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HOWDEN AFRICA HOLDINGS LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 1996/002982/06)
("HOWDEN AFRICA")
RESULTS
FOR THE SIX MONTHS ENDED 30 JUNE 2000
THE SUMMARISED UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2000 ARE AS
FOLLOWS:
ABRIDGED CONSOLIDATED INCOME STATEMENT
ACTUAL ACTUAL ACTUAL
6 MONTHS 6 MONTHS 12 MONTHS
ENDED ENDED ENDED
30 JUNE 30 JUNE 31 DECEMBER
2000 1999 1999
(UNAUDITED) (UNAUDITED) (AUDITED)
R'000 R'000 R'000
TURNOVER 176 717 176 634 370 598
OPERATING PROFIT 2 390 5 740 5 543
NET FINANCIAL REVENUE 1 309 2 239 3 506
PROFIT BEFORE TAXATION 3 699 7 979 9 049
TAXATION (1 110) (2 394) (4 889)
PROFIT AFTER TAXATION 2 589 5 585 4 160
ATTRIBUTABLE TO OUTSIDE
SHAREHOLDERS (1 285) (993) (1 630)
NET PROFIT ATTRIBUTABLE
TO ORDINARY SHAREHOLDERS 1 304 4 592 2 530
ORDINARY DIVIDENDS (3 210) (3 210) (8 990)
(LOSS)/PROFIT FOR THE PERIOD (1 906) 1 382 (6 460)
NUMBER OF SHARES:
IN ISSUE ('000) 64 215 64 215 64 215
WEIGHTED AVERAGE ('000) 64 215 64 215 64 215
EARNINGS PER SHARE (CENTS) 2,03 7,15 3,94
DIVIDENDS PER SHARE (CENTS) 5,00 5,00 14,00
INTERIM 5,00 5,00 5,00
FINAL 9,00
ARIDGED CONSOLIDATED BALANCE SHEET
ACTUAL ACTUAL ACTUAL
6 MONTHS 6 MONTHS 12 MONTHS
ENDED ENDED ENDED
30 JUNE 30 JUNE 31 DEC
2000 1999 1999
(UNAUDITED) (UNAUDITED) (AUDITED)
R'000 R'000 R'000
ASSETS
NON-CURRENT ASSETS 38 581 37 146 39 639
FIXED ASSETS 31 492 30 057 32 550
LONG-TERM LOAN 7 089 7 089 7 089
CURRENT ASSETS 164 854 198 799 179 994
INVENTORIES 58 331 64 993 52 653
RECEIVABLES AND
PRE-PAYMENTS 75 503 102 985 77 288
AMOUNTS OWING BY
FELLOW SUBSIDIARIES 679 508 809
CASH AND CASH EQUIVALENTS 30 341 30 313 49 244
TOTAL ASSETS 203 435 235 945 219 633
EQUITIES AND LIABLITIES
CAPITAL AND RESERVES 104 457 114 053 106 245
OUTSIDE SHAREHOLDERS'
INTEREST 10 429 10 076 9 113
NON-CURRENT LIABILITIES 370 2 669 467
LOAN FROM HOLDING COMPANY 260 323 260
DEFERRED TAX 110 2 346 207
CURRENT LIABILITIES 88 179 109 147 103 808
ACCOUNTS PAYABLE 85 955 103 951 94 621
TAXATION (1 337) 1 740 2 902
AMOUNTS OWING TO
FELLOW SUBSIDIARIES 351 246 505
SHAREHOLDERS FOR DIVIDEND 3 210 3 210 5 780
TOTAL LIABILITIES 88 549 111 816 104 275
TOTAL EQUITY AND LIABILITIES 203 435 235 945 219 633
OTHER GROUP SALIENT FEATURES
NET ASSET VALUE
PER SHARE (CENTS) 162,67 177,61 165,45
DEPRECIATION 2 354 2 319 4 415
CAPITAL EXPENDITURE 696 1 162 6 308
CAPITAL COMMITMENTS
AUTHORISED AND CONTRACTED - 200 -
AUTHORISED NOT CONTRACTED 1 656 60 19
ABRIDGED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
OPENING BALANCE 106 245 112 671 112 671
CURRENCY TRANSLATION DIFFERENCES 118 - 34
NET PROFIT 1 304 4 592 2 530
DIVIDENDS (3 210) (3 210) (8 990)
CLOSING BALANCE 104 457 114 053 106 245
ABRIDGED CONSOLIATED CASH FLOW STAEMENT
CASH FLOW FROM
OPERATING ACTIVITIES
CASH GENERATED BY OPERATIONS 4 744 8 059 9 444
UTILISED TO (DECREASE)/INCREASE
WORKING CAPITAL (12 465) 68 29 146
CASH GENERATED BY
OPERATING ACTIVITIES (7,721) 8 127 38 590
FINANCIAL REVENUE 1 309 2 239 3 506
DIVIDENDS PAID (5 780) (5 779) (8 989)
TAXATION PAID (5 446) (8 839) (12 311)
(17 638) (4 252) 20 796
CASH UTILISED IN
INVESTING ACTIVITIES (1 265) (174) (4 628)
CASH EFFECTS OF
FINANCING ACTIVITIES - - (1 663)
(DECREASE)/INCREASE IN CASH AND
CASH EQIVALENTS (18 903) (4 426) 14 505
COMMENTS
THE SETBACK TO ECONOMIC RECOVERY EXPERIENCED OVER THE PERIOD END FEBRUARY TO
EARLY JUNE IMPACTED NEGATIVELY ON RESULTS ACHIEVED FOR THE
SIX-MONTH PERIOD TO 30 JUNE 2000. IN PARTICULAR, THE FLOODING OF LARGE TRACTS
OF AGRICULTURAL LAND HAD AN ADVERSE EFFECT ON RESULTS REPORTED IN THE PUMP
BUSINESS. BUSINESS CONFIDENCE HAS, HOWEVER, REFLECTED AN IMPROVEMENT OF LATE
WITH A NUMBER OF DIVISIONS REPORTING AN INCREASE IN TENDERING ACTIVITY.
RESULTS
IN THE SIX MONTHS ENDED 30 JUNE 2000, ORDERS RECEIVABLE OF R160,0 MILLION WERE
DOWN BY 4,9% COMPARED WITH THE CORRESPONDING PERIOD IN 1999. TURNOVER OF R176,7
MILLION WAS SIMILAR TO LAST YEAR, BUT AN UNFAVOURABLE MIX OF BUSINESS RESULTED
IN POORER GROSS MARGINS BEING ACHIEVED.
IN THE SIX MONTHS TO 30 JUNE 2000 GROUP OPERATING PROFITS OF R2,4 MILLION ARE
REPORTED, AGAINST R5,7 MILLION FOR THE SAME PERIOD LAST YEAR.
NET CASH AND BANK BALANCES OF R30,3 MILLION COMPARE WITH R30,3 MILLION REPORTED
LAST YEAR. THE REDUCTION IN NET WORKING CAPITAL HAS TENDED TO NEUTRALISE THE
NEGATIVE EFFECT OF PAYING DIVIDENDS IN EXCESS OF EARNINGS.
EARNINGS PER SHARE OF 2,03 CENTS COMPARES WITH 7,15 CENTS LAST YEAR.
REVIEW OF OPERATIONS
FANS AND HEAT EXCHANGERS
ORDER INTAKE FOR FANS AND HEAT EXCHANGERS TOTALLED R79,2 MILLION COMPARED WITH
R83,2 MILLION IN THE CORRESPONDING PERIOD LAST YEAR. DEPRESSED CONDITIONS IN
THE MINING SECTOR, COUPLED WITH AGGRESSIVE COMPETITION IN ENGINEERED FANS,
RESULTED IN AN UNSATISFACTORY LEVEL OF ORDERS BEING RECORDED. STANDARD FAN
ORDERS WERE 11% DOWN ON THE SAME PERIOD LAST YEAR.
PROSPECTS FOR THE BALANCE OF THE YEAR ARE IN LINE WITH THAT ACHIEVED IN THE
FIRST HALF.
ENVIRONMENTAL CONTROL
THE ENVIRONMENTAL CONTROL BUSINESS RECEIVED ORDERS TOTALLING R35,5 MILLION
COMPARED WITH R29,0 MILLION LAST YEAR. THIS REPRESENTS A 22% INCREASE, DUE
MAINLY TO ADDITIONAL ORDERS ACQUIRED THROUGH THE ACQUISITION OF THE 3TS
BUSINESS, AS A GOING CONCERN. A NUMBER OF ORDER PROSPECTS ARE PRESENTLY BEING
TARGETED AND THIS DIVISION APPEARS WELL-PLACED TO CONTINUE IMPROVING ITS
CONTRIBUTION TO GROUP RESULTS.
BUSINESS IN THE SECOND HALF OF THE YEAR IS EXPECTED TO REFLECT AN IMPROVEMENT
ON THAT ACHIEVED IN THE FIRST HALF.
PUMPS
ORDER INTAKE FOR THE PUMPS BUSINESS TOTALLED R45,3 MILLION AGAINST THE R56,0
MILLION ACHIEVED LAST YEAR, FLOODING IN ITS TRADITIONAL AGRICULTURE MARKET
IMPACTING NEGATIVELY ON SALES. THIS DIVISION REMAINS PROBLEMATIC AND
RE-ORGANISATION EFFORTS ARE BEING CONSIDERED GIVEN THE DEPRESSED RESULTS.
A RETURN TO MORE STABLE WEATHER PATTERNS AT THE START OF THE SUMMER PERIOD
SHOULD RESULT IN ORDERS RECEIVABLE POSITION STABILISING AT MORE RESPECTABLE
LEVELS.
OUTLOOK
THE PERIOD TO 30 JUNE 2000 REPRESENTS THE FOURTH CONSECUTIVE
SIX-MONTH PERIOD OVER WHICH DEPRESSED OPERATING RESULTS HAVE BEEN REPORTED. THE
MAJOR BUSINESS SECTORS SERVED BY THE GROUP EMBRACING AGRICULTURE, MINING,
MANUFACTURING, ELECTRICITY AND CONSTRUCTION, HAVE LIKEWISE EXPERIENCED LOW
LEVELS OF ACTIVITY OVER THE SAME PERIOD. ALTHOUGH MANY MEASURES HAVE BEEN TAKEN
TO RIGHT SIZE OPERATIONS TO SUIT THESE DEPRESSED LEVELS, THE GROUP REMAINS
VULNERABLE TO ECONOMIC ACTIVITY IN THE SAID SECTORS. IN AN EFFORT TO REDUCE
THIS VULNERABILITY EFFORTS TO MOVE OUTSIDE THE LOCAL MARKET CONTINUE IN THE
FORM OF ORGANIC GROWTH PLUS SELECTIVE, SMALLER LATCH-ON TYPE ACQUISITIONS AND
PARTNERING ARRANGEMENTS.
A REVERSAL IN THE FORTUNES OF THE AFOREMENTIONED SECTORS AND SOME SUCCESS IN
MARKETS BEYOND OUR BORDERS WOULD BODE WELL FOR THE GROUP MOVING FORWARD. THIS
IS, HOWEVER, A SHIFT WHICH TAKES TIME TO MATERIALISE AND YOUR DIRECTORS
THEREFORE REMAIN CAUTIOUS REGARDING THE OUTLOOK FOR THE BALANCE OF THE YEAR.
DIVIDEND
AN INTERIM DIVIDEND OF 5 CENTS PER SHARE HAS BEEN DECLARED TO ALL SHAREHOLDERS
REGISTERED IN THE BOOKS OF THE COMPANY AT CLOSE OF BUSINESS
ON 6 OCTOBER 2000. PAYMENT IS EXPECTED TO BE MADE ON OR ABOUT
27 OCTOBER 2000.
FOR AND ON BEHALF OF THE BOARD
DR JW HERBERT
(CHAIRMAN)
4 SEPTEMBER 2000
(CHAIRMAN)
DIRECTORS: DR JW HERBERT (NON-EXECUTIVE CHAIRMAN)# **, CJ FERREIRA (MANAGING
DIRECTOR), RJ CLELAND# **, TV MAPHAI**, S MEYER, R MOKATE**, JC MOODIE**,
NWR SMITH# **(#BRITISH **NON-EXECUTIVE) COMPANY SECRETARY: MJM LAKE
REGISTERED OFFICE: 1A BOOYSENS ROAD, BOOYSENS, 2091 POSTAL ADDRESS: PO BOX
2239, JOHANNESBURG, 2000
TRANSFER SECRETARIES: MERCANTILE REGISTRARS LIMITED, 11 DIAGONAL STREET,
JOHANNESBURG, 2001