Invicta Holdings Limited HY 2014 results

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Invicta Holdings Limited HY 2014 results

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Invicta Holdings Limited HY 2014 results

  1. 1. UNAUDITED INTERIM RESULTS for the six months ended 30 September 2013 Registration number: 1966/002182/06 (Incorporated in the Republic of South Africa) Share code: IVT • ISIN: ZAE000029773 (“Invicta” or “the Group” or “the Company”) REVENUE UP BY 46% Consolidated condensed STATEMENT EARNINGS PER SHARE OPERATING PROFIT UP BY OF COMPREHENSIVE INCOME Change % Unaudited 6 months ended 30 Sept 2013 R’000 Revenue 46 5 128 724 Operating profit Interest and dividends received Negative goodwill Finance costs Share of profits of associate 57 492 663 286 062 Profit before taxation Taxation Profit for the period Unaudited 6 months ended 30 Sept 2012 R’000 3 514 126 Audited year ended 31 Mar 2013 R’000 7 557 899 (355 774) 731 64 423 682 (90 513) 258 452 (21 530) 818 756 (75 224) 41 333 169 236 922 743 532 Other comprehensive income: Items that will not be reclassified to profit or loss Exchange differences on translating foreign operations 31 785 Total comprehensive income for the period 364 954 Profit attributable to: Owners of the Company Non-controlling interest Preference shareholders (1 706) 235 216 883 531 52 (651 3 759 673 066 760) 018 26 810 770 342 15% UP BY Consolidated condensed STATEMENT 314 709 261 980 – (318 908) 671 – 57% OF FINANCIAL POSITION Unaudited 30 Sept 2012 R’000 Audited 31 Mar 2013 R’000 Non-current assets 6 314 650 5 202 148 6 080 956 Property, plant and equipment Financial investments and investment in associate Goodwill and other intangible assets Financial asset, finance lease and long-term receivables Deferred taxation 1 100 676 2 143 118 781 350 2 137 824 151 682 467 3 167 673 806 87 616 283 859 015 375 1 010 636 2 018 353 773 815 2 117 013 161 139 Current assets 7 076 717 3 901 746 6 123 855 Held for sale assets Inventories Trade and other receivables Current portion of financial investments, finance lease and long-term receivables Taxation prepaid Bank balances and cash 3 478 3 794 381 1 865 432 – 2 247 242 1 134 491 9 957 2 913 052 1 619 567 756 360 6 238 650 828 68 134 27 093 424 786 883 599 18 831 678 849 ASSETS 13 391 367 9 103 894 12 204 811 EQUITY AND LIABILITIES Capital and reserves 3 298 621 2 020 009 3 095 212 Equity attributable to the equity holders Non-controlling interest 2 840 295 458 326 1 951 319 68 690 2 690 077 405 135 263 077 37 490 32 602 743 532 Non-current liabilities 6 453 690 4 845 376 5 679 828 223 701 11 515 741 874 28 468 Long-term borrowings, guaranteed repurchase liabilities and financial liabilities Deferred taxation 6 426 584 27 106 4 839 789 5 587 5 654 572 25 256 235 216 770 342 Current liabilities 3 639 056 2 238 509 3 429 771 358 356 312 298 955 948 263 077 225 880 693 152 Current portion of long-term borrowings and guaranteed repurchase liabilities Trade, other payables and provisions Taxation liabilities Bank overdrafts 592 028 2 895 003 38 442 113 583 124 2 066 3 44 290 646 307 266 1 137 908 2 070 533 30 199 191 131 – – 9 103 894 12 204 811 263 077 358 225 880 312 534 980 737 263 077 Determination of normalised earnings Attributable earnings 236 922 304 019 60 935 15 19 693 152 28 468 21 912 364 954 Earnings per share (cents) Diluted earnings per share (cents) 225 880 11 042 – 333 169 Total comprehensive income attributable to: Owners of the Company Non-controlling interest 225 880 693 152 Adjustments – Gain on partial derecognition of financial investments Normalised earnings Normalised earnings per share (cents) 15 (158 172) Total equity and liabilities 13 391 367 Consolidated condensed STATEMENT Determination of headline earnings Attributable earnings OF CHANGES IN EQUITY – – – (6 048) (844) – 569 – – (13) (18) 2 791 (52 066) – (3 551) Total adjustments before taxation and non-controlling interest Taxation Non-controlling interest (6 892) 1 572 1 489 556 4 – (52 844) 999 769 Total adjustments (3 831) Headline earnings 560 13 18 Shares in issue Weighted average (000’s) At the end of the period (000’s) Number of shares used for diluted earnings per share (000’s) Headline earnings per share (cents) Earnings per share (cents) Dividends per share* (cents) – Interim – Final 226 440 642 076 353 351 313 298 885 878 73 427 73 434 15 72 433 72 531 72 588 73 409 73 906 13 15 75 918 73 125 353 358 102 313 312 89 885 955 268 102 – 89 – 89 179 * In accordance with IAS 10, the interim dividend of 102 cents per share proposed by the directors has not been reflected in the interim results. Consolidated condensed STATEMENT OF CASH FLOWS Unaudited 6 months ended 30 Sept 2013 R’000 Cash flows from operating activities Cash generated from operations Finance costs Dividends paid to Group shareholders and non-controlling interest Taxation paid Interest and dividends received Net cash inflow from operating activities Cash flows from investing activities Net cash effects of acquisitions of property, plant and equipment and intangible assets Acquisition of subsidiaries and associates Decrease (increase) in long-term receivables including current portion Increase in investments Dividend received from associate Net cash outflow from investing activities Unaudited 6 months ended 30 Sept 2012 R’000 Unaudited 6 months ended 30 Sept 2012 R’000 Audited year ended 31 Mar 2013 R’000 Share capital Balance at the beginning of period Ordinary shares issued 3 743 2 3 706 – 3 706 37 3 745 3 706 3 743 (51 076) 259 246 Headline earnings per share (cents) Diluted headline earnings per share (cents) Unaudited 6 months ended 30 Sept 2013 R’000 Balance at the end of the period Adjustments – Net impairment of property, plant and equipment – Goodwill impaired – Negative goodwill – Profit on sale of fixed assets held for sale – Net profit on disposal of property, plant and equipment Audited year ended 31 Mar 2013 R’000 386 105 (355 774) (179 039) (89 428) 286 062 275 746 (318 908) (136 003) (55 895) 261 980 732 078 (651 760) (198 433) (161 137) 531 673 47 926 26 920 252 421 (114 994) (98 028) (35 531) (255 153) (131 724) (1 496 282) 4 936 (53 955) 1 198 (102 489) (80 854) 500 (1 060 115) – 425 (260 843) (473 527) Share premium Balance at the beginning of period Ordinary shares issued 331 515 2 377 272 320 – 272 320 59 195 Balance at the end of the period 333 892 272 320 331 515 Treasury shares Balance at the beginning of period Treasury shares utilised to settle share appreciation rights Treasury shares purchased (80 098) – – (93 931) 7 795 – (93 931) 51 958 (38 125) Balance at the end of the period (80 098) (86 136) (80 098) Preference share capital Balance at beginning of the year Preference shares issued 750 000 – – – – 750 000 Balance at the end of the period 750 000 – 750 000 Retained earnings Balance at the beginning of period Earnings attributable to ordinary shareholders Share appreciation rights exercised Change in non-controlling interest Dividends paid 2 014 469 263 077 (15 700) 2 351 (131 180) 1 716 222 225 879 (89 573) (2 166) (128 380) 1 676 751 693 152 (150 043) (12 128) (193 263) Balance at the end of the period 2 133 017 1 721 982 2 014 469 Other reserves Balance at the beginning of period Share appreciation rights issued Share appreciation rights exercised Fair value of put option on non-controlling interest Translation of foreign operations (329 552) 1 866 (4 360) – 31 785 54 020 2 395 (18 674) – 1 706 36 385 4 990 (17 361) (380 376) 26 810 Balance at the end of the period (300 261) 39 447 (329 552) Attributable to equity shareholders 356 214 (115 095) – Net cash inflow from financing activities 262 444 241 119 49 527 487 718 (205 488) 586 008 (98 290) 586 008 Cash and cash equivalents at the end of the period 537 245 380 520 487 718 OTHER INFORMATION The tough trading conditions in the industrial consumables market in South Africa (served by BMG) continued during the period under review. Labour unrest was particularly debilitating in the mining and automotive industries. Capital equipment markets (served by CEG) experienced mixed conditions – demand for earthmoving machinery improved while demand for agricultural machinery declined. Trading conditions in markets in South East Asia in which Kian Ann Engineering operates are extremely challenging and the results of Kian Ann reflect this. The Building Supplies Group (BSG) grew steadily in a market that is showing signs of growth. Acquisitions made by the Group during the past 12 months helped to bolster performance and provide a solid platform for future growth. Group revenue grew by R1,615 billion (46%) to R5,129 billion, of which R1,106 billion (31,5%) was from acquisitions and R509 million (14,5%) was organic. Operating profit, which includes a non-recurring profit on sale of fixed assets of R6 million, increased by R178 million (57%) to R493 million. R101 million (32%) of the increase came from acquisitions and R77 million (25%) from organic growth. Excluding the non-recurring profit on sale of fixed assets of R6 million, operating profit increased by 55% to R487 million. Profit for the period increased by 41% to R333 million, while earnings per share and normalised earnings grew by 15% to 358 cents per share. Working capital management was good, resulting in cash generated from operations of R386 million, 40% up from R276 million in the comparable period last year. On the acquisition front, HPE Africa, the distributor of Hyundai earthmoving machinery in South Africa, was acquired during the period under review. BEARING MAN GROUP (BMG) BMG performed extremely well, given the challenging market conditions. Labour unrest in the mining and automotive industries stretched over 2 months, severely affecting business in both those sectors. The sharp decline in the rand put pressure on gross margins. Notwithstanding this, BMG grew its revenue by 21% to R1,978 billion, all of which was organic, although the prior period’s results included several months of Man-Dirk’s results. Excellent management of costs and gross margins resulted in BMG’s operating profit increasing by 26% to R220 million. Working capital management was good. CAPITAL EQUIPMENT GROUP (CEG) CEG has been a star performer during the period under review. Earthmoving machinery sales in the country continued to improve steadily, whilst agricultural machinery sales in the country, measured by tractor unit sales, declined by about 5% during the period under review. This decline in the latter part of the period under review has led to the agricultural machinery business having excess inventory, which is being addressed. Fork lift sales in South Africa during the period declined, but CEG increased its market share. Kian Ann Engineering, the Group’s Singaporean company which was acquired with effect from 1 February 2013, has been included in CEG’s results. Trading conditions in South East Asia, the major region serviced by Kian Ann, continued to be challenging. CEG’s revenue increased by 53% to R2,583 billion, 45% being due to acquisitions and 8% organic. Excellent operational cost and margin management resulted in operating profit increasing by 69% to R251 million, 56% from acquisitions and 13% organic. CEG continues to outperform its benchmarks and to be a major contributor to the Invicta stable. BUILDING SUPPLIES GROUP (BSG) BSG comprises Tiletoria and MacNeil (which was acquired on 1 October 2012). Revenue increased by R369 million (188%), R29 million (15%) thereof being organic and R 340 million (173%) from acquisitions. BSG has settled down well and made a small bolt-on acquisition during the period, which should add to the Group in the medium term. 1 951 319 2 690 077 Trading conditions in the second half of the year are expected to be similar to the first half. The labour unrest in the mining and automotive industries has been resolved, although at the time of going to press with this report, there were rumblings of fresh unrest in the mining sector. This underscores the challenges of doing business in South Africa, which is entering an election year. Notwithstanding the above, Invicta will continue to do what it has done well in the past – manage its operations soundly while seeking out acquisitions and opportunities for growth. In the first half of the year, management resolved to make no further acquisitions until those made in the past 12 months had been bedded down satisfactorily. This has largely been achieved. The Group will focus on diversifying its businesses geographically and has set the intent of becoming a more global business in the sectors in which it has operated historically. Any forward-looking statements in this announcement have not been reviewed nor audited by the Company’s Auditors. BOARD RE-STRUCTURE In keeping with the Group’s growth strategy, the Board is pleased to announce the following realignment of roles on the Board aimed at ensuring proper succession and underpinning growth. The changes will take effect immediately. Arnold Goldstone, in addition to his responsibilities as Invicta Group CEO, will assume the position of Executive Deputy Chairman of the Invicta Group. Charles Edward Walters (Charles Walters), in addition to his responsibilities as Bearing Man Group (BMG) CEO, will assume the position of Invicta Group Deputy CEO. Once a suitable replacement is found to fill the position of BMG CEO, Charles Walters will move into the position of Invicta Group CEO and Arnold Goldstone will take on the role of Executive Deputy Chairman in a full-time capacity. ORDINARY SHARE CASH DIVIDEND 405 135 37 490 23 445 (2 351) 2 114 (7 507) 59 321 11 042 473 – (396) (1 750) 59 321 28 468 – 327 076 – (9 730) The Board has declared a gross interim dividend on 7 November 2013 of 102 cents per share. • The dividend has been declared out of income reserves; Balance at the end of the period 458 326 68 690 405 135 • The local Dividend Tax rate is 15% (fifteen per centum); The dividend will be subject to the Dividends Tax that was introduced with effect from 1 April 2012. In accordance with paragraphs 11.17(a)(i) and (x) and 11.17(c) of the JSE Listings Requirements the following additional information is disclosed: • 2 336 985 Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the period FINANCIAL OVERVIEW The Group has again delivered strong results in markets characterised by labour unrest in South Africa and a marked deterioration in the rand. Non-controlling interest Balance at the beginning of period Earnings attributable to non-controlling interest Share of foreign currency translation reserve Non-controlling interest acquired during the period Change in non-controlling interest Dividends paid 1 676 334 (148 581) 809 232 Unaudited six months ended 30 September 2013 Segment revenue Segment operating profit Segment assets Segment liabilities 776 549 126 770 2 583 251 4 251 2 664 203 415 606 684 Building supplies R’000 • 565 31 662 463 214 990 365 042 2 531 (10 291) 6 372 270 6 235 250 Total R’000 5 128 492 13 391 10 092 724 663 367 746 The gross local dividend amount is 102 cents per ordinary share for shareholders exempt from the Dividend Tax; The gross and net local dividend amount is 102 cents per ordinary share for shareholders liable to pay the Dividend Tax; • Invicta Holdings Limited has 73 433 716 ordinary shares in issue (which includes 1 452 920 treasury shares); and • 1 977 219 2 105 729 Capital equipment R’000 Group, financing and other operations R’000 Secondary Tax on Companies (STC) credits of 102 cents per share will be utilised; • Engineering consumables R’000 Invicta Holdings Limited’s income tax reference number is 9400/012/03/6. In compliance with the requirements of Strate the following dates are applicable: Last date of trade “CUM” dividend Friday, 29 November 2013 First date of trading “EX” dividend Monday, 2 December 2013 Record date Unaudited 6 months ended 30 Sept 2013 R’000 Net interest-bearing debt: equity ratio (excluding long-term funding debt secured by investments and loans) (%) Depreciation and amortisation (R’000) Net asset value per share (cents) Tangible net asset value per share (cents) Capital expenditure (R’000) Capital commitment (R’000) 2 840 295 SEGMENT INFORMATION 260 065 – 2 379 15% PROSPECTS (2 687 696) Cash flows from financing activities Net cash effects of liabilities raised Net settlement of share appreciation rights Ordinary shares and preference shares issued UP BY COMMENTS Unaudited 30 Sept 2013 R’000 Total assets DIVIDEND Unaudited 6 months ended 30 Sept 2012 R’000 Audited year ended 31 Mar 2013 R’000 Unaudited six months ended 30 September 2012 Segment revenue Segment operating profit Segment assets Segment liabilities 34 68 003 3 867,8 2 803,8 116 912 58 640 30 33 869 2 690,3 1 761,3 47 491 6 200 39 86 814 3 664,5 2 610,4 152 276 81 770 Audited year ended 31 March 2013 Segment revenue Segment operating profit Segment assets Segment liabilities Friday, 6 December 2013 Payment date 1 635 174 2 011 884 3 424 390 2 189 867 046 099 529 159 847 047 286 637 1 682 148 1 713 1 283 3 502 339 3 215 1 874 982 466 103 480 965 338 154 215 196 12 201 141 625 38 502 325 098 270 088 151 141 610 070 923 – (20 126) 5 178 174 4 775 095 4 115 6 298 6 041 946 764 301 824 3 514 126 314 709 9 103 894 7 083 885 7 557 899 883 759 12 204 811 9 109 599 NOTES TO THE FINANCIAL INFORMATION Monday, 9 December 2013 Share certificates may not be dematerialised or rematerialised between Monday, 2 December 2013 and Friday, 6 December 2013, both days inclusive. By order of the Board C Barnard Secretary Cape Town 11 November 2013 INVICTA HOLDINGS LIMITED Registered office: Invicta Holdings Limited, 3rd Floor, Pepkor House, 36 Stellenberg Road, Parow Industria, 7493 • PO Box 6077, Parow East, 7501 Transfer secretaries: Computershare Investor Services (Pty) Ltd, Ground Floor, 70 Marshall Street, Johannesburg, 2001 • PO Box 61051, Marshalltown, 2107 Basis of preparation The Group’s condensed consolidated interim financial statements (results) are prepared in accordance with the requirements of the JSE Limited Listings Requirements for interim reports, the requirements of the Companies Act applicable to summary financial statements, the framework, measurement and recognition requirements of International Financial Reporting Standards (IFRS), the SAICA Financial Reporting guides as issued by the Accounting Practices Committee, the Financial Reporting Standards Council and the requirements of IAS 34 Interim Financial Reporting. The accounting policies applied in the preparation of the results are in terms of IFRS and are consistent with the accounting policies applied in the preparation of the Group’s previous summarised consolidated annual financial statements. The following accounting standards are effective from the 2014 financial year and did not have a material impact on the Group results: IFRS7, IFRS 9, IFRS10, IFRS12, IFRS13, IAS 1, IAS 19, IAS 27, IAS 28, IAS 32 and IAS 34, including Circular 2 of 2013 on Headline Earnings Per Share. Directors: Dr CH Wiese* (Chairman), A Goldstone (Managing), C Barnard, DI Samuels^, LR Sherrell*, AM Sinclair, RA Wally*^, CE Walters, Adv JD Wiese* * Non-executive ^ Independent non-executive Sponsor: Deloitte & Touche Sponsor Services (Pty) Ltd Prepared by These interim financial statements have been prepared under the supervision of Craig Barnard CA(SA), the Executive Director – Financial and Commercial. Events after the reporting date There were no reportable events from the reporting date to the date of this report. w w w. i n v i c t a h o l d i n g s . c o . z a www.bmgworld.net www.capitalequipmentgroup.co.za GRAPHICULTURE Acquisitions Various acquisitions were made during the period ended 30 September 2013, amounting to R98 million of which HPE Africa (Pty) Ltd is the more significant acquisition.

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