Minority interest 497 637 720
Interest of all shareholders 12 060 10 921 11 865
Non-current liabilities 6 402 5 319 6 885
Interest-bearing 4 604 3 750 4 871
Deferred tax liabilities 810 671 800
Non-interest bearing 988 898 1 214
Current liabilities 9 681 12 588 9 078
Amounts due to bankers and short- 3 883 6 377 2 839
term loans
Convertible bond 100
Taxation 451 507 468
Trade and other payables 4 855 4 942 5 272
Provisions 492 662 499
Total equity and liabilities 28 143 28 828 27 828
Summarised Group cash flow statement
Six months ended Year
ended
31 March 31 March 30 Sept
2005 2004 2004
R million Reviewed Reviewed Audited
Restated Restated
Cash flow from operating activities
Operating cash flows before 2 414 1 976 4 457
movements in working capital
Increase in working capital (948) (504) (206)
Cash generated from operations 1 466 1 472 4 251
Realised fair value adjustments on (27) (15) (52)
financial instruments
Finance costs and investment income (120) (106) (172)
Taxation paid (506) (448) (874)
Cash flow from operations 813 903 3 153
Dividends paid (including outside (883) (596) (871)
shareholders)
Net cash (used in) / from operating (70) 307 2 282
activities
Net cash applied to investing (1 324) (2 255) (2 124)
activities
Acquisition of subsidiaries and (254) (1 525) (1 555)
investments
Acquisition of property, plant and (660) (291) (899)
equipment
Investment in rental assets (441) (315) (1 425)
Investment in car hire vehicles (157) (138)
Reduction /(investment) in 4 (308) (608)
installment sale and leasing
receivables
Proceeds on disposal of 184 184 2 501
subsidiaries, investments
and property, plant and equipment
Net cash (outflow) / inflow before (1 394) (1 948) 158
financing activities
Net cash available from financing 947 2 066 (258)
activities
Ordinary shares issued 176 10 13
Increase in interest-bearing 771 2 056 (271)
liabilities
Net (decrease) / increase in cash (447) 118 (100)
and cash equivalents
Cash and cash equivalents at 1 443 1 547 1 547
beginning of period
Effect of foreign exchange rate 4 (28) (4)
movements
Cash and cash equivalents at end of 1 000 1 637 1 443
period
Statement of changes in equity
Six months ended Year
ended
31 March 31 March 30 Sept
2005 2004 2004
R million Reviewed Reviewed Audited
Restated Restated
Interest of all shareholders
Balance at the beginning of the 11 865 10 436 10 436
period
Adjustment to opening balance for (8) (8)
changes in accounting policy
Net movements not recognised through (28) 148 547
the income statement
(Decrease) / increase in minority (223) (71) 12
interest
Shares issued in the current period 176 382 467
Movement on foreign currency 3 (221) (158)
translation reserve
Other reserve movements 16 58 226
Net movements recognised through the 223 345 890
income statement
Net profit for the period 775 739 1 516
Dividends on ordinary shares (552) (394) (626)
Balance at the end of the period 12 060 10 921 11 865
Group salient features
Six months ended Year
ended
31 March 31 March 30 Sept
2005 2004 2004
Reviewed Reviewed Audited
Restated Restated
Number of ordinary shares in issue, 208 221 202 274 203 802
net of buyback (000)
Net asset value per share including
investments
at market value (cents) 5 455 5 123 5 360
126.6 157.8 127.8
Total liabilities to total
shareholders` funds (%)
Total borrowings to total
shareholders` funds (%)
- Trading segment 28.9 34.4 21.0
- Total group 70.4 93.6 65.0
Interest cover (times)
- Trading segment 10.3 6.8 7.6
- Total group 5.5 4.7 4.5
Notes
Six months ended Year
ended
31 March 31 March 30 Sept
2005 2004 2004
R million Reviewed Reviewed Audited
Restated Restated
1 Reconciliation of net profit to
. headline earnings
Net profit attributable to 775 739 1 516
Barloworld shareholders
Profit on disposal of
properties, investments and (24) (64) (108)
subsidiaries
Impairment of assets 9 5 108
Goodwill amortisation 55 148
Realisation of translation
reserves on liquidation of 57
offshore subsidiary
Interest in associate goodwill 6 6
amortisation
Loss/(profit) on sale of plant
and equipment excluding rental 3 (3) (15)
assets
Taxation on exceptional items 2 (3) (7)
Attributable exceptional items
of associates (impairment 3
losses)
Interest of outside shareholders 3
in exceptional items
Headline earnings 768 735 1 708
Weighted average number of
ordinary
shares in issue during the
period (000)
- basic 206 249 196 628 199 375
- fully diluted 211 501 203 073 204 212
Headline earnings per share
(cents)
- basic 372.4 373.8 856.7
- fully diluted 363.1 364.9 836.4
Operating profit
2
.
Included in operating profit
are:
Cost of sales 13 781 13 891 28 472
Depreciation 885 614 1 545
Charge in respect of UK pension 28 35 70
fund deficit
Profit on sale of rental assets 72 6 115
(Loss) / profit on sale of other (3) 3 15
plant and equipment
3 Fair value adjustments on
. financial instruments
(Losses) / gains arising from:
Forward exchange contracts and (55) (62) (85)
other financial instruments
Translation of foreign currency 10 5 (22)
monetary items
(45) (57) (107)
4 Finance costs
.
Total finance cost (300) (294) (764)
Less: Leasing interest 87 110 290
classified as cost of sales
(213) (184) (474)
Six months ended Year
ended
31 March 31 March 30 Sept
2005 2004 2004
R million Reviewed Reviewed Audited
Restated Restated
5 Exceptional items
.
Profit on disposal of 24 64 108
properties, investments and
subsidiaries
Impairment of assets including (9) (5) (111)
share of associates` impairment
losses
Reversal of provision for 100 100
closure of pension fund
Reversal of translation reserve (57)
on liquidation of offshore
subsidiary
Exceptional profits 15 159 40
Taxation on exceptional items (2) (27) (23)
Interest of outside shareholders (3)
Net exceptional profits 10 132 17
6 Taxation
.
Taxation per Income Statement 401 367 838
Prior year taxation excluding (2) 6
exceptionals
Taxation on exceptional items (2) (27) (23)
excluding prior year
Taxation on profit before STC 397 340 821
and exceptional items
Profit before exceptional items 1 358 1 042 2 517
Goodwill amortisation 55 148
Profit before exceptional items 1 358 1 097 2 665
and dividends received
Effective taxation rate
excluding exceptional items,
prior year tax and dividends
received (%):
- excluding STC 29.2% 31.0% 30.8%
- including STC 36.9% 36.5% 32.8%
7 Ordinary dividends
.
Ordinary dividends per share 130 115 380
(cents)
Reviewed Reviewed Audited
Six months ended Six months Year ended
ended
31 March 2005 31 March 2004 30 Sept 2004
Market Market Market
value/ value/ value/
Directors Book Directors Book Directors Book
valuation value valuation value valuation value
R million Restated Restated
8. Other non-
current
assets
Listed 8 8 8 8 8 8
investments
Unlisted 346 346 294 294 48 48
investments
Investment in 302 302 322 322 315 315
Portland
Holdings
Limited
656 656 624 624 371 371
Other non- 491 435 725
current
assets
1 147 1 059 1 096
Reviewed Reviewed Audited
Six months ended Six months Year ended
ended
31 March 2005 31 March 2004 30 Sept 2004
Market Market Market
value/ value/ value/
Directors Book Directors Book Directors Book
valuation value valuation value valuation value
R million Restated Restated
9. Investment in associates
and joint ventures
Joint 297 133 176 110 237 125
ventures
Unlisted 155 72 201 86 193 96
associates
452 205 377 196 430 221
Loans and advances 123 (11) 98
328 185 319
Six months ended Year ended
31 March 31 March 30 Sept
2005 2004 2004
