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HOWDEN AFRICA HOLDINGS LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 96/02982/06)
("HOWDEN AFRICA")
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 1999
THE SUMMARISED AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 1999 ARE AS
FOLLOWS:
CONSOLIDATED INCOME STATEMENT
ACTUAL ACTUAL
YEAR ENDED YEAR ENDED
31 DEC 1999 31 DEC 1998
(AUDITED) (AUDITED)
R'000 R'000
REVENUE 370 598 409 168
OPERATING PROFIT 5 543 26 655
NET FINANCIAL REVENUE 3 506 3 768
PROFIT BEFORE TAXATION 9 049 30 423
TAXATION (4 889) (9 331)
PROFIT AFTER TAXATION 4 160 21 092
OUTSIDE SHAREHOLDERS' INTEREST (1 630) (1 634)
NET PROFIT FOR THE YEAR 2 530 19 458
NUMBER OF SHARES:
IN ISSUE ('000) 64 215 64 215
WEIGHTED AVERAGE ('000) 64 215 64 063
EARNINGS PER SHARE (CENTS) 3,94 30,37
DIVIDENDS PER SHARE (CENTS) 14,00 14,00
INTERIM 5,00 5,00
FINAL 9,00 9,00
OTHER GROUP SALIENT FEATURES
NET ASSET VALUE PER SHARE (CENTS) 165,45 175,46
DEPRECIATION 4 415 4 737
CAPITAL EXPENDITURE 6 308 4 029
CAPITAL COMMITMENTS
AUTHORISED AND CONTRACTED - 426
AUTHORISED NOT CONTRACTED 19 60
ABRIDGED CONSOLIDATED BALANCE SHEET
ACTUAL ACTUAL
YEAR ENDED YEAR ENDED
31 DEC 1999 31 DEC 1998
(AUDITED) (AUDITED)
R'000 R'000
ASSETS
NON-CURRENT ASSETS 39 639 38 572
FIXED ASSETS 32 550 31 483
LONG-TERM LOAN 7 089 7 089
CURRENT ASSETS 179 994 193 911
INVENTORIES 52 653 66 951
RECEIVABLES AND PRE-PAYMENTS 77 288 90 887
AMOUNTS OWING BY FELLOW SUBSIDIARIES 809 1 334
CASH AND CASH EQUIVALENTS 49 244 34 739
TOTAL ASSETS 219 633 232 483
EQUITIES AND LIABILITIES
CAPITAL AND RESERVES 106 245 112 671
OUTSIDE SHAREHOLDERS' INTEREST 9 113 8 158
NON-CURRENT LIABILITIES 467 2 669
LOAN FROM HOLDING COMPANY 260 323
DEFERRED TAX 207 2 346
CURRENT LIABILITIES 103 808 108 985
AMOUNTS PAYABLE 94 621 92 229
TAXATION 2 902 8 185
AMOUNTS OWING TO FELLOW SUBSIDIARIES 505 2 792
SHAREHOLDERS FOR DIVIDEND 5 780 5 779
TOTAL LIABILITIES 104 275 111 654
TOTAL EQUITY AND LIABILITIES 219 633 232 483
ABRIDGED CONSOLIDATED CASH FLOW
CASH FLOW FROM
OPERATING ACTIVITIES
CASH GENERATED BY OPERATIONS 9 444 30 579
GENERATED FROM
DECREASE IN WORKING CAPITAL 29 146 1 910
CASH GENERATED
BY OPERATING ACTIVITIES 38 590 32 489
FINANCIAL REVENUE 3 506 3 768
DIVIDENDS PAID (8 989) (8 963)
TAXATION PAID (12 311) (12 166)
20 796 15 128
CASH UTILISED IN INVESTING ACTIVITIES (4 628) (16 519)
CASH EFFECTS OF FINANCIAL ACTIVITIES (1 663) (5 248)
INCREASE/(DECREASE) IN CASH AND
CASH EQUIVALENTS 14 505 (6 639)
THIS IS THE FIFTH PRELIMINARY STATEMENT OF HOWDEN AFRICA FOLLOWING THE LISTING
ON THE JOHANNESBURG STOCK EXCHANGE ON 3 MAY 1996.
HOWDEN AFRICA IS PART OF AN INTERNATIONAL GROUP OF BUSINESSES WITH LEADING
MARKET POSITIONS SERVING INDUSTRIAL CUSTOMERS. THE GROUP'S CORE BUSINESS
DIVISIONS ARE FANS AND HEAT EXCHANGERS, ENVIRONMENTAL CONTROL AND PUMPS.
RESULTS
OPERATING RESULTS FOR THE YEAR ENDED 31 DECEMBER 1999 WERE BELOW EXPECTATIONS,
DEPRESSED CAPITAL EQUIPMENT MARKETS IN PARTICULAR MAKING TRADING CONDITIONS
VERY DIFFICULT. DESPITE THE WELCOME RELIEF OFFERED BY DECLINING INTEREST RATES
OVER THE YEAR, THERE IS TRADITIONALLY A LAGGED EFFECT BEFORE THE BENEFITS OF
THIS ARE EXPERIENCED IN THE MARKETS SERVED BY GROUP COMPANIES. GROUP TURNOVER
FROM CONTINUING OPERATIONS OF R370,1 MILLION REDUCED BY 6,7% COMPARED TO THE
FULL YEAR TO DECEMBER 1998.
THE COMPARISONS BELOW REFER TO THE CORRESPONDING 12-MONTH PERIOD TO DECEMBER
1998.
ORDER INTAKE AMOUNTED TO R332 MILLION COMPARED TO R316 MILLION IN THE
CORRESPONDING PERIOD.
* TURNOVER WAS R371 MILLION COMPARED TO R409 MILLION.
* OPERATING PROFIT OF R5,5 MILLION COMPARED TO R26,7 MILLION.
* EARNINGS PER SHARE OF 3,94 CENTS COMPARED TO 30,37 CENTS.
* AT 31 DECEMBER 1999 THE GROUP HAD A NET POSITIVE CASH POSITION OF R49 MILLION
COMPARED TO R35 MILLION.
* DIVIDENDS TOTALLING 14 CENTS PER SHARE HAVE BEEN DECLARED FOR THE PERIOD.
BOARD OF DIRECTORS
DURING THE YEAR UNDER REVIEW, ALLAN MACLACHLAN RESIGNED AS A DIRECTOR OF THE
BOARD. IT IS INTENDED TO FILL HIS ROLE AS NON-EXECUTIVE DIRECTOR AND AN
ANNOUNCEMENT IN THIS REGARD WILL BE MADE IN DUE COURSE. THERE WERE NO OTHER
CHANGES TO THE BOARD.
DIVIDENDS
AN INTERIM DIVIDEND OF 5 CENTS PER SHARE WAS PAID OUT ON 29 OCTOBER 1999 (OCT
1998: 5 CENTS). THE DIRECTORS HAVE RECOMMENDED A FINAL DIVIDEND OF 9 CENTS PER
SHARE PAYABLE ON 26 MAY 2000 TO MEMBERS REGISTERED AS SUCH ON 5 MAY 2000. THIS
WILL RESULT IN A TOTAL DIVIDEND FOR THE YEAR OF 14 CENTS PER SHARE (DEC 1998:
14 CENTS).
OUTLOOK
THE PAST YEAR HAS DEMANDED A FOCUS ON LOOKING INWARDS IN ORDER TO IDENTIFY
THOSE ACTIONS NECESSARY TO ALIGN THE GROUP WITH EXISTING MARKET CONDITIONS.
WITH ECONOMIC INDICATORS SUGGESTING A BOTTOMING OUT OF THE RECENT CYCLE AND A
RETURN TO MORE FAVOURABLE GROWTH RATES, AN IMPROVEMENT IN RESULTS IS BEING
BUDGETED FOR THE YEAR 2000. CAPITAL EQUIPMENT MARKETS DO, HOWEVER, GENERALLY
LAG GROWTH IN OTHER AREAS OF THE ECONOMY AND AN UPTURN IN THESE MARKETS IS
STILL BEING AWAITED.
A COMMITTED EFFORT IS BEING DIRECTED TOWARDS IMPROVING GROUP EXPORTS AND
INCREASING ITS PROPORTION TO TOTAL TURNOVER. DEVELOPMENTS ON THIS FRONT ARE
ENCOURAGING GIVEN THE JOINT VENTURE COMPANIES OF AIRFLO HOWDEN (ZIMBABWE) AND
ENGART AUSTRALASIA (AUSTRALIA), COUPLED WITH THE NATIONAL DRIVE TO EXTEND
BILATERAL TRADING AGREEMENTS.
YEAR 2000 COMPLIANCE
AS ANTICIPATED, NO Y2K OPERATIONAL PROCESSING PROBLEMS WERE ENCOUNTERED, AND IN
THE INTEREST OF PRUDENCE THE SITUATION CONTINUES TO BE MONITORED.
FOR AND ON BEHALF OF THE BOARD
DR JW HERBERT
(CHAIRMAN)
13 MARCH 2000
DIRECTORS: JW HERBERT (NON-EXECUTIVE CHAIRMAN)# **, CJ FERREIRA (MANAGING
DIRECTOR), S MEYER, TV MAPHAI**, R MOKATE**, JC MOODIE**,
NWR SMITH# **(#BRITISH **NON-EXECUTIVE)
REGISTERED OFFICE: 1A BOOYSENS ROAD, BOOYSENS, 2091 POSTAL ADDRESS: PO BOX
2239, JOHANNESBURG, 2000
TRANSFER SECRETARIES: MERCANTILE REGISTRARS LIMITED, 11 DIAGONAL STREET,
JOHANNESBURG, 2001
