| Tue 20 Feb 2007, 15:00 | | KWV - KWV Investments - Interim report: six months |
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KWV
KWV
KWV - KWV Investments - Interim report: six months ended 31 December 2006
KWV INVESTMENTS LIMITED
Reg No 1979/007263/06
KWV Investments Limited
(Incorporated in the Republic of South Africa)
("KWV Investments")
Share Code: KWV & ISIN Number: ZAE000004016
Interim report for the six months ended 31 December 2006
Salient features
Increase in headline earnings per share: 59%
Increase in headline earnings per share, excluding non-recurring portion of BEE
costs: 29,1%
Increase in dividend per share: 26,3%
Increase in net asset value per share: 14,1%
Income statement
Unaudited Audited
Six months ended Year ended
31 December 30 June
2006 2005 2006
R`000 R`000 R`000
Restated
Income from associate 143 421 85 302 158 295
- share of retained earnings 93 548 65 862 98 957
- dividends received 49 873 39 312 79 210
- share in non-recurring portion of
BEE expense - (19 872) (19 872)
Interest income 67 62 124
Administrative expenses (457) (323) (829)
Profit before taxation 143 031 85 041 157 590
Taxation (19) (18) (36)
Net profit attributable to ordinary
shareholders 143 012 85 023 157 554
RECONCILIATION
OF HEADLINE EARNINGS
Net profit attributable to ordinary
shareholders 143 012 85 023 157 554
Share in adjustments (net of taxation)
of associate (7 885) (246) 468
Headline earnings 135 127 84 777 158 022
Ordinary shares issued (thousands) 42 000 42 000 42 000
Cents Cents Cents
Earnings per share
- attributable earnings 340,5 202,4 375,1
- headline earnings 321,7 201,9 376,2
- headline earnings, excluding
BEE expense 321,7 249,2 423,6
Dividends declared per share 120,0 95,0 213,0
- interim 120,0 95,0 95,0
- final - - 118,0
Balance sheet
Unaudited Audited
31 December 30 June
2006 2005 2006
R`000 R`000 R`000
Assets
Non-current assets
Investment in associate 1 060 947 929 324 966 522
Current assets
Cash and cash equivalents 67 534 94
Total assets 1 061 014 929 858 966 616
Equity and liabilities
Capital and reserves
Share capital 42 000 42 000 42 000
Reserves 1 018 499 887 428 924 171
Ordinary shareholders` funds 1 060 499 929 428 966 171
Current liabilities 515 430 445
Payables 511 415 441
Taxation payable 4 15 4
Total equity and liabilities 1 061 014 929 858 966 616
Statement of changes in equity
Unaudited Audited
Six months ended Year ended
31 December 30 June
2006 2005 2006
R`000 R`000 R`000
Restated
Share capital at beginning and end
of the period 42 000 42 000 42 000
Retained earnings
Balance at beginning of the period (351) (79) (79)
Net profit attributable to ordinary
shareholders 143 012 85 023 157 554
Net transfer to equity reserve (91 739) (41 453) (69 613)
Dilution of investment in associate (1 810) (4 537) (9 472)
Unclaimed dividends written back - - 9
Dividends (49 560) (38 850) (78 750)
Balance at end of the period (448) 104 (351)
Equity reserve
Balance at beginning of the period 924 522 821 591 821 591
Additions for the period:
- net transfer from retained earnings 91 739 41 453 69 613
- BEE share-based payment reserve
of associate 1 014 22 031 21 905
- other movements in equity of
associate 1 672 2 249 11 413
Balance at end of the period 1 018 947 887 324 924 522
Reserves at end of the period 1 018 499 887 428 924 171
Equity at end of the period 1 060 499 929 428 966 171
Cash flow statement
Unaudited Audited
Six months ended Year ended
31 December 30 June
2006 2005 2006
R`000 R`000 R`000
Cash flow from operating activities
Administrative expenses (457) (323) (829)
Change in payables 70 93 128
Cash utilised in operations (387) (230) (701)
Dividends received 49 873 39 312 79 210
Dividends paid (49 560) (38 850) (78 750)
Interest received 67 62 124
Taxation paid (20) (23) (52)
Net (decrease)/increase in cash and
cash equivalents (27) 271 (169)
Cash and cash equivalents at beginning
of the period 94 263 263
Cash and cash equivalents at end of
the period 67 534 94
Notes to the interim report
Basis of preparation
The interim report have been 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.
The accounting policies and the methods of computation are consistent with those
applied in the previous financial periods, with the exception of a number of new
statements, amendments and interpretations to IFRS that became effective during
the current reporting period. The adoption of these new policies had no impact
on the results of either the current or prior periods.
Restatement of comparative interim results
The group has accepted the policy to account for the dilutive and antidilutive
effects of equity transactions by associates, that the group is not party to,
directly in equity. In the previous interim period a dilutive expense of R4 537
000 was recognised. The comparative results have been restated to account for
this amount directly in equity.
In addition, the presentation of comparative figures in the income statement for
the six months ended 31 December 2005 have been restated. Of the group`s total
interest of R22,0 million in the cost of Distell`s BEE share-based payment, only
the non-recurring portion of R19,9 million is disclosed separately.
The effect of the changes are that the net profit for the six months ended 31
December 2005 has increased by R4 537 000 and earnings per share increased by
10,8 cents from 191,6 to 202,4 cents. It had no effect on headline earnings or
headline earnings per share.
Group structure
The main asset of KVW Investments Limited (KWV) is an effective interest of
29,50% (2005: 29,72%) in the issued share capital of Distell, held via Remgro
KWV Investments Limited. Each issued share in KWV represents 1,397 issued shares
in Distell.
Financial results
Attributable earnings and headline earnings for the six months under review
increased by 68,2% and 59,4% respectively compared to the prior period. Headline
earnings, excluding the BEE share-based payment expense of Distell, increased by
29,1%.
Directorate
Mr Matthys Jan Loubser has been appointed as director with effect from 1
February 2007. Mr Loubser has been appointed following the retirement of Dr
Willem Barnard.
Prospects
The board of Distell has indicated the following:
- They expect that growth in consumer spending in the domestic market will
continue, albeit at a slower pace. Growing consumer demand, together with the
ongoing expansion in the domestic economy, should benefit sales in the alcoholic
beverage industry.
- Prospects for the world economy will remain favourable, although moderating
over the short term. The effects of the oversupply in wine in both the global
and domestic markets continue, placing ongoing pressure on producers
participating in major markets. As Distell participates across a broad
geographical front, exposure to volatility in any single market is reduced while
a wide spectrum of products across a range of categories and price points makes
the Distell group well placed to capitalise on changes in consumption patterns.
- The group will continue to reflect growth in revenue and in adjusted headline
earnings.
These expectations will largely be mirrored in the results of KWV Investments
Limited.
Declaration of interim dividend
The directors have resolved to declare an interim dividend of 120,0 cents (2005:
95,0 cents) per share.
Last day to trade "cum" dividend Friday, 9 March 2007
Trading "ex" dividend commences Monday, 12 March 2007
Record date Friday, 16 March 2007
Dividend payment date Monday, 19 March 2007
Shareholders may not dematerialise or rematerialise their share certificates
during the period from Monday, 12 March 2007 to Friday, 16 March 2007, both days
inclusive.
Signed on behalf of the board of directors
PBB Hugo MJ Loubser
Chairman Director
Paarl
20 February 2007
Company secretary: AW Eksteen
Registered office: La Concorde, 57 Main Street, Suider-Paarl, 7646
Website: www.kwv.co.za
Transfer secretaries: Computershare Investor Services 2004 (Pty) Ltd, PO Box
61051, Marshalltown, 2107
Sponsor: Absa Capital (a division of Absa Bank Limited)
Date: 20/02/2007 15:00:00 Produced by the JSE SENS Department.
