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MURRAY & ROBERTS HOLDINGS LIMITED (REGISTRATION NUMBER 05/29826/06)
PRELIMINARY REPORT IN RESPECT OF THE YEAR ENDED 30 JUNE 1999
THE AUDITED CONSOLIDATED RESULTS FOR THE YEAR ENDED 30 JUNE 1999 ARE AS SET OUT BELOW: SUMMARISED CONSOLIDATED INCOME STATEMENT
YEAR ENDED
30 JUNE 30 JUNE
(R MILLIONS) 1999 1998
GROUP TURNOVER 12 972 12 586
ONGOING OPERATIONS (NOTE 1) 12 639 10 796
DISCONTINUED OPERATIONS (NOTES 1 AND 2) 333 1 790 EARNINGS BEFORE INTEREST
AND EXCEPTIONAL ITEMS (EBIT) 203 545
ONGOING OPERATIONS (NOTE 1) 210 443
DISCONTINUED OPERATIONS (NOTES 1 AND 2) (7) 102
EXCEPTIONAL ITEMS (76) 348 EARNINGS BEFORE INTEREST
AND TAXATION 127 893
INTEREST (109) (262)
EARNINGS/(LOSS) BEFORE TAXATION 18 631
TAXATION (32) (65) (LOSS)/EARNINGS AFTER
TAXATION (14) 566
OUTSIDE SHAREHOLDERS' INTEREST (52) (48) (LOSS)/EARNINGS ATTRIBUTABLE TO
ORDINARY SHAREHOLDERS (66) 518 AVERAGE NUMBER OF ORDINARY SHARES
IN ISSUE ('000) 345 968 345 968
(LOSS)/EARNINGS PER SHARE - TOTAL (19C) 150C
- HEADLINE 3C 49C
DIVIDEND PER SHARE 50C 48,5C
INTERIM - 14,5C
FINAL 50C 34C
OPERATING CASH FLOW PER SHARE 142C 369C HEADLINE EARNINGS (R MILLIONS)
ATTRIBUTABLE (LOSS)/EARNINGS (66) 518 ADJUSTMENTS: NET LOSS/(PROFIT)
ON DISPOSALS/CLOSURES 76 (338)
ADJUSTMENTS: PROVISIONS - SUBSIDIARIES' ASSETS - (20)
- OTHER - 10
HEADLINE EARNINGS 10 170 NOTES:
1. COMPARATIVE FIGURES HAVE BEEN RESTATED FOR THE RECLASSIFICATION BETWEEN ONGOING AND DISCONTINUED ITEMS.
2. TURNOVER AND EBIT CONTRIBUTIONS FROM ACTIVITIES DISCONTINUED SINCE 1 JULY 1997. SUMMARISED CONSOLIDATED BALANCE SHEET
30 JUNE 30 JUNE
(R MILLIONS) 1999 1998
PROPERTY, PLANT AND EQUIPMENT 2 023 2 091
INVESTMENTS 132 243
CURRENT ASSETS (EXCLUDING BANK BALANCES) 3 328 3 634
TOTAL TANGIBLE ASSETS 5 483 5 968
GOODWILL 151 269
TOTAL ASSETS 5 634 6 237
DEFERRED TAXATION (242) (280)
OTHER NON-INTEREST BEARING DEBT (3 225) (3 368)
CAPITAL EMPLOYED 2 167 2 589
ORDINARY SHAREHOLDERS' FUNDS 2 410 3 003
OUTSIDE SHAREHOLDERS' INTEREST 329 362
PERMANENT CAPITAL 2 739 3 365 NET (FUNDS ON HAND AND CASH EQUIVALENTS)
/BORROWINGS (572) (776)
LONG TERM BORROWINGS - FINANCE LEASES 42 39
LONG TERM BORROWINGS - OTHER 472 827
SHORT TERM BORROWINGS 216 482
BANK BALANCES AND DEPOSITS (1 122) (581)
RECEIVABLES - DISPOSALS (180) (1 543)
CAPITAL EMPLOYED 2 167 2 589 SUPPLEMENTARY INFORMATION
NET ASSET VALUE PER SHARE (CENTS) 697 868 CONSOLIDATED CAPITAL EXPENDITURE (RM)
- SPENT DURING YEAR 536 609
- COMMITTED/AUTHORISED 519 607
DEPRECIATION CHARGE (RM) 368 383 SUMMARISED CONSOLIDATED CASH FLOW STATEMENT
YEAR ENDED
30 JUNE 30 JUNE
(R MILLIONS) 1999 1998
CASH GENERATED BY OPERATIONS 522 878
INTEREST AND TAXATION PAID (146) (307)
DECREASE IN WORKING CAPITAL 117 704
OPERATING CASH FLOW 4931 275
DIVIDENDS PAID (137) (182)
CASH RETAINED IN OPERATIONS 356 1 093
NET (INVESTMENT)/DIVESTMENT ACTIVITIES (566) 979
NET CASH (UTILISED)/GENERATED (210) 2 072 COMMENTS TURNOVER
TURNOVER FROM ONGOING OPERATIONS REFLECTED AN INCREASE OF 17% ON THE PREVIOUS YEAR. THE CURRENT YEAR'S FIGURES INCLUDE A FULL YEAR'S TURNOVER OF THE UNITRANS MOTOR RETAILING AND FINANCE ACTIVITIES WHICH WERE ACQUIRED ON 1 JANUARY 1998. PROFITABILITY
AS FORECAST IN THE INTERIM REPORT PUBLISHED ON 25 FEBRUARY 1999, THE GROUP HAS REPORTED IMPROVED TRADING RESULTS IN THE SECOND HALF OF THE FINANCIAL YEAR. NOTWITHSTANDING THIS IMPROVEMENT AT THE OPERATING LEVEL, THE GROUP INCURRED AN ATTRIBUTABLE LOSS OF R66 MILLION FOR THE YEAR.
THE EXTENT OF THE BETTER OPERATING PERFORMANCE IN THE SECOND SIX MONTHS IS REFLECTED IN THE FOLLOWING TABLE OF CONTRIBUTIONS TO CONSOLIDATED EBIT FROM ONGOING OPERATIONS:
6 MONTHS 6 MONTHS YEAR YEAR
TO TO ENDED ENDED
R MILLIONS 31.12.98 30.06.99 30.06.99 30.06.98 CONTRACTING 38 61 99 155 CONTRACTING SERVICES
AND MATERIALS 39 21 60 161
SPECIALIST MANUFACTURING 10 32 42 67 ENGINEERING AND
MINING SUPPLIES 5 6 11 20
AUTOMOTIVE COMPONENTS (83) (14) (97) (89)
MAJOR TRAIN CONTRACTS (1) 5 4 74
CORPORATE (54) (44) (98) (115)
MURRAY &ROBERTS LIMITED (46) 67 21 273
UNITRANS 103 86 189 170
57 153 210 443
NOTE: COMPARATIVE FIGURES HAVE BEEN RESTATED FOR SUBSEQUENT RECLASSIFICATION OF ONGOING OPERATIONS.
WITHIN THE OVERALL IMPROVEMENT IN THE SECOND HALF, THE STEMMING OF THE LOSSES IN THE AUTOMOTIVE COMPONENTS BUSINESSES WAS A WELCOME FEATURE. IN THIS REGARD, SHAREHOLDERS ARE ADVISED THAT THE ALLOY WHEELS INTERNATIONAL ("AWI") ACTIVITIES INCURRED A R6 MILLION LOSS BEFORE INTEREST IN THE SIX MONTHS TO JUNE 1999 AS COMPARED TO THE LOSS OF R79 MILLION REPORTED IN THE FIRST HALF. IT IS
SIGNIFICANT TO NOTE THAT THESE ACTIVITIES ACHIEVED AN EBIT PROFIT OF R8 MILLION IN THE FINAL QUARTER.
THE DEPRESSED CONSTRUCTION INDUSTRY IN SOUTH AFRICA HAS HAD A MAJOR IMPACT ON THE CONTRACTING SERVICES AND MATERIALS ACTIVITIES WHICH, BY THE NATURE OF THEIR BUSINESS, HAVE HIGHER FIXED COSTS AND LESS FLEXIBILITY TO MAKE SHORT TERM ADJUSTMENTS TO THEIR COST STRUCTURE.
AS REPORTED BY UNITRANS, THE RESULTS FOR THEIR SECOND HALF INCLUDE RESTRUCTURING COSTS OF R12 MILLION. EXCEPTIONAL ITEMS
EXCEPTIONAL LOSSES WERE INCURRED IN RESPECT OF THE CLOSURE OR DISPOSAL OF NON CORE OPERATIONS. THESE INCLUDED THE CLOSURE OF THE HOBAS PLASTIC PIPE
MANUFACTURING FACILITY AND THE TRAILER MANUFACTURING AND COMMERCIAL TRUCK SALE AND ENGINEERING DIVISIONS OF UNITRANS. THE ASTAS SPECIALIST GEARBOX AND TRANSMISSION MANUFACTURING BUSINESS WAS SOLD AT A LOSS.
A CAPITAL PROFIT WAS REALISED ON THE SALE OF THE GROUP'S 50% SHAREHOLDING IN PENTOW MARINE. CASH FLOW AND BALANCE SHEET
THE GROUP ACHIEVED AN OPERATING CASH FLOW OF R493 MILLION IN THE YEAR, FOLLOWING A MARKED IMPROVEMENT IN THE CASH FLOW IN THE SECOND HALF OF THE YEAR. THE BALANCE SHEET REMAINS STRONG WITH NET CASH FUNDS OF R572 MILLION AT YEAR END. THESE NET FUNDS INCLUDED SIGNIFICANT CASH HELD OFFSHORE TO SUPPORT THE GROUP'S INTERNATIONAL CONTRACTING OPERATIONS.
THE ORDINARY SHAREHOLDERS' FUNDS OF R2 410 MILLION ARE REFLECTED NET OF A DEDUCTION OF R150 MILLION BEING THE COST OF SHARES HELD BY THE GROUP'S SHARE INCENTIVE SCHEME VEHICLE. SUBSEQUENT EVENTS SUBSEQUENT TO THE YEAR END, THE GROUP ACQUIRED:
- THE 50% SHAREHOLDING IN REINFORCING STEEL HOLDINGS (PTY)LIMITED ("RSH") NOT ALREADY OWNED
- STOBAR, THE REINFORCING STEEL ACTIVITIES PREVIOUSLY OWNED BY THE STOCKS &STOCKS GROUP WHICH WILL BE MERGED INTO THE WHOLLY OWNED RSH BUSINESS
- STEEL PIPE INDUSTRIES, THE STEEL PIPE DIVISION OF DORBYL LIMITED, WHICH WILL BE MERGED INTO THE HALL LONGMORE BUSINESS. YEAR 2000 COMPLIANCE
THE GROUP'S YEAR 2000 PROJECT HAS PROGRESSED ACCORDING TO SCHEDULE AND INCLUDED THE CARRYING OUT OF INDEPENDENT REVIEWS IN MOST OF THE GROUP'S OPERATING ENTITIES. CONFIRMATION OF COMPLIANCE OF ALL RELEVANT SYSTEMS AND FACILITIES IN THE OPERATING ENTITIES IS DUE FOR COMPLETION DURING OCTOBER 1999. NO MATERIAL DIFFICULTIES IN THIS REGARD HAVE BEEN ENCOUNTERED TO DATE AND NO MATERIAL EXPENDITURE HAS BEEN INCURRED OR IS ANTICIPATED. PROSPECTS
ALTHOUGH THERE ARE EARLY INDICATIONS THAT THE SOUTH AFRICAN ECONOMY MIGHT HAVE REACHED A TURNING POINT, THE GROUP'S LOCAL MARKETS REMAIN DEPRESSED. THE PROGRESS ALREADY MADE IN APPROPRIATE INTERNATIONAL MARKETS WILL THEREFORE ASSUME A GREATER RELEVANCE, AT LEAST IN THE SHORT TERM.
NOTHWITHSTANDING THE UNCERTAINTIES IN THE LOCAL ECONOMY, MOST OF THE BUSINESS UNITS IN MURRAY &ROBERTS LIMITED ARE CAUTIOUSLY FORECASTING IMPROVEMENTS IN THEIR OPERATING RESULTS IN THE YEAR AHEAD.
THE DIRECTORS OF UNITRANS LIMITED ARE OF THE VIEW THAT THEIR GROUP IS WELL POSITIONED TO PRODUCE IMPROVED RESULTS IN THE YEAR ENDING 30 JUNE 2000. OVERALL, THE GROUP IS BUDGETING A RETURN TO POSITIVE EARNINGS ATTRIBUTABLE TO ORDINARY SHAREHOLDERS. DIVIDEND
IN THE INTERIM ANNOUNCEMENT, THE BOARD ADVISED THAT IT HAD DECIDED THAT THIS YEAR'S TOTAL DIVIDEND SHOULD BE CONSOLIDATED INTO ONE PAYMENT AND ACCORDINGLY NO INTERIM DIVIDEND WAS DECLARED.
NOTHWITHSTANDING THE LOSS INCURRED IN THE YEAR, THE BOARD BELIEVES THAT THE STRENGTH OF THE BALANCE SHEET PLACES THE GROUP IN A POSITION TO PAY A DIVIDEND. ACCORDINGLY, THE BOARD HAS DECLARED A FINAL AND TOTAL DIVIDEND OF 50 CENTS PER SHARE IN RESPECT OF THE YEAR ENDED 30 JUNE 1999.
ATTENTION IS DRAWN TO THE FORMAL ANNOUNCEMENT THAT APPEARS BELOW. ON BEHALF OF THE BOARD
BEDFORDVIEW D.C. BRINK EXECUTIVE CHAIRMAN
25 AUGUST 1999 L.B. BIRD FINANCIAL DIRECTOR NOTICE TO SHAREHOLDERS DECLARATION OF FINAL ORDINARY DIVIDEND NO. 100
NOTICE IS HEREBY GIVEN THAT FINAL ORDINARY DIVIDEND NO. 100 OF 50 CENTS PER SHARE MAKING A TOTAL DISTRIBUTION OF 50 CENTS FOR THE YEAR ENDED 30 JUNE 1999 (1998: 48,5 CENTS) HAS BEEN DECLARED PAYABLE TO HOLDERS OF ORDINARY SHARES REGISTERED IN THE BOOKS OF THE COMPANY AT THE CLOSE OF BUSINESS ON 8 OCTOBER 1999.
DIVIDEND PAYMENTS WILL BE MADE ELECTRONICALLY OR POSTED ON 29 OCTOBER 1999. BY ORDER OF THE BOARD BEDFORDVIEW L.J. LINDSAY 25 AUGUST 1999 SECRETARY
DIRECTORS: D.C. BRINK EXECUTIVE CHAIRMAN, B.N. BAM, L.B. BIRD, W.P.
ESTERHUYSE P.G. JOUBERT, A.A. ROUTLEDGE, J.J.M. VAN ZYL SECRETARY: L.J. LINDSAY FORMING OUR BUSINESS ENVIRONMENT
