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(REGISTRATION NO. 68/024909/06)
INTERIM REPORT FOR THE HALF YEAR ENDED 28 FEBRUARY 1999
- TURNOVER UP 20.7%
- PROFIT BEFORE TAXATION UP 26.7%
- ATTRIBUTABLE INCOME UP 36.6%
- HEADLINE EARNINGS PER SHARE UP 15.7%
SUMMARISED CONSOLIDATED INCOME STATEMENT
HALF YEAR ENDED HALF YEAR ENDED %
28 FEB 1999 28 FEB 1998 CHANGE
(R000) (R000)
TURNOVER 242 033 200 602 20.7
NET OPERATING INCOME 13 805 11 889 16.1
INTEREST PAID 3 598 3 833 -6.1
INCOME BEFORE TAXATION 10 207 8 056 26.7
TAXATION 1 880 1 961
INCOME AFTER TAXATION 8 327 6 095 36.6
HEADLINE EARNINGS 8 327 6 095 36.6
EARNINGS PER SHARE
(CENTS) 39.0 33.6 16.1
EARNINGS PER SHARE
(CENTS) 39.1 33.8 15.7
- WEIGHTED
HEADLINE EARNINGS PER
SHARE CENTS 39.0 33.6 16.1
HEADLINE EARNINGS PER
SHARE CENTS 39.1 33.8 15.7
- WEIGHTED
INTEREST COVER 3.8 3.1 22.6
SHARES IN ISSUE 21 327 18 145 17.5
SHARES IN ISSUE
- WEIGHTED 21 272 18 040 17.9
SUMMARISED CONSOLIDATED BALANCE SHEET
HALF YEAR ENDED HALF YEAR ENDED %
28 FEB 1999 28 FEB 1998 CHANGE
(R000) (R000)
SHAREHOLDERS' FUNDS 176 697 84 167 109.9
LONG-TERM LIABILITY 22 307 32 343 -31.0
CAPITAL EMPLOYED 199 004 116 510 70.8
FIXED ASSETS 23 852 23 258 2.6
NET CURRENT ASSETS 175 152 93 252 87.8
CURRENT ASSETS 213 632 161 586
BANK DEPOSITS /
(BORROWINGS) 23 569 370
CURRENT LIABILITIES 59 549 66 204
CURRENT PORTION OF
LONG-TERM LIABILITIES 2 500 2 500
EMPLOYMENT OF CAPITAL 199 004 116 510 70.8
DEBT : EQUITY RATIO 0.0% 41.0%
COMMENTS
IN AN ECONOMY, WHICH DURING THE PAST SIX MONTHS HAS BEEN BORDERING ON
RECESSIONARY - IT IS PLEASING FOR THE DIRECTORS TO REPORT ON A FINE SET OF
RESULTS FOR THIS INTERIM PERIOD TO THE 28TH OF FEBRUARY 1999.
TURNOVER INCREASED BY 20.7% TO R242,033M FROM R200,602M - FOR THE CORRESPONDING
6 MONTH PERIOD TO FEBRUARY 1998.
NET OPERATING INCOME AT R13,805M REPRESENTS A 16.1% INCREASE OVER FEBRUARY 1998
(1998: R11,889M). THE SLIGHT FALL IN THE GROSS PROFIT PERCENTAGE BY 0.2% IS A
REFLECTION OF THE TIGHTER MARGINS WHICH THE GROUP EXPERIENCED IN THE PREVAILING
HARSH ECONOMIC CLIMATE.
INTEREST PAID DECREASED TO R3,598M FROM R3,833M - WHILST INTEREST COVER
INCREASED TO A MULTIPLE OF 3.8 TIMES FROM A MULTIPLE OF 3.1 - FOR THE
CORRESPONDING PERIOD LAST YEAR.
CASH HOLDINGS INCREASED TO R23,569M, WHILST THE DEBT : EQUITY RATIO HAS
DECREASED FROM 41.0% IN FEBRUARY 1998 TO THE CURRENT ZERO POSITION - PARTLY AS
A RESULT OF THE RIGHTS ISSUE IN MARCH 1998.
INCOME BEFORE TAX AT R10,207M REPRESENTS AN INCREASE OF 26.7% ON THE PREVIOUS
YEAR (1998 : R8,056M).
TAXATION OF R1,880M REPRESENTING A TAX RATE OF 18.4%, REFLECTS A DECREASE ON
LAST YEAR - DUE IN PART TO THE LEGISLATIVE DECREASE IN THE RATE OF CORPORATE
TAX.
ATTRIBUTABLE INCOME / HEADLINE EARNINGS, HAS INCREASED BY 36.6% FROM R6,095M TO
R8,327M. THIS INCREASE REPRESENTS MORE THAN FIVE CONSECUTIVE YEARS OF 35%-PLUS
GROWTH IN HEADLINE EARNINGS, AT THE INTERIM STAGE.
HEADLINE EARNINGS PER SHARE ON A WEIGHTED BASIS, INCREASED BY 15.7% TO 39.1
CENTS (1998 : 33.8 CENTS). THIS CREDITABLE INCREASE HAS BEEN ACHIEVED
NOTWITHSTANDING THE FULL IMPACT OF THE ADDED DILUTION OF THE ADDITIONAL 3.1
MILLION SHARES, ARISING FROM THE RIGHTS ISSUE DURING MARCH OF 1998.
IN LINE WITH COMPANY POLICY AND PREVIOUS YEARS, NO DIVIDEND IS DECLARED AT THE
INTERIM STAGE.
THE NATURE OF THE ORGANIC GROWTH OF THE GROUP OVER THE PAST 5 YEARS HAS BEEN
DRIVEN BY ITS DIVERSIFICATION INTO A BROAD BASED GLOBAL SOURCE FOR 'BRANDED
CONSUMER DURABLES'.
THE OPERATIONAL ACTIVITIES OF THE GROUP ARE ORGANISED ACROSS SEVEN INTEGRATED
DIVISIONS.
THE SEVEN DIVISIONS COMPRISE:
1. MANUFACTURE / IMPORT / DISTRIBUTION OF SMALL DOMESTIC APPLIANCES
2. EXPORT OF SMALL DOMESTIC APPLIANCES
3. ELECTRICAL WIRING ACCESSORIES
4. BRANDED CONSUMER ELECTRONICS
5. 'WHITE GOODS' - 'LAUNDRY', 'COOKING' AND 'REFRIGERATION'
6. BRANDED CONSUMABLES / SEMI DURABLES / HOUSEWARES
7. AIR-CONDITIONING
EXPORTS AND IN-HOUSE MANUFACTURING OF SMALL ELECTRICAL APPLIANCES - EXPORTS
HAVE IMPROVED FAVOURABLY YEAR-ON-YEAR. THE AFTERMATH OF THE ASIAN CRISIS, WHICH
IS THE PRINCIPAL AREA OF PRODUCTION FOR SMALL APPLIANCES IN THE WORLD - IS
PERPETUATING EXTREMELY COMPETITIVE INTERNATIONAL PRICING. NONETHELESS, THE
GROUP IS MORE THAN HOLDING ITS OWN IN ITS PREFERRED EXPORT MARKETS AND BREAKING
NEW GROUND INTO OTHER AREAS AT THE SAME TIME.
IT IS ANTICIPATED THAT EXPORTS WILL BE BOOSTED OVER THE FORTHCOMING PERIOD AS
THE GROUP GEARS UP TO INCREASE IN-HOUSE MANUFACTURE, WITH MORE NEW PRODUCTS
CURRENTLY IN DESIGN AND TOOLING, THAN AT ANY TIME BEFORE. A NUMBER OF THESE NEW
PRODUCTS WILL BE LAUNCHED DURING THE NEXT SIX MONTHS.
THE MANUFACTURING DIVISION WILL INTRODUCE NEW PRODUCTS WITHIN ITS PROVEN LOW
COST AMBIT, BETTER UTILISING EXISTING PLANT AND EQUIPMENT AND FURTHER IMPROVING
PRODUCTIVITY. ALL NEW PRODUCTS HAVE BEEN DESIGNED MOST SPECIFICALLY FOR EXPORT
TO EUROPE. THE BENEFITS TO THE GROUP ARE TWOFOLD, IN THAT, ADDITIONAL PRODUCTS
ARE AVAILABLE FOR EXPORT, WHILST IN SOUTH AFRICA, THE GROUP WILL BENEFIT FROM
IMPORT SUBSTITUTION AND LOWER COSTS.
CONSUMER ELECTRONICS - WHILST JVC CONTINUES TO ENJOY STRONG GROWTH AND GAIN
MARKET SHARE AT THE MIDDLE TO UPPER END OF THE MARKET - THE GROUP HAS
INTRODUCED THE NU-TEC RANGE OF CONSUMER ELECTRONICS, TARGETED AT THE
PRICE-ENTRY SEGMENT OF THE MARKET.
BOTH JVC AND NU-TEC PROMISE TO BE KEY GROWTH DRIVERS IN THE LOCAL AND
SUB-SAHARAN MARKETS, AS INTEREST RATES FALL AND MARKET CONDITIONS IMPROVE.
CONSUMABLES / SEMI DURABLES / HOUSEWARES - THIS DIVISION IS ENJOYING HEALTHY
GROWTH. THE DIVISION AS IT ORIGINATED, HOUSED RANGES OF BRANDED VIDEO AND AUDIO
TAPES.
SUBSEQUENTLY, IT HAS BEEN BROADENED AND DIVERSIFIED INTO LIGHTING CONSUMABLES
AS WELL AS HOUSEWARES, WHICH INCLUDES RANGES OF CUTLERY, CROCKERY, GLASSWARE
AND COOKWARE. ALL OF THESE PRODUCTS ARE SOLD UNDER INTERNATIONAL OR IN-HOUSE
BRANDS TO SELECTED RETAILERS.
PROSPECTS
PROSPECTS FOR THE SECOND SIX MONTHS OF THE FINANCIAL YEAR ARE EXPECTED TO BE
MORE THAN MODERATELY IMPROVED. THE STEADY AND SUSTAINED FALL IN INTEREST RATES
BODES WELL FOR AN ECONOMIC UPTURN AND CONSEQUENT IMPROVED TRADING CONDITIONS.
LOWER INTEREST RATES WILL IMPACT POSITIVELY ON SPENDING ON CONSUMER DURABLES,
AS HOUSEHOLDS BENEFIT FROM HIGHER REAL DISPOSABLE INCOME.
THE GOVERNMENTS' COMMITMENT TO THE DELIVERY OF AFFORDABLE HOUSING, THE
IMPRESSIVE RATE OF ELECTRIFICATION, THE DEMUTUALISATION OF SANLAM AND OLD
MUTUAL - ARE ALL ENCOURAGING INDICATORS THAT PROSPECTS FOR GROWTH WILL BE
ENHANCED SUBSTANTIALLY.
COMPANY SECRETARY
GRAHAM HINDLE CA(SA)
26 APRIL 1999
DIRECTORS
DR J.A. TEMPLE PHD (CHAIRMAN), M.S. GOLDBERG BCOM MBA (RAND) (MANAGING),
J.A. GOLDBERG BSC (ENG) (RAND), J.M. JUDIN DIP LAW (RAND), G.R. HINDLE CA (SA)
REGISTERED OFFICE
35 - 3RD STREET
WYNBERG, SANDTON
2199
TRANSFER SECRETARIES
MERCANTILE REGISTRARS LTD
11 DIAGONAL STREET
JOHANNESBURG 2001
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