| Tue 12 Dec 2006, 17:15 | | WNH - Winhold Limited - Audited Abridged Consolida |
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WNH
WNH
WNH - Winhold Limited - Audited Abridged Consolidated Results
WINHOLD LIMITED
(Registration number 1945/019679/06)
(Incorporated in the Republic of South Africa)
(Share code: WNH) & (ISIN number: ZAE000033916)
Statement of results
The board announces the audited abridged consolidated results of the group for
the year ended 30 September 2006
Highlights
Ordinary shareholders profit up by 41%
Headline earnings up by 37%
Consolidated Income Statement
Year ended
30 September
`2006 `2005
(Re-stated)
R`000 R`000
Revenue 873,225 833,448
Operating profit 37,756 34,576
Investment income 14,656 -
Profit on sale of investment property 3,116 -
Restructuring costs (1,636) -
Net finance costs (19,812) (4,999)
Profit before taxation 34,080 29,577
Taxation (7,877) (9,613)
Net profit after taxation 26,203 19,964
Share of after tax profits of associate 419 153
companies
Attributable to outside shareholders (2,257) (2,839)
Ordinary shareholders profit 24,365 17,278
Earnings 24,365 17,278
Headline earnings 23,161 16,856
EBITDA 47,702 44,644
Earnings per ordinary share ( cents ) 19,4 16,0
Headline earnings per ordinary share ( 18,5 15,6
cents )
Weighted average ordinary shares in issue
adjusted for shares held in group on
which the earnings per share has been
calculated (000`s)
125,506 108,074
Ordinary shares in issue ( 000`s ) 126,215 126,215
Dividend per ordinary share 7,0 7,0
Reconciliation of headline earnings
Ordinary shareholders profit 24,365 17,278
Net profit on disposal of investment (3,116) -
property
Net (loss) / profit on disposal of fixed 118 (479)
assets
Taxation effect on disposals 158 61
Restructuring costs 1,636 -
Preference dividend - (4)
Headline earnings for the year 23,161 16,856
Reconciliation of Earnings before
interest, tax, depreciation and
amortisation ("EBITDA")
Profit from operations 37,756 34,576
Depreciation 9,884 10,015
Ammortisation of intangibles 62 53
EBITDA 47,702 44,644
Summarised consolidated balance sheet
Year ended
30 September 06
`2006 `2005
(Re-stated)
R`000 R`000
ASSETS
Property plant and equipment 94,755 101,643
Trade marks and patents 1,493 823
Other non current assets - 442
Investments 160,788 -
Investments in associates 729 386
Goodwill 26,541 26,541
Deferred taxation 1,449 2,713
Current assets
- inventory 124,792 102,928
- receivables 157,615 131,003
- bank and cash 19,408 12,891
Total assets 587,570 379,370
EQUITY AND LIABILITIES
Ordinary share capital and premium 122,793 123,627
Retained earnings 76,240 60,710
Shareholder`s interest 199,033 184,337
Outside shareholders interest 2,287 30
Total Equity 201,320 184,367
Non-current liabilities
- interest bearing 187,736 35,886
- interest free 904 1,268
- deferred taxation 3,399 3,341
Current liabilities
- bank overdraft 20,680 25,597
- short term borrowings 12,971 10,561
Current liabilities - interest free
- payables 156,182 116,355
- taxation 4,378 1,995
Total equity and liabilities 587,570 379,370
Supplementary information
Capital commitments 20,116 -
Capital expenditure 10,333 34,651
Depreciation 9,946 10,068
Interest bearing borrowings 221,387 72,044
Interest earning deposits 19,323 12,774
Net asset value per ordinary share ( 157,7 146,0
cents )
Net tangible asset value per ordinary 135,5 124,4
share ( cents )
Summarised consolidated cash flow statement
Year ended
30 September 06
`2006 `2005
R`000 R`000
Cash flow from / (used in) operating 18,923 (2,222)
activities
Profit before interest, tax and non-cash 45,659 44,167
items
Increase in inventory (21,864) (12,911)
Increase in receivables (11,956) (6,678)
Increase in payables 26,771 1,502
Cash flow from operations 38,610 26,080
Net finance costs (6,756) (4,999)
Share of results from associates 76 29
Taxation paid (4,172) (15,899)
Dividends paid (8,835) (7,433)
Cash flow used in investing activities (161,518) (34,437)
Buyout of minorities in a subsidiary - (1,322)
Investment in fixed assets (10,333) (34,652)
Investment in preference shares (160,788) -
Proceeds from disposal of fixed assets 9,603 1,537
Cash flow from financing activities 154,029 20,070
Interest bearing borrowings raised 167,605 26,238
Interest bearing borrowings repaid (13,709) (6,303)
Loans advanced 133 135
Net increase / (decrease) in cash & cash 11,434 (16,589)
equivalents
Cash and cash equivalents at beginning of (12,706) 3,883
period
Cash and cash equivalents at end of (1,272) (12,706)
period
Summarised consolidated statement of changes in equity
Year ended
30 September
`2006 `2005
R`000 R`000
Shareholders` funds at beginning of the 184,337 117,996
year
Adjustment for cost of shares held in (834) -
group
Issue of ordinary shares - 53,965
Changes in retained earnings 24,365 17,278
Dividend paid - ordinary (8,835) (4,898)
- preference - (4)
Shareholders` interests at end of the 199,033 184,337
period
BUSINESS SEGMENTS Mining Industrial Flexible
(R`000) Consumables Consumables Plastics
2006 2005 2006 2005 2006 2005
Re- Re- Re-
stated stated stated
Turnover 359,908 373,806 132,052 128,794 381,265 330,848
Operating profit 8,387 13,145 6,722 6,376 22,729 13,064
Investment income - - - - - -
Depreciation 847 771 447 619 8,495 8,486
Capital expenditure 835 1,180 671 839 8,097 32,332
Total assets 123,680 98,938 39,056 37,455 224,000 203,688
Total liabilities 61,030 41,100 19,290 18,689 137,704 129,402
Continued
BUSINESS SEGMENTS Property Totals
(R`000) and
Other
2006 2005 2006 2005
Re- Re-
stated stated
Turnover - - 873,225 833,448
Operating profit (82) 1,991 37,756 34,576
Investment income 14,656 - 14,656 -
Depreciation 157 192 9,946 10,068
Capital expenditure 730 300 10,333 34,651
Total assets 200,834 39,289 587,570 379,370
Total liabilities 168,226 5,812 386,250 195,003
Impact of IFRS and other adjustments
(R`000) (R`000)
IFRS IFRS
restated transition
year ended date 01 Oct
30 Sept 2005 2004
Impact on ordinary shareholders` interest
Ordinary shareholders` impact as 172,204 103,080
previously reported - SA GAAP
Change in accounting policy and - (3,723)
correction of prior period error
- change in subsidiary accounting policy - (3,276)
relating to property from fair value to
cost method, in order to comply with
Group policy
- understatement in subsidiary taxation - (447)
charge
IFRS adoption 12,133 18,639
IFRS3 - Negative goodwill credited to - 7,301
retained earnings
IAS16 - Restatement of accumulated 15,179 13,545
depreciation to reflect Property Plant
and Equipment at correct value based on
reassessment of useful lives and residual
values
Deferred tax adjustments on the above (3,046) (2,207)
restatements
Ordinary shareholders` impact as 184,337 117,996
currently stated
INCOME STATEMENT IMPACT
Net Income as previously reported - SA 16,483
GAAP
IFRS adoption 795
IFRS3 - Negative goodwill credited to -
retained earnings
IAS16 - Restatement of accumulated 1,634
depreciation to reflect Property Plant
and Equipment at correct value based on
reassessment of useful lives and residual
values
Deferred tax adjustments on the above (839)
restatements
Net income as currently stated 17,278
Declaration of dividend
Notice is hereby given that an ordinary dividend of 7,0 cents ( 2005 : 7,0
cents ) per share for the year ended 30 September 2006 has been declared to
holders of ordinary shares recorded in the share register of the company at the
close of business on 16 February 2007.
In compliance with the requirements of STRATE, the following dates are
applicable:
Last day to trade "cum" dividends is: Friday 9 February 2007
Commence trading "ex" dividend from: Monday 12 February 2007
Record date is: Friday 16 February 2007
Payment date is: Monday 19 February 2007
Share certificates may not be de-materialised / re-materialised between Monday
12 February 2007 and Friday 16 February 2007, both dates inclusive.
Ordinary individual shareholders to whom a dividend of less than R10,00 ( ten
rand ) has been declared, are reminded that in terms of a special resolution
registered on 26 March 2003, such amounts shall not be paid to the individual
shareholders concerned but shall be donated to an independent charity chosen by
the directors.
By Order of the Board
D J DE VILLIERS
Company Secretary
12 December 2006
COMMENTS
COMPANY PROFILE
The Winhold Group is an investment holding company with its main investments in
wholly owned subsidiaries Gundle Limited ("Gundle") and Inmins Limited
("Inmins"), and a 50% investment in a new venture, Novara Profile Extrusions
(Pty) Limited ("Novara").
Gundle is comprised of three manufacturing / distribution operations in Gauteng
and one in Swaziland, with a further four distribution centres in the main
coastal cities and Bloemfontein. Gundle manufactures and distributes
polyethylene and polypropylene bags, sheeting and packaging to the
agricultural, chemical, construction, food processing, industrial and consumer
markets.
Inmins is comprised of two trading divisions that service the mining and
industrial sectors, supplying mainly industrial consumer goods, and an added
value division also serving the mining sector.
Novara will be a manufacturer of various products made out of recycled PET
plastic products.
MAIN CORPORATE ACTIVITIES DURING 2006
Internal restructure -
As detailed in previous announcements / circular to shareholders, in order to
facilitate a Black Economic Empowerment transaction, an internal restructure
took place in the operating subsidiaries of the group, effective February 2006.
Black economic empowerment -
With effect from 1 July 2006, the main operating subsidiaries namely Gundle
Plastics Group (Pty) Ltd and Inmins Trading (Pty) Ltd each issued 25% of their
issued share capital to BEE parties. The BEE parties include broad based
employee share incentive schemes, as well as experienced outside partners.
REVIEW OF RESULTS
These results incorporate the effect of the conversion to International
Financial Reporting Standards ("IFRS"). The full disclosure of the effect of
the conversion to IFRS is given under the section headed Impact of IFRS and
Other Adjustments.
Earnings increased by 41% to R24,4 million (2005 : R17,3 million), and headline
earnings increased by 37% to R23,2 million(2005 : R16,9 million ).
Headline earnings per share increased by 18,2% to 18,5 cents per share (2005 :
15,6 cps).
Earnings per share increased by 21,3% to 19,4 cents per share (2005 : 16,0 cps)
Income on a new investment amounted to R14,6 million (2005 : nil).
Interest has increased to R19,8 million (2005 : R5,0 million) due to funding of
the BEE restructuring.
Revenue grew by 4,8% to R873 million (2005 : R833 million).
Operating profit increased by 9,2% to R37,7 million (2005 : R34,6 million). See
operational reviews for further information.
During the reporting period there was a net positive cashflow of R11,4 million.
The cashflow from operating activities was R18,9 million.
Inventory increases were due to long lead times, and substantial raw material
price increases.
Receivables increased due to higher raw material prices, most of which were
passed on to the customers, and increased volumes in the latter part of the
financial year.
An increase in payables funded most of the abovementioned outflows.
With the restructuring of the Group for BEE purposes, the gearing has increased
substantially but, excluding the restructuring, the gearing would have improved
to 30% (2005: 38%).
OPERATIONAL REVIEWS
Gundle - Despite severe price increases in polymers, capacity oversupply in the
market causing reduced margins, shortages of recycled material, and Sasol again
announcing a 12 month delay in their expansion projects to approximately July
2007 causing extreme shortages of local polymers, Gundle produced it`s best
ever profits. Successful implementation of capital projects, repositioning of
business units by increasing critical mass and positive changes in the
fertilizer market resulted in some plants producing their best ever outputs and
profits. These actions will continue in order to ensure sustainable future
improvements.
Inmins - As reported in the interim results earlier this year, the continuation
of the negative trend of lower capital expenditure in hydro-power and back fill
projects experienced by the added value arm of the business, resulted in a
disappointing performance by this division. The mining trading divisions and
the industrial trading divisions both posted good results.
Novara - The group has invested in Novara during the past year to develop
products to be made mainly out of recycled polyethylene terephthalate polymer
(PET) bottles. A provisional patent has been filed. All tests have proved
very promising. Capital expansion has been approved and commissioning of
equipment should take place during December 2006/January 2007. Initially
profiles will be used to build various configurations of pallets and certain
crates. Current legislation is forcing changes in the transportation of goods
demanding substitutes for wooden pallets. The advantages of these plastic
pallets are numerous, and after the successful launching of these products, the
Group looks forward to future profitable returns soon.
PROSPECTS
The Group has now been restructured, and BEE structures implemented. This
should enable the group to grow more aggressively, both organically and through
acquisitions and mergers. The Group is now able to use its listing in order to
achieve the abovementioned objectives.
In the New Year, two of the Inmins operations will be moved to new premises,
which should improve efficiencies and profitability. This will also allow for
expansion in both operations. Inmins is also well positioned to take advantage
of the growth in the platinum industry. New agreements have been reached with
certain overseas suppliers, which should increase the profitability of certain
Inmins operations. Inmins is continually reviewing its supply chain in order
to improve and increase its product base.Continued attention to the
manufacturing models of Gundle, and the elimination of bottlenecks should
ensure that the turnaround achieved continues.
The investment in Novara should bear fruit, as the manufacturing facilities are
to be commissioned as from December 2006. This business will be established in
the market during the first year, and market share will be developed and grown.
During the next few years, this operation will be expanded further and should
be a worthwhile profit contributor to the Group.
The board is positive that all the actions taken will benefit the Group in the
future.
DIVIDENDS
A dividend of 7 cents per share, unchanged from last year, has been declared
and will be paid on 19 February 2007. The dividend cover is 2,7 times.
CAPITAL COMMITMENTS
The amount of R20,1 million reflected in the supplementary information, was
made up as follows :
Property (for use in the group ) R13 000 000
Plant and equipment for existing operations R 660 000
Plant and equipment for new operations R 6 457 000
BASIS OF PREPARATION
These results have been prepared on a going concern basis, in accordance with
International Financial Reporting Standards ("IFRS") in compliance with the
Companies Act of South Africa of 1973, as amended, and the Listing Requirements
of the JSE Limited. Previously the financial statements were prepared in terms
of the South African Statements of Generally Accepted Accounting Practice
("GAAP"). The first time adoption of IFRS has resulted in changes to the
Group`s accounting policies, and the need to re-state the prior year accounts,
as detailed above, under the section headed Impact of IFRS and Other
Adjustments.
AUDIT REPORT
The financial information set out in these abridged consolidated group results
for the year ended 30 September 2006 have been audited by BDO Spencer Steward
(Johannesburg) Inc. Their unqualified report is available for inspection at the
registered office of the company. We wish to draw your attention to a
modification in the audit report regarding a reportable irregularity, as
reported to the Independent Regulatory Board of Auditors. The directors are of
the opinion that they have responded to the circumstances to the extent that no
loss will be experienced. The Circumstances and remedies relating to the
reportable irregularity are as follows:
In a foreign subsidiary, certain past bonus accruals and current drawings
credited to the loan account of a director were not subject to employees
withholding tax on the understanding that the director himself would be
responsible for making such payments. The foreign subsidiary has now taken
steps to pay the relevant employees tax to the tax authorities, to withhold
employees tax on current drawings, and to reduce the amount credited to the
director`s loan account by the amount of taxes payable.
CORPORATE GOVERNANCE
The Group subscribes to the value of good corporate governance and is committed
to continued implementation of the recommendations of the King II Report and
the requirements of the JSE Securities Exchange of South Africa. The Group
endeavours to conduct its business in accordance with the principles of
accountability, transparency and integrity.
DIRECTORATE
It is with deep regret that the Board notes that Mr. JH Henderson, who was the
Non-Executive Deputy Chairman, passed away on 20th November 2006. He had 20
years service with the Group as a Director, including 3 years as Chairman of
Inmins Limited. Previously he was non-executive Deputy Chairman of Inmins
Limited prior to its de-listing. He was the Founder and Executive Chairman of
Chick Henderson (Pty) Limited for 20 years prior to its acquisition by the
Winhold Group. His support and contribution to the Group will be greatly
missed.
On behalf of the board
WAR Wenteler D B Mostert
Chairman Non-executive Director
12 December 2006
Directors:
WAR Wenteler (Chairman), W Fourie (Financial), PJ Kruger, D B Mostert #, C J
Pallas #
(# Non-executive)
E-mail: secretary@winhold.co.za
Website: www.winhold.co.za
Company Secretary and registered office:
D J de Villiers
884 Linton Jones Street, Industries East, Germiston
Telephone: +27 11 345 9800
Fax: +27 11 86 631 6386
(PO Box 5324, Johannesburg 2000)
(Email: davedevilliers@winhold.co.za)
Transfer Secretaries:
Computershare Investor Services 2004 (Pty) Ltd
70 Marshall Street, Johannesburg
Telephone: +27 11 370 5000
Fax: +27 11 688 5248
(PO Box 61051, Marshalltown 2107)
(Email: registrar@computershare.co.za )
Sponsor:
Arcay Moela Sponsors (Pty) Limited
4th Floor, South Office Tower, Hyde Park Corner
Telephone: +27 11 325 6008
Fax: +27 11 325 6337
(Email: doug@lpcmanhattan.co.za )
Auditors:
BDO Spencer Steward (Johannesburg) Inc
13 Wellington Road, Parktown, 2193
Telephone: +27 11 643 7271
Fax: +27 11 643 6585
(Pvt Bag X60500, Houghton, 2041)
(Email: bdojhb@bdo.co.za )
Date: 12/12/2006 17:15:01 Produced by the JSE SENS Department.
