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MTA
MTA
Metair Investments Limited - Abridged Audited Results For The Year Ended
31 December 2005
METAIR INVESTMENTS LIMITED
(Reg.No.1948/031013/06)
Share Code: MTA
Isin code: ZAE000004743
Abridged Audited Results for the year ended 31 December 2005
ABRIDGED GROUP INCOME STATEMENT
31 December 31 December
2005 2004
R"000 R"000
Revenue 2 151 020 1 949 547
Cost of sales (1 643 989) (1 428 638)
Depreciation and amortisation (48 787) (41 605)
Gross profit 458 244 479 304
Other operating income 50 175 17 849
Distribution, administrative and other (261 511) (265 235)
expenses
Operating profit 246 908 231 918
Interest income 14 338 15 118
Interest expense (10 104) (11 953)
Share of results of associates 3 236 2 451
Impairment of investment in associate (12 906) (3 775)
company
Profit before taxation 241 472 233 759
Taxation (70 388) (72 022)
Profit for the year 171 084 161 737
Attributable to:
Equity holders of the Company 158 428 161 143
Minority interest 12 656 594
171 084 161 737
Earnings per share
Basic earnings per share (cents) 2 648 2 714
Loss on disposal of property, plant and 5
equipment
Impairment of investment in associate 215 64
company
Profit on disposal of investment (271)
Headline earnings per share (cents) 2 597 2 778
Diluted earnings per share
Basic earnings per share (cents) 2 611 2 671
Headline earnings per share (cents) 2 562 2 733
Dividend per share (cents) 850 700
Number of ordinary shares in issue 5 995 5 949
(`000)
Weighted average number of ordinary 5 984 5 937
shares in issue (`000)
ABRIDGED GROUP CASH FLOW STATEMENT
31 December 31 December
2005 2004
R"000 R"000
Operating activities
Cash generated from operations 203 360 318 712
Finance charges (10 104) (11 953)
Investment income 14 338 15 118
Taxation paid (74 434) (55 620)
Dividends paid (51 071) (41 637)
Dividend income from associate 10 725
Net cash inflow from operating 82 089 235 345
activities
Investing activities
Proceeds on disposal of 25% interest in 47 000
subsidiary
Net cash used in other investing (116 336) (115 267)
activities
Net cash outflow from investing (69 336) (115 267)
activities
Net cash outflow from financing (14 645) (13 255)
activities
Net (decrease)/increase in cash and cash (1 892) 106 823
equivalents
At beginning of the year 230 434 123 611
Cash and cash equivalents at end of year 228 542 230 434
ABRIDGED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Treasury Retained Share- Non-
capital shares earnings based distri-
and payment butable
premium reserve reserves
R"000 R"000 R"000 R"000 R"000
Balance at 1 January 35 149 (219) 777 555 1 068 20 297
2005
Net profit for the year 158 428
Ordinary shares issued 1 265
Dividends (50 807)
Employee share option
scheme:
- value of services 763
provided
Net movement in (240)
treasury shares
Transfers 7 908 (7 908)
Balance at 31 December 36 414 (459) 893 084 1 831 12 389
2005
ABRIDGED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Continued)
Total Minority Total equity
interest
R"000 R"000 R"000
Balance at 1 January 833 850 700 834 550
2005
Net profit for the year 158 428 12 656 171 084
Ordinary shares issued 1 265 1 265
Dividends (50 807) (264) (51 071)
Employee share option 0
scheme:
- value of services 763 763
provided
Net movement in (240) (240)
treasury shares
Disposal of 25% 30 559 30 559
interest in subsidiary
Transfers
Balance at 31 December 943 259 43 651 986 910
2005
ABRIDGED GROUP BALANCE SHEET
31 December 31 December
2005 2004
R"000 R"000
ASSETS
Non-current assets 576 137 515 371
Property, plant and equipment 502 118 439 476
Intangible assets 11 676 4 353
Investment in associates 18 249 30 491
Deferred taxation 9 094 5 895
Other non-current assets 35 000 35 156
Current assets 792 889 736 278
Inventory 309 486 262 028
Accounts receivable 248 428 239 885
Cash 139 011 153 584
Other financial assets at fair 95 964 80 781
value through profit or loss
Total assets 1 369 026 1 251 649
EQUITY AND LIABILITIES
Capital and reserves 943 259 833 850
Share capital and premium 36 414 35 149
Share-based payment reserve 1 831 1 068
Treasury shares (459) (219)
Non-distributable reserves 12 389 20 297
Retained earnings 893 084 777 555
Ordinary shareholders equity 943 259 833 850
Minority interest 43 651 700
Total equity 986 910 834 550
Non-current liabilities 126 138 131 956
Interest bearing borrowings 53 252 69 248
Post-employment medical benefits 14 681 13 019
Deferred taxation 58 205 49 689
Current liabilities 255 978 285 143
Trade and other payables 210 875 238 188
Borrowings 15 829 15 503
Taxation 9 687 19 050
Provisions for liabilities and 13 154 8 471
charges
Bank overdrafts 6 433 3 931
Total liabilities 382 116 417 099
Total equity and liabilities 1 369 026 1 251 649
Net asset value per share (cents) 16 462 14 028
Capital expenditure 111 788 108 121
Capital commitments
- contracted 60 537 26 569
- authorised but not contracted 39 728 24 783
Notes to the abridged consolidated financial statements
Accounting policies
These consolidated abridged audited financial statements have been
prepared in accordance with IAS34, International Financial Reporting
Standards ("IFRS") and IFRIC interpretations adopted by the International
Accounting Standards Board ("IASB").
Contingencies
The bank and other guarantees given by the Group to third parties
amounted to R43.1 million as at 31 December 2005 (R43,0 million as at 31
December 2004).
Borrowings 31 December 31 December
2005 2004
R"000 R"000
Current 15 829 15 503
Non-current 53 252 69 248
69 081 84 751
The movement in the borrowings can be analysed as follows:
Year ended December 2005
Opening amount (84 751)
Repayments 16 082
Amounts raised (412)
Closing amount (69 081)
Fair value adjustments on financial instruments
31 December 31 December
2005 2004
R"000 R"000
Forward foreign exchange contracts - (190) (1 085)
fair value hedges
Total (190) (1 085)
Annual General Meeting
The annual report will be mailed to shareholders by 31 March 2006 along
with the notice of annual general meeting.
The annual general meeting will be held on 3 May 2006 at 14h00 at Metair
Investments Limited, 10 Anerley Road, Parktown.
Auditors" report
The abridged results of the Group as set out above have been audited by
the Group"s auditors, PricewaterhouseCoopers.
Their report is available for inspection at the Company"s registered
office (address details as above).
Operating Results
Profit after tax increased by 5,8% but the net profit attributable to
shareholders was R158,4 million compared to the R161,1 million achieved
in 2004, due to the increase in minority shareholders interest. Headline
earnings per share for the full year were 2597 cents compared to 2778
cents achieved in the previous year.
Total Group turnover increased by 10,3% to R2151,0 million compared to
R1949,5 million in 2004. Sales of components to OE customers increased
by 27,2%, export sales (direct and indirect) declined by 15,5%,
aftermarket sales increased by 7,0% and non-automotive turnover increased
by 8,7%.
The 2005 year was characterised by an exceptional increase in demand for
vehicles in the domestic market. Trading conditions for exports remained
difficult. The Rand was stable throughout 2005 at between 6.00 and 6.70
to the Dollar and this together with equally stable interest rates
resulted in improved vehicle affordability and an increase in domestic
vehicle sales to an all time record. However, the bulk of this growth was
achieved by imported vehicles which recorded a substantial gain in market
share. The strength of the Rand resulted in continuing pressure not only
on export volumes and margins but also on domestic margins and this
pressure was exacerbated by significant increases in raw material and
commodity prices.
Overall gross profit reduced by 4,4% and gross margins achieved were 3,3%
lower than 2004 (21,3% compared to 24,6%). The main reason was that the
new business won was at lower margins due to the need to meet globally
benchmarked prices. Additional costs were incurred during the launch of
technically more complex products mainly in the first six months and
costs for technical assistance, training and launch costs were also
absorbed.
The Balance Sheet reflects an increase in the net book value of fixed
assets of R62,6 million from R439,5 million to R502,1 million following
the commissioning of the new project facilities. Current assets (stock
and debtors but excluding cash) increased by R56,0 million reflecting the
increase in turnover. The reduction in export sales had a positive effect
on debtor"s days. The Balance Sheet remained strong with Shareholders
funds representing 72,1% of total assets at year end (2005: 66,7%).
Financing costs were very similar to 2004 despite the capital expenditure
incurred and dividends paid during the year. Net cash increased to R159,5
million on the Balance Sheet compared to R145,7 million in December 2004.
Dividend
A dividend of R8,50 per share was declared on March 15th 2006 in respect
of the 2005 financial year.
Group Structure
As announced in the Interim Report, Metair sold 25% of the shares in
Smiths Manufacturing (Smiths) to Denso Corporation effective 1st May
2005. The consideration was R47 million.
As also announced, Metair signed an agreement on November 8th 2005 to
sell 25,1% of the shares in Hesto Harnesses to Yazaki Corporation. The
effective date of the sale will be 3 April 2006.
Prospects
The continued growth expected in the domestic vehicle market in 2006
should have a positive impact on turnover for the Group. Toyota"s
decision to increase production of the Hilux model to 500 vehicles per
day by the end of 2006 will require additional investments to be made but
will generate significant additional turnover for the Group. Gross
margins will however be lower and cost recovery on existing OE business
will be difficult particularly if the Rand remains in the current trading
range. Component export volumes and margins will remain constrained by
the Rand exchange rate but some niche markets have potential for growth.
The growth of imported products in the domestic replacement market
remains a concern but P&A sales should reflect the higher vehicle sales.
2005 saw the culmination of three years of discussions with the signing
of agreements with Denso and Yazaki. Metair is convinced that such equity
relationships are essential in meeting the global challenge of component
production in South Africa particularly for OE customers. Further
discussions commenced in 2005 and will be pursued in 2006.
The exchange rate remains a major determining factor in terms of the
overall profitability of the Group and at the current level, margins will
remain under pressure.
DECLARATION OF ORDINARY DIVIDEND NO 56
NOTICE IS HEREBY GIVEN that a final ordinary dividend of 850 cents per
ordinary share has been declared in respect of the year ended 31 December
2005. The last date to trade cum dividend will be Thursday 6 April 2006.
Trading will commence ex dividend from Friday 7 April 2006 and the record
date will be Thursday 13 April 2006. Date of payment will be Tuesday 18
April 2006.
Share certificates may not be dematerialised or rematerialised between
Friday 7 April 2006 and Thursday 13 April 2006, both days inclusive.
The audited consolidated profit before taxation of the company and its
subsidiaries for the year ended 31 December 2005 amounts to R241 472 000
from which source this dividend will be fully funded.
BY ORDER OF THE BOARD
Transfer Secretaries Registered
OfficeComputershare Investor Services 10 Anerley Road2004
(Pty) Limited Parktown70 Marshall Street
2193Johannesburg
Signed on behalf of the board
A D PLUMMER - Chairman
JOHANNESBURG, 15 March 2006
TRANSFER SECRETARIES
Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street
JOHANNESBURG
2001
SPONSOR
LPC Manhattan Moela (Pty) Limited
4th Floor
South Office Tower
Hyde Park Corner
Hyde Park
2196
EXECUTIVE DIRECTORS : C T Loock (Managing); C I J van der Merwe
(Finance)
NON-EXECUTIVE DIRECTORS : A D Plummer (Chairman)*; Mrs E le R Bradley;
G J Strydom
INDEPENDENT NON-EXECUTIVE DIRECTORS : R S Broadley; L Soanes*
COMPANY SECRETARY : S M Vermaak
* British
Date: 15/03/2006 05:42:14 PM Produced by the JSE SENS Department
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