| Wed 15 Feb 2006, 17:11 | | Brandcorp - Unaudited Results For The 6 Months End |
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BRC
BRC
Brandcorp - Unaudited Results For The 6 Months Ended 31 December 2005
Brandcorp Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration No. 1992/006647/06)
Share code: BRC ISIN number: ZAE000013611
("Brandcorp")
UNAUDITED RESULTS FOR THE 6 MONTHS ENDED 31 DECEMBER 2005
- Operating profit up 12,4%
- Dividend up 25%
- Net cash resources R65,2 million
Abridged group income statement
31 Dec 31 Dec 30 June
2005 2004 2005
Unaudited Unaudited % Audited
R"000 R"000 Change R"000
Revenue 470 345 437 948 7,4 824 578
Operating profit 59 081 52 551 12,4 114 420
Fair value of forward
exchange contracts (6 097) (2 505) 11 399
Net finance income 1 035 448 475
Net profit before taxation 54 019 50 494 6,9 126 294
Taxation (18 816) (16 896) (40 393)
Current (14 952) (14 434) (37 480)
Secondary tax on companies (3 151) (1 724) (2 491)
Deferred taxation (713) (738) (422)
Net profit after taxation 35 203 33 598 4,8 85 901
Number of shares in
issue (000)* 78 773 76 635 2,8 76 635
Weighted average number
of shares (000)* 78 023 75 684 3,1 76 159
Headline earnings per
share - cents 45,1 44,4 1,6 112,8
Earnings per share - cents 45,1 44,4 1,6 112,8
Diluted headline earnings
per share - cents 44,6 43,0 3,7 109,0
Diluted earnings per
share - cents 44,6 43,0 3,7 109,0
*Net of treasury stock
RECONCILIATION OF EARNINGS AND HEADLINE EARNINGS
31 Dec 31 Dec 30 June
2005 2004 2005
Unaudited Unaudited % Audited
R"000 R"000 Change R"000
Net profit after taxation 35 203 33 598 85 901
Profit on disposal of
tangible assets (37) (5) (5)
Headline earnings 35 166 33 593 4,7 85 896
ABRIDGED GROUP BALANCE SHEET
31 Dec 31 Dec 30 June
2005 2004 2005
Unaudited Unaudited % Audited
R"000 R"000 Change R"000
Assets
Non-current assets 32 330 24 863 31 847
Tangible assets 17 934 16 629 16 313
Intangible Assets 7 310 750 7 734
Deferred taxation 7 086 7 484 7 800
Current assets 392 586 374 994 385 273
Inventories 134 578 140 591 146 972
Accounts receivable 176 508 175 202 153 752
Cash and cash equivalents 81 500 59 201 84 549
424 916 399 857 417 120
Equity and liabilities
Capital and reserves 285 039 226 421 272 676
Long-term liabilities 4 906 14 999 7 223
Current liabilities 134 971 158 437 137 221
Non-interest-bearing
liabilities 91 150 123 905 94 216
Interest-bearing
liabilities 11 332 15 697 15 927
Taxation 32 489 18 835 27 078
424 916 399 857 417 120
Net asset value per share-
cents 361,8 295,5 22,4 355,8
ABRIDGED GROUP CASH FLOW STATEMENT
31 Dec 31 Dec 30 June
2005 2004 2005
Unaudited Unaudited Audited
R"000 R"000 R"000
Operating activities 30 171 9 842 58 673
Operating profit before
working capital movements 61 363 51 875 119 485
Increase in working capital (19 537) (32 872) (36 107)
Net finance income 1 036 448 475
Taxation paid (12 691) (9 609) (25 180)
Investing activities (3 440) (2 367) (12 189)
Purchase of tangible assets (3 518) (2 413) (4 873)
Proceeds on disposal of tangible
assets 78 46 46
Purchase of intangible assets - - (7 362)
Financing activities (29 780) (20 011) (33 672)
Proceeds from issue of share
capital 2 328 1 868 1 868
Payment of borrowings (6 912) (8 093) (15 638)
Distributions to shareholders (25 196) (13 786) (19 902)
Net movement in cash resources (3 049) (12 536) 12 812
Cash and cash equivalents at the
beginning of the period 84 549 71 737 71 737
Cash and cash equivalents at the
end of the period 81 500 59 201 84 549
STATEMENT OF CHANGES IN EQUITY
Accu-
Share Share mulated
capital premium profits NDR Total
R"000 R"000 R"000 R"000 R"000
Balance at
1 July 2004 739 1 842 202 088 - 204 669
Net profit after
taxation - - 85,901 - 85,901
Share-based payments - - - 163 163
Ordinary shares
issued 15 1 021 - - 1 036
Net transactions by
share trust 12 5 450 (4 630) - 832
Dividend - - (19 925) - (19 925)
Balance at
1 July 2005 766 8 313 263 434 163 272 676
Net profit after
taxation - - 35 203 - 35 203
Share-based payments - - - 39 39
Ordinary shares
issued 21 2 307 - - 2 328
Dividend - - (25 207) - (25 207)
Balance at
31 Dec 2005 787 10 620 273 430 202 285 039
SEGMENT ANALYSIS
Operating
Turnover profit Assets Liabilities
R"000 R"000 R"000 R"000
Tools & Hardware 306 045 38 358 245 223 77 828
Leisure & Accessories 70 298 8 567 62 702 24 234
House & Home 94 002 13 075 67 511 31 414
Corporate - (919) 49 480 6 401
Total 470 345 59 081 424 916 139 877
COMMENTARY
NATURE OF BUSINESS
Brandcorp distributes niche consumer and industrial products to a broad range of
customers through three trading divisions:
Tools & Hardware - Matus distributes power tools, hand tools and hardware,
servicing the needs of the industrial, building and construction, engineering,
agricultural, DIY and mining sectors.
House & Home - Prestige/MIC/Decocraft distributes dinnerware, cutlery,
tableware, gifting, homewares, kitchen tools, kitchenware, bakeware, paper
products and BBQ products.
Leisure & Accessories - Cellini/Interbrand distributes luggage, handbags,
backpacks and accessory products.
FINANCIAL REVIEW
Brandcorp has produced solid results for the six months ended 31 December 2005,
with growth in revenue of 7,4% and in operating profit of 12,4%.
The group has a policy of hedging its foreign exchange exposure by the
utilisation of forward exchange contracts. In terms of International Financial
Reporting Standard (IFRS), IAS39, profits or losses on forward exchange
contracts on hand are recognised at balance sheet date, measured on a "mark to
market" basis.
The impact of this accounting treatment was a charge of 5,5 (2004: 2,3) cents
against earnings and headline earnings per share.
Earnings per share and headline earnings per share, nonetheless increased from
44,4 cents to 45,1 cents.
Management"s continued focus on working capital has once again borne fruit with
cash generated by operating activities amounting to R30,2million (2004:
R9,8million).
The balance sheet remains sound with net cash resources amounting to
R65,2million.
Net asset value has increased to 361,8 cents per share.
DIVISIONAL PERFORMANCE
The tool & hardware division enjoyed growth both in revenue (8,9%) and in
operating profit (13,7%). Demand continues to remain solid.
The house & home division produced a revenue increase of 7,1% and an operating
profit increase of 5,1%. Whilst demand for the Prestige product range continues
to grow, the MIC business slowed down resulting in a lower contribution to the
division"s revenue and operating profit. Decocraft, the hospitality and catering
business, produced pleasing growth in both revenue and operating profit.
The leisure & accessories division has exceeded expectations with an operating
profit increase of 14,5%.
ACCOUNTING POLICIES
The unaudited interim results of the group for the six months ended 31 December
2005 have been prepared in accordance with the group"s accounting policies.
These comply with International Financial Reporting Standards (IFRS) and were
adopted with effect from 1 July 2005. This interim report complies with
International Accounting Standard 34 - Interim Financial Reporting.
Due to the adoption of IFRS, the comparative figures for the six months ended 31
December 2004 have been restated, resulting in share based payments amounting to
R81 000 being charged to the income statement for such comparative period.
DIVIDEND DECLARATION
The board has declared an interim dividend of 10 cents per share. The salient
dates are as follows:
- Declaration date Wednesday, 15 February 2006
- Last date to trade "cum" dividend Friday, 3 March 2006
- Date trading commences "ex" dividend Monday, 6 March 2006
- Record date Friday, 10 March 2006
- Date of payment Monday, 13 March 2006
Share certificates may not be dematerialised or rematerialised between Monday, 6
March 2006 and Friday, 10 March 2006, both days inclusive.
EMPOWERMENT
Brandcorp continues to explore the most optimal manner in which to structure an
empowerment transaction, taking into account the aspirations of all
stakeholders, including employees, shareholders and customers.
ACQUISITION
The board is pleased to announce the acquisition of the business of the Moto
Quip group (including ownership of the successful brands, Moto Quip, Leisure
Quip and Travel Quip) and the incorporation of the business into Brandcorp with
effect from 1 February 2006.
Moto Quip is a distributor of aftermarket vehicle accessories (not spare parts),
outdoor and camping equipment, travel aids and accessory products.
The acquisition will be funded by internal cash resources. Had the acquisition
been effective 1 July 2005, earnings per share for the reporting period would
have been enhanced by approximately 7%, whilst tangible net asset value per
share would have decreased by approximately 8 cents.
We welcome the Moto Quip team to the Brandcorp group and are excited about the
prospects and future growth potential that this experienced and competent
management team, all of whom retain their executive roles, will bring to
Brandcorp.
Brandcorp will continue to actively pursue its stated acquisition strategy.
PROSPECTS
The current outlook for the South African economy remains positive, as do the
key indicators that influence the Brandcorp businesses.
On behalf of the board
Colin Datnow Brad Taurog
Chief Executive Chief Financial Officer
15 February 2006
Registrars: Computershare Investor Services 2004 (Pty) Ltd - Ground Floor 70
Marshall Street Johannesburg 2001
Secretary and Registered Office: Light and Livingstone Financial Services CC -
3rd Floor Palm Grove 196 Louis Botha Avenue Houghton Estate 2198
Directors: C S Datnow, S Ellerine*, J D Goldberg, J C Livingstone*, H B Marcus,
B D Taurog, M Yachad* (*Non-executive)
Brandcorp Holdings Limited (incorporated in the Republic of South Africa)
("Brandcorp" or "The Group") Reg No: 1992/006647/06 JSE Code: BRC ISIN No:
ZAE000013611
These results can be viewed on our website: www.brandcorp.co.za
Date: 15/02/2006 05:11:30 PM Produced by the JSE SENS Department
