| Wed 29 Nov 2006, 17:00 | | Remgro Limited - Unaudited Interim report for the |
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REM
REM
Remgro Limited - Unaudited Interim report for the six months ended
30 September 2006
Remgro Limited
Registration number 1968/006415/06
ISIN: ZAE000026480
Share Code REM
Interim report for the six months ended 30 September 2006 (unaudited)
- Salient features
- Headline earnings per share: +38.6%
- Headline earnings per share - excluding non-recurring portion of BEE costs
in the comparative period: +22.2%
- Intrinsic value per share during the six months: +17.5%
- Interim dividend per share: +15.0%
Abridged consolidated balance sheet
30 September 31 March
2006 2005 2006
R"m R"m R"m
Assets
Non-current assets
Property, plant and equipment 2 486 4 203 2 318
Biological agricultural assets 95 94 95
Investment properties 32 31 31
Goodwill and trade marks 403 386 352
Investments
- Associated companies 31 761 25 661 26 098
- Other 4 551 2 622 4 136
Loans 2 151 6
Deferred taxation 88 142 90
39 418 33 290 33 126
Current assets 6 610 8 043 8 210
Cash and cash equivalents 4 108 5 231 6 357
Other current assets 2 502 2 812 1 853
Total assets 46 028 41 333 41 336
Equity and liabilities
Issued capital 8 8 8
Reserves 43 344 38 549 37 898
Treasury shares (1 415) (3 112) (412)
Shareholders" equity 41 937 35 445 37 494
Minority interest 633 2 161 596
Total equity 42 570 37 606 38 090
Non-current liabilities 1 317 940 1 144
Retirement benefits 211 240 185
Long-term loans 234 145 169
Deferred taxation 872 555 790
Current liabilities 2 141 2 787 2 102
Short-term loans 413 371 101
Other current liabilities 1 728 2 416 2 001
Total equity and liabilities 46 028 41 333 41 336
Net asset value per share (Rand)
(attributable to equity holders)
- At book value R88.69 R73.55 R78.14
- At intrinsic value R185.17 R136.36 R157.59
Abridged consolidated
income statement
Six months ended Year
ended
30 September 31 March
2006 2005 2006
R"m R"m R"m
Sales 3 755 5 382 9 802
Inventory expenses (2 342) (2 537) (4 919)
Personnel costs (678) (1 503) (2 603)
Depreciation (110) (148) (293)
Other net operating expenses (186) (544) (771)
Dividends received 79 192 410
Interest received 206 149 341
Finance costs (15) (17) (29)
Net impairment of investments, - 4 3
assets and goodwill
Profit on redemption and sale of 6 3 043 3 162
investments
Consolidated profit before tax 715 4 021 5 103
Taxation (211) (577) (857)
Consolidated profit after tax 504 3 444 4 246
Share of after-tax profit of 2 698 2 230 4 354
associated companies
Net profit 3 202 5 674 8 600
Attributable to:
Equity holders 3 136 5 442 8 202
Minority interests 66 232 398
3 202 5 674 8 600
Share of after-tax profit of
associated companies
Profit before taking into account 2 789 2 193 4 428
impairments, capital and non-
recurring items
Net impairment of investments, 7 (118) (157)
assets and goodwill
Profit on the sale of investments 26 566 681
Restructuring costs (142) (164) (280)
Non-recurring portion of BEE costs - (319) (380)
Other capital and non-recurring 18 72 62
items
2 698 2 230 4 354
Reconciliation of headline earnings
Six months ended Year
ended
30 September 31 March
2006 2005 2006
R"m R"m R"m
Net profit for the period 3 136 5 442 8 202
attributable to equity holders
Plus/(minus) - portion attributable
to equity holders:
- Net impairment of investments, (7) 114 157
assets and goodwill
- Profit on redemption and sale of (32) (3 273) (3 475)
investments
- Restructuring costs 142 164 279
- Other capital and non-recurring (6) (75) (67)
items
- Net loss/(surplus), after
taxation, on disposal of property, (1) - (12)
plant and equipment
Headline earnings 3 232 2 372 5 084
Non-recurring portion of BEE costs - 319 380
Headline earnings - excluding non- 3 232 2 691 5 464
recurring portion of BEE costs
Earnings and dividends
Six months ended Year
ended
30 September 31 March
2006 2005 2006
Cents Cents Cents
Headline earnings per share
- Basic 678.1 489.2 1 052.3
- Diluted 659.8 479.4 1 027.7
Headline earnings per share -
excluding non-recurring portion of
BEE costs
- Basic 678.1 555.0 1 130.9
- Diluted 659.8 544.9 1 106.1
Earnings per share
- Basic 657.9 1 122.4 1 697.6
- Diluted 639.6 1 110.6 1 671.3
Dividends per share
Ordinary 153.00 133.00 361.00
- Interim 153.00 133.00 133.00
- Final 228.00
Special 400.00
Abridged consolidated statement of changes in equity
Six months ended Year
ended
30 September 31 March
2006 2005 2006
R"m R"m R"m
Balance at 1 April 38 090 36 503 36 503
Total income accounted for 8 786 5 576 9 108
Exchange rate adjustments 5 232 (682) (1 395)
Net fair value adjustments for the 352 584 1 903
period
Net income directly accounted for in 5 584 (98) 508
equity
Net profit for the period 3 202 5 674 8 600
Dividends paid (3 069) (3 975) (4 676)
Change in reserves of subsidiary
companies, associated companies and (246) 50 (527)
joint ventures
Purchase of shares by wholly owned (942) (563) (977)
subsidiary (treasury shares)
Medi-Clinic* - - (1 418)
Net shares sold/(purchased) by The (60) 2 92
Remgro Share Trust
Other 11 13 (15)
Total equity 42 570 37 606 38 090
*Medi-Clinic was consolidated for nine months to 31 December 2005
only and has been accounted for as an associated company from 1
January 2006.
Abridged consolidated cash flow statement
Six months ended Year
ended
30 September 31 March
2006 2005 2006
R"m R"m R"m
Cash generated from operations 806 700 1 786
Taxation paid (524) (267) (369)
Dividends received 1 361 1 536 3 888
Cash available from operating 1 643 1 969 5 305
activities
Dividends paid (3 069) (3 975) (4 676)
Net cash flow from operating (1 426) (2 006) 629
activities
Investing activities (1 213) 4 724 3 364
Financing activities 184 (31) 99
Net increase/(decrease) in cash and (2 455) 2 687 4 092
cash equivalents
Cash and cash equivalents at the 6 339 2 247 2 247
beginning of the period
Cash and cash equivalents at the end 3 884 4 934 6 339
of the period
Cash and cash equivalents - per 4 108 5 231 6 357
balance sheet
Bank overdrafts (224) (297) (18)
Additional information
30 September 31 March
2006 2005 2006
Number of shares in issue
- Ordinary shares of 1 448 802 207 486 493 650 448 802 207
cent each
Issued at 1 April 448 802 207 486 493 650 486 493 650
Cancelled during the - - (37 691
period 443)
- Unlisted B ordinary 35 506 352 35 506 352 35 506 352
shares of 10 cents each
Total number of shares in 484 308 559 522 000 002 484 308 559
issue
Number of shares held in (11 481 584) (40 056 880) (4 473 004)
treasury
- Ordinary shares (8 002 196) (35 709 404) (1 379 635)
repurchased and held in
treasury
- Ordinary shares held by
The Remgro Share Trust (3 479 388) (4 347 476) (3 093 369)
and accounted for as
treasury shares
472 826 975 481 943 122 479 835 555
Weighted number of shares 476 643 317 484 841 736 483 154 691
In determining earnings per share and headline earnings per share
the weighted number of shares was taken into account.
30 September 31 March
2006 2005 2006
R"m R"m R"m
Listed investments
Associated
- Book value 11 184 9 645 9 989
- Market value 21 567 17 653 23 248
Other
- Book value 4 427 2 529 4 013
- Market value 4 427 2 529 4 013
Unlisted investments
Associated
- Book value 20 577 16 016 16 109
- Directors" valuation 55 867 36 884 41 564
Other
- Book value 124 93 123
- Directors" valuation 124 93 123
Additions to and 246 346 689
replacement of property,
plant and equipment
Capital commitments 399 750 275
(Including amounts
authorised, but not yet
contracted for)
Dividends received from 1 283 1 215 3 349
associated companies set
off against investments
Comments
1. Accounting policies
The interim report is prepared in accordance with the recognition and
measurement principles of International Financial Reporting Standards (IFRS),
IAS 34: Interim Financial Reporting, the requirements of the South African
Companies Act, Act 61 of 1973, as amended, and the Listings Requirements of the
JSE Limited.
These financial statements incorporate accounting policies that are consistent
with those of the previous financial periods, with the exception of the
implementation of the following new accounting standards, interpretations and
amendments to IFRS:
IFRIC 4: Determining whether an Arrangement Contains a Lease
IFRS 4 (Amendment): Financial Guarantee Contracts
Amendments to IAS 19: Employee Benefits, IAS 21: The Effects of Changes in
Foreign Exchange Rates, and IAS 39: Financial Instruments - Recognition and
Measurement.
The adoption of these new accounting standards, interpretations and amendments
to IFRS had no impact on the results of either the current or prior periods.
2. Prior year adjustments
Restatement of comparative figures in respect of associated companies
As previously reported, FirstRand Limited (FirstRand) and RMB Holdings Limited
(RMBH) restated their IFRS results to comply with the revised accounting
circular on headline earnings. The revision of the circular had the effect that
profits and losses on the realisation of equity accounted private equity or
venture capital investments are excluded from headline earnings.
Accordingly, Remgro reduced its headline earnings for the comparative interim
period ended 30 September 2005 by R42 million, or 8.7 cents per share, as set
out in the table below.
Six months ended
30 September 2005
Non- Non-
recurring recurring
portion of portion
BEE of BEE
costs costs
included excluded
R"m R"m
Headline earnings as reported during 2 414 2 733
April 2006
Restatement of comparative figures in (42) (42)
respect of associated companies
Restated headline earnings 2 372 2 691
Headline earnings per share as reported 497.9 563.7
during April 2006 (cents)
Restated headline earnings per share 489.2 555.0
(cents)
Note: "Headline earnings as reported during April 2006" was
disclosed in the updated Transition Report and Revised Unaudited
Financial Information issued on 19 April 2006.
Comparison with prior periods
During the previous financial year various investee companies in the Group
concluded black economic empowerment (BEE) transactions. The specific
accounting treatment of these transactions resulted in non-recurring charges of
R318.6 million and R379.7 million respectively against headline earnings for
the six months ended 30 September 2005 and the year ended 31 March 2006.
Due to the material effect that the accounting treatment of these transactions
had on Remgro"s results, headline earnings per share is also presented
excluding the non-recurring portion of BEE costs.
Since 1 January 2006, Medi-Clinic Corporation Limited (Medi-Clinic) is
accounted for as an associated company, whilst previously it was consolidated.
Certain balance sheet and income statement items are therefore not directly
comparable with those of prior periods.
3. Results
Headline earnings
Headline earnings increased by 36.3% from R2 372 million to R3 232 million.
Headline earnings per share, however, increased by 38.6% from 489.2 cents to
678.1 cents due to the favourable impact of the share repurchase programme.
Headline earnings and headline earnings per share, excluding the non-recurring
portion of BEE costs, increased by 20.1% and 22.2% respectively.
Contribution to headline earnings
Six months ended
30 September
Non-recurring Non-recurring
portion of BEE portion of BEE
costs included costs excluded
2006 % 2005 % 2005
R"m change R"m change R"m
Tobacco interests 1 483 17.3 1 264 17.3 1 264
Financial services 772 55.0 498 (1.9) 787
Industrial interests 729 44.9 503 36.8 533
Mining interests 76 (1.3) 77 (1.3) 77
Corporate finance 172 473.3 30 473.3 30
and other
interests
3 232 36.3 2 372 20.1 2 691
The contribution of the tobacco interests, which represented
45.9% (2005: 47.0%) of headline earnings (excluding the non-
recurring portion of BEE costs), increased by 17.3%.
Currency movements had a greater impact on the Group"s earnings than a year
ago. Due to the weaker rand, the currency impact on translation of R&R Holdings
SA, Luxembourg"s (R&R) contribution to headline earnings increased from an
unfavourable R4 million in 2005 to a favourable R104 million as set out in the
table below.
Six months ended Year ended
30 September
31 March
2006 2005 2006
Average exchange rate (GBP/R) 12.5995 11.7175 11.4050
Closing exchange rate (GBP/R) 14.5143 11.1970 10.6437
R&R contribution (GBP"m) 118 108 208
R&R contribution (R"m) 1 483 1 264 2 369
Favourable/(unfavourable) 104 (4) (26)
currency impact (R"m)
The combined contribution of FirstRand and RMBH to Remgro"s headline earnings
amounted to R772 million (2005: R375 million). This increase can be attributed
mainly to the non-recurring BEE costs resulting from FirstRand"s BEE
transaction (Remgro"s portion amounting to R289 million) accounted for during
the comparative period. In 2005 dividends from Absa Group Limited amounting to
R123 million were also accounted for in headline earnings.
The contribution of the industrial interests increased by 44.9%, mainly due to
good performances by Unilever Bestfoods Robertsons LLC and Total South Africa.
As Remgro effectively acquired its interest in Kagiso Trust Investments
(Proprietary) Limited (KTI) during December 2005, no income from KTI was
accounted for during the six months ended 30 September 2005. KTI"s contribution
to Remgro"s headline earnings for the period under review was R37 million.
Rainbow and Distell reported solid earnings growth and their contribution to
headline earnings was R107 million and R74 million respectively (2005: R95
million and R57 million). Nampak"s contribution to headline earnings increased
from R13 million in 2005 to R55 million for the period under review. This
increase can be attributed mainly to the non-recurring BEE costs resulting from
Nampak"s BEE transaction (Remgro"s portion amounting to R30 million) accounted
for during the comparative period. Medi-Clinic"s contribution to Remgro"s
headline earnings amounted to R131 million (2005: R143 million). This decrease
can be attributed mainly to that company"s BEE transaction concluded during
December 2005, which resulted in the dilution of Remgro"s shareholding in Medi-
Clinic.
The total contribution of the mining interests decreased by 1.3% to R76
million. Trans Hex reported lower results and its contribution to headline
earnings was R3 million (2005: R16 million). Dividends received from Implats
during the period under review amounted to R73 million (2005: R60 million).
The central treasury division"s contribution to Remgro"s headline earnings
increased from R53 million to R196 million for the period under review. This
increase can be attributed mainly to higher interest rates as well as higher
average cash balances compared to 2005. Included in the central treasury
division"s contribution to headline earnings referred to above, are foreign
currency profits amounting to R74 million (2005: R10 million loss) relating to
outstanding intergroup balances. These intergroup balances have been settled
subsequent to 30 September 2006.
Earnings
Total earnings decreased by 42.4% to R3 136 million (2005: R5 442 million),
mainly as a result of capital gains arising on the realisation of investments
accounted for during the comparative period.
4. Intrinsic value
Remgro"s intrinsic value per share increased by 17.5% from R157.59 at 31 March
2006 to R185.17 at 30 September 2006. Refer to Annexure A for full details.
5. British American Tobacco Plc (BAT)
Remgro"s interest in BAT is represented by its one-third holding of the
ordinary shares and all of the "2005" participation securities, issued by R&R.
This gives Remgro an effective interest of 10.4% in BAT at 30 September 2006.
The other two-thirds of the ordinary share capital of R&R is held by Compagnie
Financiere Richemont SA.
There was no change in the number of BAT shares held by R&R. However, due to
the positive effect of BAT"s continuing share buy-back programme, R&R"s
interest in BAT increased to 29.2% at 30 September 2006 (2005: 28.7%).
Remgro"s share of R&R"s headline earnings consists of 35.46% of R&R"s share of
the attributable profit of BAT and its share of R&R"s non-BAT income (including
income attributable to its investment in the "2006" participation securities
issued by R&R during March 2006).
Six months
to
September
2006 2005
GBP"m GBP"m
Attributable profit of BAT before capital and 1 100 1 011
non-recurring items
R&R"s share of the attributable profit of BAT:
- 29.06% to 29.21% (2005: 28.56% to 28.72%) 320 290
R&R"s non-BAT income 6 15
R&R"s headline earnings for the six months to 326 305
30 September
Remgro"s share thereof:
- 35.46% of R&R"s share of the attributable 114 103
profit of BAT
- portion of R&R"s non-BAT income 4 5
118 108
R"m R"m
Translated at an average GBP/R rate of 12.5995 1 483 1 264
(2005: 11.7175)
BAT has a 31 December year-end but reports to its shareholders on a quarterly
basis. The following commentary is condensed from BAT"s financial report for
the nine months ended 30 September 2006.
BAT"s reported profit from operations was 2% higher at GBP1 944 million.
However, profits from operations would have been 8% higher (or 6% at comparable
rates of exchange) if exceptional items and the impact arising from the change
in terms of trade following the sale of Etinera, an Italian distribution
business, were excluded, with all regions except Europe contributing to this
good growth. This like-for-like information provides a better understanding of
the subsidiaries" trading results.
Tobacco product volumes from BAT"s subsidiaries increased by 1% to 509 billion
on both a reported and a like-for-like basis. BAT"s reported revenue for the
nine months ended 30 September rose by 5% to GBP7 251 million. On a like-for-
like basis, revenue increased by 6% (or 4% at comparable rates of exchange).
This volume and revenue growth was achieved across a broad spread of markets.
The four global drive brands achieved impressive overall volume growth of 16%
on a like-for-like basis. Kent volumes grew by 16%, Dunhill rose by 5%, but
Lucky Strike volumes declined by 4%, mainly as a result of lower industry
volumes in Germany and Japan, but there were good share growth performances in
a number of key markets for Lucky Strike. Pall Mall continued its exceptional
growth, with an increase of 37%.
In Europe, profit at GBP594 million was GBP22 million lower than last year as a
result of very competitive trading conditions in a number of markets and the
inclusion in the comparative period of a one-off benefit, resulting from the
change in terms of trading following the sale of Etinera. Excluding this
benefit, profit decreased by GBP8 million, with strong growth from Russia,
Italy and France, more than offset by declines in Germany, Spain, Poland and
Ukraine. Regional volumes on a like-for-like basis were 1% higher at 184
billion, with growth in Russia, Spain and Hungary partly offset by declines in
Italy, Germany and Ukraine.
In Asia-Pacific, regional profit rose by GBP48 million to GBP466 million,
mainly attributable to strong performances in Australia, Malaysia, South Korea
and New Zealand. Volumes at 106 billion were 3% higher as strong increases in
Pakistan, Bangladesh, South Korea and Vietnam were partially offset by declines
in Malaysia and Indonesia.
Profit in Latin America increased by GBP69 million to GBP447 million due to
good performances across the region coupled with strong local currencies.
Volumes also grew in many of the markets contributing to an overall increase of
3% to 113 billion.
Profit in the Africa and Middle East region grew by GBP54 million to GBP362
million, mainly driven by South Africa, Nigeria and Iran, as well as reduced
losses in Turkey. Volumes declined by 2% to 74 billion, as a result of Turkey,
the Levant and supply chain problems in West Africa and the Caucasus, partly
offset by increases in Iran, Egypt and the Gulf.
The profit from the America-Pacific region increased by GBP5 million to GBP332
million, with a strong performance in Japan offsetting the lower profit
contribution from Canada. Volumes were down 1% to 33 billion as higher volumes
from Japan were more than offset by the decline in Canada.
BAT"s share of the post-tax results of its own associates increased by GBP71
million to GBP348 million. Excluding exceptional items, BAT"s share of the post-
tax results of its associates increased by GBP58 million to GBP331 million. The
contribution from Reynolds American, excluding the benefit from the favourable
resolution of tax matters in 2006 and restructuring costs in 2005, was GBP42
million higher mainly due to improved pricing, cost reductions, the timing of
promotional spending and the impact of the stronger US dollar. Reynolds
American acquired Conwood, the second largest manufacturer of smokeless tobacco
products in the U.S., for US$3.5 billion on 31 May 2006. Reynolds American
reported that on a pro forma basis, as if it had been owned since the beginning
of 2005, Conwood delivered strong gains in volume, share and operating income
for the nine months to 30 September 2006.
In the nine months to September 2006 BAT"s adjusted earnings per share
(excluding restructuring costs and other distortions) rose by 13% compared to
the prior year as the higher net finance costs and minority interests were more
than offset by the improvement in profit from operations, the share of
associates" post-tax results, a lower tax rate and the benefit from the share
buy-back programme.
6. Other investments
The most important changes to Remgro"s other investments during the period
under review were as follows:
Repurchase of Remgro shares
During the period under review, a wholly owned subsidiary company of Remgro
acquired a further 6 622 561 ordinary Remgro shares at an average price of
R142.23 for a total amount of R941.9 million. Together with those shares
acquired in the previous financial year, 8 002 196 ordinary Remgro shares
(1.8%) are held as treasury shares by the wholly owned subsidiary.
During the period under review, The Remgro Share Trust purchased 563 000
ordinary Remgro shares at an average price of R130.40 for a total amount of
R73.4 million, while 176 981 shares were delivered to participants against
payment of the subscription price.
Gencor Limited (Gencor)
On 14 March 2006, Gencor announced that it has been placed under voluntary
liquidation and it had declared a liquidation dividend of R0.20 per share.
During May 2006, Remgro received R7.6 million.
Sage Group Limited (Sage)
As previously reported, Remgro sold its 17.9% interest in Sage to Momentum
Group Limited during the previous financial year for R114 million, or R1.75 per
Sage share, comprising an initial payment of R1.42 per share and a potential
subsequent payment of up to R0.33 per share. The initial payment received
amounted to R92 million and an after-tax capital gain of R10 million was
realised on this transaction. On 31 March 2006 the potential subsequent payment
was still subject to certain tax queries being resolved.
During the period under review Remgro received a further R6 million, or R0.0913
per Sage share, as partial payment of the potential subsequent payment.
Subsequent to 30 September 2006:
KTI and the Kagiso Infrastructure Empowerment Fund (KIEF)
Remgro has entered into agreements with KTI and KIEF, in terms of which it has
committed funds amounting to R350 million to KIEF. The fund has a target size
of R650 million and aims to invest in infrastructure projects, including roads,
airports, power and telecommunication installations, railway systems, ports,
water and social infrastructure.
KIEF has drawn no funds to date.
7. Information regarding unlisted investments
Tsb Sugar Limited (TSB)
TSB"s contribution to Remgro"s headline earnings amounted to R54 million (2005:
R23 million).
TSB"s results for the period have been positively affected by the inclusion of
the income from its 27.0% investment in Royal Swaziland Sugar Corporation,
since its acquisition on 1 October 2005.
It is expected that TSB"s sugar production for the season will be 440 600 tons
(2005: 456 800 tons). The decrease in production is attributed to the after
effects of the drought that prevailed during the previous financial year. The
strengthening of the export sugar price and the weaker exchange rate as well as
the citrus division"s return to profitability did, however, lead to increased
income during the period under review.
Wispeco Holdings Limited (Wispeco)
Wispeco"s results for the six months ended 30 September 2006 were satisfactory.
Sales volumes for the period increased by 15% compared to the same period last
year although turnover was 45% higher, mainly due to price increases and the
acquisition of two new stockist outlets. Headline earnings increased from R29
million to R33 million. Capacity expansions in the extrusion and finishing
plants are in progress. A second extrusion press in Parow will be commissioned
early in 2007.
Total South Africa (Proprietary) Limited (Total SA)
Total SA"s contribution to Remgro"s headline earnings for the period under
review was R116 million (2005: R83 million). Total SA"s higher earnings was
mainly due to a higher market share in the retail business and increased
refining margins.
Total SA continued to grow its market share in the retail business, while the
regulated marketing margin remained constant. The Natref refinery performed
well although production capacity decreased by 14% following the introduction
of new fuel specifications on 1 January 2006. Refining margins remained strong.
Air Products South Africa (Proprietary) Limited (Air Products)
Air Products" turnover for its financial year ended 30 September 2006 increased
by 5% from the previous year due to demand growth in the manufacturing sector,
resulting in increased sales mainly in the packaged gas division, as well as
from the commencement of the Implats oxygen-contract.
Net income before tax for the six months ended 30 September 2006 increased by
20.8% due to improved plant and operational efficiencies and improved margins
in the packaged gas division. A significant STC-charge on dividends paid in the
2006 year resulted in Air Products" contribution to headline earnings
increasing by only 3.1%, from R32 million for the six months ended 30 September
2005 to R33 million.
Unilever Bestfoods Robertsons LLC (UBR)
UBR"s contribution to Remgro"s headline earnings for the period (which includes
interest on the shareholders" loan of R8 million (2005: R11 million)) amounted
to R92 million (2005: R53 million). The increased contribution is mainly due to
increased trading profits partially being offset by increased taxation charges.
Interest on the shareholders" loan decreased due to the repayment of loan
capital since 30 September 2005.
The South African retail operation delivered an underlying turnover growth of
12.9%, mainly driven by volume. The key product categories continued to gain
market share due to innovation, advertising and promotional activities. The
Food Solutions business delivered an 8.0% underlying sales growth.
The Israeli business reported an underlying turnover growth of 1.3%, resulting
mainly from a 3.1% growth in the Food Solutions business. Despite the recent
border conflict with Lebanon, the increased turnover, together with lower
indirect costs resulting from prior restructuring, enabled the Israeli business
to deliver improved results.
KTI
KTI"s contribution to Remgro"s headline earnings amounted to R37 million.
KTI"s headline earnings for its year ended 30 June 2006 increased by 23.2% to
R473 million (2005: R384 million) mainly due to fair value gains in its
investment in Metropolitan Holdings Limited and increased contributions by its
investments in associated companies and joint ventures.
Dividend declaration
Declaration of Dividend No 13
Notice is hereby given that an interim dividend of 153 cents (2005: 133 cents)
per share has been declared in respect of both the ordinary shares of one cent
each and the unlisted B ordinary shares of ten cents each, for the half year to
30 September 2006.
Dates of importance:
Last day to trade in order to participate Friday, 5 January 2007
in the interim dividend
Trading on or after this date will be ex Monday, 8 January 2007
the interim dividend
Record date Friday, 12 January 2007
Payment date Monday, 15 January 2007
Shareholders may not dematerialise or rematerialise their holdings of ordinary
shares between Monday, 8 January 2007, and Friday, 12 January 2007, both days
inclusive.
Signed on behalf of the Board of Directors.
Johann Rupert
Chairman
Thys Visser
Chief Executive Officer
Stellenbosch
29 November 2006
Directorate
Non-executive directors
Johann Rupert (Chairman), E de la H Hertzog (Deputy Chairman),
P E Beyers, G D de Jager*, J W Dreyer, P K Harris*, J Malherbe#,
D Prins*, F Robertson*
(*Independent, #Appointed on 11 October 2006)
Executive directors
M H Visser (Chief Executive Officer), W E Buhrmann, D M Falck,
J A Preller (Mrs), T van Wyk
Retirement
Mr J F Mouton retired as director on 11 October 2006.
Corporate information
Secretary
M Lubbe (Mrs)
Listing
JSE Limited
Sector: Financials - General Financial
American depositary receipt (ADR) program
Cusip number 75956M107
ADR to ordinary share 1 : 1
Depositary
The Bank of New York, 101 Barclay Street, New York NY 10286
Business address and registered office
Carpe Diem Office Park, Quantum Street, Techno Park, Stellenbosch 7600
(PO Box 456, Stellenbosch 7599)
Transfer Secretaries
Computershare Investor Services 2004 (Pty) Limited,
70 Marshall Street, Johannesburg 2001
(PO Box 61051, Marshalltown 2107)
Auditors
PricewaterhouseCoopers Inc.,
Cape Town
Sponsor
Rand Merchant Bank (A division of FirstRand Bank Limited)
Website
www.remgro.com
Annexure A
Intrinsic net asset value
Shares Stock 30 31
exchang Septembe March
e r
held closing Exch- 2006 2006
ange
Note million price GBP"m rate R"m R"m
s
Tobacco
interests
R&R Holdings 3 274.5 14.514 47 527 34
3 065
- BAT ordinary 1 214.3 1 444 3 094.5
shares
- Cash and 180.2
dividends
accrued
- Other net (0.2)
assets
Financial
services
FirstRand 481.1 1 770 8 516 9 623
RMB Holdings 274.1 2 700 7 401 7 990
Sagecor - - - 1
Industrial
interests
Medi-Clinic 171.0 2 040 3 488 3 531
Corporation
Unilever 2 235 1 984
Bestfoods
Robertsons
Distell Group 58.7 3 975 2 332 2 112
Nampak 78.1 1 820 1 421 1 308
Total South 2 248 1 889
Africa
Rainbow 172.8 1 061 1 834 1 642
Chicken
Tsb Sugar 1 805 1 260
Air Products 813 801
South Africa
Dorbyl 14.1 1 400 197 191
Wispeco 465 441
Caxton 7.8 1 640 128 117
Kagiso Trust 710 710
Investments
Mining
interests
Implats 3.3 128 4 287 3 886
500
Trans Hex 30.2 1 025 310 363
Group
Gencor 38.0 - - 8
Other
Sundry 116 116
investments
and loans
Deferred (501) (417)
taxation
asset/
(liability)
Other net 271 (100)
assets/
(liabilities)
Cash at the
centre
- Local 2 308 4 066
- Offshore 2 237.7 14.514 3 450 1 729
3
Intrinsic net 89 361 77 316
asset value
Potential CGT 3 (1 809) (1
liability 699)
Intrinsic net 87 552 75 617
asset value
after tax
INTRINSIC VALUE PER SHARE R185.17 R157.5
9
Issued shares after deduction of shares repurchased and 472.8 479.8
the shares in The Remgro Share Trust (million)
Notes
1. This represents Remgro"s effective interest of 10.4% in BAT Plc.
2. Cash at the centre excludes cash held by subsidiaries and associated
companies that are separately valued above.
3. The potential capital gains tax (CGT) liability, which is unaudited, is
calculated on the specific identification method using the most favourable
calculation for investments acquired before 1 October 2001 and also taking into
account the corporate relief provisions. Deferred CGT on investments available-
for-sale (Implats and Caxton) is included in "Other" above.
4. The listed investments are valued at stock exchange prices and unlisted
investments at directors" valuation.
Date: 29/11/2006 05:00:43 PM Produced by the JSE SENS Department
