| Mon 26 Jun 2006, 17:39 | | Invicta - Audited Group results for the year ended |
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IVT
IVT
Invicta - Audited Group results for the year ended 31 March 2006
Invicta Holdings Limited
(Registration number 1966/002182/06)
(Incorporated in the Republic of South Africa)
(Share code: IVT)
(ISIN: ZAE000029773)
Audited Group results for the year ended 31 March 2006
- Minorities of Bearing Man bought out
- Group restructured in preparation for BEE
- Group Headline Earnings up by 21%
Income statement
Restated
2006 2005 %
R"000 R"000 change
Revenue 1 913 204 1 937 593 (1)
Operating income 197 843 231 928 (15)
Interest and preference dividend 21 396 8 787
received
Finance costs 40 552 15 506
Profit before taxation 178 687 225 209 (21)
Taxation 53 522 75 166
Profit for the year 125 165 150 043 (17)
Outside shareholders 290 (41 536)
Attributable to ordinary 125 455 108 507 16
shareholders
Earnings per share (cents) 170 190 (11)
Diluted earnings per share (cents) 169 190 (11)
Determination of headline earnings
Attributable earnings 125 455 108 507
Adjustments - after taxation and
minority interests where applicable
- Profit on disposal of investment - (3 995)
- Profit on disposal of property, (29) (444)
plant and equipment
Headline earnings 125 426 104 068 21
Shares in issue
Weighted average (000s) 73 861 57 258
At the end of the year (000s) 73 861 57 884
Number of shares used for diluted 74 246 57 258
earnings per shares (000s)
Headline earnings per share (cents) 170 181 (6)
Diluted headline earnings per share 169 181 (7)
(cents)
Dividends per share* (cents) 68 77 (12)
Interim 27 31 (13)
Final 41 46 (13)
* In accordance with IAS10, the final dividend of 41 cents per share proposed by
the directors has not been reflected in the annual financial statements.
Balance sheet
Restated
2006 2005
R"000 R"000
ASSETS
Non-current assets 1 547 755 182 308
Property, plant and equipment 123 220 118 059
Investments 1 195 303 202
Goodwill and other intangible assets 203 701 37 600
Deferred taxation 19 843 20 759
Loan receivable 5 688 5 688
Current assets 949 924 813 703
Inventories 633 901 553 030
Accounts receivable 289 655 224 889
Bank balances and cash 26 368 35 784
2 497 679 996 011
EQUITY AND LIABILITIES
Capital and reserves 718 531 528 814
Ordinary shareholders" funds 716 296 365 075
Outside shareholders" interest 2 235 163 739
Non-current liabilities 1 203 060 12 821
Long-term borrowings 1 203 060 12 821
Current liabilities 576 088 454 376
Bank overdrafts and bankers" acceptances 105 642 9 681
Short-term borrowings 19 984 6 421
Accounts payable 401 574 379 177
Provisions 48 888 59 097
2 497 679 996 011
Cash flow statement
2006 2005
R"000 R"000
Cash flows from operating activities
Cash generated from operations 98 372 197 169
Finance costs (40 552) (15 506)
Dividends paid (46 494) (63 257)
Taxation paid (58 704) (91 810)
Interest and dividend received 21 396 8 787
Net cash (outflow) inflow from operating (25 982) 35 383
activities
Cash flows from investing activities
Net cash effects of asset acquisitions (31 129) (24 302)
Net cash effects of other investing (1 523 416) (1 753)
activities
Cash flows from financing activities
Net cash effects of share capital - (30 608)
repurchased
Net cash effects of shares issued 271 505 8 944
Net cash effects of borrowings raised 1 203 645 4 251
Net decrease in cash and cash equivalents (105 377) (8 085)
Cash and cash equivalents at the beginning 26 103 34 188
of the year
Cash and cash equivalents at the end of (79 274) 26 103
the year
Statement of changes in equity
Restated
31 March 31 March
2006 2005
R"000 R"000
SHARE CAPITAL
Balance at beginning of period 2 894 2 873
Shares issued 799 -
Share options issued - 168
Shares purchased in terms of the share buy- - (147)
back scheme
Balance at end of period 3 693 2 894
SHARE PREMIUM
Balance at beginning of period 6 352 28 037
Shares issued 270 706 -
Share options issued - 8 776
Shares purchased in terms of the share buy- - (30 461)
back scheme
Balance at end of period 277 058 6 352
ACCUMULATED PROFITS
Balance at beginning of period 347 787 284 144
Earnings attributable to ordinary 125 455 108 507
shareholders
Dividends paid (46 569) (44 864)
Balance at end of period 426 673 347 787
OTHER RESERVES
Balance at beginning of period 8 042 8 194
Arising on translation of foreign 830 (152)
operations
Balance at end of period 8 872 8 042
Ordinary shareholders" funds 716 296 365 075
OUTSIDE SHAREHOLDERS" INTEREST
Balance at beginning of period 163 739 177 356
Earnings attributable to outside (290) 41 536
shareholders
Dividends paid to outside shareholders (18 477)
Net investment in subsidiaries (161 214) (36 556)
Currency translation differences (120)
Balance at the end of period 2 235 163 739
RECONCILIATION OF PREVIOUS SA GAAP TO IFRS
Attributable earnings for the period - SA 108 757
GAAP
Adjustments:
Negative goodwill at date of transition (1 636)
Depreciation 1 234
Translation of foreign operations 152
Attributable earnings for the period - 108 507
IFRS
31 March 31 April
2005 2004
R"000 R"000
RECONCILIATION OF EQUITY OF PREVIOUS SA
GAAP AT 31 MARCH 2005 TO IFRS RESTATEMENT
Capital and reserves - SA GAAP 510 899 483 257
Revaluation reserve 8 194 8 194
Currency translation differences (152) -
Ordinary shareholders" funds 2 465 2 715
Attributable to outside shareholders" 7 408 6 438
Capital and reserves - IFRS 528 814 500 604
OTHER INFORMATION
Restated
31 March 31 March
2006 2005
R"000 R"000
Debt: Equity ratio (%) (excluding the long- 18 8
term BEE funding debt secured by
investments)
Depreciation and amortisation (R"000) 22 566 19 952
Net asset value per share (cents) 969,8 630,7
Tangible net asset value per share (cents) 694,0 571,9
Contingent liabilities (R"000) 3 954 4 922
Segment information on these businesses is presented below:
Capital
Engineering equipment
consumables and spares
R"000 R"000
2006 2005 2006 2005
Revenue 1 172 670 1 048 087 740 534 889 506
Operating profit before 154 564 156 326 43 279 76 806
finance costs, interest
and preference dividend
received
Balance sheet
Assets 702 515 596 578 797 518 557 439
Liabilities 284 800 246 799 295 391 311 408
Segment information on these businesses is presented below: (Contd)
Non-segment
allocations Restated
R"000 R"000
2006 2005 2006 2005
Revenue - 1 913 204 1 937 593
Operating profit before (1 204) 197 843 281 928
finance costs, interest
and preference dividend
received
Balance sheet
Assets 992 646 (158 007) 2 497 679 996 011
Liabilities 1 198 957 (91 010) 1 779 148 467 197
Geographical segments: The group has not reported segment information by
geographical location as the operations occur substantially within Southern
Africa.
Notes to the financial information
Basis of preparation
The results for the period ended 31 March 2005 have been restated due to the
adoption of IFRS. The audited financial statements have been prepared in
accordance with IAS 34 and IFRS1 - First time adoption of IFRS. Accounting
policies have been consistently applied except for the changes required as the
result of IFRS implementation. The effect on equity is set out above. The effect
on both basic and diluted earnings per share amounted to a reduction in 0.4
cents and a reduction of R1,090 million in earnings attributable to outside
shareholders in 2005.
Comments
Group activities
The Invicta Group continues to be a major regional player in the importation and
distribution of:
- Bearings, belts, seals, power transmission products, geared motors and
fasteners (Bearing Man Limited ("Bearing Man"))
- Agricultural machinery and equipment (Northmec Division ("Northmec"))
- Construction and earthmoving equipment, turf grooming equipment and golf
utility cars(CSE Division ("CSE"))
- Automotive and motorcycle parts (Autobax Division ("Autobax"))
Financial overview
The year was extremely challenging. All three sectors of industry in which the
group operates, Agriculture, Mining and Manufacturing, traded under difficult
conditions. Notwithstanding, the results were solid, but showed a decline of
some 6% in headline earnings per share.
The group was however very busy with Corporate activity and consolidated its
position in each of the sectors in which it operates.
Corporate activity
- The acquisition of the minorities in Bearing Man with the concommitant
delisting of Bearing Man.
- The internal restructuring and raising of funding in order to facilitate
the introduction of a BEE Partner.
- The acquisition of New Holland SA (Pty) Ltd was completed, effective 1
April 2006. This results in the group now being the sole distributors in
South Africa for both the Case and New Holland ranges of Agricultural
equipment.
- Bearing Man made two strategic acquisitions in Top Class, a distributor of
Automotive products and OST a manufacturer and distributor of specialised
industrial vibration products.
- Bearing Man was appointed the exclusive distributor in South Africa for
Timken Bearings.
- Bearing Man completed the installation of a state of the art ERP computer
system.
Trading Results
The depressed state of the Agricultural industry referred to in the interim
report, continued for the rest of the 2005 calendar year. Total tractor sales in
South Africa fell by 11% and combine harvesters by 35%. The large tractor sector
fell by 60%, which is the area that Northmec has particular strength, as a
consequence Northmec"s turnover decreased by R172 million. Despite this decline,
Northmec remains market leader in sales of combine harvesters and high kilowatt
tractors.
Bearing Man increased its turnover by R125 million and CSE and Autobax increased
their combined turnover by R23 million. It is pleasing, therefore, to report
that overall, group turnover decreased by only 1% to R1 913 million.
Gross margins in the group continued to be under pressure in the second half of
the year, which, coupled with increased operating costs, resulted in operating
profit declining by 15% to R198 million. However, the buy-out of the minorities
of Bearing Man enabled the group to increase earnings attributable to ordinary
shareholders to R125 million, an increase of 16%.
Headline earnings increased by 21% to R125 million. The increase in the number
of shares in issue due to the buy-out of the Bearing Man minorities in Bearing
Man resulted in headline earnings per share decreasing by 6% to 170 cents per
share. The debt:equity ratio (excluding the long-term BEE funding debt, which is
secured by investments) increased to 18% from 8%, largely as a result of the
cash paid out to those minorities of Bearing Man who elected to receive cash
instead of shares, and the cash used for acquisitions and increased investment
in working capital. Notwithstanding this, the debt:equity ratio is 2% lower than
it was at the interim stage.
BEE
Having completed the raising of funding and internal group restructuring,
negotiations are currently under way with potential BEE partners, with a target
completion date of 31 October 2006 for this process. The transaction will
include a staff empowerment scheme.
Prospects
The agricultural sector is looking positive for the 2006 calendar year. There
have been good rainfalls countrywide and the maize price is substantially higher
than last year. The acquisition of New Holland SA (Pty) Ltd strengthens the
group"s leading role in the agricultural machinery market and gives the group a
greater spread of products in that market. This acquisition is, however, only
expected to make a positive contribution to group profits in 2008.
The construction machinery industry is expected to remain at its current strong
levels due to continued government infrastructural expenditure and the lead-up
to the Soccer World Cup in 2010. However, management is cautious about the
benefits to be derived from this as the market is extremely competitive and all
supply chain problems have not yet been satisfactorily resolved.
The engineering consumables market is expected to remain fairly static during
the coming year, but management aims to improve operating margins by focusing on
better asset management and improved efficiencies.
Overall, the group"s focus in the coming year will be on consolidation,
improvement of margins and working capital. Acquisitions will not be given high
priority in the first half of the year until the introduction of BEE partners
has been concluded.
Taking everything into consideration, shareholders can expect improved results
in the coming year.
Dr C H Wiese A GoldstoneChairman
Managing Director
Dividend
Notice is hereby given that a final dividend of 41 cents per share has been
declared. The last day to trade ("CUM" the dividend) in order to participate in
the dividend will be Friday, 14 July 2006.
The shares of Invicta Holdings Limited will commence trading "EX" the dividend
from Monday, 17 July 2006 and the record date will be Friday, 21 July 2006. The
dividend will be paid to members on Monday, 24 July 2006.
Share certificates may not be dematerialised or rematerialised between Monday,
17 July 2006 and Friday, 21 July 2006, both days inclusive.
Audit opinion
Our auditors, Deloitte & Touche, have issued their opinion on the group"s
financial statements for the year ended 31 March 2006. They have issued an
unmodified audit opinion. A copy of their report is available for inspection at
the company"s registered office. These summarised financial statements have been
derived from the group"s financial statements and are consistent in all material
respects with the group financial statements.
By order of the board
C Barnard Johannesburg
Secretary 26 June 2006
REGISTERED OFFICEInvicta Holdings Limited
Unit 1A, Ground Floor
Seardel House
Alphen Park
Constantia Main Road
Constantia 7806
PO Box 89
Constantia 7848
TRANSFER SECRETARIES
Computershare Investor Services 2004 (Pty) Limited
Ground Floor
70 Marshall Street
Johannesburg 2001
PO Box 61051
Marshalltown 2107
DIRECTORS
Dr CH Wiese*, A Goldstone, M Rose-Innes*, DI Samuels*,
RE Sherrell*, Dr LJ Marais#,AM Sinclair#
* Non-executive # Alternate
SPONSOR
Deloitte & Touche Sponsor Services (Pty) Ltd
www.invictaholdings.co.za
Date: 26/06/2006 05:39:51 PM Produced by the JSE SENS Department
