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Dorbyl - Interim Group Results For The Six Months Ended 30 September 2005
Dorbyl Limited
(Incorporated in the Republic of South Africa)
(Company Registration 1911/001510/06)
Share Code: DLV ISIN Code: ZAE000002184
INTERIM GROUP RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2005
Abridged Income statement
Reviewed
Unaudited Unaudited 12 Months to
6 Months to 6 Months to
September September March
2005 2004 2005
restated % restated
R000 R000 Change R000
Continuing operations:
Revenue 519 183 469 789 11 915 604
Operating (loss)/income (2 811) 10 110 (128) 14 397
Interest received 18 512 13 543 24 339
Interest paid (270) (1 462) (765)
Preference dividends (106) (106) (212)
Income - associates 251 295 415
Profit before taxation 15 576 22 380 38 174
Taxation - normal and (8 324) (9 731) (14 192)
deferred
Taxation - Secondary Tax (111 145) (2 079) (3 206)
on Companies
(Loss)/profit after (103 893) 10 570 20 776
taxation from continuing
operations
Profit after taxation 33 237 48 552 78 898
from discontinued
operations (refer below
for analysis)
Profit/(loss) on sale of 696 613 (11 188) (22 799)
discontinued operations,
net of taxation
Impairment of fixed (54 916)
assets
Profit for the year 571 041 47 934 76 875
Attributable to:
Equity holders of the 566 815 44 300 71 627
company
Minority interest 4 226 3 634 5 248
571 041 47 934 76 875
Earnings per share
(cents)
Basic (loss)/earnings 1 696,9 134,2 1 165 217,0
per share
Continuing operations (488,7) 23,7 (2 165) 54,7
Discontinued operations 2 185,6 110,5 1 878 162,3
Headline (loss)/earnings (223,6) 166,1 (235) 280,7
per share
Continuing operations (323,1) 19,0 (1 797) 41,7
Discontinued operations 99,5 147,1 (32) 239,0
Headline earnings per
share before Secondary
Tax on Companies (STC) 106,5 166,1 (36) 280,7
on special dividends
Continuing operations 7,0 19,0 (63) 41,7
Discontinued operations 99,5 147,1 (32) 239,0
Dividends paid per 2 665 50 85
ordinary share (cents)
Final - year ended 31 65 50 50
March 2005 (2004)
Interim - period ended 35
30 September 2004
Special - 29 August 2005 2 600
Dividend cover -
headline earnings before
STC on special
dividend/ normal 1,6 3,3 3,3
dividends (times)
Dividends declared per 10 35 65
ordinary share (cents)
Headline earnings
reconciliation
Earnings per the income 566 815 44 300 71 627
statement
Adjusted for : (641 506) 10 537 21 045
Profit/(loss on sale of (698 245) 11 052 22 719
discontinued operations
Impairment of fixed 54 916
assets
(Profit)/loss on sale of 191 (930) (2 546)
other fixed assets
Tax charge attributable 1 632 415 684
to adjustments
Attributable to minority 188
shareholders
Headline earnings (74 691) 54 837 92 672
STC relating to special 110 253 - -
dividends
Headline earnings before 35 562 54 837 92 672
STC on special dividends
Depreciation 20 139 24 526 53 735
Discontinued operations
Revenue 383 695 595 723 1 146 364
Operating income 51 693 71 264 119 067
Interest received 1 654 1 424
Interest paid - (684) (880)
Profit before taxation 51 694 71 234 119 611
Taxation (18 457) (22 682) (40 713)
Profit after taxation 33 237 48 552 78 898
Attributable to:
Equity holders of the 33 237 48 605 79 227
company
Minority interest - (53) (329)
33 237 48 552 78 898
Abridged Balance sheet
Unaudited Unaudited Reviewed
September September March
2005 2004 2005
restated restated
R000 R000 R000
ASSETS
Non-current assets 234 521 417 014 277 476
Fixed and intangible assets 210 523 388 036 256 824
Investments and advances - 1 415 1 280 1 191
associates
Deferred tax assets 19 516 25 183 19 445
Other non-interest bearing 67 2 515 16
advances
Interest bearing advances 3 000 - -
Current assets 616 225 805 192 874 610
Inventories 110 459 195 298 105 752
Trade and other receivables 147 734 260 823 108 029
Assets classified as held - - 340 925
for sale
Cash and cash equivalents 358 032 349 071 319 904
Total assets 850 746 1 222 206 1 152 086
EQUITY AND LIABILITIES
Capital and reserves 493 382 769 125 775 674
Ordinary shareholders" funds 447 317 722 421 733 798
Minority interest 46 065 46 704 41 876
Non-current liabilities 42 892 60 137 43 061
Deferred tax liabilities 12 302 12 622 12 118
Preference share capital 3 980 3 980 3 980
Provisions 26 610 27 409 26 963
Long term - borrowings - 16 126 -
Current liabilities 314 472 392 944 333 351
Trade and other payables 314 472 368 806 212 891
Liabilities classified as - - 120 460
held for sale
Short - term borrowings - 24 138 -
Total equity and liabilities 850 746 1 222 206 1 152 086
Additional financial
information
Net assets held for sale
ASSETS
Fixed and intangible assets 141 950
Inventories 86 341
Trade and other receivables 100 900
Cash and cash equivalents 11 734
Total assets 340 925
LIABILITIES
Deferred tax liabilities 6 741
Long term - borrowings 9 196
Trade and other payables 99 784
Short - term borrowings 4 739
Total equity and liabilities 120 460
Capital commitments 7 717 43 227 19 151
authorised
Contracted for 7 442 41 970 18 986
Not contracted for 275 1 257 165
Contingent liabilities 718 3 263 2 108
Debtors discounted with - 2 289 1 908
recourse
Other 718 974 200
Repurchase commitment on
sale contracts where
underlying securities exceed
the outstanding
commitment amounted to R2,1
million at 30 September 2005
(31 March 2005- R4 million)
Operating lease commitments 19 032 91 924 77 073
Operating lease receivables - 29 995 18 756
Investments and advances to
associates
at valuation 1 500 1 500 1 500
Net asset value per share 1 319 2 188 2 223
(cents)
Unaudited Unaudited Reviewed
6 Months to 6 Months to 12 Months to
September September March
2005 2004 2005
R000 R000 R000
Capital expenditure
Expansion 15 996 23 860 49 147
Replacement 15 846 29 742 61 095
Ordinary shares (000)
Issued (excluding Treasury 33 924 33 014 33 014
shares)
Weighted average (excluding 33 402 33 014 33 014
Treasury shares)
Abridged cash flow statement
Unaudited Unaudited Reviewed
6 Months to 6 Months to 12 Months to
September September March
2005 2004 2005
restated restated
R000 R000 R000
Net cash (utilised (913 695) (3 393) 50 243
by)/retained from operations
Operating cash flow 69 118 95 724 168 954
Movement in working capital 20 480 (78 118) (67 584)
Net interest received 18 243 12 051 24 118
Taxation paid (117 918) (16 438) (46 971)
Dividends paid (903 618) (16 612) (28 274)
Net cash effect from 931 978 2 202 (40 283)
investing activities
Capital expenditure (31 842) (53 602) (110 242)
Disposals of fixed assets 169 55 754 63 568
Disposals of businesses 966 675 - 3 858
Increase/(decrease) in (3 024) 50 2 533
advances
Net cash effect from 10 174 (7 545) (35 705)
financing activities
Decrease in minority (37) (4 410) (7 332)
interest
Net repayment of long/short (1 257) (3 135) (28 373)
- term borrowings
Increase in stated capital 11 468 - -
Net cash inflow/(outflow) 28 457 (8 736) (25 745)
Foreign currency translation (2 063) 363 (61)
effect
Increase/(decrease) in cash 26 394 (8 373) (25 806)
and cash equivalents
Cash and cash equivalents at 331 638 357 444 357 444
beginning of period
Cash and cash equivalents at 358 032 349 071 331 638
end of period
Segmental analysis
Unaudited Unaudited Reviewed
6 Months to 6 Months to 12 Months to
September September March
2005 2004 2005
R000 R000 R000
Revenue
Business Segment
Continuing operations
Automotive Manufacturing 519 183 469 789 915 604
Discontinued operations
Automotive Manufacturing - 30 266 58 640
Building Products 383 695 565 457 1087 724
Total Revenue 902 878 1 065 512 2 061 968
Geographical Location
South African operations - 449 715 421 614 776 976
local
South African operations - 69 468 78 441 197 268
export
International operations 383 695 565 457 1 087 724
Total Revenue 902 878 1 065 512 2 061 968
Operating income
Business Segment
Continuing operations
Automotive Manufacturing 23 548 17 909 34 560
Discontinued operations
Automotive Manufacturing - (26) (2 768)
Building Products 51 693 71 290 121 835
Corporate and consolidation (26 359) (7 799) (20 163)
Total operating income 48 882 81 374 133 464
Geographical Location
South African operations (2 811) 10 084 11 629
(including exports)
International operations 51 693 71 290 121 835
Total operating income 48 882 81 374 133 464
Statement of changes in equity incorporating IFRS adjustments
Stated Capital Reserves Retained
capital redemption income
net of reserve fund
treasury
shares
R000 R000 R000 R000
Balance at 1 April 2004
- as previously stated (220) 4 000 (42 601) 718 502
Fair value adjustments
(IFRS)
- IAS 16 - Property,plant 14 432
and equipment
- IAS 38 - Intangible (81)
assets
Leases (7 136)
Balance at 1 April 2004
- as restated (220) 4 000 (42 601) 725 717
Retained surplus of 295 (295)
associate
Movement in translation 7 731 -
reserves
Attributable earnings for 44 300
the period - restated IFRS
Attributable earnings for 44 016
the period - GAAP
Fair value adjustments
(IFRS)
- IAS 16 - Property,plant (242)
and equipment
- IAS 38 - Intangible (78)
assets
Leases 604
Ordinary dividends (16 506)
Dividends to minorities
Change in holding in and -
disposal of minorities
Balance at 30 September (220) 4 000 (34 575) 753 216
2004
Retained surplus of (106) 106
associate
Movement in translation (4 395) -
reserves
Attributable earnings for 27 328
the period - restated IFRS
Attributable earnings for 25 917
the period - GAAP
Fair value adjustments
(IFRS)
- IAS 16 - Property,plant (30)
and equipment
- IAS 38 - Intangible (78)
assets
Leases 1 519
Ordinary dividends (11 556)
Dividends to minorities
Change in holding in and
disposal of minorities
Balance at 31 March 2005 (220) 4 000 (39 076) 769 094
Retained surplus of 251 (251)
associate
Movement in translation 38 748
reserves
Attributable earnings for 566 815
the period
Shares issued 11 468
Ordinary dividends (903 512)
Change in holding in and
disposal of minorities
Balance at 30 September 11 248 4 000 (77) 432 146
2005
Ordinary Minority Total
shareholders interest equity
funds
R000 R000 R000
Balance at 1 April 2004
- as previously stated 679 681 43 048 722 729
Fair value adjustments
(IFRS)
- IAS 16 - Property,plant 14 432 3 704 18 136
and equipment
- IAS 38 - Intangible (81) (81)
assets
Leases (7 136) (7 136)
Balance at 1 April 2004
- as restated 686 896 46 752 733 648
Retained surplus of - -
associate
Movement in translation 7 731 7 731
reserves
Attributable earnings for 44 300 3 634 47 934
the period - restated IFRS
Attributable earnings for 44 016 3 627 47 643
the period - GAAP
Fair value adjustments - -
(IFRS)
- IAS 16 - Property,plant (242) 7 (235)
and equipment
- IAS 38 - Intangible (78) (78)
assets
Leases 604 604
Ordinary dividends (16 506) (16 506)
Dividends to minorities (1 568) (1 568)
Change in holding in and - (2 114) (2 114)
disposal of minorities
Balance at 30 September 722 421 46 704 769 125
2004
Retained surplus of - -
associate
Movement in translation (4 395) (4 395)
reserves
Attributable earnings for 27 328 1 614 28 942
the period - restated IFRS
Attributable earnings for 25 917 1 554 27 471
the period - GAAP
Fair value adjustments
(IFRS)
- IAS 16 - Property,plant (30) 60 30
and equipment
- IAS 38 - Intangible (78) (78)
assets
Leases 1 519 1 519
Ordinary dividends (11 556) (11 556)
Dividends to minorities - (2 961) (2 961)
Change in holding in and - (3 481) (3 481)
disposal of minorities
Balance at 31 March 2005 733 798 41 876 775 674
Retained surplus of - -
associate
Movement in translation 38 748 38 748
reserves
Attributable earnings for 566 815 4 226 571 041
the period
Shares issued 11 468 11 468
Ordinary dividends (903 512) (903 512)
Change in holding in and - (37) (37)
disposal of minorities
Balance at 30 September 447 317 46 065 493 382
2005
INTERIM PROFIT STATEMENT
RESULTS
As a result of the disposal of Alpine Engineered Products Inc. (Alpine) in July
2005 and the Secondary Tax on Companies (STC) of R110,3 million incurred on the
subsequent payment of a special dividend of R26,00 on 29 August 2005, headline
earnings per share for the period declined by 235% when compared to the
comparative period last year. Excluding the STC charge, headline earnings would
have declined by 36%.
On the other hand, the capital profit realised on the disposal of Alpine
increased basic earnings significantly from 134,2 cents per share to 1696,9
cents per share.
Excluding the results of the discontinued operations, mainly Alpine, from both
periods, turnover increased by 11% and operating income decreased by 128% mainly
as a result of the raising of the R15 million provision in respect of the
benefit funds referred to below.
Interest benefited from the proceeds received on the Alpine disposal, but this
was for a limited period as the special dividend was paid shortly after the
receipt of those proceeds. Accordingly, while net interest received was 51%
higher than the comparative period last year, this included a non-recurring
amount of some R8 million in respect of the above.
In order to clarify a confusing situation, excluding the discontinued operations
and the various non-recurring items, the Group"s headline earnings for the six
month period would have been 21 cents per share.
In regard to the issue of the management participation scheme referred to in the
relevant circular to shareholders relating to the disposal of Alpine dated 18
June 2005, the exceptional profit realized on the disposal of Alpine materially
increased the performance bonuses potentially due to the executive directors in
terms of the scheme. Against this exceptional profit of R748 million, a
provision of R50 million has been charged for this purpose. Amounts already paid
as part of this scheme were included in "Directors" Remuneration" in previous
annual reports, and when further payments are made in terms of the management
participation scheme, these will be similarly disclosed.
CASH ON HAND/BORROWINGS
The net cash position of R358 million at 30 September 2005 is slightly higher
than the figure of R331,6 million at 31 March 2005.
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The results for the six months ended 30 September 2005 have been prepared in
accordance with International Financial Reporting Standards (IFRS) and comply
with IAS 34 - Interim Financial Reporting. All comparative information has been
restated to comply with the new accounting policies.
The following IFRS standards have impacted on group accounting policies and the
disclosure of the group"s results:
IAS16 - Property, plant and equipment. The residual values and useful lives of
major fixed assets have been assessed and where applicable, depreciation has
been adjusted.
IFRS2 - Share-based payments. The group has elected not to apply the provisions
of IFRS2 to shares granted before 7 November 2002
IFRS5 - Non-current assets held for sale and discontinued operations. The assets
and liabilities of Alpine have been disclosed separately as at 31 March 2005.
IAS38 - Intangibles. In terms of the policy, trademarks are now amortised.
In addition to the above, the accounting treatment for lease rentals has, in
accordance with IAS17, been modified, whereby escalations in operating lease
rentals are now charged to the income statement on a straight line basis over
the period of the lease.
The effects of the above accounting policy changes are detailed in the
"Statement of changes in Equity". Apart from the initial adjustments effected at
1 April 2004, which are detailed below, the remaining adjustments processed
through the income statements in subsequent periods were not material.
Initial adjustments at 1 April 2004
Adjustments
IFRS Lease
Rm Rm
Write up of Plant and equipment (Fixed and 29,8
intangible assets)
Provision for Restoration/rehabilitation (3,5)
(Other payables)
Provision for additional lease expense (Other (11,2)
payables)
Provision for additional lease revenue (Other 1,0
receivables)
Deferred taxation (8,2) 3,1
Minority shareholder share (3,7)
Net effect on Equity - Refer "Statement of 14,4 (7,1)
changes in Equity"
DIVISIONAL REVIEW
ALPINE - USA
Alpine reflected an operating profit of R51,7 million, for the period to 13 July
2005, i.e. the date of sale. This compares to R71,3 million for the six month
period to 30 September 2004.
AUTOMOTIVE DIVISION - SOUTH AFRICA
The Automotive Division increased turnover by 10,5% when compared to the
comparable period last year, and operating profit increased by 31,9%. Generally
those businesses involved in exports or affected by the Rand/Dollar exchange
rate continued to report poor results. The assets of those operations most
impacted by the Rand"s strength were impaired to the extent of R55 million.
As has been the case in the past, the results for the second six months of the
Automotive Division will be lower than the first six months due to the December
shutdown of the automotive industry. Nevertheless it is expected that the
operating profits of the division will be ahead of those of last year.
DORBYL PENSION AND PROVIDENT FUNDS
The trustees of the above funds are still in the process of finalizing the
position in regard to the Surplus Apportionment Legislation. Accordingly, the
exposure in this regard cannot be finally quantified at this time. However,
following recent trustee meetings, and based on actuarial advice, there is some
degree of clarity developing and it has been deemed prudent to provide R15
million in this regard during the current period.
INTERIM DIVIDEND NO. 112
An interim dividend of 10 cents per ordinary share has been declared. The last
date to trade "cum" the interim dividend in order to participate in the interim
dividend will be Friday, 6 January 2006. The shares of Dorbyl will commence
trading "ex" the interim dividend from the commencement of business on Monday, 9
January 2006 and the record date will be Friday, 13 January 2006.
The interim dividend is payable on Monday, 16 January, 2006.
No dematerialisation or rematerialisation of share certificates may take place
between Monday, 9 January 2006 and Friday, 13 January 2006, both days inclusive.
On behalf of the board.
N. Phillips (Chairman)
WW Cooper (Chief Executive)
22 November 2005
Registrars:
Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street, Johannesburg 2001
(P.O. Box 61051, Marshalltown, 2107)
Company secretary and registered office:
BD Bhikha
Dorbyl Ridge
16 Jan Smuts Avenue
Parktown, 2193
Directors
N Phillips (Chairman)*, WW Cooper (Chief Executive)
WE Buhrmann*, RC Duff, JB Magwaza*,
D Orwin, EJ Vorster, T van Wyk*,
* Non-executive
Sponsor - PSG Capital Limited
Date: 23/11/2005 08:39:27 AM Produced by the JSE SENS Department
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