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BELL EQUIPMENT LIMITED
REG NO. 66/04606/07
INTERIM REPORT FOR THE SIX MONTHS ENDED 30 JUNE 1999
CONSOLIDATED INCOME STATEMENT
UNAUDITED AUDITED
6 MONTHS 12 MONTHS
ENDED ENDED
30 JUNE 30 JUNE 31 DEC.
R000 1999 1998 1998
REVENUE
CONTINUING OPERATIONS 460 674 456 268 898 238
DISCONTINUED OPERATIONS
(AFTER 30 JUNE 1998) - - 44 447
TOTAL REVENUE 460 674 456 268 942 685
COST OF SALES 364 193 331 445 702 625
GROSS MARGIN 96 481 124 823 240 060
OPERATING COSTS 84 433 128 663 242 796
OPERATING PROFIT(LOSS)
BEFORE FINANCE COSTS 12 048 (3 840) (2 736)
NET FINANCE COSTS (NOTE 2) 20 925 4 008 29 817
LOSS BEFORE TAXATION (NOTE 3) (8 877) (7 848) (32 553)
TAXATION 1 760 1 294 149
LOSS AFTER TAXATION (10 637) (9 142) (32 702)
ATTRIBUTABLE TO OUTSIDE
SHAREHOLDERS - (424) 1 243
LOSS ATTRIBUTABLE TO SHAREHOLDERS (10 637) (8 718) (31 459)
NUMBER OF SHARES IN ISSUE - 000 93 248 63 248 63 248
WEIGHTED AVERAGE NUMBER OF
SHARES IN ISSUE - 000 73 248 63 248 63 248
LOSS PER SHARE (CENTS) (NOTE 4) (14,5) (13,8) (49,7)
DIVIDENDS PER SHARE (CENTS) - - -
CONSOLIDATED BALANCE SHEET
UNAUDITED AUDITED
AT AT
30 JUNE 30 JUNE 31 DEC.
R000 1999 1998 1998
CAPITAL EMPLOYED
STATED CAPITAL 221 761 41 641 41 641
NON-DISTRIBUTABLE RESERVES (NOTE 5) 18 947 61 562 17 165
RETAINED INCOME 92 674 97 782 103 311
SHAREHOLDERS' EQUITY 333 382 200 985 162 117
OUTSIDE SHAREHOLDERS' INTEREST - 2 848 -
TOTAL SHAREHOLDERS' FUNDS 333 382 203 833 162 117
LONG-TERM LOANS 32 224 38 748 33 778
DEFERRED TAXATION 194 7 562 4 290
TOTAL CAPITAL EMPLOYED 365 800 250 143 200 185
EMPLOYMENT OF CAPITAL
PROPERTY, PLANT AND EQUIPMENT 26 534 102 805 29 782
INVESTMENTS 16 125 1 363 16 070
CURRENT ASSETS
INVENTORY 373 104 389 817 359 986
ACCOUNTS RECEIVABLE 141 780 173 489 121 587
CASH RESOURCES 41 614 6 995 6 366
TAXATION - 2 563 3 944
TOTAL CURRENT ASSETS 556 498 572 864 491 883
CURRENT LIABILITIES
CURRENT PORTION OF LONG-TERM LOANS 553 548 1 150
ACCOUNTS PAYABLE 152 382 179 944 102 733
TAXATION 2 410 - -
SHORT-TERM INTEREST BEARING DEBT 78 012 246 397 233 667
TOTAL CURRENT LIABILITIES 233 357 426 889 337 550
NET CURRENT ASSETS 323 141 145 975 154 333
TOTAL EMPLOYMENT OF CAPITAL 365 800 250 143 200 185
NET ASSET VALUE PER SHARE - CENTS
(WT. AVG) 455 318 256
NET ASSET VALUE PER SHARE - CENTS
(CLOSING) 358 318 256
ABBREVIATED CASH FLOW STATEMENT
UNAUDITED AUDITED
6 MONTHS 12 MONTHS
ENDED ENDED
30 JUNE 30 JUNE 31 DEC.
R000 1999 1998 1998
OPERATING INCOME BEFORE WORKING
CAPITAL CHANGES 18 140 6 689 1 217
DECREASE (INCREASE) IN
WORKING CAPITAL 16 338 (36 629) (29 990)
NET FINANCE COSTS PAID (21 984) (4 751) (31 585)
TAXATION REFUNDED (PAID) 498 (110) (2 846)
NET CASH FLOW 12 992 (34 801) (63 204)
NET (INVESTMENT IN) PROCEEDS
ON DISPOSAL OF FIXED ASSETS (1 117) (2 777) 48 432
SHARE CAPITAL ISSUED 180 120 - -
NET BORROWINGS
DECREASED (INCREASED) 191 995 (37 578) (14 772)
NOTES
UNAUDITED AUDITED
6 MONTHS 12 MONTHS
ENDED ENDED
30 JUNE 30 JUNE 31 DEC.
R000 1999 1998 1998
1. ACCOUNTING POLICIES
THE SAME ACCOUNTING POLICIES AND METHODS OF COMPUTATION ARE FOLLOWED IN THE
INTERIM FINANCIAL STATEMENT AS COMPARED WITH THE ANNUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 1998.
2. NET FINANCE COSTS
NET INTEREST PAID 14 203 13 878 33 026
NET CURRENCY EXCHANGE LOSSES (GAINS) 7 781 (9 127) (1 441)
NET FINANCE COSTS PAID 21 984 4 751 31 585
FINANCIAL INSTRUMENT INCOME (1 059) (743) (1 768)
NET FINANCE COSTS 20 925 4 008 29 817
3. LOSS BEFORE TAXATION
LOSS BEFORE TAXATION IS ANALYSED AS FOLLOWS:
>FROM CONTINUING OPERATIONS (8 877) (7 848) (16 017)
>FROM DISCONTINUED OPERATIONS - - (16 536)
LOSS BEFORE TAXATION (8 877) (7 848) (32 553)
LOSS BEFORE TAXATION IS ARRIVED AT AFTER TAKING INTO ACCOUNT:
INCOME
NET SURPLUS (LOSS) ON DISPOSAL OF
PROPERTY, PLANT AND EQUIPMENT 1 334 171 (4 443)
EXPENDITURE
DEPRECIATION OF FIXED ASSETS 4 310 4 440 9 363
OPERATING LEASE CHARGES
- EQUIPMENT AND MOTOR VEHICLES 5 914 4 695 12 589
- PROPERTIES 5 833 3 090 7 346
RESTRUCTURING COSTS - 4 903 8 497
4. LOSS PER SHARE
THE CALCULATION OF LOSS PER SHARE IS BASED ON INCOME ATTRIBUTABLE TO
SHAREHOLDERS AND THE WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES IN ISSUE DURING
THE PERIOD. THE WEIGHTED AVERAGE NUMBER OF SHARES IN ISSUE FOR THE PERIOD UNDER
REVIEW WAS 73 248 200 (1998: 63 248 200)
5. NON-DISTRIBUTABLE RESERVES
THE MOVEMENT IN NON-DISTRIBUTABLE RESERVES FROM 30 JUNE 1998 RELATES PRIMARILY
TO THE REALISATION OF PROFITS FROM THE DISPOSAL OF LAND AND BUILDINGS OF A
SUBSIDIARY COMPANY.
6. STATED CAPITAL
AUTHORISED:
100 000 000 (1998: 100 000 000) ORDINARY SHARES OF NO PAR VALUE.
ISSUED:
93 248 200 (1998: 63 248 200) ORDINARY SHARES OF NO PAR VALUE:
221 761 41 641 41 641
30 000 000 ORDINARY SHARES OF NO PAR VALUE WERE ISSUED ON 29TH APRIL 1999 AT
R6,0040 PER SHARE TO DEERE.
7. CAPITAL EXPENDITURE
EXPENDED 1 117 3 351 -
AUTHORISED OR COMMITTED 32 510 500 4 888
TOTAL CAPITAL EXPENDITURE 33 627 3 851 4 888
8. YEAR 2000 COMPLIANCE
A PROJECT TEAM, UNDER THE GUIDANCE OF SENIOR MANAGEMENT AND SUPPORTED BY
EXTERNAL CONSULTANTS, WAS APPOINTED TO ENSURE YEAR 2000 COMPLIANCE BY THE END
OF SEPTEMBER 1999. THE PROJECT PLAN, WHICH IS NEARING COMPLETION, PROVIDES FOR
THE TESTING, UPGRADING AND REPLACEMENT OF SYSTEMS AND EQUIPMENT. PROGRESS IS
MONITORED REGULARLY BY THE BOARD AND AUDIT COMMITTEE AND THE PROJECT IS ON
TRACK. IT IS NOT ANTICIPATED THAT THE MILLENNIUM PROBLEM WILL HAVE A MATERIALLY
ADVERSE EFFECT ON THE GROUP'S BUSINESS, FINANCIAL CONDITION OR THE RESULTS OF
OPERATIONS. COSTS ASSOCIATED WITH YEAR 2000, WHICH ARE NOT MATERIAL, HAVE BEEN
EXPENDED AS INCURRED. THE GROUP CONTINUALLY ASSESSES THE RISK OF POTENTIAL
DISTRUPTION TO OPERATIONS AS A RESULT OF NON-COMPLIANCE BY THIRD PARTIES AND
AGENTS. CONTINGENCY PLANS ARE BEING DEVELOPED TO LIMIT THE IMPACT SHOULD SUCH
DISRUPTION OCCUR.
COMMENTARY
AS PREDICTED IN OUR 1998 ANNUAL REPORT, THE BELL GROUP HAS CONTINUED TO
EXPERIENCE DIFFICULT TRADING CONDITIONS DURING THE PERIOD UNDER REVIEW. THE
OVERALL DEPRESSED ECONOMIC ACTIVITY IN THE SECTORS WITHIN WHICH WE OPERATE IN
SOUTHERN AFRICA, OUR LARGEST MARKET, TOGETHER WITH THE CONTINUED DIFFICULT
ECONOMIC CONDITIONS IN OUR SOUTH EAST ASIAN MARKETS, HAS IMPACTED ON SALES
VOLUMES AND MARGINS.
OPERATING PROFITS HAVE SHOWN A GOOD RECOVERY DESPITE REDUCED MARGINS. THIS IS
MAINLY DUE TO AGGRESIVE COST CONTAINMENT UNDERTAKEN DURING 1998 AS PART OF THE
GROUP RESTRUCTURING. MOST PLEASING HAS BEEN THE IMPROVED CASH FLOW. FURTHER
REDUCTIONS IN WORKING CAPITAL ARE EXPECTED BEFORE THE YEAR END, PARTICULARLY AS
A RESULT OF DEERE PURCHASING MACHINES ON AN FOB BASIS.
ON THE 29 APRIL 1999, AN AGREEMENT WITH DEERE WAS CONCLUDED, IN WHICH DEERE
ACQUIRED A 32% EQUITY STAKE IN BELL FOR R180 MILLION. THIS CAPITAL INJECTION
ALLOWED SUBSTANTIAL REDUCTION OF DEBT, REDUCING DEBT EQUITY RATIOS TO MORE
ACCEPTABLE LEVELS. THE TWO MONTHS SINCE 30 JUNE 1999 HAVE BEEN PROFITABLE.
ON BEHALF OF THE BOARD
H J BUTTERY G W BELL
CHAIRMAN CHIEF EXECUTIVE
DIRECTORS:
G W BELL (CHIEF EXECUTIVE), P C BELL, H J BUTTERY (CHAIRMAN), M A CAMPBELL, P J
C HORNE*, R D MARCUS*, D J J VLOK*, J M FIELD (USA)*, C D ANDERSON (USA)*, M A
GUINN (USA)*. *NON-EXECUTIVE DIRECTORS.
ALTERNATE DIRECTORS:
P A BELL, D I CAMPBELL, R C CRAWFORD, T G GRAFF (USA), G P HARRIS, D C MANHART
(USA), J W BLOOM (USA).
COMPANY SECRETARY:
D P MAHONY.
REGISTERED OFFICE:
13 - 19 CARBONODE CELL, ALTON
RICHARDS BAY, 3900
TRANSFER SECRETARIES:
MERCANTILE REGISTRARS LIMITED, PO BOX 1053, JOHANNESBURG, 2000
BELL EQUIPMENT
(REG. NO. 68/13656/06)
TRANSFER SECRETARIES:
MERCANTILE REGISTRARS LIMITED, PO BOX 1053, JOHANNESBURG, 2000
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