| Wed 6 Sep 2006, 15:01 | | Tiwheel - Audited group results for the year ended |
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TIW
TIW
Tiwheel - Audited group results for the year ended 30 June 2006
TIGER WHEELS LIMITED
("Tiwheel" or "the group" or "the company")
Registration number 1970/011662/06
Incorporated in the Republic of South Africa
Share code: TIW * ISIN: ZAE000007407
HIGHLIGHTS
Revenue increases by 6,7%
Headline earnings per share decreases by 40,4%
AUDITED GROUP RESULTS FOR THE YEAR ENDED 30 JUNE 2006
ABRIDGED INCOME STATEMENTS
Year ended Year ended*
30 June 30 June
Change 2006 2005
% R"000 R"000
Revenue 6,7 3 299 295 3 091 576
Operating income (46,4) 115 840 216 221
Interest received 19 148 14 998
Interest paid (39 815) (35 747)
Profit before taxation (51,3) 95 173 195 472
Taxation (16 102) (38 472)
Profit for the year 79 071 157 000
Attributable to:
Equity holders of the parent 75 736 110 945
Minority interest 3 335 46 055
Profit for the year 79 071 157 000
Reconciliation of headline
earnings per share (cents)
Attributable earnings per share 125,3 184,7
Adjusted for:
- Closure costs 10,8 -
- Write-down of investments/loans - 0,9
- Impairment of fixed assets - 1,4
- Sale of investments - 41,2
Headline earnings per
share (cents) (40,4) 136,1 228,2
Diluted attributable earnings
per share (cents) 122,8 180,3
Diluted headline earnings
per share (cents) 133,4 222,8
Number of shares in issue ("000)
- At end of period (net of
treasury shares) 59 602 60 441
- Weighted average 60 439 60 076
ABRIDGED CASH FLOW STATEMENTS
Year ended Year ended*
30 June 30 June
2006 2005
R"000 R"000
Cash flows from:
Operating activities 255 412 321 672
Investing activities (412 096) (177 669)
Financing activities 208 668 (132 450)
Movement in cash resources 51 984 11 553
Foreign entities translation adjustment 14 578 (458)
Cash resources at beginning of year 232 808 221 713
Cash resources at end of year 299 370 232 808
Comprising:
Bank and cash balances 148 232 201 537
Financial assets held for trade 177 810 53 526
Short-term borrowings (26 672) (22 255)
299 370 232 808
Free cash flow per share (cents) 60.6 239,7
ABRIDGED BALANCE SHEETS
30 June 30 June*
2006 2005
R"000 R"000
ASSETS
Property, plant and equipment 1 465 567 1 096 201
Intangible assets 4 519 3 982
Goodwill 14 836 13 105
Investments 64 51
Financial assets 4 509 5 676
Investment tax credit 105 744 70 050
Deferred taxation 47 543 24 121
Non-current assets 1 642 782 1 213 186
Inventories 507 261 453 311
Trade and other receivables 600 683 424 239
Taxation 11 720 67
Financial assets held for trade 177 810 53 526
Bank and cash balances 148 232 201 537
Current assets 1 445 706 1 132 680
Total assets 3 088 488 2 345 866
EQUITY AND LIABILITIES
Capital and reserves 976 791 900 336
Minority interest 280 832 253 424
Total equity 1 257 623 1 153 760
Interest-bearing liabilities 585 725 195 112
Financial liabilities 1 673 4 411
Operating lease liabilities 17 948 14 688
Deferred income 106 044 70 050
Deferred taxation 55 475 35 426
Non-current liabilities 766 865 319 687
Trade and other payables 779 431 575 477
Provisions 124 729 95 907
Interest-bearing liabilities 123 290 150 208
Short-term borrowings 26 672 22 255
Taxation 9 878 28 572
Current liabilities 1 064 000 872 419
Total liabilities 1 830 865 1 192 106
Total equity and liabilities 3 088 488 2 345 866
Net tangible asset value
per share (cents) 1 614 1 468
Asset value per share (cents) 2 110 1 909
Capital expenditure committed (R"000) 102 661 41 104
FOREIGN EXCHANGE RATES
Closing rate Average rate
2006 2005 2006 2005
Euro/Rand 9,09 8,03 7,87 7,88
Euro/Pound 1,44 1,49 1,46 1,46
Euro/Dollar 1,27 1,21 1,22 1,27
Euro/Zloty 4,06 4,05 3,94 4,21
Dollar/Rand 7,15 6,66 6,45 6,20
Pound/Rand 13,11 11,94 11,46 11,50
ABRIDGED STATEMENTS OF CHANGES IN EQUITY
Year ended Year ended*
30 June 30 June
2006 2005
R"000 R"000
Equity at beginning of year as
previously reported 1 153 760 852 575
Adoption of IFRS - 97 618
Restated equity at beginning of year 1 153 760 950 193
Changes in:
Share capital (10) 6
Share premium (21 515) 4 800
Capital distribution (44 130) -
Share-based compensation 2 381 829
Other reserves 63 993 57 807
Movement in foreign currency
translation reserve 46 532 44 166
Movement in hedging reserve 17 461 22 074
Transfer to accumulated profit - (7 908)
Other - (525)
Accumulated profit 75 736 76 240
Earnings attributable to ordinary
shareholders 75 736 110 945
Transfer from non-distributable
reserves - 7 908
Dividend paid - (42 613)
Minority interest 27 408 63 885
Share of foreign currency
translation reserve 19 439 18 487
Share of hedging reserves 4 634 4 236
Share of profits 3 335 46 055
Dividend - (5 433)
Transfer to accumulated profit - 540
Equity at end of year 1 257 623 1 153 760
SEGMENTAL ANALYSIS
Year ended 30 June 2006
ATS group Balance of group
Europe SA USA SA Europe Total
Rm Rm Rm Rm Rm Rm
Revenue
Manufacturing 1 465 419 454 - - 2 338
Wholesale 57 - - 333 238 628
Retail - - - 483 - 483
Group services (24) (25) - (101) - (150)
Total revenue 1 498 394 454 715 238 3 299
Operating income
Manufacturing 106 3 (62) - - 47
Wholesale 4 - - 32 7 43
Retail - - - 48 - 48
Group services (24) - - 1 - (23)
Total operating
income 86 3 (62) 81 7 115
Interest received 3 - - 14 1 18
Interest paid (31) (4) (1) (3) - (39)
Net interest (28) (4) (1) 11 1 (21)
Interest-bearing
debt 679 5 11 41 - 736
Capital
expenditure 88 16 278 9 - 391
Depreciation 75 25 38 6 1 145
Year ended 30 June 2005 *
ATS group Balance of group
Europe SA USA SA Europe Total
Rm Rm Rm Rm Rm Rm
Revenue
Manufacturing 1 679 434 155 - - 2 268
Wholesale 58 - - 286 223 567
Retail - - - 439 - 439
Group services (45) - - (137) - (182)
Total revenue 1 692 434 155 588 223 3 092
Operating income
Manufacturing 155 12 (24) - - 143
Wholesale 5 - - 25 2 32
Retail - - - 44 - 44
Group services (13) 85 - (75) - (3)
Total operating
income 147 97 (24) (6) 2 216
Interest received 3 - - 10 2 15
Interest paid (18) (6) (2) (9) (1) (36)
Net interest (15) (6) (2) 1 1 (21)
Interest-bearing
debt 236 55 32 45 - 368
Capital
expenditure 127 17 25 9 - 178
Depreciation 67 23 11 9 1 111
COMMENTS
BACKGROUND
Tiger Wheels Limited ("Tiwheel") at present comprises a group of companies
focused on the automotive aluminium wheel and passenger car tyre industries. The
group"s two main business units are its international wheel manufacturing plants
in Germany, Poland, South Africa and the USA, and its, primarily South African,
trading businesses. These comprise the 45 Tiger Wheel & Tyre retail stores in
southern Africa - 32 owned and 13 franchised. The stores cover all major centres
and hold a significant share of the replacement passenger tyre and wheel
aftermarket business in the region. This business unit also operates wholesale
wheel and tyre distribution businesses in the United Kingdom and South Africa.
RESULTS OVERVIEW
The full year"s results, as forecast in the half-year report, continue to
reflect the contrasting solid performance of the domestic trading businesses and
the poor results of the international wheel manufacturing operations. The
reasons for the setbacks in manufacturing are laid out in the divisional report
below. Group revenue increased by 6,7%, operating income declined by 46,4% and
headline earnings per share by 40,4%.
ATS Group
The comments accompanying the half-year results are also pertinent when applied
to the full financial year. The lag effect of higher aluminium prices continued
during the second half as aluminium prices rose to an all time record during May
2006. Order book volatility, pricing pressure caused by overcapacity in the
industry, and the tail end of start-up losses in the new USA plants, all
continued to impact negatively on the results.
Management has continued to focus on productivity improvement and cost
containment in all plants, in pursuit of the goal of cost leadership in our
industry.
Trading businesses
The 11% increase in turnover in the trading businesses has resulted in a 23%
increase in operating income for the year. Four new retail stores were opened
during the year and new wheel and tyre products were introduced into the
wholesale business. The new stores are expected to become contributors to future
earnings growth in the years ahead.
The UK wholesale business had a vastly improved year.
PROSPECTS
ATS Group
The long-term benefits of recent investments in capacity growth and productivity
improvements should start to impact on the results during the forthcoming year,
more so in the second half than the first, when earnings should return to
historical levels. In terms of the three-year plan which has been prepared based
on current knowledge and market conditions, the group"s order book is well
matched to its available and planned global capacity. The most significant
future contributor to growth in earnings should be the two US plants, with a
return to historic performance levels from the two European plants. The South
African plant continues to suffer the effects of a strong Rand and is budgeting
to maintain a break-even scenario if last year"s average exchange rates prevail
into the future.
Trading businesses
The steep growth in new car sales in recent years should start to impact
positively on total replacement tyre sales in the years ahead and the business
is budgeting on achieving a growing share of this market. This should result in
an improved growth rate in revenue and earnings in the coming years. The
challenges of the highly competitive nature of the replacement tyre business,
and the high cost of new retail sites, can only be overcome by continued focus
on customer service excellence and intense focus on cost containment. Steady
rather than spectacular growth is management"s objective.
Tiwheel Group and the recent unbundling announcement
In terms of the announcement to shareholders dated 11 July 2006 regarding the
board"s intention to unbundle the group"s trading businesses, documentation is
in progress and a more detailed confirmation will be given to shareholders in
due course.
Audit report
These summarised consolidated results and the annual financial statements for
the year ended 30 June 2006, from which they have been extracted, have been
audited by the company"s auditors, PKF (Jhb) Inc. Their audit report is
available for inspection at the company"s registered office.
DECLARATION OF DISTRIBUTION
Notice is hereby given that the board of directors ("the board") has resolved to
distribute to ordinary shareholders a portion of the share premium account in
lieu of a dividend to ordinary shareholders ("the distribution"). The
distribution will amount to 51 cents per ordinary share (2005: capital
distribution of 73 cents per ordinary share), maintaining the group"s policy of
distributing 40% of attributable earnings to shareholders.
In terms of the company"s Articles of Association and the JSE Limited"s Listings
Requirements, any such distribution is subject to the passing of an ordinary
resolution by the company"s shareholders. It is accordingly proposed that the
appropriate resolution will be put to the shareholders at the Annual General
Meeting of the company ("AGM") which will take place on 28 November 2006. Should
such resolution be approved by the shareholders, the following salient dates to
the distribution will apply:
Last date to trade "CUM" the
distribution Friday, 8 December 2006
Trading commences "EX" the
distribution Monday, 11 December 2006
Record date Friday, 15 December 2006
Date of payment Monday, 18 December 2006
The above dates are subject to change. Any change will be announced on SENS and
in the press. Share certificates may not be dematerialised or rematerialised
between Monday, 11 December 2006 and Friday, 15 December 2006, both days
inclusive.
On behalf of the board
Eddie Keizan Josh Loots Johannesburg
Executive chairman Group financial director 6 September 2006
ACCOUNTING POLICIES
1. Basis of preparation
The group has adopted International Financial Reporting Standards ("IFRS")
for the year ended 30 June 2006, with a date of transition of 1 July 2004.
Previously the consolidated results were prepared in accordance with South
African Statements of Generally Accepted Accounting Practice ("SA GAAP").
This preliminary report has been prepared and presented in accordance with
IAS34: Interim Financial Reporting, the Companies Act 1973 (amended) and
the Listings Requirements of the JSE Limited.
The financial statements for the year ended 30 June 2006 is the group"s
first consolidated IFRS-compliant financial statements and hence IFRS 1:
First-time Adoption of IFRS has been applied in preparing this preliminary
report. Comparative information has been restated as required by IFRS. The
condensed financial information does not include all the relevant
information required by IFRS for full annual financial statements. For
further information on the IFRS and related adjustments, refer to the
annual financial statements.
2. Effect on the first-time adoption of IFRS and other restatements
2.1 Property, plant and equipment
Where components of property, plant and equipment have significantly
different useful lives, they are accounted for as separate assets. The
useful lives and residual values of all assets are assessed annually.
The increase in carrying values of property, plant and equipment
relates to changes in their estimated useful lives with a resulting
adjustment to deferred taxation, other reserves and minority interest.
2.2 Presentation of minority interest in subsidiary companies
Minority interests are now reflected as part of equity. Any change in
ownership interest in subsidiary companies without a change in control
is recognised as an equity transaction in the consolidated financial
statements.
2.3 Rebates and discounts
In accordance with circular 9/2006 issued by the South African
Institute of Chartered Accountants regarding the treatment of
settlement discounts and cash discounts, the valuation of inventories
and accounts receivable and payable as well as the measurement of cost
of sales and revenue have been adjusted retrospectively by the
settlement discounts received from suppliers in respect of purchases,
and discounts granted to customers in respect of sales. The impact on
the balance sheet was minimal.
2.4 Reclassifications and disclosure adjustments
In addition to the above, certain reclassifications and disclosure
adjustments were made to the balance sheet presentation:
* Intangible assets - Acquired computer software, previously
reflected in property, plant and equipment as furniture, fittings
and equipment, has been reclassified as an intangible asset. The
useful life of computer software is assessed annually.
* Foreign exchange contract derivative revaluations were in the
past classified as financial assets or liabilities. These
balances have been reclassified to either trade and other
receivables, or trade and other payables.
* The only adjustments to the cash flow statement relate to
reclassifications between categories.
The effect of the transition from SA GAAP to IFRS on the group"s balance sheets
and net profit is indicated below:
Balance sheet extract - asset/(liability)
June 2004
Reported Adjustment Restated
R"000 R"000 R"000
Property, plant and
equipment 801 973 129 168 931 141
Trade and other
receivables 483 339 2 412 485 751
Inventory 404 781 (1 627) 403 154
Retained income (414 124) (93 868) (507 992)
Other reserves 8 950 14 773 23 723
Minority interest (171 018) (18 521) (189 539)
Deferred taxation (net) 2 148 (32 337) (30 189)
Balance sheet
extract - asset/(liability)
June 2005
Reported Adjustment Restated
R"000 R"000 R"000
Property, plant and
equipment 949 456 146 745 1 096 201
Intangible assets - 3 982 3 982
Financial assets 8 053 (2 377) 5 676
Trade and other
receivables 420 247 3 992 424 239
Inventory 455 155 (1 844) 453 311
Retained income (488 990) (95 243) (584 233)
Other reserves (36 825) 2 740 (34 085)
Minority interest (221 166) (32 258) (253 424)
Deferred taxation (net) 14 432 (25 737) (11 305)
Summarised income statement
June 2005
Reported Adjustment Restated
R"000 R"000 R"000
Revenue 3 102 644 (11 068) 3 091 576
Cost of sales (2 341 836) 27 802 (2 314 034)
Gross profit 760 808 16 734 777 542
Other income 68 426 (28 019) 40 407
Administration expenses (476 556) 7 981 (468 575)
Distribution costs (144 221) 11 068 (133 153)
Operating profit 208 457 7 764 216 221
Finance income 14 998 - 14 998
Finance costs (35 747) - (35 747)
Profit before taxation 187 708 7 764 195 472
Taxation (41 457) 2 985 (38 472)
Attributable income 146 251 10 749 157 000
Minority interest (36 681) (9 374) (46 055)
Profit for the year 109 570 1 375 110 945
DIRECTORS:
Eddie Keizan (Executive chairman), Phillip Vallet* (Deputy chairman and chairman
of the board), Martin Glatt*, Rainer Hagemann** (German), Josh Loots, Mike
Groves**, Keith Rivers, Siegfried Teichert (German), Brian Joffe*,
Brand Pretorius (Alternate to Brian Joffe)
*Non-executive **Independent non-executive
REGISTERED OFFICE:
Cnr Old Pretoria Road and K101, Midrand 1685
Telephone (011) 256 4500, Fax (011) 256 4515
COMPANY SECRETARY:
Marco Nel (marco@tiw.co.za)
SPONSOR:
Sasfin Capital a division of Sasfin Bank Limited
Registration number 1951/002280/06
TRANSFER SECRETARIES:
Computershare Investor Services 2004 (Pty) Limited
Registration number 2004/003647/07
70 Marshall Street, Johannesburg 2001
PO Box 61051, Marshalltown 2107
Telephone (011) 370 5000
Date: 06/09/2006 03:01:54 PM Produced by the JSE SENS Department
