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BELL EQUIPMENT LTD
(Incorporated in the Republic of South Africa)
(Registration number 1968/013656/06)
("Bell")
Interim Report for the six months ended 30 June 2001
' Revenue up 29%
' Profit after tax up 14%
' Net asset value per share up 10% since December 2000
Consolidated Income Statement
UNAUDITED AUDITED
6 months 12 months
ended ended
% 30 June 30 June 31
December
R'000 change 2001 2000 2000
REVENUE 29 857 787 662 992 1 438 507
Cost of sales 31 627 184 477 967 1 032 289
Gross profit 25 230 603 185 025 406 218
Other operating income (18) 25 517 31 107 52 742
Distribution costs 26 (126 106) (100 185) (232 688)
Administration costs 1 (27 203) (26 977) (69 866)
Other operating costs 2 (14 630) (14 347) (38 477)
Profit from operating
activities 18 88 181 74 623 117 929
Net finance costs (Note 2) 103 13 258 6 530 11 538
Profit before taxation
(Note 3) 10 74 923 68 093 106 391
Taxation - 20 795 20 776 25 077
Profit after taxation 14 54 128 47 317 81 314
Earnings per share
(basic) (cents) (Note 4) 14 58 51 87
Earnings per share
(diluted) (cents) (Note 4) 14 57 50 86
Headline earnings per share
(basic) (cents) (Note 4) 14 59 51 87
Headline earnings per
share (diluted) (cents)
(Note 4) 14 58 50 86
Dividend per share (cents) - - - 10
Consolidated Balance Sheet
UNAUDITED AUDITED
at at
30 June 30 June 31
December
R'000 2001 2000 2000
ASSETS
Non-current assets 134 400 92 379 115 584
Property, plant and equipment 111 442 85 066 102 892
Long-term receivables 22 958 7 313 12 692
Current assets 765 503 650 286 784 825
Inventory 515 615 453 197 513 638
Trade and other receivables 223 838 174 653 236 248
Prepayments 11 500 7 210 3 627
Taxation 1 480 - 3 053
Cash resources 13 070 15 226 28 259
Total assets 899 903 742 665 900 409
EQUITY AND LIABILITIES
Capital and reserves 547 011 450 546 496 689
Stated capital (Note 5) 223 162 222 117 222 822
Non-distributable reserves 53 739 36 985 48 458
Retained earnings 270 110 191 444 225 409
Non-current liabilities 36 724 39 382 36 411
Long-term borrowings 30 391 29 041 31 700
Deferred taxation 6 333 10 341 4 711
Current liabilities 316 168 252 737 367 309
Trade and other payables 237 905 198 661 206 254
Current portion of
long-term borrowings 2 296 735 1 915
Warranty provision 28 250 - 25 407
Taxation 18 380 25 167 33 702
Short-term interest bearing debt 29 337 28 174 100 031
Total equity and liabilities 899 903 742 665 900 409
Number of shares in issue (000) 93 763 93 383 93 634
Net asset value per share (cents) 583 482 530
Abbreviated Cash Flow Statement
UNAUDITED AUDITED
6 months 12 months
ended ended
30 June 30 June 31
December
R'000 2001 2000 2000
Operating profit before
working capital changes 103 169 88 060 172 957
Cash generated by/(invested in)
working capital 34 211 (54 000) (164 860)
Net finance costs paid (14 785) (7 801) (14 079)
Taxation paid (32 922) (506) (4 955)
Net cash from/(applied to)
operating activities 89 673 25 753 (10 937)
Dividend paid (9 363) (5 595) (5 595)
Invested in property, plant,
equipment and long-term receivables (25 744) (12 835) (40 783)
Net cash surplus/(outflow) 54 566 7 323 (57 315)
Proceeds from shares issued 340 356 1 061
Net (repayment of)/increase in
borrowings (54 906) (7 679) 56 254
Cash (surplus applied)/deficit funded (54 566) (7 323) 57 315
Statement of Changes in Equity
UNAUDITED AUDITED
6 months 12 months
ended ended
30 June 30 June 31
December
R'000 2001 2000 2000
Equity at beginning of period 496 689 397 202 397 202
Changes in share capital 340 356 1 061
Issue of share capital 340 356 1 061
Changes in non-distributable reserves 5 281 5 671 17 144
Deferred taxation on revaluation
of properties - (3 432) (3 432)
Increase in legal reserve
of foreign subsidiary 64 - 32
Increase in currency translation
reserve 5 477 9 052 20 655
Exchange differences
on foreign reserves (260) 51 (111)
Changes in retained earnings 44 701 47 317 81 282
Net profit for period 54 128 47 317 81 314
Transfer to legal reserve
of foreign subsidiary (64) - (32)
Dividend (9 363) - -
Equity at end of period 547 011 450 546 496 689
Notes to Interim Report
UNAUDITED AUDITED
6 months 12 months
ended ended
30 June 30 June 31 December
R'000 2001 2000 2000
1. ACCOUNTING POLICIES
The same accounting policies and
methods of computation are followed
in the interim report as compared
with the annual financial statements
for the year ended 31 December 2000.
2. NET FINANCE COSTS
Net interest paid 4 346 4 088 7 684
Net currency exchange losses 10 439 3 713 6 395
Net finance costs paid 14 785 7 801 14 079
Financial instrument income (1 527) (1 271) (2 541)
Net finance costs 13 258 6 530 11 538
3. PROFIT BEFORE TAXATION
Profit before taxation is arrived at after
taking into account:
Income
MIDP and other benefits 13 558 20 664 35 900
Net surplus on disposal of property,
plant and equipment - 158 -
Expenditure
Depreciation of property,
plant and equipment 5 958 4 492 9 411
Net loss on disposal of property,
plant and equipment 970 - 96
Operating lease charges
- equipment and motor vehicles 3 720 2 420 9 464
- properties 3 615 3 572 7 724
Staff costs 125 552 105 844 251 717
Warranty provision 2 843 - 25 407
4. EARNINGS PER SHARE
The calculation of earnings per share
is based on profit after taxation
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 93 715 300 (June 2000: 93 299 856).
On a diluted basis, the fully
converted weighted average number of
shares is 94 926 650
(June 2000: 94 925 106).
Headline earnings is arrived at after
taking into account the net loss
on disposal of property, plant and
equipment as reflected in Note 3.
5. STATED CAPITAL
Authorised
100 000 000 (December 2000: 100 000 000)
ordinary shares of no par value
Issued
93 763 100 (December 2000: 93 634 200)
ordinary shares of no par value 223 162 222 117 222 822
6. COMMITMENTS
Capital expenditure
Authorised, but not contracted 15 729 15 240 31 207
7. SEGMENTAL ANALYSIS
Geographical segments
The group operates in two geographical areas
Operating
Rm Revenue profit Assets Liabilities
June 2001
South Africa 436 69 714 318
Rest of the world 422 19 186 35
Total 858 88 900 353
June 2000
South Africa 365 72 615 267
Rest of the world 298 3 128 25
Total 663 75 743 292
December 2000
South Africa 703 61 658 293
Rest of the world 736 57 242 111
Total 1 439 118 900 404
Assets in South Africa are also used to generate rest of the world revenue.
Chairman's Statement for the six months ended 30 June 2001
Once again I am proud to report on a record breaking six month trading
result. Operating profit is 18% up on the comparable period in 2000 whilst
net asset value increased by 53 (fifty-three) cents per share to R5,83 since
the beginning of the year, this despite a dividend of 10 (ten) cents being
paid in April 2001. In Rand terms this increase in net asset value for the
six months amounted to R50,3 million, of which R0,3 million was in respect
of additional shares to option holders.
Another very positive aspect of the results was the very strong cash flow
allowing the debt : equity ratio to stay below 10% despite capex, taxation
and dividend payments of R68 million. Working capital management remains a
high priority and we are planning further reductions in the next six months.
Increased competition in the Southern African market has resulted in a
decreased gross profit margin. Finance charges have increased principally
due to currency exchange losses arising from a volatile Euro and increased
procurement of componentry out of Europe.
Once again special tribute must be paid to the group's Southern African
Sales & Distribution Division for the record performance and contribution to
group profits. Our market share in South Africa for articulated dump trucks,
wheel loaders and tracked excavators has improved in the first six months of
this year. In the wheeled loader market we attained number one position for
the first time.
We continue to work very closely with our strategic alliance partners,
John Deere Construction Equipment Company and Hitachi Construction Machinery
Limited, in an effort to increase leverage by reducing costs of manufacture
and distribution. From the end of October 2001 we will be launching our new
D-series articulated dump trucks, which will give us the opportunity to
prove that we are at the leading edge of world technology in this field. Our
new range of trucks is a quantum leap ahead of our existing products and
will be in line with both our partners' and our customers' expectations.
The first six months' results are unlikely to be repeated in the next six
months due to a general slow down in the world economies. Despite this,
continued investment in research and development, in our people and our
market, places Bell in a strong position for the years to come.
Howard J Buttery
Group Chairman 10 August 2001
REVIEW BY INDEPENDENT AUDITORS
The financial information set out above has been reviewed but not audited by
Deloitte & Touche and their unqualified report is available at the
registered office.
Registered office: Transfer secretaries:
13 - 19 Carbonode Cell Mercantile Registrars Limited
Alton PO Box 1053
Richards Bay 3900 Johannesburg 2000
Directors: G W Bell (Chief Executive), H J Buttery (Chairman), P C Bell,
M A Campbell, J W Bloom (USA)*, M A Guinn (USA)*, P J C Horne*, D J J
Vlok*,
T D Kgobe*, M W Arnold (USA)*, B B Brock (USA)*, G P Harris*
Alternate Directors: P A Bell, D I Campbell, D B Rhind, T J Graff (USA)*,
D C Manhart (USA)*, T N Trone (USA)* * Non-executive
Company Secretary: D P Mahony
