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ARDENT INDUSTRIAL LIMITED
(FORMERLY SCHARRIG INDUSTRIAL HOLDINGS LIMITED)
INTERIM RESULTS
UNAUDITED
REVENUE 7,4%
OPERATING INCOME 23%
HEADLINE EARNINGS PER SHARE 7,7%
ABRIDGED CONSOLIDATED INCOME STATEMENT
FOR THE 6 MONTHS ENDED 30 SEPTEMBER 1999
R000 1999 1998
REVENUE 107 517 100 110
OPERATING INCOME BEFORE FINANCE CHARGES 11 901 9 667
NET FINANCE CHARGES 2 637 287
NET INCOME BEFORE TAXATION 9 264 9 380
TAXATION 1 227 1 716
NET INCOME AFTER TAXATION 8 037 7 664
EARNINGS ATTRIBUTABLE TO OUTSIDE SHAREHOLDERS 345 468
EARNINGS ATTRIBUTABLE TO ORDINARY SHAREHOLDERS 7 692 7 196
ATTRIBUTABLE EARNINGS PER SHARE (CENTS 19,6 18,3 *
HEADLINE EARNINGS PER SHARE (CENTS) 19,7 18,3 *
DIVIDENDS PER SHARE (CENTS) 10,0 10,0 *
SHARES IN ISSUE (000)
- END OF PERIOD 39 311 39 311
* BASED ON THE NUMBER OF SHARES IN ISSUE AFTER SHARE CONSOLIDATION.
ABRIDGED CONSOLIDATED CASH FLOW STATEMENT
FOR THE 6 MONTHS ENDED 30 SEPTEMBER 1999
R000 1999 1998
CASH GENERATED FROM OPERATIONS 16 809 (4 616)
INTEREST RECEIVED 2 240 2 806
INTEREST PAID (4 877) (3 093)
DIVIDENDS PAID (3 931) (3 931)
TAXATION PAID (1 328) (2 087)
CASH FLOWS FROM OPERATING ACTIVITIES 8 913 (10 921)
CASH FLOWS FROM INVESTING ACTIVITIES (2 339) (2 540)
CASH FLOWS FROM FINANCING ACTIVITIES (3 062) (2 140)
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 3 512 (15 601)
ABRIDGED CONSOLIDATED BALANCE SHEET
FOR THE 6 MONTHS ENDED 30 SEPTEMBER 1999
R000 1999 1998
CAPITAL EMPLOYED
SHARE CAPITAL AND PREMIUM 1 966 1 966
RESERVES 105 132 100 766
ORDINARY SHAREHOLDERS' EQUITY 107 098 102 732
OUTSIDE SHAREHOLDERS' INTEREST 4 825 4 519
TOTAL SHAREHOLDERS' FUNDS 111 923 107 251
LONG-TERM LIABILITIES 21 464 18 013
DEFERRED TAXATION 2 624 1 412
136 011 126 676
EMPLOYMENT OF CAPITAL
FIXED ASSETS 92 144 71 553
NET CURRENT ASSETS 43 867 55 123
CURRENT ASSETS
INVENTORIES 36 913 49 238
ACCOUNTS RECEIVABLE 45 938 43 374
BANK BALANCE AND CASH 9 760 7 866
92 611 100 478
CURRENT LIABILITIES
ACCOUNTS PAYABLE 38 986 36 770
CURRENT PORTION OF LONG-TERM LIABILITIES 5 463 3 430
TAXATION 364 1 224
DIVIDENDS 3 931 3 931
48 744 45 355
136 011 126 676
NET ASSET VALUE PER SHARE (CENTS) 272 261 *
* BASED ON THE NUMBER OF SHARES IN ISSUE AFTER SHARE CONSOLIDATION.
COMMENTARY
REVIEW OF THE PERIOD'S RESULTS
THE GROUP'S ATTRIBUTABLE EARNINGS IMPROVED BY 7% TO R7,7 MILLION (1998 - R7,2
MILLION) FOR THE SIX MONTHS ENDED 30 SEPTEMBER 1999. A SIMILAR INCREASE WAS
EXPERIENCED IN THE GROUP'S HEADLINE EARNINGS PER SHARE, WHICH INCREASED BY 7,7%
TO 19,7 CENTS PER SHARE (1998 - 18,5 CENTS PER SHARE) FOR THE SAME PERIOD.
ALTHOUGH THESE INCREASES WERE NOT QUITE AS HIGH AS EXPECTED, THE GROUP STILL
PERFORMED VERY SATISFACTORILY IN THE FACE OF CONTINUED POOR MARKET CONDITIONS.
DESPITE THE MARKET INTEREST RATES DECREASING BY ALMOST 40% OVER THE LAST YEAR
OR SO, SEVERAL INDUSTRIES WERE STILL FEELING THE PINCH DURING THE MAJOR PART OF
THE PERIOD UNDER REVIEW. THE RESULTANT PROLONGED SLOWDOWN OF THE SOUTH AFRICAN
ECONOMY WAS A MAJOR FACTOR IN THE LOWER THAN EXPECTED INCREASE IN EARNINGS.
DIVISIONAL PERFORMANCE
STEEL AND STEEL PROCESSING
THE PHOENIX STEEL MERCHANTING OPERATIONS IN GAUTENG AND KWAZULU-NATAL PERFORMED
ABOVE EXPECTATIONS IN A SLIGHTLY IMPROVED MARKET. THE TWO DIVISIONS BOTH
INCREASED THEIR TURNOVER AND MARGINS DURING THE SIX MONTHS. THE RESTRUCTURING
OF PHOENIX STEEL PROCESSING DIVISION HAS BEEN COMPLETED - THE GROUP EXPECTS
THIS SUBSIDIARY TO CONTRIBUTE POSITIVELY TO EARNINGS OVER THE NEXT SIX MONTHS.
KOCH'S CUT AND SUPPLY STEEL CENTRE, WHICH IS INCREASINGLY BECOMING INVOLVED IN
THE FABRICATION OF STEEL PRODUCTS, ALSO CONTRIBUTED SIGNIFICANTLY IN THIS
"ADDED VALUE" MARKET.
FABRICATION
HENDOR MINING SUPPLIES HAS CONTINUED WITH ITS RECENT OUTSTANDING RESULTS.
TURNOVER CONSTANTLY TOPS R2,2 MILLION PER MONTH AND THE COMPANY'S ORDER INTAKE
FOR ITS SCRAPER PRODUCTS SHOULD ALSO IMPROVE SHOULD THE GOLD PRICE CONTINUE TO
SHOW SIGNS OF RECOVERY. BAVARIAN METAL INDUSTRIES, THE TIPPER BODY
MANUFACTURER, CONTRIBUTED POORLY DUE TO THE STAGNANT CONSTRUCTION, OPENCAST
MINING AND ALLIED INDUSTRIES. THE COMPANY HAS DIVERSIFIED ITS PRODUCT RANGE IN
AN EFFORT TO PRODUCE POSITIVE RESULTS FOR THE NEXT FINANCIAL YEAR.
PRECISION ENGINEERING
NEW JOULES ENGINEERING NORTH AMERICA INC. SPENT THE PERIOD UNDER REVIEW
ESTABLISHING THEMSELVES AS A RETARDER MANUFACTURER AND REPUTABLE GENERAL
PRECISION ENGINEERING WORKS IN KANSAS CITY, U.S.A. THIS INVESTMENT, WHILE
ACHIEVING RESPECTABLE TURNOVER LEVELS TO DATE, WILL START GENERATING REAL
RETURNS IN THE NEXT FINANCIAL YEAR. GIFLO ENGINEERING, AFTER A RELATIVELY QUIET
FEW MONTHS, IS CURRENTLY SUPPLYING MAJOR CONTRACTS FOR LANDROVER U.K. AND LOCAL
VEHICLE MANUFACTURER SAMCOR. GIFLO'S TURNOVER LEVELS SHOULD REACH AN ALL TIME
HIGH DURING THE NEXT SIX MONTHS AND THE COMPANY WILL CONTINUE TO GO FROM
STRENGTH TO STRENGTH. NWN AUTOMOTIVE PRECISION ENGINEERING, HAVING OUTGROWN THE
LADYSMITH AREA, IS CURRENTLY RELOCATING TO PINETOWN IN ORDER TO INCREASE ITS
MARKET COVERAGE. THE RELOCATION WILL BE COMPLETED BY JANUARY 2000 AND THE COSTS
THEREOF, ESTIMATED AT R800 000, WILL BE EXPENSED DURING THE SECOND HALF OF THE
2000 FINANCIAL YEAR.
MATERIALS HANDLING AND PROJECT MANAGEMENT
BARKER FLYNN ASSOCIATES HAS INCREASED ITS EMPHASIS ON SHORT-TERM, SMALLER
PROJECTS, HENCE THIS SECTOR HAS PERFORMED ABOVE EXPECTATIONS FOR THE PERIOD
UNDER REVIEW. THE WEST WITS PROJECT HAS BEEN COMPLETED WHILE THE CONTRACTS
AWARDED BY ORAPA DIAMOND MINE AND AFROX ARE NEARING COMPLETION. PAID
FEASIBILITY STUDIES FOR BOTH BEESHOEK MINE AND N.C.P. HAVE COMMENCED. SEVERAL
SIGNIFICANT CONTRACTS ARE EXPECTED TO BE AWARDED TO BARKER FLYNN ASSOCIATES AND
SOLIFLO SHORTLY.
CONCRETE AND STONE
AT VILLIERSDORP QUARRIES, A SECOND CRUSHING PLANT TOTALING A R2,5 MILLION
INVESTMENT, WAS COMMISSIONED IN JULY 1999. TURNOVER IS STEADILY INCREASING
MONTH-BY-MONTH AND REAL RETURNS WILL BE GENERATED BY THE COMPANY IN THE
FORTHCOMING FINANCIAL YEAR. MEGAMIX, THE CONCRETE SUPPLIER, HAS PERFORMED BELOW
PROJECTED FORECASTS, ALTHOUGH NOT GENERATING REAL LOSSES. MEGAMIX WILL START
CONTRIBUTING POSITIVELY ONCE THE CAPE TOWN CONSTRUCTION INDUSTRY STARTS
IMPROVING.
PROSPECTS
THE GROUP CERTAINLY SEES AN IMPROVEMENT IN THE GENERAL ECONOMY IN THE
SHORT-TERM. IT THUS EXPECTS TO INCREASE EARNINGS OVER THE LAST SIX MONTHS OF
THE 2000 FINANCIAL YEAR, EVEN THOUGH DECEMBER AND JANUARY ARE TRADITIONALLY
VERY POOR TRADING MONTHS IN THE FABRICATION, ENGINEERING AND STEEL INDUSTRIES.
DIVIDEND
NOTICE IS HEREBY GIVEN THAT DIVIDEND NUMBER 9, OF 10 CENTS PER SHARE HAS BEEN
DECLARED PAYABLE TO SHAREHOLDERS REGISTERED IN THE BOOKS OF THE COMPANY AT
CLOSE OF BUSINESS ON FRIDAY, 3 MARCH 2000. DIVIDEND CHEQUES WILL BE POSTED ON
OR ABOUT FRIDAY, 24 MARCH 2000.
ON BEHALF OF THE BOARD
T.R. HENDRY CA (SA) GERMISTON
MANAGING DIRECTOR 28 OCTOBER 1999
DIRECTORS:
T. SCHARRIGHUISEN (CHAIRMAN), T.R. HENDRY (MANAGING), M.P. ALLEN (FINANCIAL),
P.A. DAY, C. SCHARRIGHUISEN.
REGISTERED ADDRESS:
13 JACK PIENAAR STREET
GERMISTON SOUTH
EXT 7
GERMISTON
1411
(P.O. BOX 14461, WADEVILLE 1422)
TRANSFER SECRETARIES:
COMPUTERSHARE SERVICES LIMITED
1ST FLOOR, EDURA HOUSE
41 FOX STREET
JOHANNESBURG
2001
(P.O. BOX 61051, MARSHALLTOWN 2107)
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