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MURRAY & ROBERTS HOLDINGS LIMITED (REGISTRATION NUMBER 05/29826/06)
PRELIMINARY REPORT IN RESPECT OF THE YEAR ENDED 30 JUNE 2000 SALIENT FEATURES PERFORMANCE IMPROVEMENT IN SECOND HALF STRATEGIC REVIEW LEADS TO MAJOR WRITE DOWN BALANCE SHEET REMAINS STRONG SOLID PLATFORM FOR FUTURE GROWTH NEW LEADERSHIP TEAM IN PLACE
THE AUDITED CONSOLIDATED RESULTS FOR THE YEAR ENDED 30 JUNE 2000 ARE AS SET OUT BELOW: SUMMARISED CONSOLIDATED INCOME STATEMENT
YEAR ENDED
(R MILLIONS) 30 JUNE 2000 30 JUNE 1999
REVENUE 13 318 12 972
ONGOING OPERATIONS 13 318 12 639
DISCONTINUED OPERATIONS - 333 EARNINGS BEFORE FINANCE COSTS, EXCEPTIONAL ITEMS AND
DEPRECIATION 662 571
DEPRECIATION (368) (368) EARNINGS BEFORE FINANCE COSTS AND EXCEPTIONAL
ITEMS (EBIT) 294 203
ONGOING OPERATIONS 294 210
DISCONTINUED OPERATIONS - (7)
EXCEPTIONAL ITEMS (697) (76)
ASSET IMPAIRMENT PROVISIONS (287) -
HEADLEASE AND OTHER PROPERTIES (283) (47)
NET LOSS ON DISPOSALS/CLOSURES (127) (29) (LOSS)/EARNINGS BEFORE
FINANCE COSTS AND TAXATION (403) 127
NET FINANCE COSTS (64) (109)
(LOSS)/EARNINGS BEFORE TAXATION (467) 18
TAXATION (39) (32)
LOSS AFTER TAXATION (506) (14)
OUTSIDE SHAREHOLDERS INTEREST (65) (52) LOSS ATTRIBUTABLE TO
ORDINARY SHAREHOLDERS (571) (66) RECONCILIATION OF HEADLINE EARNINGS
ATTRIBUTABLE LOSS (571) (66) ADD BACK : EXCEPTIONAL
ITEMS AS ABOVE 697 76
HEADLINE EARNINGS 126 10 AVERAGE NUMBER OF ORDINARY SHARES IN
ISSUE ('000) 345 968 345 968
(LOSS)/EARNINGS PER SHARE - TOTAL (165C) (19C)
- HEADLINE 36C 3C
DIVIDEND PER SHARE - 50C
OPERATING CASH FLOW PER SHARE 107C 142C SUMMARISED CONSOLIDATED CASH FLOW STATEMENT
YEAR ENDED
(R MILLIONS) 30 JUNE 2000 30 JUNE 1999
CASH GENERATED BY OPERATIONS 457 522
INTEREST AND TAXATION PAID (95) (146)
DECREASE IN WORKING CAPITAL 8 117
OPERATING CASH FLOW 370 493
DIVIDENDS PAID (180) (137)
CASH RETAINED IN OPERATIONS 190 356
NET INVESTMENT ACTIVITIES (454) (566)
NET CASH UTILISED (264) (210) SUMMARISED CONSOLIDATED BALANCE SHEET
(R MILLIONS) 30 JUNE 2000 30 JUNE 1999 ASSETS
PROPERTY, PLANT AND EQUIPMENT 1 239 2 023 ASSOCIATE COMPANY - UNITRANS
LIMITED (MARKET VALUE R764 MILLION) 383 -
INVESTMENTS 171 132
CURRENT ASSETS 2 880 3 329
CASH 984 1 122
RECEIVABLES - DISPOSALS - 180
TOTAL TANGIBLE ASSETS 5 657 6 786
GOODWILL - 151
TOTAL ASSETS 5 657 6 937 EQUITY AND LIABILITIES
PERMANENT CAPITAL 1 725 2 739
ORDINARY SHAREHOLDERS' FUNDS 1 717 2 410
OUTSIDE SHAREHOLDERS' INTEREST 8 329
NON-CURRENT LIABILITIES 879 896
LONG TERM PROVISION 367 140
LONG TERM LOANS 402 514
DEFERRED TAXATION 110 242
CURRENT LIABILITIES 3 053 3 302
OVERDRAFTS AND SHORT TERM LOANS 175 217
ACCOUNTS PAYABLE AND OTHER 2 878 3 085
TOTAL EQUITY AND LIABILITIES 5 657 6 937 SUPPLEMENTARY INFORMATION
NET ASSET VALUE PER SHARE (CENTS) 496 697 NET ASSET VALUE PER SHARE INCLUDING ASSOCIATE COMPANY AT MARKET VALUE (CENTS) 606 CONSOLIDATED CAPITAL EXPENDITURE (RM)
- SPENT DURING YEAR 555 536
- AUTHORISED 250 519 SUMMARISED STATEMENT OF CHANGES IN EQUITY
YEAR ENDED
(R MILLIONS) 30 JUNE 2000 30 JUNE 1999
OPENING BALANCE 2 410 3 003
LOSS ATTRIBUTABLE TO SHAREHOLDERS (571) (66) FOREIGN CURRENCY TRANSLATION
MOVEMENTS ON INVESTMENTS 42 14
REALISED SURPLUS ON INVESTMENTS 23 -
GOODWILL AMORTISED (191) (168) CHANGE IN COST OF SHARES HELD BY THE MURRAY & ROBERTS TRUST (1999 :
FULL COST DEDUCTED FOR FIRST TIME) 4 (150)
DIVIDENDS PAID - (173)
UNREALISED SURPLUS ON INVESTMENTS - (50)
1 717 2 410 COMMENTS OPERATING PERFORMANCE
THE GROUP HAS ACHIEVED AN IMPROVED OPERATING PERFORMANCE AS COMPARED TO THE PREVIOUS YEAR.
THE EXTENT OF THIS IMPROVEMENT IS REFLECTED IN THE FOLLOWING TABLE OF
CONTRIBUTIONS TO CONSOLIDATED EBIT FROM ONGOING OPERATIONS :
FIRST SECOND YEAR YEAR
HALF HALF ENDED ENDED
30.06.00 30.06.99 BUILDING AND CIVIL
ENGINEERING 28 43 71 37
INDUSTRY AND MINING 22 27 49 21
ENGINEERED PRODUCTS (24) 5 (19) (42)
SUPPLIES AND SERVICES 3 40 43 92
CORPORATE (23) (30) (53) (87)
MURRAY & ROBERTS LIMITED 6 85 91 21
UNITRANS 114 89 203 189
120 174 294 210
THE BUILDING AND CIVIL ENGINEERING OPERATIONS RECORDED IMPROVED PERFORMANCES DURING THE YEAR. THE INDUSTRY AND MINING ACTIVITIES PERFORMED WELL ON MAJOR INDUSTRIAL PROJECTS IN THE REGION. IN ANOTHER DIFFICULT YEAR, THE ENGINEERED PRODUCTS ACTIVITIES INCURRED A LOSS, ALBEIT LOWER THAN LAST YEAR. WITHIN THESE ACTIVITIES ALLOY WHEELS INTERNATIONAL ACHIEVED AN EBIT PROFIT. UNION CARRIAGE AND WAGON INCURRED AN EBIT LOSS IN THE YEAR BUT THE CAPITAL EXPENDITURE PROGRAMME INDICATED BY TRANSNET WILL RETURN THIS ENTITY TO PROFITABILITY. THE SUPPLIES AND SERVICES ACTIVITIES IMPROVED SIGNIFICANTLY ON THEIR FIRST HALF RESULT WITH BETTER PERFORMANCES IN THE SECOND SIX MONTHS FROM REINFORCING STEEL HOLDINGS AND JOHNSON CRANE HIRE. HALL LONGMORE INCURRED A SMALLER EBIT LOSS IN THE SECOND HALF. UNITRANS RECORDED A YEAR ON YEAR INCREASE AT EBIT LEVEL. THE LOWER EBIT IN THE SECOND HALF RESULTS FROM THE SEASONALITY OF EARNINGS IN THE SUGAR DIVISION OF THE FREIGHT ACTIVITIES AND IN THE PASSENGER AND EXPRESS DELIVERY DIVISIONS. EXCEPTIONAL ITEMS
FOLLOWING A COMPREHENSIVE REVIEW OF THE GROUP, THE BOARD HAS CONSIDERED IT PRUDENT TO RECOGNISE THE FOLLOWING EXCEPTIONAL ITEMS :
IMPAIRMENT - THE CARRYING VALUE OF ALLOY WHEELS INTERNATIONAL AND CERTAIN OF THE SUPPLIES AND SERVICES ACTIVITIES HAVE BEEN WRITTEN DOWN BY R218 MILLION AND R69 MILLION RESPECTIVELY.
HEADLEASE AND OTHER PROPERTIES - IN THE PRIOR YEAR, A PROVISION WAS CREATED BASED ON THE NET PRESENT VALUE OF THE EXPECTED LOSSES ON HEADLEASE AND OTHER DISCONTINUED PROPERTY ACTIVITIES, WITH A CONSEQUENTIAL ONGOING ANNUAL COST TO SERVICE THE PROVISION. A MORE CONSERVATIVE PROVISION HAS BEEN CREATED THIS YEAR BASED ON THE PROJECTED NOMINAL LOSSES. THE WRITE OFF ON THESE ACTIVITIES THIS YEAR TOTALLED R283 MILLION.
OTHER - DURING THE YEAR A DECISION WAS MADE TO CLOSE THE CARDIFF PLANT OF ALLOY WHEELS INTERNATIONAL, WITH A NET COST, AFTER THE SALE OF THE PROPERTY, OF R35 MILLION. THE LIQUIDATION OF THE DEBTOR IN RESPECT OF THE SALE OF ASTAS, NECESSITATED A PROVISION OF R55 MILLION. OTHER NON OPERATING LOSSES, PARTIALLY OFFSET BY A NET SURPLUS ON DISPOSALS, TOTALLED R37 MILLION. NET FINANCE COSTS
NET FINANCE COSTS REFLECT A SUBSTANTIAL REDUCTION ON THE PRIOR YEAR'S COSTS DUE TO LOWER INTEREST COSTS IN UNITRANS AS WELL AS THE IMPACT OF A GAIN ON THE CONVERSION OF THE GROUP'S SURPLUS TREASURY FUNDS HELD OFFSHORE. INVESTMENT IN UNITRANS
DURING JUNE THE GROUP DISPOSED OF 5 MILLION UNITRANS SHARES TO FACILITATE THE FORMATION OF A HOUSEHOLD GOODS LOGISTICS JOINT VENTURE BETWEEN UNITRANS AND STEINHOFF INTERNATIONAL HOLDINGS LIMITED. AT 30 JUNE 2000, THE GROUP HELD 43,8% OF THE UNITRANS ISSUED SHARES. THE RESULTS OF UNITRANS HAVE BEEN CONSOLIDATED IN THE INCOME STATEMENT FOR THE YEAR BUT THE GROUP'S INVESTMENT HAS BEEN EQUITY ACCOUNTED IN THE BALANCE SHEET. THE GROUP'S SHARE OF THE UNITRANS TRADING RESULTS WILL BE EQUITY ACCOUNTED IN THE INCOME STATEMENT WITH EFFECT FROM 1 JULY 2000. CASH FLOW AND BALANCE SHEET
THE GROUP ACHIEVED AN OPERATING CASH FLOW OF R370 MILLION IN THE YEAR. DESPITE THE EXCEPTIONAL WRITE DOWN, THE BALANCE SHEET REMAINS STRONG WITH CASH BALANCES OF R984 MILLION EXCEEDING THE INTEREST BEARING DEBT WHICH TOTALLED R577 MILLION ACQUISITION
SUBSEQUENT TO THE END OF THE FINANCIAL YEAR, THE GROUP FINALISED THE
ACQUISITION, EFFECTIVE 26 MARCH 2000, OF 100% OF BOOKER TATE LIMITED, AN ENGINEERING CONTRACTOR AND MANAGEMENT COMPANY WHICH OPERATES IN THE GLOBAL SUGAR INDUSTRY. THE ACQUISITION HAD NO MATERIAL IMPACT ON THE GROUP'S RESULTS FOR THE YEAR ENDED 30 JUNE 2000, EXCEPT THAT GOODWILL OF R25 MILLION WAS AMORTISED. PROSPECTS
MURRAY & ROBERTS HAS MADE SIGNIFICANT PROGRESS OVER THE PAST YEAR IN THE DEVELOPMENT OF ITS STRATEGY AS ENGINEERS AND CONTRACTORS. MANY OF ITS
UNDER-PERFORMING ASSETS HAVE BEEN RATIONALISED AND REFOCUSED. THE CONSTRUCTION SECTOR CONTINUES TO DELIVER VALUE AND ALL ENGINEERING BASED BUSINESSES SHOW GOOD UPSIDE POTENTIAL. THE GROUP REMAINS COMMITTED TO FURTHER GROWTH OF ITS INTERNATIONAL ACTIVITIES OFF ITS SOUTH AFRICAN BASE. REBUILDING MURRAY & ROBERTS WILL INCLUDE THE DISPOSAL OF NON CORE ACTIVITIES.
MURRAY & ROBERTS LIMITED IS FORECASTING IMPROVED TRADING RESULTS IN THE YEAR ENDING 30 JUNE 2001. THE DIRECTORS OF UNITRANS ARE OF THE VIEW THAT THEIR GROUP IS WELL POSITIONED TO PRODUCE A REAL RETURN IN THE YEAR AHEAD.
OVERALL, THE GROUP EXPECTS AN IMPROVEMENT IN HEADLINE EARNINGS FOR THE 2001 YEAR. DIVIDEND
IN VIEW OF THE SIGNIFICANT REDUCTION IN SHAREHOLDERS' FUNDS THIS YEAR, THE BOARD HAS DECIDED THAT NO DIVIDEND SHOULD BE PAID.
AS PART OF A STRATEGY TO REBUILD MURRAY & ROBERTS, A DIVIDEND POLICY WILL BE DETERMINED FOR THE FUTURE THAT ESTABLISHES A BALANCE BETWEEN GROWTH REQUIREMENTS AND YIELD. ON BEHALF OF THE BOARD BEDFORDVIEW D C BRINK CHAIRMAN
30 AUGUST 2000 B C BRUCE CHIEF EXECUTIVE
R W REES FINANCIAL DIRECTOR
DIRECTORS : D C BRINK (CHAIRMAN), B C BRUCE (CHIEF EXECUTIVE), B N BAM, L B BIRD, A J DE NYSSCHEN, C A DI NICOLA, W P ESTERHUYSE, S E FUNDE, K J GROVE, P G JOUBERT, A J MORGAN, R W REES, A A ROUTLEDGE, R C SHEPPARD, J J M VAN ZYL. SECRETARY : L J LINDSAY
