Wrap Text
Unaudited Interim Results for 6mths ended 30 September 2012
SEARDEL INVESTMENT CORPORATION LIMITED
Registration number: 1968/011249/06
JSE share code: SER ISIN: ZAE000029815
JSE share code: SRN ISIN: ZAE000030144
UNAUDITED GROUP INTERIM RESULTS
for the six months ended 30 September 2012
STATEMENT OF FINANCIAL POSITION
30 Sept 30 Sept 31 March
2012 2011 2012
Rand thousands Unaudited Unaudited Audited
ASSETS
Non-current assets 1 239 561 1 047 426 1 142 413
Property, plant and equipment 701 640 677 618 695 048
Intangible assets 11 688 9 278 10 563
Investment properties 442 489 285 711 357 801
Other investments 3 329 3 339 3 329
Long-term receivables 43 966 41 193 43 402
Deferred tax 36 449 30 287 32 270
Current assets 1 253 550 1 216 682 1 286 386
Non-current assets held for sale 3 298 14 983 12 906
Inventories 622 182 597 462 581 816
Trade and other receivables 624 883 595 979 688 644
Current tax asset 1 187 2 893 971
Cash and cash equivalents 2 000 5 365 2 049
Total assets 2 493 111 2 264 108 2 428 799
EQUITY AND LIABILITIES
Total equity 1 392 874 1 256 032 1 411 645
Share capital and share premium 309 988 304 620 304 620
Treasury shares (17 793) (14 610) (14 610)
Reserves 1 100 679 965 412 1 121 635
Equity attributable to owners of the parent 1 392 874 1 255 422 1 411 645
Non-controlling interests - 610 -
Non-current liabilities 86 850 77 237 85 226
Deferred tax 8 252 7 332 8 725
Post-employment medical aid benefits 76 057 66 598 74 645
Interest-bearing liabilities 1 002 3 010 715
Operating lease accruals 1 539 297 1 141
Current liabilities 1 013 387 930 839 931 928
Current tax payable - 334 -
Post-employment medical aid benefits 4 750 4 368 4 662
Interest-bearing liabilities 26 456 129 110 25 427
Short-term provisions 355 2 916 13 538
Trade and other payables 459 587 469 534 437 830
Bank overdrafts 522 239 324 577 450 471
Total liabilities 1 100 237 1 008 076 1 017 154
Total equity and liabilities 2 493 111 2 264 108 2 428 799
Net asset value (excluding intangible assets) 1 381 186 1 246 144 1 401 082
Net asset value per share after treasury shares
(cents) 203 177 199
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
30 Sept 30 Sept
2012 2011
Rand thousands Unaudited Unaudited % change
Revenue 1 199 283 1 207 947 (0,7)
Gross profit 255 007 229 021 11,3
Operating profit before impairments and
restructuring costs 25 134 30 879 (18,6)
Net impairment of assets - 192
Net restructuring and retrenchment costs (1 316) (5 521)
Operating profit before finance costs 23 818 25 550 (6,8)
Finance income 1 456 3 451
Finance expenses (23 344) (17 842)
Profit before tax 1 930 11 159 (82,7)
Income tax income/(expense) 1 119 (1 095)
Profit for the period from continuing operations 3 049 10 064 (69,7)
Loss for the period from discontinued operations (1 286) (8 624)
Total comprehensive income for the period 1 763 1 440 22,4
Total comprehensive income attributable to:
Owners of the parent 1 763 1 440
Non-controlling interests - -
1 763 1 440
CONDENSED STATEMENT OF CASH FLOWS
30 Sept 30 Sept
2012 2011
Rand thousands Unaudited Unaudited
Net cash flow from operating activities 50 950 (19 581)
Net cash flow from investing activities (103 007) (92 941)
Net cash flow from financing activities (19 760) 552
Net decrease in cash and cash equivalents (71 817) (111 970)
Cash and cash equivalents at beginning of period (448 422) (207 242)
Cash and cash equivalents at end of period (520 239) (319 212)
STATEMENT OF CHANGES IN EQUITY
Share Share Treasury Other
Rand thousands capital premium shares reserves
Balance at 1 April 2011 159 207 144 762 (14 610) 264 064
Total comprehensive profit for the
period - - - -
Shares issued 192 459 - -
Share incentive scheme - - - -
Balance at 30 September 2011 159 399 145 221 (14 610) 264 064
Balance at 1 April 2012 159 399 145 221 (14 610) 284 791
Total comprehensive profit for the
period - - - -
Shares issued 986 4 401 - -
Share incentive scheme - - - -
Own shares acquired - - (20 789) -
Shares cancelled (19) - 17 606 -
Balance at 30 September 2012 160 366 149 622 (17 793) 284 791
Non-
Retained controlling Total
Rand thousands income Total interest equity
Balance at 1 April 2011 700 559 1 253 982 610 1 254 592
Total comprehensive profit for the
period 1 440 1 440 - 1 440
Shares issued - 651 - 651
Share incentive scheme (651) (651) - (651)
Balance at 30 September 2011 701 348 1 255 422 610 1 256 032
Balance at 1 April 2012 836 844 1 411 645 - 1 411 645
Total comprehensive profit for the
period 1 763 1 763 - 1 763
Shares issued - 5 387 - 5 387
Share incentive scheme (5 132) (5 132) - (5 132)
Own shares acquired - (20 789) - (20 789)
Shares cancelled (17 587) - - -
Balance at 30 September 2012 815 888 1 392 874 - 1 392 874
Composition of other reserves 30 Sept 30 Sept
2012 2011
Revaluation of investments 2 861 2 861
Capital redemption reserve fund 440 440
Surplus on disposal of subsidiary and associated companies 7 923 7 923
Surplus on revaluation of land and buildings 273 567 252 840
284 791 264 064
CONDENSED SEGMENTAL REPORT
Branded
product
Rand thousands Textiles Industrials Clothing distribution
2012
Segment revenue
Gross sales 331 523 168 877 361 298 342 261
Inter-segment sales (these
transactions are at arm's length) (23 043) - - -
308 480 168 877 361 298 342 261
Less: Revenue attributable to
discontinued operations - - (3 717) -
Revenue as per statement of
comprehensive income 308 480 168 877 357 581 342 261
Segment results
Operating profit/(loss) from
operations (7 352) 10 676 (10 927) 2 891
Less: Operating profit/(loss) from
discontinued operations 20 - (1 306) -
Operating profit/(loss) from
continuing operations (7 372) 10 676 (9 621) 2 891
2011*
Segment revenue
Gross sales 363 978 178 909 449 451 257 029
Inter-segment sales (these
transactions are at arm's length) (20 763) - - -
343 215 178 909 449 451 257 029
Less: Revenue attributable to
discontinued operations - - (29 606) -
Revenue as per statement of
comprehensive income 343 215 178 909 419 845 257 029
Segment results
Operating profit/(loss) from
operations 21 631 12 592 (42 999) (805)
Less: Operating profit/(loss) from
discontinued operations 517 - (9 141) -
Operating profit/(loss) from
continuing operations 21 114 12 592 (33 858) (805)
* Restated, refer note 4.
Head
Rand thousands Properties office Total
2012
Segment revenue
Gross sales 46 114 - 1 250 073
Inter-segment sales (these transactions are
at arm's length) (24 030) - (47 073)
22 084 - 1 203 000
Less: Revenue attributable to discontinued
operations - - (3 717)
Revenue as per statement of comprehensive income 22 084 - 1 199 283
Segment results
Operating profit/(loss) from operations 33 229 (5 985) 22 532
Less: Operating profit/(loss) from discontinued
operations - - (1 286)
Operating profit/(loss) from continuing operations 33 229 (5 985) 23 818
2011*
Segment revenue
Gross sales 29 681 - 1 279 048
Inter-segment sales (these transactions are
at arm's length) (20 732) - (41 495)
8 949 - 1 237 553
Less: Revenue attributable to discontinued
operations - - (29 606)
Revenue as per statement of comprehensive income 8 949 - 1 207 947
Segment results
Operating profit/(loss) from operations 31 740 (5 233) 16 926
Less: Operating profit/(loss) from discontinued
operations - - (8 624)
Operating profit/(loss) from continuing operations 31 740 (5 233) 25 550
* Restated, refer note 4.
STATISTICS PER SHARE
30 Sept 30 Sept
2012 2011
In cents, where applicable Unaudited Unaudited
Weighted average number of shares in issue ('000) 688 393 703 074
Number of shares in issue ('000) 681 594 703 711
Diluted weighted average number of shares in issue ('000) 731 154 737 493
Basic earnings/(loss) 0,3 0,2
Continuing operations 0,5 1,4
Discontinued operations (0,2) (1,2)
Headline earnings/(loss) 0,1 0,1
Continuing operations 0,3 1,4
Discontinued operations (0,2) (1,3)
Diluted earnings/(loss) 0,2 0,2
Continuing operations 0,4 1,4
Discontinued operations (0,2) (1,2)
Diluted headline earnings/(loss) 0,1 0,1
Continuing operations 0,3 1,4
Discontinued operations (0,2) (1,3)
Reconciliation between profit and headline earnings
Income attributable to shareholders 1 763 1 440
Net impairment of assets - (808)
Surplus on disposal of property, plant and equipment (1 319) (25)
Loss on disposal of property, plant and equipment 7 52
Total tax effect of adjustments 15 (2)
Headline earnings 466 657
NOTES
1. Basis of preparation
The Group interim results have been prepared in accordance with International
Financial Reporting Standards (IFRS) and specifically International Accounting
Standard IAS 34: Interim Financial Reporting and the AC 500 Standards as issued by
the Accounting Practices Board or its successor, the Listings Requirements of the
JSE Limited and the Companies Act, No 71 of 2008. These results have been prepared
under the supervision of the Financial Director, Gys Wege (CA)SA, and have not been
audited or reviewed by the Group's auditors, KPMG Inc.
2. Significant accounting policies
The Group interim results have been prepared under the historical cost convention,
except for the revaluation of certain properties and financial instruments. The
accounting policies adopted are consistent with those followed in the preparation of
the Group's annual financial statements for the year ended 31 March 2012.
3. Capital expenditure and commitments
Capital Capital Contractual Contractual
expenditure expenditure commitments commitments
30 Sept 30 Sept 30 Sept 30 Sept
2012 2011 2012 2011
Rand thousands Unaudited Unaudited Unaudited Unaudited
Investments property 28 469 59 163 95 845 70 402
Land and buildings 64 995 942 - -
Plant and equipment 17 002 36 214 19 110 12 898
Intangible assets 3 500 945 - -
Total capital expenditure 113 966 97 264 114 955 83 300
The capital commitments are expected to be incurred in the remainder of the 2013
reporting period.
4. Restatement of prior year results
The prior year's condensed segmental report has been restated due to the Group's
decision to change the composition of its reportable segments.
The recomposition reflects the underlying changes within the Group and provides
improved reporting to stakeholders. The restatement has no effect on the financial
information other than to the segmental report.
5. Issue and repurchase of shares
14 175 366 ordinary shares and 11 885 606 N ordinary shares were repurchased from the
market in accordance with the Settlement Agreement as communicated in the circular to
shareholders dated 30 April 2012.
During the period, 3 943 800 ordinary shares were issued in terms of the Group's share
incentive scheme.
6. Diluted weighted average number of shares
The difference between the weighted average number of shares and the diluted weighted
average number of shares are due to the impact of the unexercised options under the
Group's incentive scheme.
COMMENTARY
The results for the six months ended 30 September 2012 represent good progress for the
Group. Although headline earnings, at a break-even level, remained constant with the
prior period, the following factors need to be considered:
- The Government incentives recognised during the period are R7 million below those
recognised in the comparative period. Incentives are recognised based on the level of
qualifying expenditure incurred during any particular period and we anticipate that
for the full year, the total incentives will be in line with those recognised in the
prior year;
- The prior period numbers include once-off income of some R14 million relating to
property rates refunds; and
- Net interest costs are some R7 million greater than in the prior period due to the
increased debt incurred relating to the property development ahead of the full benefit
of increased rentals.
The Group's revenue at R1.2 billion was 0.7% down on the prior period. The prevailing
economic environment for local manufacturers remained challenging and revenue from the
Group's manufacturing operations was down 11% to R835 million. However, this shortfall
was offset by a 37% increase, to R364 million, in revenue from the Group's non-
manufacturing operations. The shift in revenue away from the lower margin manufacturing
segments as well as improved margins in the Apparel manufacturing business saw gross
margins improve from 19.0% to 21.3%.
SEGMENTS
In order to better disclose the nature of the underlying businesses within the Group
the segmental reporting has been adjusted. The segmental report now comprises the
following segments:
- Textiles: This segment includes the Group's traditional textile operations, namely,
Berg River Textiles, Hextex, Frame Knitting and the Home Textiles business;
- Industrials: This segment includes the Group's manufacturing businesses that
predominantly derive their revenue from industrial sectors including the automotive,
construction and mining industries. The businesses that fall within this segment are
our chemicals, non-woven and polypropylene businesses;
- Clothing: This segment incorporates the Group's apparel manufacturing business; and
- Branded product distribution: This segment incorporates the Group's toy, stationery,
electronics and branded apparel businesses.
Textiles
The performance of the textiles segment was disappointing. This segment delivered an
operating loss of R7.4 million for the period compared to an operating profit of
R21.1 million in the prior period. The main reason for the decline was a 9% reduction
in revenue to R332 million due largely to softer market conditions. The results were
also affected by a number of extenuating circumstances, most notably the liquidation
of an external steam supplier which cost the Group some R7 million in increased energy
costs. A coal powered boiler has recently been commissioned which should see energy
costs return to normal levels going forward.
Industrials
Revenue in this segment was down 6% to R169 million, due to the tough trading
environment and the effect of the transport strike. The fixed cost nature of the
businesses in this segment saw operating profit decline from R12.6 million in the prior
period to R10.7 million in the current period.
Clothing
Revenue reduced by 20% to R361 million in line with the downsized operations. The
reduced capacity has enabled fixed overheads to be substantially reduced and
efficiencies improved. As a result, the operating losses were greatly reduced, down
from R33.9 million in the prior period to R9.6 million in the current period. Although
much improvement has been made there are still areas where margins and efficiencies are
below the required hurdles. Remedial steps are being implemented to further curb the
losses.
Branded product distribution
Revenue in this segment is up 33% to R342 million partly driven by the fact that
revenue generated on the Microsoft Xbox distribution was not included in the prior
period numbers as this distribution agreement only kicked off in October 2011. The
segment delivered an operating profit of R2.9 million compared to a R0.8 million loss
in the prior period. Included in this segment are the results of our start-up branded
apparel business "Brand ID" which is in the building phase and still at least 18 months
away from break-even. We are pleased with the progress made with all the businesses
within this segment and it remains a key growth area for the Group going forward.
Properties
Revenue grew 55% to R46 million with rentals from external tenants comprising 48% of
the total revenue at R22.1 million. Operating profit was only up 5% to R33.2 million
due to the prior period figure including the once-off rates refund income of
R14 million.
The property developments are progressing well. The New Germany Industrial Park will
be completed by the end of 2012 and is 155 000 m2 in extent. 108 500 m2 is available
to be let to external tenants with in excess of 80% already having been let. The
Mobeni Industrial Park will be completed by mid 2013 and is 82 500 m2 in extent.
42 500 m2 is available to be let to external tenants with practically all of it having
already been let.
On behalf of the board
Stuart Queen Gys Wege
Chief Executive Officer Financial Director
Cape Town
16 November 2012
CORPORATE INFORMATION
SEARDEL INVESTMENT CORPORATION LIMITED
Registration number: 1968/011249/06 (Incorporated in the Republic of South Africa)
The company's shares are listed under the Consumer Goods - Personal and Household
Goods Sector of the JSE Limited.
JSE share code: SER ISIN: ZAE000029815
JSE share code: SRN ISIN: ZAE000030144
Directors: J A Copelyn* (Chairman), Adv N N Lazarus* (Deputy Chairman), M H Ahmed*,
T G Govender*, A M Ntuli, S A Queen (Chief Executive Officer), Y Shaik*, R Watson*,
G D T Wege (Financial Director) (*Non-executive)
Company Secretary: HCI Managerial Services (Pty) Ltd
Registered office: 1 Moorsom Avenue, cnr Bofors Circle and Moorsom Avenue,
Epping Industria II 7460 | PO Box 524, Eppindust 7475, South Africa
Transfer secretaries: Computershare Investor Services (Pty) Ltd, 70 Marshall Street,
Johannesburg 2001 | PO Box 61051, Marshalltown 2107
Auditors: KPMG Inc.
Sponsors: Investec Bank Limited
Date: 19/11/2012 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
