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AER
AER
Amecor - Unaudited Results For The Six Months Ended 30 September 2006
AMALGAMATED ELECTRONIC CORPORATION LIMITED
("AMECOR")
(Incorporated in the Republic of South Africa)
(Registration number 1997/010036/06)
Share code: AER & ISIN: ZAE000070587
("Amecor" or "the Company" or "the Group")
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2006
- Turnover R17,9 million:
- 16,3% ahead of first half F2006
- Operating profit R9,6 million:
- 14,9% ahead of first half F2006
- Profit attributable to shareholders R7,1 million:
- 16,4% ahead of first half F2006
- Earnings per share 10,4 cents:
- 14,2% ahead of first half F2006
SUMMARISED GROUP INCOME STATEMENT
Six months Six months Twelve months
ended ended ended
30 September 30 September 31 March
2006 2005 2006
(Unaudited) (Unaudited) (Audited)
R000"s R000"s R000"s
Turnover 17 864 15 380 33 756
Profit before interest,
taxes, depreciation and
amortisation (EBITDA) 9 621 8 663 18 772
Net interest received 170 25 264
Depreciation and
amortisation (233) (362) (852)
Operating profit before
taxation 9 558 8 326 18 184
Taxation (2 451) (2 225) (4 632)
Profit attributable
to shareholders 7 107 6 101 13 552
Headline earnings
per share (cents) 10,4 9,1 20,1
Earnings per share (cents) 10,4 9,1 20,1
Shares in issue (000"s) 74 046 68 796 68 796
Contingently issuable shares (5 250) - -
Adjustment for treasury
shares held (222) (1 481) (1 481)
Shares in issue - weighted
average (000"s) 68 574 67 315 67 315
SUMMARISED GROUP BALANCE SHEET
30 September 30 September 31 March
2006 2005 2006
(Unaudited) (Unaudited) (Audited)
R000"s R000"s R000"s
Non-current assets
Property, plant and equipment 2 141 2 277 1 709
Patents, trade marks
and goodwill 57 273 44 196 55 838
Treasury shares 433 - -
Current assets 14 998 13 658 16 517
Cash resources 6 693 7 162 10 098
Other current assets 8 305 6 496 6 419
Total assets 74 845 60 131 74 064
Capital and reserves
Shareholders" funds 70 096 49 222 67 101
Non-current liabilities
Long-term liabilities - 3 685 18
Current liabilities
Accounts payable 4 749 7 224 6 945
Total equity and liabilities 74 845 60 131 74 064
Tangible net asset value
per share (cents) 18,7 7,5 16,7
Net asset value per
share (cents) 102,2 73,1 99,6
SUMMARISED GROUP CASH FLOW STATEMENT
Six months Six months Twelve months
ended ended ended
30 September 30 September 31 March
2006 2005 2006
(Unaudited) (Unaudited) (Audited)
R000"s R000"s R000"s
Cash generated by operating
activities 3 258 6 591 14 258
Net income before tax,
adjusted for depreciation
and amortisation 9 791 8 688 19 036
Movement in working capital (4 752) (2 099) (428)
Tax paid (1 781) 2 (4 350)
Cash (utilised) by investing
activities (1 098) (45 577) (45 486)
Cash retained by financing
activities (5 565) 44 902 40 080
Net movements in cash
balances (3 405) 5 916 8 852
Cash (deficit)/surplus at
beginning of period 10 098 (12) (12)
Cash acquired - 1 258 1 258
Cash at end of period 6 693 7 162 10 098
STATEMENT OF CHANGES IN SHAREHOLDERS" EQUITY
Shares Distri-
Issued Share to be butable
capital premium issued reserve Total
R000"s R000"s R000"s R000"s R000"s
Balance at 1 April 2006 673 68 973 11 655 (14 200) 67 101
Dividends paid
to shareholders - - - (4 127) (4 127)
Issue of share capital 15 - - - 15
Profit attributable
to shareholders - - - 7 107 7 107
Balance 30 September 2006 688 68 973 11 655 (11 220) 70 096
BASIS OF PRESENTATION AND ACCOUNTING POLICIES
The financial results are prepared in accordance with IAS 34 (Interim
Financial Reporting), the requirements of the South African Companies Act, Act
61 of 1973, and the Listings Requirements of the JSE Limited in a manner
consistent with the annual results for the year ended 31 March 2006, which
were prepared in accordance with International Financial Reporting Standards
("IFRS").
COMMENTARY
Introduction
Amecor and its subsidiaries" principal businesses consist of the supply of the
following products and services:
- Digital long range radio transmitters;
- Computerised base stations, transmitters and intelligent data repeaters;
- High speed data radio networks;
- Guard monitoring units;
- Radio panic systems; and
- The ownership and operation of licensed data radio networks throughout
South Africa.
Financial and operational review
The financial results presented above have been reviewed but not audited, by
Moores Rowland, the Group"s auditors. Their limited review report is available
for inspection at the Group"s registered office during normal office hours.
The board of directors is pleased to report headline earnings for the six
months ended 30 September 2006 of 10,4 cents per share, which is 14,2% higher
than the corresponding period last year (six months ended 30 September 2005
was 9,1 cents per share).
The rollout of the new generation surface mount manufactured products which
are nearing full production is expected to create manufacturing efficiencies
and reduce unit costs in the second half of the year.
Product development
The appointments of a Chief RF (Radio Frequency) Technical Officer and a
Software Engineer have added substance to the research and development
initiatives and have accelerated the design and development of new surface
mount designed products. As reported earlier the financial benefits of these
initiatives have begun to be implemented and realised in throughput and should
reach full production in the second half of financial 2007.
Capital commitments
The Group has committed to product development costs in the sum of
approximately R750 000 which will be incurred evenly over the remainder of the
financial year. In addition, the Group is investing in the construction of a
clean room production facility for the SMD production line and improved R&D
laboratories which will cost approximately R500 000. These capital investments
will be funded out of internal cash flows.
Outlook
Traditionally demand for the Group"s products and services increases in the
second half of the financial year. The Group is expecting trading conditions
to increase due to:
- An increase in spending on security preceding the December holiday period;
and
- Replacement of existing radios with the new upgrades to comply with Sabre
(South African Band Replanning Exercise).
This will contribute to an increase in headline earnings for the second half
of the year.
Dividends
It is the Group"s policy to pay a single dividend annually and to retain a
three times dividend cover. Accordingly, no interim dividend has been
declared.
Resignation of director
The Company announces the resignation of Mr Rabie van der Merwe from the
boards of Amecor and the Group subsidiary companies. Mr van der Merwe was the
founder of the FSK Group and entered into a fixed term Employment Agreement
with FSK at the time of the listing of Amecor in 2005. The fixed term
Employment Agreement will expire on 31 December 2006, but Mr van der Merwe is
taking leave until that date in preparation for his departure to Australia.
The board thanks Rabie for his input and wishes him every success in his new
ventures.
On behalf of the board
P van Niekerk D Alexander
Chairman Chief Executive
Johannesburg
15 November 2006
Directors
P van Niekerk*, DH Alexander, KA Colley, HS Courtney, M Noge**
* non-executive chairman, ** independent non-executive
Transfer Secretaries
Link Market Services (Pty) Limited, 11 Diagonal Street, Johannesburg, 2001
(PO Box 4844, Johannesburg, 2000)
Registered office
2nd Floor, Moores Rowland House, 5 St Davids Place, Parktown, 2193
(PO Box 669, Johannesburg, 2000)
Sponsor
Sansara Financial Services (Pty) Limited, First Floor, Block C,
65 Central Street, Houghton, 2041
Visit us at www.amecor.com
INNOVATION THROUGH TECHNOLOGY
FSK ELECTRONICS
FSK Electronics SA (Pty) Ltd
SABRE RADIO NETWORKS
Sabre Radio Networks SA (Pty) Ltd
Date: 15/11/2006 05:35:32 PM Produced by the JSE SENS Department
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