Go Back Email this Link to a friend


African Oxygen Limited - Results For The Six Months Ended 31 March 2005

Release Date: 29/04/2005 14:59:32      Code(s): AFX
African Oxygen Limited - Results For The Six Months Ended 31 March 2005         
AFRICAN OXYGEN LIMITED                                                          
African Oxygen Limited                                                          
(Incorporated in the Republic of South Africa).                                 
Registration number: 1927/000089/06.                                            
ISIN Code: ZAE000030920.                                                        
South African share code: AFX.  Namibian share code: AOX.                       
("Afrox" or "the Company").                                                     
AFRICAN OXYGEN LIMITED                                                          
Results for the six months ended 31 March 2005                                  
- Sale of Afrox Healthcare Limited concluded for R3,4 billion                   
- Afrox returns R2,1 billion to shareholders                                    
- Interim dividend increased by 21 percent                                      
Summarised Income Statement                                                     
                     Unaudited              Unaudited   Audited                 
6 months               6 months    12 months               
                     to March   %           to March    to Sept.                
R"000                2005       Change      2004        2004                    
Revenue              4 071 347  9           3 734 865   7 835 144               
Operating profit     641 163    7           598 298     1 277 501               
Net profit on sale                                                              
of shares in Afrox                                                              
Healthcare Limited   1 003 591              -           (16 167)                
Profit from                                                                     
operations           1 644 754              598 298     1 261 334               
Finance costs        (20 854)               (52 942)    (97 854)                
Income from                                                                     
associates           27 805                 26 046      51 770                  
Profit before                                                                   
taxation             1 651 705  189         571 402     1 215 250               
Income tax expense   (352 230)              (188 487)   (402 165)               
Profit after                                                                    
taxation             1 299 475  239         382 915     813 085                 
Minorities           (99 359)               (77 615)    (190 393)               
Total net profit                                                                
for the period       1 200 116  293         305 300     622 692                 
Reconciliation of                                                               
headline earnings                                                               
Total net profit                                                                
for the period       1 200 116  293         305 300     622 692                 
- Net profit on sale                                                            
of shares in Afrox                                                              
Healthcare Limited   (1 003 591)            -           16 167                  
- Taxation effect on                                                            
net profit on sale                                                              
of shares in Afrox                                                              
Healthcare Limited   143 937                -           -                       
- Goodwill impaired  6 449                  5 725       10  075                 
- Profit on disposal                                                            
of property, plant                                                              
and equipment        (1 379)                (2 693)     (6 222)                 
Headline earnings    345 532    12          308 332     642 712                 
Basic earnings per                                                              
ordinary share                                                                  
- Group (cents)      350,0      293         89,0        181,6                   
Headline earnings                                                               
per ordinary share                                                              
- Group (cents)      100,8      12          89,9        187,5                   
Summarised Balance Sheet                                                        
Unaudited   Unaudited   Audited                 
                                As at       As at       As at                   
                                31 March    31 March    30 Sept.                
R"000                           2005        2004        2004                    
ASSETS                                                                          
Non-current assets              2 035 204   3 443 223   3 530 712               
Property, plant and equipment   1 582 312   2 969 614   3 048 255               
Associate investment            375 000     -           -                       
Other non-current assets        77 892      473 609     482 457                 
Current assets                  2 861 337   1 864 693   2 100 642               
Inventories                     303 652     425 434     406 544                 
Receivables and prepayments     552 357     1 401 051   1 213 149               
Cash and cash equivalents       2 005 328   38 208      480 949                 
Total assets                    4 896 541   5 307 916   5 631 354               
EQUITY AND LIABILITIES                                                          
Capital and reserves            3 798 902   2 497 968   2 705 924               
Issued capital                  17 143      17 143      17 143                  
Share premium                   537 314     537 314     537 314                 
Accumulated profits and                                                         
reserves                        3 244 445   1 943 511   2 151 467               
Minority interest               10 687      665 955     786 791                 
Non-current liabilities         160 488     787 160     570 378                 
Borrowings                      11 303      621 440     415 103                 
Other non-current liabilities   149 185     165 720     155 275                 
Current liabilities             926 464     1 356 833   1 568 261               
Current portion of borrowings   68 002      91 571      237 056                 
Provisions for liabilities                                                      
and charges                     91 255      175 553     220 912                 
Other current liabilities       762 656     1 083 801   1 107 229               
Bank overdraft                  4 551       5 908       3 064                   
Total equity and liabilities    4 896 541   5 307 916   5 631 354               
Statistics and Ratios                                                           
6 months    6 months    12 months               
                                to March    to March    to Sept.                
                                2005        2004        2004                    
Statistics and Ratios                                                           
Total number of shares in                                                       
issue ("000)                    342 853     342 853     342 853                 
Number of ordinary shares on                                                    
which earnings per share are                                                    
based ("000)                    342 853     342 853     342 853                 
Dividends per share (cents)     40,0         33,0        64,0                   
Special dividend per share(cents)415,0       -           -                      
Ratios                                                                          
Interest cover (times)          78,9        11,3        12,9                    
Effective tax rate (%)                                                          
- excluding the sale of shares                                                  
in Afrox Healthcare             32,1        33,0        33,1                    
- including the sale of shares                                                  
in Afrox Healthcare             21,3        33,0        33,1                    
Gearing (%)                     -           17,0        4,6                     
Dividend cover - Headline                                                       
earnings (times)                1,62        1,87        1,83                    
Performance summary                                                             
For the six months ended 31 March 2005, the consolidated results of both Afrox  
industrial and healthcare, have shown a 9 percent increase in revenue to R4,1   
billion (2004: R3,7 billion), with operating profit up 7 percent at R641,2      
million (2004: R598,3 million) and headline earnings per share 10,9 cents higher
than the comparable period last year.                                           
The first quarter, in particular, was characterised by a rapid escalation in    
costs of liquefied petroleum gas (LPG) and steel. After an initial lag in the   
recovery of these costs, they had been fully recovered by the end of the second 
quarter, which saw a general improvement with a pleasing growth in profits.     
Overall the results were according to expectations.                             
The Process Gas Solutions" (PGS) business was affected by reduced plant         
efficiencies, which have now been rectified through planned maintenance.        
Sale of Afrox Healthcare                                                        
The sale of Afrox Healthcare was granted final approval by the Competition      
Tribunal and became effective on 22 March 2005.  Business Venture (Bidco), a BEE
consortium, led by Brimstone Investment Corporation Limited and Mvelaphanda     
Strategic Investments (Pty) Limited, became the registered holder of all of the 
issued shares of Afrox Healthcare Limited.  On 23 March 2005, Afrox Healthcare  
Limited"s listing on the JSE Securities Exchange was terminated.  All           
shareholders have been paid in full.                                            
Afrox Healthcare Limited performed well and should continue this trend as a     
stand-alone BEE company. In this regard the directors, management and employees 
of Afrox wish Afrox Healthcare a successful future.                             
To comply with accounting standards, the healthcare income statement is         
consolidated with the industrial results but is also shown separately in the    
table below. In future, Afrox"s remaining 20,1 percent interest in Bidco, will  
be equity accounted and shown as income from associates.                        
As Afrox remains an investor in Healthcare through Bidco, Healthcare is no      
longer disclosed as a discontinuing operation.                                  
Business review                                                                 
Afrox is a strong, robust business that has proved its ability to grow through  
all economic cycles. Since inception in 1927, the company has clearly           
demonstrated this by producing a compound annual growth rate in profit of 14,6  
percent over the 78-year period.                                                
Afrox is a broad based company operating in a wide range of business segments.  
Our strategy is to sustain our core business while utilising our strong branding
and distribution network to grow into new markets and new geographies.          
On a comparative basis for the six months under review, the Afrox industrial    
business stripped of healthcare results, showed a pleasing 12 percent increase  
in revenue at R1,6 billion (2004: R1,4 billion) with net profit 7 percent higher
at R222,8 million (2004: R207,4 million). Cash flow improved considerably from  
R235 million in March 2004 to R320 million.                                     
Several growth projects are in place, many of which are at an advanced stage and
are already producing good returns. In 2004, for example, we entered the global 
export market with our Vitemax general-purpose electrodes by selling to BOC     
companies in Australia and New Zealand. The product was well received and has   
proved a growth area.                                                           
Following success with exports of our world benchmark Afrox designed and        
manufactured gas and welding equipment to Australia, New Zealand and SE Asia,   
the company won the contract to supply BOC in the United Kingdom with our       
redesigned range of gas equipment and accessories.                              
We are converting, re-locating or upgrading our existing chain of retail        
outlets, aimed at smaller collect customers, to a new concept in industrial     
retailing known as Afrox Gas & Gear. The centres are stocked with a wide range  
of specially merchandised equipment. We plan to have 16 Gas & Gear centres      
countrywide operational by the year-end and should introduce 24 more within the 
next two years.                                                                 
In April 2005, we acquired Twinco, a leading safety products company that will  
position us to compete successfully in the safety products market. In addition, 
sales of the AfroxPac 35 self-contained self-rescuer, launched in 2003, are on  
track to achieve stringent stretch targets by year-end.  Growth in the safety   
business has led to the consolidation of our safety products under a single     
business unit called Afrox Safety, which already has an annualised turnover in  
excess of R180 million.                                                         
During the half-year we also focused on cost control and efficiency enhancing   
projects. An example is the R100 million re-engineering and expansion of our    
Gases Operations Centre in Germiston. This three-year project will enlarge and  
increase efficiencies in what is already the biggest gas production, cylinder   
filling and distribution centre in the southern hemisphere, manufacturing,      
producing and distributing the entire range of our industrial, medical and      
scientific gases.                                                               
Process Gas Solutions" sales were affected by a shortage of carbon dioxide for  
the carbonated beverage industry over the high volume summer season.  A planned 
shutdown for maintenance of our largest gas producing plant in Mpumalanga       
resulted in rationing product to keep all customers supplied.                   
During the half-year, BOC Edwards appointed PGS as the sole distributor for its 
world benchmark range of vacuum products. PGS is currently developing several   
revenue-enhancing projects, which should increase revenues over the next six    
months.                                                                         
Accounting policies                                                             
These results have been prepared in accordance with South African Statements of 
Generally Accepted Accounting Practice. The accounting policies for the six     
months are consistent with those applied at 30 September 2004.                  
Special dividend and share buy back                                             
The board of directors has resolved to distribute the net proceeds from the     
disposal of the company"s 68 percent shareholding in Afrox Healthcare Limited by
way of a share buy back and a special dividend of 415 cents per ordinary share. 
The attention of shareholders is drawn to a parallel announcement regarding the 
distribution of the remainder of the net proceeds by way of a 10 percent        
compulsory share buy back.                                                      
This will result in a total distribution of 608 cents per share.                
Interim dividend                                                                
The results for the six months under review have enabled the board of directors 
to declare an interim cash dividend from the industrial business of 40 cents per
share (2004: 33 cents per share), an increase of 21 percent on last year. The   
dividend is covered 1,62 times by earnings from the industrial operations.      
Outlook                                                                         
Afrox is known as a strong performer through all economic cycles.  The past six 
months have, however, been difficult. We have actions to address the challenges 
for the second half of the year. As a result we expect increased revenues and   
profits from our new product and service offerings. We look forward to the next 
six months with confidence and expect earnings growth to be higher for the full 
year.                                                                           
Kent Masters        Rick Hogben              Johannesburg                       
Chairman            Managing Director        29 April 2005                      
Summarised Cash Flow Statement                                                  
Unaudited   Unaudited   Audited                 
                                6 months    6 months    12 months               
                                to March    to March    to Sept.                
R"000                           2005        2004        2004                    
Cash generated from operations  577 291     589 494     1 611 376               
Finance costs and taxation paid (250 238)   (273 501)   (472 040)               
Net dividends paid              (106 295)   (171 427)   (283 472)               
Net cash inflow from operating                                                  
activities                      220 758     144 566     855 864                 
Disposal/(acquisition) of                                                       
subsidiaries                    2 171 338   (45 269)    (46 408)                
Purchase of property, plant                                                     
and equipment                   (308 291)   (230 868)   (493 713)               
Other investing cash flows, net (317 792)   14 904      64 449                  
Net cash inflow/(outflow)                                                       
from investing activities       1 545 255   (261 233)   (475 672)               
Minorities                      (29 788)    (58 895)    (48 889)                
Decrease in borrowings          (213 333)   (51 313)    (112 593)               
Net cash outflow from                                                           
financing activities            (243 121)   (110 208)   (161 482)               
Net increase/(decrease) in                                                      
cash and cash equivalents       1 522 892   (226 875)   218 710                 
Cash and cash equivalents at                                                    
start of period                 477 885     259 175     259 175                 
Cash and cash equivalents at                                                    
end of period                   2 000 777   32 300      477 885                 
Summarised Statement of Changes of Equity                                       
                                                        Revalu-                 
Issued      Share       ation                   
R"000                           capital     premium     reserves                
Balance at 1 October 2004       17 143      537 314     101 758                 
Surplus on revaluation                                                          
of properties                   -           -           200                     
Other movements                 -           -           (495)                   
Net profit for the period       -           -           -                       
Dividend declared               -           -           -                       
Balance at 31 March 2005        17 143      537 314     101 463                 
Balance at 1 October 2003       17 143      537 314     102 745                 
Surplus on revaluation                                                          
of properties                   -           -           648                     
Other movements                 -           -           (1 063)                 
Net profit for the period       -           -           -                       
Dividend declared               -           -           -                       
Balance at 31 March 2004        17 143      537 314     102 330                 
Summarised Statement of Changes of Equity                                       
                                AC133       Accu-                               
                                hedging     mulated                             
R"000                           reserve     Profits     Total                   
Balance at 1 October 2004       -           2 049 709   2 705 924               
Surplus on revaluation                                                          
of properties                   -           -           200                     
Other movements                 -           (548)       (1 043)                 
Net profit for the period       -           1 200 116   1 200 116               
Dividend declared               -           (106 295)   (106 295)               
Balance at 31 March 2005        -           3 142 982   3 798 902               
Balance at 1 October 2003       (332)       1 720 261   2 377 131               
Surplus on revaluation                                                          
of properties                   -           -           648                     
Other movements                 332         (12 953)    (13 684)                
Net profit for the period       -           305 300     305 300                 
Dividend declared               -           (171 427)   (171 427)               
Balance at 31 March 2004        -           1 841 181   2 497 968               
Geographical Segments                                                           
                                South       Rest of                             
R"000                           Africa      Africa      Total                   
Six months ended 31 March 2005                                                  
Revenue                         3 827 737   243 610     4 071 347               
Operating profit                590 514     50 649      641 163                 
Six months ended 31 March 2004                                                  
Revenue                         3 505 192   229 673     3 734 865               
Operating profit                554 704     43 594      598 298                 
12 months ended 30 September 2004                                               
Revenue                         7 363 834   471 310     7 835 144               
Operating profit                1 186 521   90 980      1 277 501               
Notice of special dividend declaration and salient features                     
Notice is hereby given that a special cash dividend of 415,0 cents per ordinary 
share has been declared payable to all shareholders of African Oxygen Limited   
recorded in the register on Friday, 24 June 2005.                               
The salient dates for the declaration and                                       
payment of the special dividend are as follows:    2005                         
Last day to trade ordinary shares `cum" dividend   Friday, 17 June              
Ordinary shares trade `ex" the dividend            Monday, 20 June              
Record date                                        Friday, 24 June              
Payment date                                       Monday, 27 June              
Share certificates may not be dematerialised or rematerialised between Monday 20
June 2005 and Friday 24 June 2005, both days inclusive.                         
Notice of interim dividend declaration and salient features                     
Notice is hereby given that, from the industrial operations, an interim cash    
dividend of 40.0 cents (2004: 33.0 cents) per ordinary share, being the interim 
dividend for the half year ended 31 March 2005, has been declared payable to all
shareholders of African Oxygen Limited recorded in the register on Friday, 22   
July 2005.                                                                      
The salient dates for the declaration and                                       
payment of the interim dividend are as follows:    2005                         
Last day to trade ordinary shares `cum" dividend   Friday, 15 July              
Ordinary shares trade `ex" the dividend            Monday, 18 July              
Record date                                        Friday, 22 July              
Payment date                                       Monday, 25 July              
Share certificates may not be dematerialised or rematerialised between Monday 18
July 2005 and Friday 22 July 2005, both days inclusive.                         
By order of the Board                                                           
Ria Sanz                         Johannesburg                                   
Company Secretary                29 April 2005                                  
Business Segments                                                               
6 months ended                  6 months ended                   
               31 March 2005                   ended 31 March 2004              
               Industrial                      Industrial                       
R"000          Operations Healthcare Total     Operations Healthcare            
Revenue        1 563 173  2 508 174  4 071 347 1 391 439  2 343 426             
Operating                                                                       
profit         327 869    313 294    641 163   312 541    285 757               
Total net                                                                       
profit for                                                                      
the period                                                                      
before sale                                                                     
of Afrox                                                                        
Healthcare     222 833    117 629    340 462   207 358    97 942                
Net profit on                                                                   
sale of shares                                                                  
in Afrox                                                                        
Healthcare                                                                      
Limited after                                                                   
CGT            -          -          859 654   -          -                     
Net profit for                                                                  
the period     222 833    117 629    1 200 116 207 358    97 942                
Business Segments                                                               
                                    12 months ended                             
                                    30 September 2004                           
Industrial                                  
R"000                     Total     Operations Healthcare Total                 
Revenue                   3 734 865 2 921 362  4 913 782  7 835 144             
Operating profit          598 298   612 711    664 790    1 277 501             
Total net                                                                       
profit for                                                                      
the period                                                                      
before sale                                                                     
of Afrox                                                                        
Healthcare                305 300   400 986    237 873    638 859               
Net profit on                                                                   
sale of shares                                                                  
in Afrox                                                                        
Healthcare                                                                      
Limited after                                                                   
CGT                       -         -          -          (16 167)              
Net profit for the period 305 300   400 986    237 873    622 692               
AFRICAN OXYGEN LIMITED                                                          
African Oxygen Limited (Incorporated in the Republic of South Africa).          
Registration number: 1927/000089/06.  ISIN Code: ZAE000030920.  South African   
share code: AFX.  Namibian share code: AOX. ("Afrox" or "the Company").         
Registered office: Afrox House, 23 Webber Street, Selby, Johannesburg 2001, PO  
Box 5404, Johannesburg 2000. Telephone (+27 11) 490-0400.                       
Directors: JK Masters** (Chairman), RL Hogben (Managing Director), RG Cottrell, 
AJ Cullens*, JA Ford*, AE Isaac*, LA MacNair,  R Medori***,  CB Strauss, LL van 
Niekerk, CJPG van Zyl.   Alternate director: RK Lourey****    Company Secretary:
ME Sanz  * British    ** American    *** French    **** Australian              
Transfer secretaries: Computershare Investor Services 2004 (Pty) Limited, 70    
Marshall Street, Johannesburg 2001 PO Box 61051 Marshalltown 2107.  Telephone   
(+27 11) 370-5000                                                               
Sponsor in South Africa: Barnard Jacobs Mellet Corporate Finance (Pty) Limited. 
Sponsor in Namibia:  Namibia Equity Brokers (Pty) Limited.                      
This is a summarised commentary and results announcement. The interim report,   
which complies with AC127, will be mailed to shareholders during May 2005.      
Stakeholder enquiries may be addressed to: rick.hogben@afrox.boc.com            
www.afrox.co.za                                                                 
Date: 29/04/2005 02:59:39 PM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                                             
                                                                                
                                                                                
                                                                                



                                        
Email this JSE Sens Item to a Friend.

Send e-mail to
© 2017 SHARENET (PTY) Ltd, Cape Town, South Africa
Home     Terms & conditions    Privacy Policy
    Security Notice    Contact Details
Market Statistics are calculated by Sharenet and are therefore not the official JSE Market Statistics. The calculation/derivation may include underlying JSE data.