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IVT
IVT
Invicta - Unaudited Group results for the six months ended 30 September 2006
and dividend declaration
INVICTA HOLDINGS LIMITED
(Registration number 1966/002182/06)
(Incorporated in the Republic of South Africa)
(Share code: IVT)
(ISIN: ZAE000029773)
Unaudited Group results for the six months ended 30 September 2006
* Revenue up 34%
* Earnings per share up 38%
* Dividend up 22%
Income statement
Unaudited Unaudited Audited
six months six months year ended
ended 30 ended 30 31 March
September September 2006
2006 2005 % R"000
R"000 R"000 change
Revenue 1 256 634 938 092 34 1 913 204
Operating income 105 488 90 161 17 197 843
Interest and preference 65 584 697 21 396
dividend received
Finance costs 87 521 (7 337) 40 552
Profit before taxation 83 551 83 521 178 687
Taxation 10 445 30 894 53 522
Profit for the period 73 106 52 627 40 125 165
Outside shareholders (316) 477 290
Attributable to ordinary 72 790 53 104 37 125 455
shareholders
Earnings per share (cents) 99 72 38 170
Diluted earnings per share 98 72 36 169
(cents)
Determination of headline
earnings
Attributable earnings 72 790 53 104 125 455
Adjustments - after taxation
and minority interests where
applicable
- Profit on disposal of (740) - -
interest in subsidiary
- Profit/(loss) on disposal (340) 517 (29)
of property, plant and
equipment
Headline earnings 71 710 53 621 125 426
Shares in issue
Weighted average (000s) 73 861 73 861 73 861
At the end of the period 73 861 73 861 73 861
(000s)
Number of shares used for 74 441 74 213 74 246
diluted earnings per shares
(000s)
Headline earnings per share 97 73 33 170
(cents)
Diluted headline earnings per 96 73 32 169
share (cents)
Dividends per share* (cents) 68
Interim 33 27 22 27
Final 41
* In accordance with IAS10, the final dividend of 33 cents per share
proposed by the directors has not been reflected in the annual financial
statements.
Balance sheet
Unaudited six Unaudited six Audited
months ended months ended year ended
30 September 30 September 31 March
2006 2005 2006
R"000 R"000 R"000
ASSETS
Non-current assets 1 553 260 337 642 1 547 755
Property, plant and equipment 121 163 113 264 123 220
Investments 1 195 303 202 1 195 303
Goodwill and other intangible 204 282 197 301 203 701
assets
Deferred taxation 26 824 21 187 19 843
Loan receivable 5 688 5 688 5 688
Current assets 1 032 473 800 205 949 924
Inventories 672 300 566 937 633 901
Accounts receivable 360 173 233 268 289 655
Bank balances and cash - - 26 368
2 585 733 1 137 847 2 497 679
EQUITY AND LIABILITIES
Capital and reserves 767 714 663 745 718 531
Ordinary shareholders" funds 762 683 662 402 716 296
Outside shareholders" interest 5 031 1 343 2 235
Non-current liabilities 1 212 436 15 770 1 203 060
Long-term borrowings 1 212 436 15 770 1 203 060
Current liabilities 605 583 458 332 576 088
Bank overdrafts and bankers" 19 614 108 645 105 642
acceptances
Short-term borrowings 18 916 5 212 19 984
Accounts payable and provisions 567 053 344 475 450 462
2 585 733 1 137 847 2 497 679
Cash flow statement
Cash flows from operating
activities
Cash generated from operations 199 558 (8 736) 98 372
Finance costs (87 521) (6 640) (40 552)
Dividends paid (30 235) (35 531) (46 494)
Taxation paid (13 793) (38 511) (58 704)
Interest and dividend received 65 584 - 21 396
Net cash (outflow) inflow from 133 593 (89 418) (25 982)
operating activities
Cash flows from investing
activities
Net cash effects of asset (3 635) (13 464) (31 129)
acquisitions
Net cash effects of other (60 559) (306 320) (1 523 416)
investing activities
Cash flows from financing
activities
Net cash effects of shares - 271 505 271 505
issued
Net cash effects of borrowings (9 739) 2 949 1 203 645
raised
Net increase/(decrease) in 59 660 (134 748) (105 377)
cash and cash equivalents
Cash and cash equivalents at (79 270) 26 103 26 103
the beginning of the period
Cash and cash equivalents at (19 614) (108 645) (79 274)
the end of the period
Statement of changes in equity
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 Sept 30 Sept 31 March
2006 2005 2006
R"000 R"000 R"000
SHARE CAPITAL
Balance at beginning of period 3 693 2 894 2 894
Shares issued - 799 799
Balance at end of period 3 693 3 693 3 693
SHARE PREMIUM
Balance at beginning of period 277 058 6 352 6 352
Shares issued - 270 706 270 706
Balance at end of period 277 058 277 058 277 058
ACCUMULATED PROFITS
Balance at beginning of period 426 673 354 902 347 787
Earnings attributable to 72 790 53 104 125 455
ordinary shareholders
Dividends paid (30 282) (26 626) (46 569)
Balance at end of period 469 181 381 380 426 673
OTHER RESERVES
Balance at beginning of period 8 872 (152) 8 042
Arising from the issue of 3 634 - -
share appreciation rights
Arising on translation of 245 423 830
foreign operations
Balance at end of period 12 751 271 8 872
Ordinary shareholders" funds 762 683 662 402 716 296
OUTSIDE SHAREHOLDERS" INTEREST
Balance at beginning of period 2 235 163 739 163 739
Earnings attributable to 316 (477) (290)
outside shareholders
Net investment in subsidiaries 2 480 (161 919) (161 214)
Balance at the end of period 5 031 1 343 2 235
Other information
Debt: Equity ratio (%) 7 20 18
(excluding the long-term BEE
funding debt secured by
investments)
Depreciation and amortisation 11 088 10 691 22 566
(R"000)
Net asset value per share 1 032,6 896,8 969,8
(cents)
Tangible net asset value per 756,0 647,9 694,0
share (cents)
Capital commitments (R"000) 2 600 2 646 -
Contingent liabilities (R"000) 3 991 4 362 3 954
Notes to the financial information
Basis of preparation
The consolidated financial statements have been prepared in accordance with
IAS34 Interim Financial Reporting and International Financial Reporting
Standards. The principal accounting policies as set out in the Group"s 2006
annual report have been consistently applied throughout the six month period
under review.
Segment information on these businesses is presented below:
Engineering Capital Non Segment Total
Consumables Equipment Allocations
and Spares
Unaudited six months
ended 30 September
2006
Revenue 638 057 618 577 - 1 256 634
Operating profit 79 277 25 772 439 105 488
before finance
costs, interest and
preference dividend
received
Balance sheet
Assets 705 496 685 137 1 195 100 2 585 733
Liabilities 251 161 371 758 1 195 100 1 818 019
Unaudited six months
ended 30 September
2005
Revenue 580 847 357 245 - 938 092
Operating profit 70 719 20 071 (629) 90 161
before finance
costs, interest and
preference dividend
received
Balance sheet
Assets 659 901 477 946 - 1 137 847
Liabilities 240 975 233 127 - 474 102
The Group has not reported segment information by geographical location
as the operations occur substantially within Southern Africa.
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")) and
New Holland SA (Pty) Limited ("New Holland")
* Construction and earthmoving equipment, turf grooming equipment and golf
utility cars (CSE Division ("CSE"))
* Automotive and motorcycle parts (Autobax Division ("Autobax"))
Financial overview
The Group experienced improved trading conditions in all its sectors. This,
coupled with the corporate activities undertaken by the Group during the
last financial year, has resulted in strong growth in the Group. Group
turnover grew by a healthy R319 million (34%), R147 million thereof being
attributable to New Holland, (acquired 1 April 2006), and operating income
grew by 17% to R105 million. Earnings attributable to ordinary shareholders
improved by 37% to R73 million, which translates into earnings per share of
99 cps, up 38% on last year.
The engineering consumables sector (Bearing Man) is showing positive signs
after a few years of minimal growth. In particular, in the latter part of
the period under review, activity in the sector picked up, with the weaker
Rand improving conditions for exporters. Turnover in Bearing Man was up 10%
to R638 million, and operating profit improved by 12% to R79 million.
The agricultural machinery sector has improved considerably since last year,
with maize plantings this year expected to be at least 50% up on last year.
This has resulted in Northmec"s turnover improving by 68% compared to the
first half of last year. The acquisition of New Holland has been bedded down
successfully, but it is not expected to contribute to profits until the next
financial year. During the period under review, it incurred an operating
loss of less than R6 million (after once-off restructuring costs). We expect
New Holland to return to its leading position in the agricultural machinery
industry soon.
The construction machinery sector is still experiencing strong growth
although there are signs that it is starting to cool down. The supply chain
problems previously experienced by this division have largely been resolved,
and management expects to be able to grow sales as a result. Competition in
the industry is, however, severe, which will put margins under pressure.
The Group"s focus on cash management has resulted in greatly improved
cashflow. Cash generated by operations for the six month period was R199
million, more than double that for the full 2006 financial year. This has
led to the Debt:Equity ratio improving to a healthy 7% from 20% in September
2005.
The interim dividend of 33 cps returns the Group to its policy of 3 times
cover at the interim stage, although it deviated from this last year when
the interim dividend cover was 2.7 times. The Group"s policy for full year
dividends is cover of not less than 2.5 times.
Prospects
The all-round improved conditions in the sectors in which the Group is
active indicate that the Group"s strong performance should continue in the
second half of the financial year.
Negotiations for the conclusion of a BEE transaction are advancing well and,
pending the release by government of the final Codes of Good Practice for
Broad Based BEE, the Group hopes to conclude negotiations before the end of
the financial year.
Management will continue to focus on improving operational efficiencies and
to seek suitable acquisitions.
Dr C H Wiese A Goldstone
Chairman Managing Director
Cape Town
17 November 2006
Dividend
Notice is hereby given that an interim dividend of 33 cents per share has
been declared. The last day to trade ("CUM" the dividend) in order to
participate in the dividend will be Friday, 1 December 2006.
The shares of Invicta Holdings Limited will commence trading "EX" the
dividend from Monday, 4 December 2006 and the record date will be Friday, 8
December 2006. The dividend will be paid to members on Monday, 11 December
2006.
Share certificates may not be dematerialised or rematerialised between
Monday, 4 December 2006 and Friday, 8 December 2006, both days inclusive.
In accordance with IAS10, the interim dividend of 33 cents per share
declared by the directors and as shown in the share information, has not
been reflected in the financial statements.
By order of the board
C Barnard
Secretary
Johannesburg
17 November 2006
REGISTERED OFFICE
Invicta 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*,
AM Sinclair#
* Non-executive # Alternate
SPONSOR
Deloitte & Touche Sponsor Services (Pty) Ltd
www.invictaholdings.co.za
Date: 17/11/2006 05:05:32 PM Produced by the JSE SENS Department
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