Sharenet Sites 
Sharenet Sites
MURRAY & ROBERTS HOLDINGS LIMITED (REGISTRATION NUMBER 05/29826/06) INTERIM REPORT TO SHAREHOLDERS - 31 DECEMBER 1997 SUMMARISED CONSOLIDATED INCOME STATEMENT
UNAUDITED AUDITED
6 MONTHS ENDED % YEAR ENDED
(R MILLIONS) 31.12.97 31.12.96 CHANGE 30.6.97
GROUP TURNOVER 5 381 6 076 -11 12 082 - ONGOING
OPERATIONS 4 906 4 651 +5 9 576 - MAJOR TRAIN
CONTRACTS 277 150 502 - DISPOSALS
(NOTE 1) 86 952 1 356 - OTHER
(NOTE 2) 112 323 648 EARNINGS BEFORE INTEREST AND EXCEPTIONAL
ITEMS (EBIT) 317 264 +20 227 - ONGOING
OPERATIONS 255 223 +14 466 - MAJOR TRAIN
CONTRACTS 68 (39) (340) - DISPOSALS
(NOTE 1) - 66 86 - OTHER
(NOTE 2) (6) 14 15 EXCEPTIONAL
ITEMS (1) 82 (118) EARNINGS BEFORE INTEREST
AND TAXATION 316 346 109
INTEREST (152) (151) (308) EARNINGS/(LOSS)
BEFORE TAXATION 64 195 (199)
TAXATION (32) (31) (42) EARNINGS/(LOSS)
AFTER TAXATION 132 164 (241) OUTSIDE SHAREHOLDERS'
INTEREST (24) (19) (31) EARNINGS/(LOSS) ATTRIBUTABLE TO ORDINARY
SHAREHOLDERS 108 145 -26 (272) AVERAGE NUMBER OF ORDINARY SHARES
IN ISSUE ('000) 345 968 345 968 345 968 EARNINGS/(LOSS)
PER SHARE - TOTAL 31C 42C -26 (79C)
- HEADLINE 31C 18C +72 (44C)
DIVIDEND PER SHARE 14,5C 14,5C 48,5C CASH EQUIVALENT EARNINGS/(LOSS)
PER SHARE 86C 92C (7C) OPERATING CASH FLOW
PER SHARE 72C (46C) (29C) HEADLINE EARNINGS/ (LOSS) (R MILLIONS) ATTRIBUTABLE
EARNINGS/(LOSS) 108 145 (272) ADJUSTMENTS: NET LOSS/(PROFIT) ON
DISPOSALS/CLOSURES 21 (82) (82) PROVISIONS - SUBSIDIARIES' ASSETS AND
HEADLEASES (20) - 200
109 63 (154) TAXATION ON
ABOVE ITEMS (2) (2) - HEADLINE EARNINGS/
(LOSS) 107 61 (154) NOTES:
1. TURNOVER AND EBIT CONTRIBUTIONS FROM ACTIVITIES DISPOSED OF SINCE 1 JULY 1996. 2. IDENTIFIED AS NON-CORE OPERATIONS. SUMMARISED CONSOLIDATED BALANCE SHEET
UNAUDITED AUDITED
(R MILLIONS) 31.12.97 31.12.96 30.6.97
FIXED ASSETS 2 661 2 732 2 667
INVESTMENTS 232 167 204 CURRENT ASSETS (EXCLUDING BANK
BALANCES) 3 420 3 825 3 699 TOTAL TANGIBLE
ASSETS 6 313 6 724 6 570
GOODWILL 434 636 501
TOTAL ASSETS 6 747 7 360 7 071
DEFERRED TAXATION (380) (408) (362) OTHER NON INTEREST
BEARING DEBT (2 315) (2 281) (2 700)
CAPITAL EMPLOYED 4 052 4 671 4 009 ORDINARY
SHAREHOLDERS' FUNDS 2 666 3 388 2 693 OUTSIDE SHAREHOLDERS'
INTEREST 217 216 215
PERMANENT CAPITAL 2 883 3 604 2 908
NET BORROWINGS 1 169 1 067 1 101 LONG TERM BORROWINGS -
FINANCE LEASES 210 203 207
- OTHER 895 839 791 SHORT TERM
BORROWINGS 497 616 539 BANK BALANCES
AND DEPOSITS (433) (591) (436)
CAPITAL EMPLOYED 4 052 4 671 4 009 SUPPLEMENTARY INFORMATION NET ASSET VALUE
PER SHARE (CENTS) 71 979 778 CONSOLIDATED CAPITAL EXPENDITURE (RM) - SPENT DURING
PERIOD 253 283 515 - COMMITTED/
AUTHORISED 401 467 654 DEPRECIATION
CHARGE (RM) 187 192 384 SUMMARISED CONSOLIDATED CASH FLOW STATEMENT
UNAUDITED AUDITED
6 MONTHS ENDED YEAR ENDED
(R MILLIONS) 31.12.97 31.12.96 30.6.97 CASH GENERATED
BY OPERATIONS 463 452 554 INTEREST AND
TAXATION PAID (164) (188) (399) INCREASE IN
WORKING CAPITAL (50) (424) (254) OPERATING
CASH FLOW 249 (160) (99)
DIVIDENDS PAID (122) (126) (179) CASH RETAINED/ (UTILISED)
IN OPERATIONS 127 (286) (278) NET INVESTMENT
ACTIVITIES (198) (95) (124)
NET CASH UTILISED (71) (381) (402) COMMENTS
EARNINGS BEFORE INTEREST AND EXCEPTIONAL ITEMS REFLECT A 20% INCREASE ON LOWER TURNOVER. EARNINGS ATTRIBUTABLE TO ORDINARY SHAREHOLDERS AND TOTAL EARNINGS PER SHARE HAVE DECLINED BY 26% ON THE COMPARABLE PERIOD OF LAST YEAR. IN THE MAIN, THIS DECLINE IS DUE TO THE INCLUSION OF A SIGNIFICANT EXCEPTIONAL SURPLUS IN THE SIX MONTHS TO DECEMBER 1996. HEADLINE EARNINGS THEREFORE REFLECT SUBSTANTIAL GROWTH. ONGOING OPERATIONS
THE CONTRIBUTIONS TO CONSOLIDATED EBIT FROM ONGOING OPERATIONS WERE AS FOLLOWS: 6 MONTHS ENDED YEAR ENDED
(R MILLIONS) 31.12.97 31.12.96* 30.6.97*
CONTRACTORS 64 54 103
MATERIALS 108 94 163
TRANSPORT 81 73 124
ENGINEERING 19 18 104 CHO AND CORPORATE
- INVESTMENTS (17) (16) (28)
255 223 466
*COMPARATIVE FIGURES RESTATED FOR SUBSEQUENT RECLASSIFICATION OF ONGOING OPERATIONS.
THE CONTRACTORS RESULTS FOR THE HALF YEAR HAVE BEEN ACHIEVED IN SPITE OF SOME WEAKENING IN THE DOMESTIC MARKET, WITH LOWER THAN FORECAST GDFI EXPENDITURE AND PROJECT DELAYS. THE INTERNATIONAL OPERATIONS OF THIS OPERATING GROUP CONTINUE TO EXPAND WITH THE RECENT AWARD OF SUBSTANTIAL CONTRACTS IN THE UNITED ARAB EMIRATES.
THE CEMENT DIVISION OF THE MATERIALS OPERATING GROUP WAS AFFECTED BY THE SLUGGISH MARKET CONDITIONS REFERRED TO ABOVE, PARTICULARLY IN THE GAUTENG REGION. A PLEASING RESULT WAS ACHIEVED IN THE HALL LONGMORE OPERATIONS. THE TRANSPORT GROUP'S IMPROVED RESULTS WERE ACHIEVED DESPITE A THREE WEEK STRIKE IN THE SUGAR INDUSTRY, EXCESSIVE RAINS AND THE CONTINUED DEPRESSED STATE OF THE NEW AND USED TRUCK MARKETS.
THE ENGINEERING OPERATING GROUP RECORDED A DISAPPOINTING RESULT IN THE SIX MONTH PERIOD AND WAS AFFECTED BY THE CONTINUING DIFFICULTIES EXPERIENCED BY SOUTH AFRICAN AUTOMOTIVE MANUFACTURERS. THE ALLOY WHEELS INTERNATIONAL DIVISION RECORDED A LOSS AS A RESULT OF PRODUCTION PROBLEMS IN THE UK AND PORT ELIZABETH PLANTS, WHICH PROBLEMS HAVE SINCE BEEN RECTIFIED. MAJOR TRAIN CONTRACTS
IN AN ANNOUNCEMENT PUBLISHED ON 7 OCTOBER 1997, SHAREHOLDERS WERE ADVISED OF A NET RECOVERY OF R79 MILLION IN RESPECT OF INSURANCE CLAIMS ON THE DORTS CONTRACT. DELIVERIES HAVE BEEN COMPLETED AND COMMISSIONING IS CURRENTLY UNDERWAY ON TWO OF THE REMAINING FOUR MAJOR EXPORT CONTRACTS. CASH FLOW AND BALANCE SHEET
THE OPERATING CASH FLOW OF R249 MILLION, SHOWS A WELCOME IMPROVEMENT AS COMPARED TO THE SUBSTANTIAL OUTFLOWS DURING THE YEAR ENDED 30 JUNE 1997. APPROPRIATE EXPENDITURE HAS BEEN APPLIED TO CAPITAL RENEWAL AND REPLACEMENT. THE GROUP'S NET BORROWINGS INCREASED BY R68 MILLION IN THE SIX MONTHS UNDER REVIEW. ACQUISITIONS AND DISPOSALS
- UNITRANS LIMITED, IN WHICH YOUR GROUP HELD 61% THROUGHOUT THE SIX MONTHS UNDER REVIEW, ACQUIRED THE ENTIRE SHAREHOLDING OF MALBAK CONSUMER PRODUCTS (PTY)LIMITED, TRADING AS MALBAK MOTOR HOLDINGS, WITH EFFECT FROM 1 JANUARY 1998. THIS ACQUISITION OF A MAJOR DISTRIBUTOR OF MOTOR VEHICLES, WHICH IS ALSO SUCCESSFULLY INVOLVED IN FINANCING THE MOTOR VEHICLE MARKET, WAS CONCLUDED AS PART OF THE UNITRANS STRATEGY OF DIVERSIFYING FROM ITS TRADITIONAL RELIANCE ON THE FREIGHT CONTRACTING MARKET. THIS PURCHASE WILL BE FUNDED BY AN ISSUE OF SHARES AND AS A RESULT, YOUR GROUP'S HOLDING IN UNITRANS LIMITED WILL REDUCE TO 47%. THIS SHAREHOLDING WILL BE PROPORTIONATELY CONSOLIDATED WITH EFFECT FROM 1 JANUARY 1998.
- THE GROUP HAS AGREED TO SELL ITS SHAREHOLDING IN UNION CARRIAGE &WAGON (PTY)LIMITED WITH EFFECT FROM 1 JULY 1998. SUITABLE ARRANGEMENTS HAVE BEEN MADE TO ENSURE ACCESS TO THE MANUFACTURING FACILITIES DURING THE MAINTENANCE PERIOD OF THE MAJOR TRAIN CONTRACTS WHICH REMAIN THE GROUP'S RESPONSIBILITY.
- FURTHER DISPOSALS OF RELATIVELY SMALL NON CORE ACTIVITIES WERE ACHIEVED DURING THE PERIOD UNDER REVIEW, AS PART OF THE OVERALL DISPOSAL PROGRAMME REFERRED TO IN PREVIOUS REPORTS. PROSPECTS
THE TOTAL EBIT CONTRIBUTIONS FROM ONGOING OPERATIONS ARE EXPECTED TO BE AT A SIMILAR LEVEL IN THE SECOND SIX MONTHS OF THE FINANCIAL YEAR TO THAT ACHIEVED IN THE FIRST HALF.
THE CONTRIBUTION FROM THE CONTRACTORS OPERATING GROUP IS EXPECTED TO INCREASE SATISFACTORILY, BUT WILL BE AFFECTED BY ACTIVITY LEVELS IN THE DOMESTIC MARKET. THE MATERIALS OPERATING GROUP'S PERFORMANCE IS CURRENTLY FORECAST TO BE LOWER THAN IN THE FIRST HALF, BUT ANY IMPROVEMENT IN THE DOMESTIC MARKET SHOULD HAVE AN IMMEDIATE POSITIVE EFFECT.
THE ENGINEERING OPERATING GROUP IS FORECASTING AN IMPROVEMENT, IN PARTICULAR A RETURN TO PROFITABILITY IN THE ALLOY WHEELS INTERNATIONAL DIVISION. A LOWER EBIT CONTRIBUTION IS EXPECTED FROM TRANSPORT, ARISING FROM THE CHANGE TO PROPORTIONAL CONSOLIDATION REFERRED TO ABOVE.
THE IMPROVEMENTS IN CASH FLOW ARE EXPECTED TO CONTINUE IN THE SECOND HALF. OVERALL, THE ATTRIBUTABLE EARNINGS ARE EXPECTED TO CONFIRM A RETURN TO PROFITABILITY. DIVIDEND
IN THE LIGHT OF THE ACTUAL AND PROJECTED PERFORMANCE, YOUR BOARD HAS DECIDED TO DECLARE AN UNCHANGED INTERIM DIVIDEND OF 14,5 CENTS PER SHARE. YOUR ATTENTION IS DRAWN TO THE FORMAL DIVIDEND NOTICE BELOW. DIRECTORATE
AS ANNOUNCED ON 20 NOVEMBER 1997, MR GRAHAM HARDY RESIGNED AS MANAGING DIRECTOR WITH EFFECT FROM 1 DECEMBER 1997 AND MR DAVE BRINK HAS ASSUMED THE ROLE OF EXECUTIVE CHAIRMAN. ON BEHALF OF THE BOARD BEDFORDVIEW 26 FEBRUARY 1998 D.C. BRINK EXECUTIVE CHAIRMAN L.B. BIRD FINANCIAL DIRECTOR NOTICE TO SHAREHOLDERS DECLARATION OF INTERIM ORDINARY DIVIDEND NO. 98
NOTICE IS HEREBY GIVEN THAT INTERIM DIVIDEND NO. 98 OF 14,5 CENTS PER SHARE IN RESPECT OF THE YEAR ENDING 30 JUNE 1998 HAS BEEN DECLARED PAYABLE TO ORDINARY SHAREHOLDERS REGISTERED IN THE BOOKS OF THE COMPANY AT THE CLOSE OF BUSINESS ON 9 APRIL 1998. DIVIDEND PAYMENTS WILL BE POSTED ON OR ABOUT 30 APRIL 1998. BY ORDER OF THE BOARD BEDFORDVIEW 26 FEBRUARY 1998 L.J. LINDSAY SECRETARY DIRECTORATE:
D.C. BRINK EXECUTIVE CHAIRMAN, B.N. BAM, L.B.BIRD, W.P. ESTERHUYSE, P.G. JOUBERT, M.W. MCCULLOCH, A.A. ROUTLEDGE.
