| Wed 24 Aug 2005, 14:31 | | RESULTS FOR THE YEAR ENDED 30 JUNE 2005 |
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Amalgamated Appliance Holdings Limited - Reviewed Results For The Year Ended
30 June 2005
Amalgamated Appliance Holdings Limited
Registration number 1997/004130/06
(`AMAP` or `the Group`)
ISIN: ZAE000012647
Share code: AMA
REVIEWED RESULTS FOR THE YEAR ENDED 30 JUNE 2005
Financial highlights
12-month comparison 30 June 2004 to 30 June 2005
Unaudited
Profit attributable to ordinary shareholders up 45%
Earnings per share up 45%
Headline earnings per share up 39%
Net cash on hand R279,8m
Dividend 17 cents
Abridged group income statement for the period ended 30 June 2005
Reviewed Audited
12 months 16 months
30 June 30 June
2005 2004
R`000 R`000
Revenue 1 798 174 2 002 340
Operating income 196 636 139 990
Net interest paid (9 666) (5 863)
Profit before taxation 186 970 134 127
Taxation (59 545) (42 731)
Profit attributable to ordinary shareholders 127 425 91 396
Basic earnings per share - (cents) 62,0 45,0
Headline earnings per share - (cents) 59,9 45,2
Diluted basic earnings per share - (cents) 60,9 44,4
Diluted headline earnings per share - (cents) 58,9 44,6
Dividend per share - (cents) 17,0 15,0
Abridged group balance sheet as at 30 June 2005
Reviewed Audited
30 June 30 June
2005 2004
R`000 R`000
ASSETS
Non-current assets
Property, plant and equipment 27 308 31 077
Goodwill 1 170 1 170
Trademarks 8 888 9 572
Other financial assets 16 256 24 433
Deferred tax 9 335 10 631
Current assets 739 944 697 335
Inventories 261 536 273 186 Trade
and other receivables 186 136 231 323
Derivative financial asset 12 513 -
Bank and cash on hand 279 759 192 826
Total assets 802 901 774 218
EQUITY AND LIABILITIES
Capital and reserves 413 742 322 935
Long-term borrowings 9 973 3 581
Deferred tax 607 388
Current liabilities 378 579 447 314
Trade and other payables 323 749 356 070
Taxation 51 412 43 600
Derivative financial liability - 46 850
Short-term portion of long-term liability 3 418 794
Total equity and liabilities 802 901 774 218
Statement of changes in equity for the period ended 30 June 2005
Fair value Share-
adjust- Accumu- holder
Share Share Treasury ment lated for
Capital premium share reserve profits dividend Total
Reviewed R`000 R`000 R`000 R`000 R`000 R`000 R`000
Balance
at
1 March
2003 2 074 157 529 (6 081) 1 397 71 767 7 449 234 135
Net profit
for the
period - - - - 18 799 - 18 799
Dividend settled
- cash
election - - - - - (2 515) (2 515)
- issue of
share capital 48 5 212 (326) - - (4 934) -
Balance at
31 August
2003 2 122 162 741 (6 407) 1 397 90 566 - 250 419
Net profit
for the
period - - - - 51 605 - 51 605
Net treasury
movement - - (878) - - - (878)
Fair value
movement - - - 909 - - 909
Balance at
29 February
2004 2 122 162 741 (7 285) 2 306 142 171 - 302 055
Net profit
for the
period - - - - 20 992 - 20 992
Dividends
- gross - - - - (31 828) 31 828 -
Dividends -
share incen-
tive trust - - - - 1 061 (1 061) -
Fair value
movement - - - (112) - - (112)
Balance at
30 June
2004 2 122 162 741 (7 285) 2 194 132 396 30 767 322 935
Net profit
for the
period - - - - 127 425 - 127 425
Dividend
Adjustment
to share
incentive
trust - - - - (64) 64 -
Dividend
settled
- cash election - - - - - (30 794) (30 794)
Net
treasury
movement - - (3 630) - - - (3 630)
Fair value
movement - - - (2 194) - - (2 194)
Dividend
proposed
- gross - - - - (36 072) 36 072 -
Dividend
proposed
- share
incentive
trust - - - - 1 112 (1 112) -
Balance at
30 June
2005 2 122 162 741 (10 915) - 224 797 34 997 413 742
Abridged group cash flow statement for the period ended 30 June 2005
Reviewed Audited
12 months 16 months
30 June 30 June
2005 2004
R`000 R`000
Cash flows from operating activities 77 417 101 024
Cash generated from trading 162 650 175 024
Working capital changes 5 697 (60 671)
Cash generated from operations 168 347 114 353
Net interest paid (9 666) (5 863)
Taxation paid (50 470) (4 951)
Dividends paid (30 794) (2 515)
Cash flows from investing activities 4 130 (14 944)
Additions to property, plant and equipment (7 435) (17 518)
Proceeds on disposal of property, plant
and equipment 470 570
Proceeds on disposal of investments 10 873 -
Decrease in other financial assets 222 2 004
Cash flows from financing activities 5 386 (1 646)
Net movement in treasury shares (3 630) (878)
Increase/(decrease) in long-term borrowings 9 016 (768)
Net increase in cash 86 933 84 434
Cash and cash equivalents
at the beginning of the period 192 826 108 392
Cash and cash equivalents
at the end of the period 279 759 192 826
Supplementary information for the period ended 30 June 2005
Reviewed Audited
12 months 16 months
30 June 30 June
2005 2004
Shares in issue (000`s) 212 190 212 190
Shares in issue - weighted (000`s) 205 486 203 226
Diluted number of shares - weighted (000`s) 209 127 205 797
Net asset value per share (cents) 195 152
Cost of sales (R`000) 1 359 088 1 514 820
Interest received (R`000) 4 513 12 978
Interest paid (R`000) (14 179) (18 841)
Capital expenditure (R`000) 7 435 17 518
Capital commitments (R`000) 906 374
Depreciation, amortisation and
impairment charge (R`000) 11 410 17 529
Finance and operating lease
commitments (R`000) 29 444 33 448
Profit attributable to
ordinary shareholders (R`000) 127 425 91 396
Goodwill amortised - 626
Profit on disposal of property, plant
and equipment (net of tax) (60) (217)
Profit on disposal of subsidiary (663) -
Profit on disposal of investment
(net of tax) (4 318) -
Impairment of property, plant and equipment 714 -
Headline earnings (R`000) 123 098 91 805
Accounting policies
The accounting policies used in the preparation of the twelve months results
announcement are consistent with those applied in the previous period. These
results are compiled in accordance with the South African Statements of
Generally Accepted Accounting Practice AC127 applicable to interim financial
reporting, the Listings Requirements of the JSE Limited and Schedule 4 of the
South African Companies Act.
Related party transactions
The company entered into various related party transactions. These transactions
are no less favourable than those arranged with third parties.
Subsequent events
No material events have occurred in the period between the period-end date and
the date of this report, other than the acquisition of 51% in Tedelex Mobile, as
noted above.
Audit opinion
The results for the twelve-month period ended 30 June 2005 have been reviewed by
the Group`s auditors, Deloitte & Touche, and their unqualified review report is
available at the Company`s registered office for inspection.
Comments
Operating Environment
Whilst the business environment remains robust and the economy appears to be on
a more sustainable expansionary path, increased competition and a discernable
slowdown in the pace of growth, coupled with continued deflation in the
electronics sector tempered sales volumes and placed some pressure on gross
margins.
Group Performance
(12 month comparison - 30 June 2004 and 30 June 2005):
Revenues grew by 13% to R1 798 million from R1 594 million and operating profit
margins increased from 8,25% to 10,9%. Profit after interest and tax includes a
R20,2 million profit (2004: 12 months (R10,2 million loss)) relating to the
AC133 and AC112 currency adjustments and rose by 45% from R87,8 million to
R127,4 million. Headline earnings of 59,9 cents per share were achieved and the
Group`s balance sheet at year-end reflects a further improvement, being ungeared
with R279,8 million cash on hand. Stock levels showed a significant improvement,
falling by 5% in spite of the increase in sales, whilst the receivables book
remains tightly controlled and in excellent shape.
Abridged group income statement for the year ended 30 June 2005
Reviewed Unaudited
12 months 12 months
% 30 June 30 June
R`000 change 2005 2004
Revenue 13 1 798 174 1 594 130
Operating income 50 196 636 131 486
Net interest paid (9 666) (2 907)
Profit before tax 45 186 970 128 579
Taxation (59 545) (40 752)
Profit attributable to
ordinary shareholders 45 127 425 87 827
Basic earnings per share (cents) 45 62,0 42,9
Headline earnings per share (cents) 39 59,9 43,0
Operations
All divisions functioned profitably, with both marketing and manufacturing
contributing to the Group`s success.
The Electronics Division, our largest contributor to turnover, experienced
challenges in the form of an increasingly competitive environment, higher than
ideal stock levels, as well as certain strains on its operating infrastructure
as a result of the massive growth in unit volumes sold in the past few years.
These have all been actively addressed and the strength of our flagship brands
continues to increase across all segments of the market.
The Appliances Division had an excellent year, with continued success in its
strategy of expansion at the higher end of the market. Russell Hobbs is now
established as the premium brand in its category and Salton also exhibited solid
growth. Several innovative new product introductions enhanced both turnover and
margins.
Our two Manufacturing operations continued to support the marketing divisions by
providing world-class, cost competitive product with high degrees of
flexibility. Both factories operate extremely efficiently and have
systematically reduced their overhead bases to ensure continued viability, in
spite of the strengthening Rand exchange rate.
Across the Group, close relationships with both customers and suppliers remain
an important cornerstone and add immeasurably to AMAP`s strength, as does the
passion and commitment of management and staff at every level.
Mobile Phone Venture
After year-end we acquired 51% in Tedelex Mobile and have provided surety in
respect of their funding to a maximum of USD25 million. Tedelex Mobile will
distribute several of the world`s leading brands of mobile phones, and
represents an important strategic initiative for the Group. Cellular phones are
the fastest growing consumer electronics category globally and it is important
that AMAP builds a meaningful position in this market. In addition, technology
convergence is transforming the portable phone into a mobile camera, music
player and video receiver - all products in our core portfolio. Tedelex Mobile
will further diversify our earnings base within our domain of core competence.
We will use our established position and extensive infrastructure in consumer
electronics distribution to support the new company. We see this as a long-term
strategic investment and expect a modest contribution from this new venture in
its first year of operation.
Dividend
The Board of directors declared a dividend of 17 cents for the twelve-month
period ended 30 June 2005, 3,7 times covered, up from the 15 cents in respect of
the sixteen-month period ended 30 June 2004.
Board
Sheldon Cohen, previously one of the Board`s non-executive directors, became an
executive director during the period under review. Thus, the Board now comprises
six non-executive directors and five executive directors.
Social responsibility and labour relations
A number of social responsibility projects are currently underway. The
`Wheelchair` project receives national TV coverage, underpinning the Group`s
efforts to uplift and improve the quality of life of the country`s poor and
disabled. A sound and close working relationship is maintained with the relevant
Unions. Ongoing skills and equity activities continue to ensure compliance with
current legislation and the planned upgrading of AMAP`s employee base.
Segmental reporting
The Group predominantly markets and distributes household electrical durables
(HED) and therefore the directors consider the disclosure of segmental
information in terms of AC115 not to be meaningful.
Outlook
According to the second quarter report issued by the BER, consumers are still
very optimistic about the prospects for the economy and their household
finances, but the BER caution that sales growth may well have peaked during the
fourth quarter of 2004 and will probably moderate going forward. Nevertheless,
with inflation pressures still muted, and a more stable pattern expectation for
the rand and interest rates, sales are expected to remain lively during the July
to December 2005 period. Earnings are however dependent on the outcome of the
AC112 and AC133 currency movement.
Dividend declaration
Notice is hereby given that on the 24 August 2005, the Board of directors
declared a dividend of 17 cents per share (2004: 15,0 cents for the sixteen-
month period). This dividend will be paid to ordinary shareholders recorded as
such in the register at the close of business on Friday, 7 October 2005. The
last day to trade to participate in this dividend is Friday, 30 September 2005.
The shares will commence trading ex-dividend from Monday, 3 October 2005.
Important dates pertaining to this dividend are as follows:
Last day to trade `CUM` dividend Friday, 30 September 2005
Shares trade `EX` dividend Monday, 3 October 2005
Record date Friday, 7 October 2005
Payment date Monday, 10 October 2005
Share certificates may not be dematerialised or rematerialised from Monday,
3 October to Friday, 7 October 2005, both days inclusive.
For and behalf of the board
J Cohen BG Drummond Johannesburg
Chairman Company secretary 24 August 2005
Directors
J Cohen (Chairman), L Dreimann* (Deputy Chairman), JM Kahn *, JP Kieser*,
SG Bernhardt, MC Berzack*, S Cohen, SA Levitt*, A Nossel, S Scafidas,
WB Rue*
Alternates
S Green*, EGW Janssen van den Doornmalen* *Non-executive
Transfer secretaries
Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street, Johannesburg 2001 PO Box 61051, Marshalltown 2107
Registered office
29 Heronmere Road, Reuven 2091 PO Box 39186, Booysens 2016
Telephone (011) 490 9000
Sponsor
Bridge Capital Services (Pty) Limited
1st Floor, Building 22A, The Woodlands, Woodlands Drive, Woodmead
Date: 24/08/2005 02:20:43 PM
Produced by the JSE SENS Department
