Wrap Text
Unaudited interim results for the six months ended 30 September 2013
INVICTA HOLDINGS LIMITED
Registration number: 1966/002182/06
(Incorporated in the Republic of South Africa)
Share code: IVT
ISIN: ZAE000029773
(Invicta or the Group or the Company)
www.invictaholdings.co.za
UNAUDITED INTERIM RESULTS for the six months ended
30 September 2013
FINANCIAL HIGHLIGHTS
REVENUE up by 46%
OPERATING PROFIT up by 57%
EARNINGS PER SHARE up by 15%
DIVIDEND up by 15%
CONSOLIDATED CONDENSED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept 30 Sept 31 Mar
Change 2013 2012 2013
% R000 R000 R000
Revenue 46 5 128 724 3 514 126 7 557 899
Operating profit 57 492 663 314 709 883 759
Interest and
dividends received 286 062 261 980 531 673
Negative goodwill 52 066
Finance costs (355 774) (318 908) (651 760)
Share of profits
of associate 731 671 3 018
Profit before
taxation 64 423 682 258 452 818 756
Taxation (90 513) (21 530) (75 224)
Profit for the
period 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 (1 706) 26 810
Total comprehensive
income for the
period 364 954 235 216 770 342
Profit attributable
to:
Owners of the Company 263 077 225 880 693 152
Non-controlling interest 37 490 11 042 28 468
Preference shareholders 32 602 21 912
333 169 236 922 743 532
Total comprehensive
income attributable
to:
Owners of the Company 304 019 223 701 741 874
Non-controlling interest 60 935 11 515 28 468
364 954 235 216 770 342
Earnings per
share (cents) 15 358 312 955
Diluted earnings
per share (cents) 19 356 298 948
Determination of
normalised earnings
Attributable earnings 263 077 225 880 693 152
Adjustments
Gain on partial
derecognition of
financial
investments (158 172)
Normalised earnings 263 077 225 880 534 980
Normalised earnings
per share (cents) 15 358 312 737
Determination of
headline earnings
Attributable earnings 263 077 225 880 693 152
Adjustments
Net impairment of
property, plant
and equipment (18)
Goodwill impaired 569 2 791
Negative goodwill (52 066)
Profit on sale of
fixed assets held
for sale (6 048)
Net profit on
disposal of
property, plant
and equipment (844) (13) (3 551)
Total adjustments
before taxation and
non-controlling
interest (6 892) 556 (52 844)
Taxation 1 572 4 999
Non-controlling
interest 1 489 769
Total adjustments (3 831) 560 (51 076)
Headline earnings 259 246 226 440 642 076
Headline earnings
per share (cents) 13 353 313 885
Diluted headline
earnings per
share (cents) 18 351 298 878
Shares in issue
Weighted
average (000s) 73 427 72 433 72 588
At the end of the
period (000s) 73 434 72 531 73 409
Number of shares used
for diluted earnings
per share (000s) 73 906 75 918 73 125
Headline earnings
per share (cents) 13 353 313 885
Earnings per
share (cents) 15 358 312 955
Dividends per
share* (cents) 102 89 268
Interim 15 102 89 89
Final 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 Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept 30 Sept 31 Mar
2013 2012 2013
R000 R000 R000
Cash flows from
operating activities
Cash generated
from operations 386 105 275 746 732 078
Finance costs (355 774) (318 908) (651 760)
Dividends paid to Group
shareholders and
non-controlling interest (179 039) (136 003) (198 433)
Taxation paid (89 428) (55 895) (161 137)
Interest and dividends
received 286 062 261 980 531 673
Net cash inflow from
operating activities 47 926 26 920 252 421
Cash flows from investing
activities
Net cash effects of
acquisitions of property,
plant and equipment
and intangible assets (114 994) (35 531) (131 724)
Acquisition of subsidiaries
and associates (98 028) (255 153) (1 496 282)
Decrease (increase) in
long-term receivables
including current portion 4 936 (102 489) (1 060 115)
Increase in investments (53 955) (80 854)
Dividend received from
associate 1 198 500 425
Net cash outflow from
investing activities (260 843) (473 527) (2 687 696)
Cash flows from financing
activities
Net cash effects of
liabilities raised 260 065 356 214 1 676 334
Net settlement of share
appreciation rights (115 095) (148 581)
Ordinary shares and
preference shares issued 2 379 809 232
Net cash inflow from
financing activities 262 444 241 119 2 336 985
Net increase (decrease) in
cash and cash equivalents 49 527 (205 488) (98 290)
Cash and cash equivalents
at the beginning of
the period 487 718 586 008 586 008
Cash and cash equivalents at
the end of the period 537 245 380 520 487 718
OTHER INFORMATION
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept 30 Sept 31 Mar
2013 2012 2013
R000 R000 R000
Net interest-bearing
debt: equity ratio
(excluding long-term
funding debt secured by
investments and loans) (%) 34 30 39
Depreciation and
amortisation (R000) 68 003 33 869 86 814
Net asset value per
share (cents) 3 867,8 2 690,3 3 664,5
Tangible net asset value
per share (cents) 2 803,8 1 761,3 2 610,4
Capital expenditure (R000) 116 912 47 491 152 276
Capital commitment (R000) 58 640 6 200 81 770
CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
30 Sept 30 Sept 31 Mar
2013 2012 2013
R000 R000 R000
ASSETS
Non-current assets 6 314 650 5 202 148 6 080 956
Property, plant and
equipment 1 100 676 467 616 1 010 636
Financial investments and
investment in associate 2 143 118 3 167 283 2 018 353
Goodwill and other
intangible assets 781 350 673 859 773 815
Financial asset, finance
lease and long-term
receivables 2 137 824 806 015 2 117 013
Deferred taxation 151 682 87 375 161 139
Current assets 7 076 717 3 901 746 6 123 855
Held for sale assets 3 478 9 957
Inventories 3 794 381 2 247 242 2 913 052
Trade and other
receivables 1 865 432 1 134 491 1 619 567
Current portion of
financial investments,
finance lease and
long-term receivables 756 360 68 134 883 599
Taxation prepaid 6 238 27 093 18 831
Bank balances and cash 650 828 424 786 678 849
Total 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 2 840 295 1 951 319 2 690 077
Non-controlling interest 458 326 68 690 405 135
Non-current liabilities 6 453 690 4 845 376 5 679 828
Long-term borrowings,
guaranteed repurchase
liabilities and
financial liabilities 6 426 584 4 839 789 5 654 572
Deferred taxation 27 106 5 587 25 256
Current liabilities 3 639 056 2 238 509 3 429 771
Current portion of
long-term borrowings
and guaranteed
repurchase liabilities 592 028 124 290 1 137 908
Trade, other payables and
provisions 2 895 003 2 066 646 2 070 533
Taxation liabilities 38 442 3 307 30 199
Bank overdrafts 113 583 44 266 191 131
Total equity and
liabilities 13 391 367 9 103 894 12 204 811
CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 Sept 30 Sept 31 Mar
2013 2012 2013
R000 R000 R000
Share capital
Balance at the beginning
of period 3 743 3 706 3 706
Ordinary shares issued 2 37
Balance at the end of
the period 3 745 3 706 3 743
Share premium
Balance at the beginning of
period 331 515 272 320 272 320
Ordinary shares issued 2 377 59 195
Balance at the end of the
period 333 892 272 320 331 515
Treasury shares
Balance at the beginning
of period (80 098) (93 931) (93 931)
Treasury shares utilised to
settle share appreciation
rights 7 795 51 958
Treasury shares purchased (38 125)
Balance at the end of
the period (80 098) (86 136) (80 098)
Preference share capital
Balance at beginning of
the year 750 000
Preference shares issued 750 000
Balance at the end of the
period 750 000 750 000
Retained earnings
Balance at the beginning
of period 2 014 469 1 716 222 1 676 751
Earnings attributable to
ordinary shareholders 263 077 225 879 693 152
Share appreciation
rights exercised (15 700) (89 573) (150 043)
Change in non-controlling
interest 2 351 (2 166) (12 128)
Dividends paid (131 180) (128 380) (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 (329 552) 54 020 36 385
Share appreciation
rights issued 1 866 2 395 4 990
Share appreciation rights
exercised (4 360) (18 674) (17 361)
Fair value of put option
on non-controlling interest (380 376)
Translation of foreign
operations 31 785 1 706 26 810
Balance at the end
of the period (300 261) 39 447 (329 552)
Attributable to equity
shareholders 2 840 295 1 951 319 2 690 077
Non-controlling interest
Balance at the beginning
of period 405 135 59 321 59 321
Earnings attributable to
non-controlling interest 37 490 11 042 28 468
Share of foreign currency
translation reserve 23 445 473
Non-controlling interest
acquired during the period (2 351) 327 076
Change in non-controlling
interest 2 114 (396)
Dividends paid (7 507) (1 750) (9 730)
Balance at the end of
the period 458 326 68 690 405 135
SEGMENT INFORMATION
Group,
Engi- financing
neering Capital Building and other
consumables equipment supplies operations Total
R000 R000 R000 R000 R000
Unaudited
six months
ended
30 September
2013
Segment
revenue 1 977 776 2 583 203 565 214 2 531 5 128 724
Segment
operating
profit 219 549 251 415 31 990 (10 291) 492 663
Segment
assets 2 105 126 4 251 606 662 365 6 372 270 13 391 367
Segment
liabi-
lities 729 770 2 664 684 463 042 6 235 250 10 092 746
Unaudited
six months
ended
30 September
2012
Segment
revenue 1 635 046 1 682 982 196 098 3 514 126
Segment
operating
profit 174 099 148 466 12 270 (20 126) 314 709
Segment
assets 2 011 529 1 713 103 201 088 5 178 174 9 103 894
Segment
liabi-
lities 884 159 1 283 480 141 151 4 775 095 7 083 885
Audited year
ended
31 March
2013
Segment
revenue 3 424 847 3 502 965 625 141 4 946 7 557 899
Segment
operating
profit 390 047 339 338 38 610 115 764 883 759
Segment
assets 2 189 286 3 215 154 502 070 6 298 301 12 204 811
Segment
liabi-
lities 867 637 1 874 215 325 923 6 041 824 9 109 599
NOTES TO THE FINANCIAL INFORMATION
BASIS OF PREPARATION
The Groups 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 Groups
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.
PREPARED BY
These interim financial statements have been prepared under the
supervision of Craig Barnard CA(SA), the Executive Director
Financial and Commercial.
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.
EVENTS AFTER THE REPORTING DATE
There were no reportable events from the reporting date to the
date of this report.
COMMENTS
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.
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
periods results included several months of Man-Dirks results.
Excellent management of costs and gross margins resulted in BMGs
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 Groups Singaporean company which was
acquired with effect from 1 February 2013, has been included in
CEGs results. Trading conditions in South East Asia, the major
region serviced by Kian Ann, continued to be challenging.
CEGs 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.
PROSPECTS
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 Companys Auditors.
BOARD RE-STRUCTURE
In keeping with the Groups 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
The Board has declared a gross interim dividend on 7 November
2013 of 102 cents per share.
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:
- The dividend has been declared out of income reserves;
- The local Dividend Tax rate is 15% (fifteen per centum);
- Secondary Tax on Companies (STC) credits of 102 cents per
share will be utilised;
- 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
- Invicta Holdings Limiteds 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 Friday, 6 December 2013
Payment date 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 Cape Town
Secretary 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
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
www.invictaholdings.co.za
Date: 11/11/2013 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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