| Tue 21 Jun 2005, 17:14 | | Remgro Limited - Audited consolidated results for |
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Remgro Limited - Audited consolidated results for the year ended 31 March 2005
Remgro Limited
Registration number 1968/006415/06
ISIN ZAE000026480
Share Code REM
Audited consolidated results
For the year ended 31 March 2005
- Increase in headline earnings per share: +7.6%
- Increase in ordinary dividend per share: +10.2%
- Intention to declare a special dividend of 600 cents per share
subject to Absa/Barclays transaction being implemented
- Intrinsic value per share at year-end: R120
- Five-year compound growth rates:
- Headline earnings per share 15.8% p.a.
- Ordinary dividend per share 21.2% p.a.
Abridged consolidated balance sheet
2005 2004
R`m R`m
Assets
Property, plant and equipment 3 864 3 408
Biological agricultural assets 94 85
Investment properties 24 22
Goodwill and trade marks 386 54
Investments - Associated companies 28 415 22 737
- Other 1 948 1 861
Loans 157 49
Deferred taxation 173 142
Cash and cash equivalents 2 372 3 446
Other current assets 2 393 1 926
Total assets 39 826 33 730
Equity and liabilities
Total shareholders` equity 34 960 29 709
Minority interest 2 011 1 702
Interest-bearing loans 316 277
Other non-current liabilities 722 513
Non-interest-bearing current liabilities 1 817 1 529
Total equity and liabilities 39 826 33 730
Net asset value per share (Rand)
- At book value R71.77 R59.26
- At intrinsic value *
- at year-end R119.97 R100.36
- at 20 June 2005 (22 June 2004) R132.94 R100.60
* Unaudited
Abridged consolidated cash flow statement
2005 2004
R`m R`m
Cash flow from operating activities 1 764 1 678
Taxation paid (546) (363)
Dividends received 2 453 1 718
Cash available from operating activities 3 671 3 033
Dividends paid (2 642) (1 438)
Net cash inflow from operating activities 1 029 1 595
Investing activities (2 184) (528)
Financing activities 9 62
Net increase/(decrease) in cash and cash
equivalents (1 146) 1 129
Cash and cash equivalents at the beginning of
the year 3 393 2 264
Cash and cash equivalents at the end of the year 2 247 3 393
Cash and cash equivalents - per balance sheet 2 372 3 446
Bank overdraft (125) (53)
Abridged consolidated statement of changes in equity
2005 2004
R`m R`m
Balance at 1 April - as previously reported 29 766 27 443
Prior year adjustments (57) (25)
Adjusted balance at 1 April 29 709 27 418
Net cumulative opening balance adjustment (AC - 36
133)
Net fair value adjustments for the year (AC 133) 46 1 204
Net profit for the year 8 807 3 605
Dividends paid (2 509) (1 316)
Exchange rate adjustments 239 (694)
Purchase of shares by wholly-owned
subsidiary (treasury shares) (1 235) (295)
Net shares purchased by The Remgro Share Trust * (24) (17)
Other (73) (232)
Balance at 31 March 34 960 29 709
* Also accounted for as treasury shares
Abridged consolidated income statement
2005 2004
R`m R`m
Revenue of the Company and its subsidiaries 12 823 11 763
Consolidated profit before taking into account
the following 1 696 1 571
Depreciation (267) (240)
Finance costs (54) (39)
Impairment and amortisation of goodwill (3) (186)
Net reversal of impairment of investments and
assets 24 4
Exceptional items 2 194 50
Consolidated profit before tax 3 590 1 160
Taxation (400) (397)
Consolidated profit after tax 3 190 763
Share of after-tax profit of associated companies 6 026 3 177
- Profit before taking into account the following 4 495 4 164
- Impairment and amortisation of goodwill (403) (383)
- Net impairment of investments and assets (30) -
- Exceptional items 1 964 (604)
Group profit after tax 9 216 3 940
Minority interest (409) (335)
Net profit for the year 8 807 3 605
Reconciliation of headline earnings:
Basic earnings - Net profit for the year 8 807 3 605
Plus/(minus) - portion attributable to own
members:
- Impairment and amortisation of goodwill 405 568
- Net impairment of investments and assets 23 (1)
- Exceptional items of a capital nature (4 184) 523
- Net surplus, after taxation, on disposal of
property, plant and equipment (69) (8)
Headline earnings 4 982 4 687
Earnings and dividends per share
2005 2004
Cents Cents
Headline earnings 1 001.8 931.3
- Diluted 998.7 929.3
Basic earnings 1 771.0 716.3
- Diluted 1 765.4 714.8
Dividends
Ordinary 314.00 285.00
- Interim 116.00 101.00
- Final 198.00 184.00
Special Note 8 200.00
Additional information
2005 2004
Number of shares in issue
- Ordinary shares of 1 cent each 486 493 650 486 493 650
- Unlisted B ordinary shares of 10 cents
each 35 506 352 35 506 352
Total number of shares in issue 522 000 002 522 000 002
Ordinary shares repurchased and held in
treasury (30 521 841) (16 442 602)
Ordinary shares held by The Remgro
Share Trust and accounted for
as treasury shares (4 381 159) (4 236 087)
487 097 002 501 321 313
Weighted number of shares 497 292 403 503 280 054
In determining the headline and basic earnings per share the weighted number of
shares was taken into account.
2005 2004
R`m R`m
Listed investments
Associated
- Book value 12 004 11 014
- Market value 19 893 14 413
Other
- Book value 1 866 1 795
- Market value 1 866 1 795
Unlisted investments
Associated
- Book value 16 411 11 723
- Directors` valuation 31 301 27 903
Other
- Book value 82 66
- Directors` valuation 82 66
Additions to and replacement of property,
plant and equipment 472 470
Capital commitments 857 640
(Including amounts authorised, but not yet contracted
for)
Dividends received
Dividends included in profit 81 28
Dividends from associated companies set off against
investments 2 501 2 156
Interest received
From unlisted investments and deposits 273 334
(Included in profit)
Exceptional items
Exceptional items of subsidiary companies:
Capital surplus on redemption of
debentures by R&R 2 100 -
Net capital surplus on the sale of
investments and businesses 45 50
Other 49 -
Total before taxation 2 194 50
Taxation (8) (3)
Total after taxation 2 186 47
Share of exceptional items of associated companies 1 964 (604)
Grand total 4 150 (557)
Attributable to minorities (20) -
Attributable to own members 4 130 (557)
Comments
1. Accounting policies
The annual financial statements are prepared on the historical cost basis, in
accordance with South African Statements of Generally Accepted Accounting
Practice, the requirements of the South African Companies Act 1973, as amended,
and the Listings Requirements of the JSE Securities Exchange South Africa. These
financial statements incorporate accounting policies which are consistent with
those of the previous financial year, with the exception of the implementation
of the South African Statements of Generally Accepted Accounting Practice, AC
140 (IFRS 3): Business combinations, AC 128 (IAS 36): Impairment of assets, AC
129 (IAS 38): Intangible assets and AC 501: Accounting for secondary taxation on
companies (STC).
The accounting policies of associated companies do not in all circumstances
correspond with those of the Company. This is mainly due to year-ends of
companies that differ, resulting in the later implementation of new accounting
standards. No adjustments are made for such differences in accounting policies
where it is not practicable.
With effect from 1 April 2005 Remgro will implement International Financial
Reporting Standards (IFRS) and in the Group`s financial statements for the year
ending 31 March 2006 the comparative figures for 2005 will be restated
accordingly. In the announcement of the interim results for the six months
ending 30 September 2005, which will be presented in terms of IFRS, the effects
of these new accounting standards will be fully disclosed.
2. Prior year adjustments
Change in accounting policy
AC 140 (IFRS 3): Business combinations and related accounting statements With
effect from 1 April 2004 Remgro adopted AC 140 (IFRS 3), AC 128
(IAS 36) and AC 129 (IAS 38). In terms of the provisions of AC 140, goodwill
arising from a business combination for which the agreement date is on or after
31 March 2004, will not be amortised, but be carried at cost less accumulated
impairment losses.
As from 1 April 2004 all goodwill that already existed on this date is also
treated in accordance with AC 140. All existing goodwill is therefore no longer
amortised but carried at cost less accumulated impairment losses. Due to the
fact that the comparative figures are not restated under the transitional
provisions of AC 140, certain items are not directly comparable on a line-for-
line basis with those of the prior year.
AC 501: Accounting for secondary taxation on companies (STC)
In terms of this accounting statement, a deferred tax asset should be recognised
for unutilised STC credits to the extent that it is probable that the entity
will declare dividends against which the STC credits can be utilised.
Remgro`s history regarding dividends received against ordinary dividends paid
suggests increasing STC credits over time. It is therefore not likely that
Remgro`s STC credits will be utilised against ordinary dividends paid in the
foreseeable future, and consequently no deferred tax asset has been created for
the Company`s unutilised STC credits.
A subsidiary company, Medi-Clinic Corporation Limited, has however recognised a
deferred tax asset for its unutilised STC credits in terms of AC 501, and its
comparative figures for 2004 have been restated accordingly. This has had no
effect on Remgro`s earnings for the comparative year. The comparative balance
sheet has been restated accordingly.
Other adjustments
Restatement of comparative figures in respect of inventories
During the year Transvaal Sugar Limited changed its revenue recognition policy
in respect of sugar sales from a seasonal basis to an accrual basis. This had
the effect that carry-over sugar inventory, which was previously recognised as
revenue, is now accounted for as inventory. The effect on Remgro`s 2004 results
was a decrease in headline earnings of R32 million. The comparative balance
sheet has been restated accordingly.
Restatement of comparative figures in respect of goodwill
As reported above Remgro adopted AC 140 (IFRS 3), AC 128 (IAS 36) and
AC 129 (IAS 38) with effect from 1 April 2004. In terms of these accounting
standards goodwill is tested annually for any possible impairments, and for this
purpose it is allocated to the different cash generating units to which it
relates.
Consequently goodwill attributable to investments in associated companies is
reported under `Investments - Associated companies` in the 2005 annual financial
statements while previously it was reported under `Goodwill and trade marks`.
The comparative balance sheet has been restated accordingly.
Restatement of prior year figures as a result of the above-mentioned
adjustments:
Year ended
31 March
2004
R`m
Income statement
Headline earnings as previously reported 4 719
Restatement of comparative figures in respect of inventories (32)
Restated headline earnings 4 687
Headline earnings per share as previously reported (cents) 937.6
Restated headline earnings per share (cents) 931.3
R`m
Balance sheet
Decrease in reserves (57)
Increase in minority interest 2
Decrease in goodwill and trade marks (3 192)
Increase in investments - associated companies 3 192
Increase in deferred tax assets 37
Increase in current assets 164
Decrease in deferred tax liability (28)
Increase in current liabilities 284
3. Results
Headline earnings
Headline earnings for the year to 31 March 2005 increased by 6.3% from
R4 687 million to R4 982 million. However, headline earnings per share increased
by 7.6% from 931.3 cents to 1 001.8 cents due to the favourable impact of the
share repurchase programme.
Currency movements continued to impact the Group`s earnings. Due to a stronger
but more stable rand, the unfavourable currency impact on translation of R&R
Holdings S.A., Luxembourg`s (R&R) contribution to headline earnings declined
from R520 million in 2004 to R100 million for the year under review as set out
in the table below.
Financial year:
2005 2004
Average exchange rate (GBP/R) 11.5342 12.1025
Closing exchange rate at year-end (GBP/R) 11.7520 11.5950
R&R`s contribution (GBPm) 176 174
R&R`s contribution (Rm) 2 029 2 100
Unfavourable currency impact (Rm) (100) (520)
The contribution of the financial services interests to Remgro`s headline
earnings increased by 21.6% from R1 394 million in 2004 to R1 695 million.
FirstRand and RMBH`s combined contribution to headline earnings amounted to R1
172 million (2004: R976 million), while Absa increased its contribution by 23.4%
to R517 million (2004: R419 million).
The contribution of the industrial interests increased by 13.1%, mainly as a
result of strong performances by Total South Africa, Distell and Medi-Clinic.
This was however offset by lower results from Rainbow, Nampak, UBR and Transvaal
Sugar.
Mining interest`s contribution to headline earnings decreased by 41.3% to
R101 million. Trans Hex reported lower results and its contribution to headline
earnings decreased to R29 million (2004: R79 million).
Analysis of comparable headline earnings (cents per share)
- Excluding contributions by R&R
2005 2004
Headline earnings as reported 1 001.8 931.3
R&R`s contribution (408.1) (417.3)
Comparable headline earnings after
exclusion of the above (+ 15.5%) 593.7 514.0
Basic earnings
Basic earnings per share increased by 147.2% to 1 771.0 cents. Basic earnings
reflects the net earnings after impairment and goodwill amortisation and after
exceptional items. This increase was mainly due to the surplus realised on the
redemption by R&R of debentures (refer to the BAT paragraph in note 7.1) and
Remgro`s share in the favourable exceptional items of associated companies. The
latter mainly comprises the profit realised by BAT following the merger of Brown
& Williamson`s US businesses with R.J. Reynolds to form a new holding company,
Reynolds American Inc., and from the sale of Lane Limited to Reynolds American.
4. Intrinsic value
Remgro`s intrinsic value per share increased by 19.5% from R100.36 at
31 March 2004 to R119.97 at 31 March 2005. Refer to Annexure A for full details.
5. Revenue
- of the Company and its subsidiaries
2005 2004
R`m R`m
Operating revenue 9 969 9 245
Dividends and interest 2 854 2 518
Total revenue 12 823 11 763
Due to the nature and composition of the Group, segmental analysis in respect of
revenue is not meaningful.
6. Source of headline earnings
2005 2004
R`m % R`m %
Tobacco interests 2 029 41 2 100 45
Financial services 1 695 34 1 394 30
Industrial interests 1 125 22 995 21
Mining interests 101 2 172 3
Corporate finance and other interests 32 1 26 1
4 982 100 4 687 100
Restatement of segmental analysis
It should be noted that Remgro changed its segmental analysis from
1 April 2004. Distell Group Limited (Distell) and Medi-Clinic Corporation
Limited (Medi-Clinic) are classified as `Industrial interests`, while previously
they were accounted for as `Trade mark interests` and `Corporate finance and
other interests` respectively. Since that date Caxton and CTP Publishers and
Printers Limited, which was previously accounted for under `Corporate finance
and other interests`, is also included in `Industrial interests`.
After the restatement, R&R, which represents Remgro`s tobacco interests is the
only remaining interest under `Trade mark interests`. Therefore, the description
`Trade mark interests` has been changed to `Tobacco interests`. The comparative
figures have been restated accordingly.
7. Investments
7.1 British American Tobacco Plc (BAT)
Remgro`s interest in BAT is represented by its one-third holding of the ordinary
shares and debentures, as well as all the participation securities, issued by
R&R. This gives Remgro an effective interest of 10.03% in BAT at 31 March 2005.
The other two-thirds of the ordinary share capital and debentures of R&R are
held by Compagnie Financiere Richemont SA (Richemont).
In May 2004, optionholders exercised the call warrants that were issued by R&R
in January 2003 in respect of the BAT preference shares. These preference shares
were converted into ordinary BAT shares and, as a result, Remgro`s effective
interest in BAT declined from 9.8% to 9.3%.
On 28 February 2005, Remgro`s wholly-owned subsidiary Remgro Investments Limited
(Jersey) invested GBP188.0 million in 19 281 686 participation securities issued
by R&R. This was funded by the proceeds of the redemption by R&R of debentures
amounting to GBP564.7 million. Remgro and Richemont received GBP188.2 million
and GBP376.5 million respectively. The debentures that were redeemed formed part
of the consideration received from the Rothmans International merger on 1
October 1995. As set out in the 1996 Rembrandt Group Limited Annual Report, no
book value was reflected in the group accounts in respect of the original
investment in R&R. As a result, the gross proceeds received by Remgro upon
redemption of the debentures has been recorded as an exceptional profit.
The participation securities entitle Remgro to all the rewards and risks of
directly owning the same number of ordinary shares in BAT. The participation
securities can be redeemed by R&R either by delivery of the appropriate number
of BAT ordinary shares on a one-for-one basis, or by the payment by R&R to the
holder of the proceeds from the disposal of the appropriate number of BAT
ordinary shares.
As Remgro and Richemont hold an interest of one-third and two-thirds
respectively in R&R`s ordinary share capital, and as the transaction did not
affect the total number of BAT shares owned by R&R, Remgro and Richemont, as
ordinary shareholders, both surrendered their indirect interest in 19 281 686
ordinary BAT shares on a pro rata basis. At the same time Remgro, as an ordinary
shareholder, acquired a one-third interest in the GBP188.0 million cash obtained
by R&R from issuing the participation securities.
The net result was that Remgro`s effective interest in BAT increased by 12 854
457 shares at a cost of GBP124.9 million, excluding transaction costs.
For the year under review, R&R`s results included its 29.6% interest of BAT`s
results for the period up to the conversion of the BAT preference shares into
ordinary shares at the beginning of June 2004 at which time its interest was
diluted to 27.9%. Subsequent share buy-backs by BAT resulted in R&R`s percentage
holding rising to 28.1% at 30 September 2004, 28.2% at 31 December 2004 and
28.3% at 31 March 2005. The results for the comparative period reflected R&R`s
28.8% effective interest for the six months to 30 September 2003 and its 29.4%
interest for the six months to 31 March 2004.
As explained in the 2003 Annual Report, the BAT preference shares, referred to
above, were treated as debt instruments since January 2003 and were no longer
equity accounted. This also resulted in those debt instruments being revalued to
fair value. The movement in the present value of the preference shares was
therefore recognised and accounted for accordingly. Remgro`s share of the
deferred net warrant premium of GBP30 million was included in equity accounted
income during the comparative period to 31 March 2004.
R&R`s share of BAT`s earnings for the twelve months to 31 March 2005 is based on
BAT`s results for the year ended 31 December 2004 plus the results for the
quarter to 31 March 2005 (now reported under IFRS) less the results for the
quarter to 31 March 2004. For this purpose R&R adjusted BAT`s results for the
quarter to 31 March 2005 to UK accounting practice to be in line with the
practice in previous years. Remgro`s share of R&R`s headline earnings is
included in the table below.
2005 2004
GBP`m GBP`m
Attributable profit of BAT before goodwill and exceptional
items 1 698 1 559
Movement in present value of BAT preference shares and
dividends (8) (42)
Adjusted attributable profit of BAT for the
twelve months ended 31 March 1 690 1 517
R&R`s share of the adjusted attributable profit of BAT:
- 1 April 2003 to 31 March 2004 - 440
- 1 April 2004 to 28 February 2005 442 -
- 1 March 2005 to 31 March 2005 38 -
Movement in present value of BAT preference shares and
dividends 8 42
R&R`s other income 38 8
R&R`s headline earnings for the year ended 31 March 526 490
Net warrant premium no longer deferred - 30
R&R`s adjusted headline earnings for the year ended 31
March 526 520
Remgro`s share thereof 176 174
R`m R`m
Translated at an average GBP/R rate of 11.5342 (2004:
12.1025) 2 029 2 100
BAT`s own attributable profit for the twelve months to 31 March 2005, excluding
goodwill amortisation and exceptional items, was 9% higher than the previous
year at GBP1 698 million. However, after accounting adjustments to reflect the
present value of the preference shares and preference share dividends, BAT`s
results for 2005 were 11% higher compared to the previous year.
In July 2004, BAT completed the agreement to combine its Brown & Williamson
(B&W) US domestic businesses with that of R.J. Reynolds (RJR) under Reynolds
American Inc, a new holding company 58% owned by RJR shareholders and 42% by
BAT. BAT also sold Lane, its US-based pipe and smoking tobacco business, to
Reynolds American for $400 million in cash. As a consequence of the merger, B&W
and each of its affiliates (other than Reynolds American Inc and its
subsidiaries) will be indemnified by Reynolds American for all existing and
future litigation relating to the US tobacco business. BAT expects that the
transaction will significantly improve its competitive position in the US
domestic market.
BAT - in line with UK accounting practice - included within its equity an amount
of GBP918 million, being the gain on the disposal of subsidiaries and some
GBP216 million in respect of goodwill reinstated on its balance sheet. These
items were linked to the deemed disposal of its US operations as a consequence
of the Reynolds American transaction. R&R has included its share of the gain on
disposal in its profit and loss account for the year to 31 March 2005.
BAT has a 31 December financial year-end. The following commentary is based on
the BAT results for the financial year ended 31 December 2004.
BAT`s adjusted diluted earnings per share, a good measure of its underlying
performance (and which excludes the effects of goodwill amortisation,
restructuring costs, disposal of subsidiaries, etc.), grew by 10% to 75.83 pence
per share. This reflects the higher operating profit, the reduced effective tax
rate, lower minority interests and the positive impact of BAT`s share buy-back
programme.
BAT`s operating profit, before goodwill amortisation and exceptional items, was
2% higher at GBP2 830 million. These results were adversely affected by average
sterling exchange rates strengthening against almost all currencies. At
comparable rates of exchange, operating profit, before goodwill and exceptional
items, would have risen by 7%, reflecting the benefit from the Ente Tabacchi
Italiani S.p.A. (ETI) acquisition at the end of 2003 and a good performance in
all regions except America-Pacific.
Further information on BAT`s performance in the different regions will be
included in the report that will be mailed to shareholders and will then be
available on the website.
7.2 Other investments
The most important changes to Remgro`s other investments during the year under
review were as follows:
Vector Logistics (Proprietary) Limited (Vector)
During the year under review Remgro`s subsidiary company, Rainbow Chicken
Limited (Rainbow), acquired a 100% share in Vector for R456 million. Vector
currently distributes approximately 70% of Rainbow`s products.
Henkel South Africa (Proprietary) Limited (Henkel)
During October 2004 Remgro sold its 50% interest in Henkel for R80 million. An
after-tax capital surplus of R43.9 million was realised and is accounted for as
an exceptional item.
Sage Group Limited (Sage)
During January 2005 Remgro advanced R95.0 million to Sage in order to enable it
to settle certain debt instruments. Interest is charged at market-related rates
and the loan is repayable by 31 October 2005. Please refer to the Sage paragraph
under `Subsequent to the year-end`.
Repurchase of Remgro shares
During the year under review, a wholly-owned subsidiary company of Remgro
acquired a further 14 079 239 ordinary Remgro shares (2.9% of the ordinary
shares) at an average price of R87.69 for a total amount of R1 234.6 million.
Together with those shares acquired in previous financial years, a total of 30
521 841 (6.3%) are held as treasury shares.
During the year under review The Remgro Share Trust purchased 660 018 (2004: 711
000) ordinary Remgro shares at an average price of R90.93 (2004: R65.43) for a
total amount of R60.0 million (2004: R46.5 million). During the year under
review 514 946 shares were delivered to participants against payment thereof.
Subsequent to the year-end:
Absa Group Limited (Absa)
On 5 May 2005, Barclays Bank Plc (Barclays) made an offer to Absa shareholders
to acquire a 60% interest in Absa (the Barclays transaction). Remgro entered
into an agreement with Barclays whereby Remgro undertook to dispose of all or
part of its interest in Absa.
The Barclays transaction will be implemented through two inter-conditional
processes:
* a scheme of arrangement in terms of section 311 of the Companies Act, whereby
Barclays will acquire 32% of the Absa ordinary shares held by each Absa ordinary
shareholder, excluding the Absa Group Limited Share Incentive Scheme Trust and
Barclays and its subsidiaries, except to the extent that they hold Absa shares
on behalf of third parties; and
* a partial offer by Barclays to acquire an additional 28% of Absa ordinary
shares held by each Absa ordinary shareholder.
The consideration amounts to R82.50 per share, plus the entitlement to receive
the final dividend of R2.00 per share declared by Absa in respect of its
financial year to 31 March 2005.
To the extent that Barclays does not secure sufficient acceptances to reach the
required level of a 60% shareholding in Absa, Remgro has agreed to tender
additional Absa shares, up to Remgro`s total shareholding, as part of the
partial offer. Barclays will acquire such additional shares from Remgro on the
same terms and conditions as all other Absa shares subject to the Barclays
transaction.
The effective date of the disposal will be determined by the operative date of
the scheme of arrangement and the record date of the partial offer.
FirstRand Limited (FirstRand)
In May this year, FirstRand announced that all conditions precedent regarding
its proposed black economic empowerment (BEE) transaction had been complied
with. The operative date of the scheme was 16 May 2005.
In terms of this transaction, FirstRand has bought back approximately 416.2
million ordinary shares on a pro rata basis from all shareholders in the ratio
of 7.6 ordinary shares for each 100 ordinary shares held. The price per ordinary
share amounted to R12.28 and in terms of this transaction Remgro received R486.0
million on 16 May 2005. At the same time FirstRand issued 119 million ordinary
shares to the BEE consortium, with the result that Remgro`s direct interest in
FirstRand has been diluted from 10.0% to 9.4%.
This transaction also diluted RMB Holdings Limited`s (RMBH) interest in
FirstRand from 34.4% to 32.2%. After this transaction, Remgro`s total interest
in FirstRand, including the indirect interest held by RMBH, is 16.8%.
Sage
On 20 May 2005 Momentum Group Limited (Momentum), a wholly-owned subsidiary of
FirstRand, announced that it has submitted an offer to acquire all the issued
shares in Sage, other than those held by Sage Life Limited, by way of a scheme
of arrangement in terms of section 311 of the Companies Act.
The consideration payable in terms of the scheme shall be R634 million, or R1.75
per Sage share, comprising an initial payment of R1.42 per share and a potential
subsequent payment of up to a maximum of R0.33 per share. As security for
certain potential contingent taxation-related liabilities, an amount of R120
million of the cash consideration will be held in an escrow account. Once the
potential tax liabilities have been resolved, the escrow amount will be reduced
and the balance will be distributed to Sage shareholders pro rata to their
shareholding.
Remgro gave an irrevocable undertaking to Momentum to vote in favour of the
proposed scheme and also agreed that the repayment of the R95 million loan to
Sage be postponed to 31 October 2005.
8. Cash flow and utilisation
The Company`s cash resources at 31 March 2005 are as follows:
Local Offshore Total
R`m R`m R`m
Per consolidated balance sheet 2 060 312 2 372
Less: Cash from other operating
subsidiaries (1 278) - (1 278)
Cash at the centre 782 312 1 094
Attributable share of R&R`s cash - 2 778 2 778
Available cash 782 3 090 3 872
In the light of the 7.6% increase in headline earnings per share, the Board has
decided to increase the ordinary dividend per share by 10.2% from 285 cents to
314 cents for the financial year ended 31 March 2005. The increase in the final
dividend is 7.6%.
Local cash at the centre may increase substantially subsequent to year-end. Over
and above normal cash flows from dividend income, the proceeds of the FirstRand
transaction have already been received and those of the Absa and Sage
transactions are receivable as soon as all conditions precedent are fulfilled.
It is the Board`s intention to also declare a special dividend of 600 cents per
share shortly after, and subject to, the Absa transaction being declared
unconditional. The salient dates of the special dividend will then be announced
on SENS and distributed to shareholders.
On the assumption that the Absa transaction goes ahead and Remgro sells at least
60% of its Absa shares to Barclays, the Group will still have sufficient cash
resources to pursue further investment opportunities and to continue its share
repurchase programme.
If the special dividend referred to above is also declared, the total
distribution to shareholders in respect of the financial year will be R4 771
million and be made up as follows:
(Based on total issued capital)
2005 2004
R`m R`m
Ordinary
- Interim 606 527
- Final 1 033 961
Total 1 639 1 488
Special 3 132 1 044
4 771 2 532
Directorate
Mr P G Steyn retired as a non-executive director with effect from 25 August
2004. The Board would like to thank him for his contribution over many years.
Mr M H Visser, the Chief Executive Officer of Remgro, has been acting as Deputy
Chairman of the Board. With effect from 22 June 2005, Dr E de la H Hertzog, a
non-executive director, will act as Deputy Chairman.
Audit report
The annual financial statements have been audited by PricewaterhouseCoopers Inc.
and their unqualified audit reports on the comprehensive annual financial
statements and the summarised financial statements are available for inspection
at the registered office of the Company.
Dividend declaration
Declaration of Dividend No 10
Notice is hereby given that a final dividend of 198 cents (2004: 184 cents) per
share has been declared in respect of both the ordinary shares of one cent each
and the unlisted B ordinary shares of ten cents each, for the financial year
ended 31 March 2005.
Dates of importance
Last day to trade in order to participate in the
final dividend Friday, 12 August 2005
Trading on or after this date will be ex the
final dividend Monday, 15 August 2005
Record date Friday, 19 August 2005
Payment date Monday, 22 August 2005
Shareholders may not dematerialise or rematerialise their holdings of ordinary
shares between Monday, 15 August 2005, and Friday, 19 August 2005, both days
inclusive.
The Annual Report will be posted to members during July 2005.
Signed on behalf of the Board of Directors.
Johann Rupert
Chairman
Thys Visser
Chief Executive Officer/Deputy Chairman
Stellenbosch
21 June 2005
Annexure A
Intrinsic net asset value
Stock 31 March 31 March
Shares exchange
held closing Exchange 2005 2004
Notes million price GBP`m rate R`m R`m
Tobacco
interests
R&R Holdings 2 235.9 11.7520 26 276 23 517
- BAT ordinary
shares 1 214.3 933.0 1 999.4
- Cash and
dividends
receivable 2 236.4
- Other net
assets 0.1
Financial
services
FirstRand 520.7 1 333 6 941 5 113
RMB Holdings 274.1 2 143 5 874 4 087
Absa Group 61.4 7 540 4 629 2 863
Sage Group 65.0 185 120 111
Sagecor 26 11
Industrial
interests
Medi-Clinic
Corporation 178.6 1 530 2 732 2 143
Unilever
Bestfoods
Robertsons 1 711 1 754
Distell Group 58.7 2 395 1 405 909
Nampak 86.8 1 580 1 371 1 150
Total South
Africa 1 187 933
Rainbow
Chicken 172.8 650 1 124 942
Transvaal
Sugar 1 028 1 073
Air Products
South Africa 606 605
Dorbyl 14.1 3 000 422 260
Wispeco 304 268
Henkel South
Africa - 75
Caxton 7.8 1 145 89 69
Mining
interests
Implats 3.3 52 500 1 751 1 720
Trans Hex
Group 30.2 1 750 529 823
Gencor 38.0 15 6 5
Other
interests
Sundry
investments
and loans 72 72
Other net
assets 283 98
Cash at the
centre
- Local 2 782 2 147
- Offshore 2 26.6 11.7520 312 3
Intrinsic net
asset value 59 580 50 751
Potential CGT
liability 3 (1 141) (439)
Intrinsic net
asset value 58 439 50 312
after tax
Issued shares after deduction of shares repurchased
and the shares in The Remgro Share Trust (million) 487.1 501.3
Intrinsic value per share R119.97 R100.36
Notes
1. This represents Remgro`s effective interest of 10.03% in BAT Plc.
2. Cash at the centre excludes cash held by subsidiaries and associated
companies that are separately valued above.
3. The potential capital gains tax (CGT) liability, which is unaudited, is
calculated at an effective rate of 14.5% on the specific identification method
using the most favourable calculation for investments acquired before 1 October
2001 and also taking into account the corporate relief provisions.
4. The listed investments are valued at stock exchange prices and unlisted
investments at directors` valuation.
Directorate
Non-executive directors
Johann Rupert (Chairman), P E Beyers, G D de Jager*, J W Dreyer,
P K Harris*, E de la H Hertzog, E Molobi*, J F Mouton*, D Prins*,
F Robertson*
(*Independent)
Executive directors
M H Visser (Chief Executive Officer/Deputy Chairman), W E Buhrmann,
D M Falck, J A Preller (Mrs), T van Wyk
Corporate information
Secretary
M Lubbe (Mrs)
Listing
JSE Securities Exchange South Africa
Sector: Financial - Investment Companies
American depositary receipt (ADR) program
Cusip number 75956M107 ADR to ordinary share 1 : 1
Depositary
The Bank of New York, 101 Barclay Street, New York NY 10286
Business address and registered office
Carpe Diem Office Park, Quantum Street, Techno Park, Stellenbosch 7600
(PO Box 456, Stellenbosch 7599)
Transfer Secretaries
Computershare Investor Services 2004 (Proprietary) Limited
70 Marshall Street, Johannesburg 2001
(PO Box 61051, Marshalltown 2107)
Auditors
PricewaterhouseCoopers Inc.
Stellenbosch
Sponsor
Rand Merchant Bank (A division of FirstRand Bank Limited)
www.remgro.com
Date: 21/06/2005 05:02:41 PM
Produced by the JSE SENS Department
