| Wed 16 Nov 2005, 7:00 | | Barloworld - Audited results for the year ended 30 |
|
BAW
BAW
Barloworld - Audited results for the year ended 30 September 2005
Barloworld Limited
(Registration number 1918/000095/06)
JSE code: BAW
NSX code: BWL
ISIN code: ZAE000026639
("Barloworld")
Audited results for the year ended 30 September 2005
Solid result sets platform for strong performance in 2006
* Net profit +23% to R2 176 million (2004: R1 768 million)
* Operating profit before goodwill amortisation +17% to R3 480 million
* Operating profit margin up to 8.8% (2004: 8.1%)
* Cash flow from operations +13% to R3 576 million
* CFROI improves to 10.3% (2004: 8.9%)
* Headline earnings per share +5% to 894 cents
* Total dividend +20% to 455 cents per share
Tony Phillips, CEO of Barloworld, said:
"Since the introduction of Value Based Management six years ago, we have grown
headline earnings per share at a compound growth rate of 20% per annum. In 2002
we set ourselves the goal of doubling the value of the company in four years
and we are well on track to achieving it."
"In the year ahead we plan to capitalise on the continuing strength of the
South African economy and to generate improved results from our international
operations. We will continue to focus on further improving our returns and
growing profits throughout the businesses."
16 November 2005
Enquiries
Barloworld Limited: Rowan Goeller Tel +27 11 445 1300,
e-mail rowang@barloworld.com
For background information visit www.barloworld.com
Chairman and Chief Executive"s report
Our long term strategy is to grow our businesses and to create value for all
stakeholders. We continue to do this in three ways:
- improving the performance of our businesses so that they all exceed our 8%
real Cash Flow Return on Investment hurdle rate on average through the
cycle;
- organic expansion into new geographic areas and complementary products and
services; and
- incremental acquisitions in our areas of competence and disposals of
businesses which cannot meet our hurdle rates.
Barloworld"s performance in 2005 once again reflects the success of this
strategy. We have achieved a six year compound annual growth rate in headline
earnings per share of 20% since the inception of Value Based Management (VBM).
Our CFROI has improved to 10.3% from 6.2% in 1999 and is now well above our
real hurdle rate of 8%.
Strong operating result
With another strong performance from our cement and lime business, record new
motor vehicle sales and a solid result from the coatings business, we took full
advantage of the strong trading conditions in most of southern Africa. We also
had full year"s contribution from 100% of Avis for the first time. The
equipment business increased profits with tighter controls and lower fair value
adjustments on financial instruments.
The international operations experienced mixed fortunes. Our Iberian equipment
business continues to generate high returns as it benefits from ongoing public
infrastructure investment. Continued management focus to bring underperforming
operations to acceptable returns produced improvements in the US industrial
distribution businesses. Truck Center made a positive contribution to profits
for the year. A full strategic review of all businesses was conducted within
scientific and significant restructuring costs were incurred (R29 million). In
Australia, improved performance from the motor business contrasted with
difficult trading conditions in coatings.
Operating profits before goodwill amortisation rose 17% and our operating
margin increased to 8.8%. Cash flows from operations remained strong at R3 576
million (2004: R3 153 million).
Headline earnings per share of 894 cents (2004: 853 cents) were impacted by
higher STC charges due to the PPC special dividend and an increased number of
shares in issue. Comparisons to the prior period were also affected by the
exceptional pension fund closure provision write back which boosted the 2004
result.
Net profit attributable to Barloworld Limited shareholders grew 23%.
The total dividend in respect of this year"s earnings was increased by 20% to
455 cents per share (2004: 380 cents).
Corporate activity continues to enhance value
During the year under review we acquired the Hyster lift truck dealership in
Northern Ireland, and Hamilton Brush in South Africa. Prostart (automotive
refinish coatings) and Midas Paints have also been acquired subject to
regulatory approvals. Our shareholding in Pretoria Portland Cement Company
Limited (PPC) was increased slightly to 71.7%.
We were awarded the Budget car rental licence in Sweden, and, subsequent to
year end, acquired the Avis and Budget car rental businesses in Denmark.
Our existing Siberian equipment dealership was merged with a neighbouring
dealer and the joint venture was granted an expanded territory by Caterpillar.
We also increased our shareholding in pan-European Caterpillar power solutions
and temperature control rental company Energyst BV to 22.3%.
25% of Logistics Africa was sold to a Black Economic Empowerment consortium as
well as the 33% holding in Slagment held through PPC.
A positive outlook enhanced by the prospect of further corporate activity
South Africa appears set on a course of strong economic growth, backed by
increasing business confidence, sound fiscal policies and a willingness by
government to increase infrastructure spending.
Our southern African businesses are well positioned to take advantage of the
organic growth opportunities that should present themselves under this positive
growth scenario.
Our Iberian Caterpillar business is operating in a mature construction
environment, but we continue to look for new sources of revenue. Our management
initiatives are set to generate an improved contribution from our industrial
distribution and scientific businesses which operate primarily in Europe and
the United States.
In summary, we look forward to a strong year in a growing South African
economy, continued growth elsewhere in southern Africa, a steady performance
from our Iberian operations and a substantial improvement in our other offshore
businesses. We will continue to focus on enhancing our returns and growing
profits throughout the business and we expect to report another year of good
progress in 2006.
WAM Clewlow AJ Phillips
Chairman Chief Executive Officer
Group financial review
Revenues increased by 7% to R39 401 million. Strong growth in the South
African motor and building and construction industries contributed to good
performances from the motor, cement and lime and coatings segments.
Operating profit before goodwill amortisation rose by 17% to R3 480 million and
profit margins continued the six year trend of improvement, rising from 8.1%
last year to 8.8%.
There was no goodwill amortisation this year (2004: R148 million) in line with
revised accounting standards.
The lesser average appreciation of the rand against the US dollar this year
resulted in a decline in the charge for fair value adjustments on financial
instruments to R56 million (2004: R107 million).
Finance costs reduced to R463 million (2004: R474 million) mainly due to lower
South African interest rates. Interest cover increased to 5.9 times (2004: 4.5
times).
Income from investments declined to R187 million (2004: R259 million) following
the sale of our equipment finance business last year.
Taxation increased by 16% to R1 033 million (2004: R888 million). The
effective taxation rate (which excludes exceptional items, Secondary Tax on
Companies, prior year taxation and goodwill amortisation) decreased to 28.8%
(2004: 30.8%), mainly due to the 1% reduction in the South African corporate
taxation rate.
Income from associates and joint ventures decreased by R50 million, largely as
a result of the exclusion of R34 million contributed in 2004 by Avis Southern
Africa Limited before it became a wholly-owned subsidiary.
Exceptional profits of R4 million (2004: R40 million) included gains on
disposal of properties, investments and subsidiaries of R25 million less
impairments of goodwill and capital assets of R21 million.
Headline earnings per share rose by 5% to 894 cents. The year on year growth
is impacted by the following:
*The prior period headline earnings benefiting from the R70 million (after tax)
reversal of a pension fund closure provision;
*An increased STC charge on the higher PPC special dividend and the fact that
STC credits no longer arise on foreign dividends received; and
*A higher weighted number of shares in issue following the Avis acquisition in
March 2004 and the exercise of share options.
Total assets grew by 3% to R28 605 million. The effect of currency movements on
translation was not material.
Total interest-bearing borrowings increased by R332 million to R8 042 million.
Borrowings in the three broad segments remained well within the targeted
gearing ranges as shown below:
Total debt to equity (%) Trading Leasing Car Rental Total Group
Target range 20-40 600-800 200-300
Ratio at 30 September 2005 20 634 259 63
Cash flow from operations rose by 13% to R3 576 million. Working capital
increased by R475 million in line with higher activity levels and increased
equipment inventory to cover stronger forward order books. Net cash used in
investing activities of R2 980 million includes additions to property, plant
and equipment of R1 186 million.
The company"s balance sheet is strong and cash generation prospects remain
good.
CB Thomson,
Finance Director
Operational reviews
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, the operating profit
is net of interest paid. Income from associates, which includes our share of
earnings from joint ventures, is shown at the profit after tax level.
Net operating assets comprise total assets less non-interest bearing
liabilities. Cash is excluded as well as current and deferred tax assets and
liabilities.
Comparatives have been restated as per note 5.
The commentaries in the operational reviews reflect performance in the relevant
local currencies.
EQUIPMENT
Revenue Operating Net operating
profit incl assets
fair value
adjustments
Year ended 30 Year ended 30 30 Sept
Sept Sept
R million 2005 2004 2005 2004 2005 2004
- Europe 5 301 5 117 484 475 2 388 2 103
- Southern 4 983 4 939 426 404 1 835 1 824
Africa
Trading 10 284 10 056 910 879 4 223 3 927
Leasing 0 180 0 28 0 0
(southern
Africa)
10 284 10 236 910 907 4 223 3 927
Share of 8 3
associate
income
The business in this segment arises mainly from our long standing relationship
with Caterpillar Inc. as their dealer and partner in 16 countries.
Revenue in Iberia grew 4% as public infrastructure investment continued at high
levels. Operating margins were maintained at 9.1% (2004: 9.3%). Demand for
heavy construction equipment in Spain remained strong, although sales volumes
were dampened by extended delivery times for equipment.
Revenue was flat in southern Africa, while operating margins improved to 8.5%
(2004: 8.2%) through tighter controls and lower fair value adjustments on
financial instruments. Demand from the construction industry grew strongly. By
contrast mining industry activity levels were unchanged with several new
projects and expansion programmes delayed by the strong rand. Maintenance and
repair contracts (MARC"s) continue to generate growing after-sales income.
The Siberian joint venture was profitable in its first year of operation.
The global shortage of new large earthmoving equipment due to unprecedented
demand, caused by steel castings and large tyre shortages, means our ability to
capitalise on the demand will depend on close co-operation with both customers
and Caterpillar. Customer orders amount to a record R2 890 million, of which
only R131 million will be carried forward to 2007.
INDUSTRIAL
DISTRIBUTION
Revenue Operating Net operating assets
profit incl
fair value
adjustments
Year ended 30 Year ended 30 30 Sept
Sept Sept
R million 2005 2004 2005 2004 2005 2004
- Europe 1 983 1 888 42 77 438 388
- North America 3 922 4 300 77 49 991 987
Trading 5 905 6 188 119 126 1 429 1 375
- Europe 367 386 66 55 1 902 1 853
- North America 98 99 (40) (6) 735 813
Leasing 465 485 26 49 2 637 2 666
6 370 6 673 145 175 4 066 4 041
Share of 0 (1)
associate income
The division had another year of mixed results. Each of the operations started
slower than had been anticipated but gained momentum as the year progressed.
In flat market conditions European lift truck revenue growth of 5% was the
result of the acquisition of the Northern Ireland dealership at the beginning
of the year. Revenues and profits were adversely impacted by a performance dip
during the implementation of the mobile service project. This exercise is now
largely complete and margins will normalise in the year ahead. Operating
margins in the region declined to 2.1% (2004: 4.1%) primarily as a result of
this disruption.
The US economy showed continued positive growth in both the material handling
and freight movement sectors, but growth in demand for heavy commercial trucks
slowed in the last quarter. While revenue in North America declined by 9%, the
recent restructuring and management changes in the Freightliner business have
started to impact positively. Operating margins from trading improved to 2.0%
(2004: 1.2%). The US handling operations performed well, holding share in a
market that grew strongly.
The leasing business remained disappointing with the high level of
repossessions in the US Freightliner book in the prior year continuing through
2005. This resulted in higher costs being charged to the business as
repossessed units were resold at a loss. The existing book will be managed out
over the next three years with losses being reduced considerably as collections
continue.
MOTOR
Revenue Operating profit Net operating
incl fair value assets
adjustments
Year ended 30 Year ended 30 30 Sept
Sept Sept
R million 2005 2004 2005 2004 2005 2004
- Southern 8 795 7 501 178 106 640 520
Africa
- Australia 1 607 1 331 12 5 399 335
Trading 10 402 8 832 190 111 1 039 855
- Southern 881 369 210 86 2 396 1 955
Africa
- Europe 478 246 66 47 1 231 1 119
Car rental 1 359 615 276 133 3 627 3 074
Leasing 638 295 88 51 1 287 1 190
(southern
Africa)
12 399 9 742 554 295 5 953 5 119
Share of 23 59
associate income
The South African motor retail operations continued to perform well in a record-
breaking new car market. New vehicle sales volumes increased by 26%, used
vehicle retail volumes increased by over 5% and strongly accelerating demand
for servicing resulted in an annual increase in hours sold of 6%. The higher
sales volumes together with operational efficiency benefits arising out of the
"fewer, bigger, better" dealership strategy resulted in significantly improved
profitability. In Australia, the new car market continued to grow marginally to
record levels. The expansion of our dealership network and upgrading of
facilities in Melbourne and Sydney had a positive impact on performance, and
sales volumes of vehicles and service hours both increased by over 20% year on
year.
Avis Rent a Car Southern Africa increased its sale of rental days by 10% for
the year. Demand was quiet at the start of the year, however during the second
quarter demand increased and volumes continued to grow throughout the year.
Operational efficiencies in fleet utilization and people productivity showed a
pleasing improvement. Lower financing costs and stable new vehicle prices
resulted in some industry pricing pressures, while servicing the strong demand
from long-standing customers resulted in the business being unable to
capitalize on higher margin opportunities. In Scandinavia, rental day volumes
also increased by 10% for the year, with strong demand being experienced in
Sweden. Fewer accidents, as a result of mild weather conditions at the start of
the year, negatively impacted volumes in the replacement market.
Avis Fleet Services experienced strong growth in demand for its value added
services, while its long-term rental fleet continued to grow. The car rental
operations improved their comparable profit before tax, while the fleet service
operations showed a marginal decline as a result of lower financing and used
car margins.
Associate income includes a strong performance from our DaimlerChrysler BEE
joint venture in KwaZulu-Natal, but now excludes Avis.
CEMENT & LIME
Revenue Operating profit Net operating
incl fair value assets
adjustments
Year ended 30 Sept Year ended 30 30 Sept
Sept
R million 2005 2004 2005 2004 2005 2004
Southern Africa 3 974 3 440 1 505 1 172 2 502 2 499
Share of 2 11
associate
income
Continued strong growth in cement demand in both the residential and non-
residential building sectors boosted cement volumes to record levels. This,
together with improved operational efficiencies, tight cost control and some
price realisation has resulted in another very good performance by the group.
Revenue increased by 16%, with operating profit improving to R1 505 million
(2004: R1 172 million). Cash flows remained strong.
Our domestic cement sales remained buoyant with volume growth of 14%
experienced for the year and all provinces reflected significant growth with
the exception of the Eastern Cape, where volumes decreased due to the
completion of the Ngqura harbour project. Reduced economic growth resulted in
a contraction in cement demand in Botswana. The increased domestic demand more
than compensated for slightly reduced export volumes.
The PPC Board approved the R1.36 billion Batsweledi project which will increase
PPC"s cement capacity by over 1 million tons per annum, in what will be South
Africa"s first new cement kiln in 20 years. An amount of R1.23 billion will be
invested in the installation of a new kiln line and related infrastructure at
the existing Dwaalboom cement factory. A further R130 million will be spent on
recommissioning and upgrading the existing cement milling and dispatch
facilities at the Jupiter factory situated in Germiston, Gauteng. The R48
million project to re-commission the 550 000 ton Jupiter plant, is currently
well advanced and will provide security of cement supply to the market over the
two and a half year construction and commissioning period of the new expansion
project.
The lime business also increased profits.
COATINGS
Revenue Operating Net operating
profit incl assets
fair value
adjustments
Year ended 30 Year ended 30 Sept
Sept 30 Sept
R million 2005 2004 2005 2004 2005 2004
Southern Africa 1 558 1 374 285 214 522 403
Australia & Asia 949 1 034 (29) 22 254 266
2 507 2 408 256 236 776 669
Share of 20 27
associate income
Barloworld Coatings achieved another solid overall performance in the southern
African businesses, with revenue growing 13% and margins improving to 18.3%
(2004: 15.6%). Demand was strong in all sectors.
Retail sales led the way and this sector grew by 10%. Trade sales showed growth
of 12% as the building industry continues to experience good growth.
The automotive coatings businesses again performed well with the wholly owned
refinish business returning a particularly pleasing result due to a buoyant
market. The joint venture with DuPont Automotive Systems in the OEM sector of
the automotive coatings market performed well.
2005 was an excellent year for the colourant division with profits ahead of
last year. The position in South Africa and the neighbouring territories was
strengthened, and exports now contribute more than 45% of sales volume.
Hamilton Brush, acquired early in the 2005 financial year, was successfully
integrated. This business not only expanded the offering to customers, but also
delivered results in line with expectations.
In Australia the difficult trading conditions continued and resulted in a
disappointing performance by that business unit. Bunnings, a major reseller in
the retail market in Australia and a major retail customer, continued on a
significant destocking exercise, which had a material impact on the business.
Considerable time and attention has been devoted to structural solutions.
SCIENTIFIC
Revenue Operating Net operating
profit incl assets
fair value
adjustments
Year ended 30 Year ended 30 30 Sept
Sept Sept
R million 2005 2004 2005 2004 2005 2004
Europe 1 009 928 24 40 629 734
North America 382 536 (6) 4 359 326
Asia 135 159 4 5 87 81
1 526 1 623 22 49 1 075 1 141
The Laboratory division again experienced mixed trading conditions with
reasonable performances in the UK and Spain while other European markets
remained flat.
In Melles Griot, the semiconductor industry is experiencing another significant
downturn, which has had a marked impact on volumes and margins.
A full strategic review of all businesses was conducted during the year.
Restructuring costs of some R23 million were incurred in Laboratory and R6
million in Melles Griot to undertake restructuring changes identified by the
strategic review.
STEEL TUBE
Revenue Operating Net operating
profit incl assets
fair value
adjustments
Year ended 30 Year ended 30 30 Sept
Sept Sept
R million 2005 2004 2005 2004 2005 2004
Southern Africa 1 603 1 739 46 52 593 480
Share of associate 4 8
income
Revenue dropped as a result of the loss of the stainless tube export market.
The carbon steel tube and pipe businesses had a good year despite a steel price
reduction in August 2005. Operating profits were however disappointing due to
the losses incurred at the stainless operation. The stainless business has been
merged with our cold rolled operation to form a precision business in order to
take full advantage of the sales and other synergies.
Net assets increased as a result of changes in supplier terms.
CORPORATE AND
OTHER
Revenue Operating Net operating
profit incl assets
fair value
adjustments
Year ended 30 Sept Year ended 30 30 Sept
Sept
R million 2005 2004 2005 2004 2005 2004
Southern 561 311 40 (4) 870 828
Africa
Europe 177 500 (54) (10) 85 85
738 811 (14) (14) 955 913
Barloworld Logistics in South Africa continues its growth. During the past year
increased sales activity has resulted in the securing of a number of large
clients and projects, while existing contracts are now beginning to show good
profitability. The logistics business in Iberia has consolidated the growth of
previous years.
Corporate office costs in southern Africa were lower and the small loss on fair
value adjustments to financial instruments last year was turned into a small
gain this year. In Europe, results were adversely affected by reduced fair
value gains, following the redemption last year of the convertible bond, and
increased claims borne by the insurance captive. Top-up contributions to the
UK pension fund of R24 million continued in the current year. The decline in
revenue in Europe relates mainly to the sale of the Henry Cooke paper business
during the prior year.
Dividend declaration for the year ended 30 September 2005: Dividend Number 153
Notice is hereby given that the following dividend has been declared in respect
of the year ended 30 September 2005: Number 153 (final dividend) of 325 cents
per ordinary share (2004: 265 cents per ordinary share).
In compliance with the requirements of the JSE Limited, the following dates are
applicable:
Last day to trade cum dividend Friday 6 January 2006
Shares trade ex dividend: Monday 9 January 2006
Record date Friday 13 January 2006
Payment date Monday 16 January 2006
Share certificates may not be dematerialised or rematerialised between Monday,
9 January 2006 and Friday, 13 January 2006, both days inclusive.
On behalf of the Board, S Mngomezulu, Secretary
GROUP INCOME STATEMENT
for the year ended 30 September
Audited
R million Note 2005 2004* % change
Revenue 39 401 36 672 7
Operating profit before 3 480 2 979 17
goodwill amortisation
Goodwill amortisation 0 (148)
Operating profit 3 480 2 831 23
Fair value adjustments on (56) (107)
financial instruments
Finance costs (463) (474)
Income from investments 187 259
Profit before exceptional items 3 148 2 509 25
Exceptional items 2 4 40
Profit before taxation 3 152 2 549
Taxation (891) (836)
STC on dividends paid (142) (52)
Profit after taxation 2 119 1 661
Income from associates and 57 107
joint ventures
Net profit 2 176 1 768 23
Attributable to:
Minority shareholders 315 259 22
Barloworld Limited shareholders 1 861 1 509 23
2 176 1 768
Net profit per share** (cents)
- basic 897.4 756.9 19
- fully diluted 877.3 738.9 19
* Restated - refer note 5
** Refer note 1 for details of headline
earnings per share calculation
GROUP BALANCE SHEET
at 30 September
Audited
R million 2005 2004*
ASSETS
Non-current assets 14 070 13 946
Property, plant and equipment 7 922 7 706
Goodwill 2 485 2 433
Intangible assets 260 242
Investment in associates and 518 319
joint ventures
Finance lease receivables 1 495 1 631
Long term financial assets 840 1 098
Deferred tax assets 550 517
Current assets 14 535 13 897
Vehicle rental fleet 2 196 1 887
Inventories 4 825 5 134
Trade and other receivables 5 897 5 267
Taxation 38 47
Cash and cash equivalents 1 399 1 443
Assets classified as held for 180 119
sale
Total assets 28 605 27 843
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 1 397 1 209
Other reserves 1 484 1 957
Retained income 9 198 7 936
Interest of shareholders of 12 079 11 102
Barloworld Limited
Minority interest 646 719
Interest of all shareholders 12 725 11 821
Non-current liabilities 7 103 6 938
Interest-bearing 5 410 4 871
Deferred tax liabilities 906 797
Provisions 383 503
Other non-interest bearing 404 767
Current liabilities 8 777 9 084
Trade and other payables 5 208 5 284
Provisions 480 493
Taxation 457 468
Amounts due to bankers and short- 2 632 2 839
term loans
Total equity and liabilities 28 605 27 843
* Restated - refer note 5
GROUP CASH FLOW STATEMENT
for the year ended 30 September
Audited
R million 2005 2004*
Cash flow from operating
activities
Operating cash flows before 5 275 4 463
movements in working capital
Increase in working capital (475) (206)
Cash generated from operations 4 800 4 257
Realised adjustments on financial (18) (52)
intruments
Finance costs and investment (231) (178)
income
Taxation paid (975) (874)
Cash flow from operations 3 576 3 153
Dividends paid (1 197) (871)
Cash retained from operating 2 379 2 282
activities
Net cash used in investing (2 980) (2 124)
activities
Acquisition of subsidiaries and (443) (1 649)
investments
Proceeds on disposal of 69 210
subsidiaries and investments
Net investment in fleet leasing (1 629) (1 646)
and rental assets
Acquisition of property, plant, (1 186) (805)
equipment and intangibles
Proceeds on disposal of property, 209 288
plant and equipment
Proceeds on sale of lease 0 1 478
receivable book
Net cash (outflow)/inflow before (601) 158
financing activities
Net cash available from/(used in) 601 (258)
financing activities
Ordinary shares issued 188 13
Increase/(decrease) in interest- 413 (271)
bearing liabilities
Net increase/(decrease) in cash 0 (100)
and cash equivalents
Cash and cash equivalents at 1 443 1 547
beginning of year
Effect of foreign exchange rate (44) (4)
movements on cash balance
Cash and cash equivalents at end 1 399 1 443
of year
* Restated - refer note 5
STATEMENT OF CHANGES IN EQUITY
for the year ended 30 September
Audited
R million Note 2005 2004*
INTEREST OF BARLOWORLD LIMITED
SHAREHOLDERS
Balance at the beginning of the 11 821 10 436
year
Adjustment to opening balance for (46)
changes in accounting policy
Net movements not recognised (1 272) (337)
through the income statement
Barloworld Limited ordinary shares 188 467
issued
Movement on foreign currency ( 279) (107)
translation reserve
Translation reserves realised on 0 57
liquidation of offshore subsidiary
Translation effect of 0 157
deconsolidation of Porthold
Dividends on ordinary shares 3 (1 197) (871)
Other reserve movements 16 (40)
Net movements recognised through
the income statement
Net profit for the year 2 176 1 768
Interest of Barloworld Limited 12 725 11 821
shareholders at the end of the year
GROUP SALIENT FEATURES
for the year ended 30 September
Audited
2005 2004*
Number of ordinary shares in issue, net of 208,612 203,802
buyback (000)
Net asset value per share including 5,904 5,550
investments at fair value (cents)
Total borrowings to total shareholders"
funds (%)
- Trading segment** 19.8 21.1
- Total group 63.2 65.2
Interest cover (times)
- Trading segment** 10.6 7.6
- Total group 5.9 4.5
Return on net assets (%)
- Trading segment** 24.6 22.3
- Total group 17.8 17.1
Cash flow return on investment - CFROI (%) 10.3 8.9
Return on ordinary shareholders" funds 16.0 14.4
(excluding exceptional items)(%)
* Restated - refer note 5
** Trading segment includes manufacturing and dealership businesses,
but excludes leasing and car rental.
NOTES
for the year ended 30 September
Audited
R million 2005 2004*
Reconciliation of net profit to headline
earnings
Net profit 2 176 1 768
Minority shareholders (315) (259)
Profit on disposal of properties, (25) (108)
investments and subsidiaries
Impairment losses 21 108
Goodwill amortisation 148
Realisation of translation reserves on 57
liquidation of offshore subsidiary
Interest in associate goodwill 6
amortisation
Profit on sale of plant and equipment (2) (15)
excluding rental assets
Taxation on exceptional items (6) (7)
Attributable exceptional items of 3
associates (impairment losses)
Interest of outside shareholders in 4
exceptional items
Headline earnings 1 853 1 701
Weighted average number of ordinary
shares
in issue during the year (000)
- basic 207 367 199 375
- fully diluted 212 117 204 212
Headline earnings per share
- basic 893.6 853.2
- fully diluted 873.6 833.0
Exceptional items
Profit on disposal of properties, 25 108
investments and subsidiaries
Impairment losses (21) (108)
Realisation of translation reserve on (57)
liquidation of offshore subsidiary
Reversal of pension fund closure 100
provision
4 43
Attributable exceptional items of (3)
associates (impairment losses)
Gross exceptional profits 4 40
Taxation 6 (23)
Interest of outside shareholders (4)
Net exceptional profits 6 17
* Restated - refer note 5
NOTES (continued)
for the year ended 30 September
Audited
R million 2005 2004
Dividends
Ordinary shares
Final dividend No 151 paid on 17 Jan 2005: 602 431
265 cents per share (2004: 200 cents)
Interim dividend No 152 paid on 13 Jun 296 255
2005: 130 cents per share (2004: 115 cents)
898 686
Dividend attributable to the share buy- (75) (60)
back
Paid to Barloworld Limited shareholders 823 626
Paid to minorities 374 245
1 197 871
Dividends per share (cents) 455 380
- interim (declared May) 130 115
- final (declared November) 325 265
Contingent liabilities
Guarantees, claims and net repurchase 296 194
commitments
Accounting policies and comparative
information
This preliminary report has been extracted from the group annual
financial statements, which have been prepared in accordance with
International Financial Reporting Standards (IFRS) on a basis
consistent with the prior year except for the adoption of the
- IAS 8 Accounting Policies, Changes in
Accounting Estimates and Errors
- IAS 16 Property, Plant and Equipment
- IAS 36 Impairment of Assets
- IAS 38 Intangible Assets
- IFRS 3 Business Combinations
- IFRS 4 Insurance Contracts
- IFRIC 1 Changes in Existing Decommissioning,
Restoration and Similar Liabilities
Comparative information has been restated for the effects of
adopting IAS 16 Property, Plant and Equipment (revised) and IFRIC
Interpretation 1 Changes in Existing Decommissioning, Restoration
and Similar Liabilities. Comparatives have also been restated for
the effect of accounting for operating leases with fixed escalations
on a straight line basis in terms of circular 7/2005 issued by the
South African Institute of Chartered Accountants and in accordance
with IAS 17.
With the adoption of IFRS 3 Business Combinations, the amortisation
of goodwill has ceased with effect from the beginning of the current
financial year. As required by the standard no restatement of
comparatives has been made. The adoption of the rest of the
abovementioned standards has not had a material impact on the
group"s results.
NOTES (continued)
for the year ended 30 September
The aggregate effect of the above changes on the annual financial
statements for the year ended
30 September 2004 is as follows:
Previously
stated Adjustments Restated
Rm Rm Rm
Income statement
Operating profit 2 836 (5) 2 831
Finance cost (468) (6) (474)
Taxation (891) 3 (888)
Net profit - 2004 1 517 (8) 1 509
Balance Sheet
Property, plant and equipment 7 728 (22) 7 706
Goodwill 2 432 1 2 433
Deferred taxation assets 498 19 517
Long term financial assets 1 096 2 1 098
Short term trade and other 5 266 1 5 267
receivables
Minority interest 721 (2) 719
Total shareholders interest 11 875 (54) 11 821
Deferred taxation liabilities 803 (6) 797
Long term non-interest-bearing 1 215 55 1 270
liabilities
Short term trade and other 5 272 12 5 284
payables
Net profit per share (cents) - 760.9 (4.0) 756.9
basic
For a better understanding of the group"s financial position, the
results of its operations and cash flows for the year, this
summarised preliminary report of its annual results should be read
in conjunction with the annual financial statements from which it
was derived.
Post Balance Sheet events
Effective from the end of October 2005, the group acquired the
Avis and Budget businesses in Denmark for DKK 170 million (R180
million) from privately owned Biludan Gruppen A/S. These
businesses will be integrated with Barloworld"s existing
Scandinavian car rental operations.
Portland Holdings Limited
(Porthold)
The results of Porthold, a wholly owned Zimbabwean subsidiary of
Pretoria Portland Cement Company Limited have in terms of the
exclusion contained in IAS 27 (Consolidated and Separate Financial
Statements) not been consolidated into the Group results as at 30
September 2005 as was the case in the prior period.
Audit opinion
The consolidated financial statements for the year have been
audited by Deloitte & Touche and the accompanying unqualified
audit report as well as their unqualified audit report on this set
of summarised financial information is available for inspection at
the company"s registered office.
Addresses
Registered office and business Transfer secretaries
address Ultra Registrars (Pty) Ltd
Barloworld Limited Physical address:
180 Katherine Street 5th Floor,
PO Box 782248 11 Diagonal Street
Sandton Johannesburg
2146, South Africa 2000, South Africa
Ph: +27 11 445 1000
E mail: invest@barloworld.com Postal address:
United Kingdom registrar P O Box 4844
Lloyds TSB Registrars Johannesburg
The Causeway, Worthing 2000, South Africa
West Sussex, BN99 6DA, England
Ph: +44 190 350 2541 Ph: +27 11 834 2266
E mail: info@ultrareg.co.za
About Barloworld
Barloworld is a diversified industrial company founded in 1902. We manufacture,
market and distribute our products and services and market and distribute
leading international brands on behalf of principals. We have operations in
thirty-one countries around the world and approximately half of our twenty five
thousand people are in South Africa. We offer our customers business solutions
backed by leading industrial brands, supported by service, relationships and
attention to detail. These include both the sale of products and services and
rental and fleet service options.
Through our business philosophy of Value Based Management we focus on creating
sustainable value for all our stakeholders simultaneously.
Our brands include PPC Surebuild (cement), Plascon, Taubmans, Bristol and White
Knight (coatings), Robor (steel tube), Melles Griot (photonics), Sterilin
(disposable plastics) and Carbolite (laboratory products). We also have a
rapidly growing Barloworld Logistics supply chain solutions business in
southern Africa and Europe.
Our principals include Caterpillar, NACCO (Hyster lift trucks), DaimlerChrysler
(including Freightliner trucks) as well as many of the world"s other leading
motor vehicle brands. We are also the Avis licensee for southern Africa and for
both Avis and Budget Rent A Car in Sweden, Norway and Denmark.
Directors
Independent: WAM Clewlow (Chairman), SAM Baqwa, MJ Levett, DB Ntsebeza, LA
Tager, G Rodriquez de Castro de los Rios***, EP Theron, RC Tomkinson*, SB
Pfeiffer**
Executive: AJ Phillips (Chief Executive)*, PJ Blackbeard, MD Coward, LS Day*,
BP Diamond, JE Gomersall*, AJ Lamprecht, M Laubscher, PM Surgey, CB Thomson
*British **American ***Spanish
Sponsor:
J.P.Morgan Equities Limited
Date: 16/11/2005 07:00:55 AM Produced by the JSE SENS Department
