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HOWDEN AFRICA HOLDINGS LIMITED
(Registration number 1996/002982/06
Share code: HWN ISIN code: ZAE 000010583
THE SUMMARISED UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2001
ABRIDGED CONSOLIDATED INCOME STATEMENT
Actual Actual Actual
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2001 2000 2000
(Unaudited) (Unaudited) (Audited)
R'000 R'000 R'000
Turnover 172 315 176 717 336 440
Operating profit 2 776 2 390 7 453
Net financial revenue 90 1 309 2 403
Profit before taxation 2 866 3 699 9 856
Taxation (1 660) (1 110) (3 687)
Profit after taxation 1 206 2 589 6 169
Attributable to outside shareholders 39 (1 285) (1 253)
Net profit attributable to
1 245 1 304 4 916
Ordinary dividends - (3 210) (9 202)
Retained profit/(loss) for the period 1 245 (1 906) (4 286)
Number of shares:
In issue (000) 65 729 64 215 65 729
Weighted average (000) 65 729 64 215 64 695
Earnings per share: (cents) 1,89 2,03 7,60
Amortisation of goodwill 0,26 - -
Headline earnings per share (cents) 2,15 2,03 7,60
Dividends per share: (cents) 0,00 5,00 14,00
Interim - 5,00 5,00
Final - - 9,00
ABRIDGED CONSOLIDATED BALANCE SHEET
Actual Actual Actual
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2001 2000 2000
(Unaudited) (Unaudited) (Audited)
R'000 R'000 R'000
ASSETS
Non-current assets 45 414 38 581 43 181
Fixed assets 33 043 31 492 34 729
Intangible assets 1 495 - -
Investment in associate 2 424 - -
Long-term loan 8 452 7 089 8 452
Current assets 142 817 164 854 165 130
Inventories 57 704 58 331 52 405
Receivables and pre-payments 84 961 75 503 81 842
Amounts owing by fellow subsidiaries 152 679 576
Cash and cash equivalents - 30 341 30 307
Total assets 188 231 203 435 208 311
EQUITIES AND LIABILITIES
Capital and reserves 103 701 104 457 103 083
Outside shareholders' interest 3 401 10 429 9 978
Non-current liabilities 1 667 370 1 692
Loan from holding company - 260 -
Deferred tax 1 667 110 1 692
Current liabilities 79 462 88 179 93 558
Accounts payable 76 861 85 955 85 806
Taxation (944) (1 337) 1 023
Amounts owing to fellow subsidiaries 351 351 814
Borrowings 3 194 - -
Shareholders for dividend - 3 210 5 915
Total liabilities 81 129 88 549 95 250
Total equity and liabilities 188 231 203 435 208 311
OTHER GROUP SALIENT FEATURES
Actual Actual Actual
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2001 2000 2000
(Unaudited) (Unaudited) (Audited)
R'000 R'000 R'000
Net asset value per share (cents) 157,77 162,67 156,83
Depreciation 2 660 2 354 4 459
Capital expenditure 1 688 696 4 153
Capital commitments
Authorised and contracted 861 - 1 095
Authorised not contracted 450 1 656 650
ABRIDGED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Actual Actual Actual
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2001 2000 2000
(Unaudited) (Unaudited) (Audited)
R'000 R'000 R'000
Opening balance 103 083 106 245 106 245
Currency translation differences (15) 118 (375)
Net profit 1 245 1 304 4 916
Dividends - (3 210) (9 202)
Reserves on subsidiary sold (612) - -
Revaluation of land and
buildings net of tax - - 136
Issue of share capital
- share options - - 1 363
Closing balance 103 701 104 457 103 083
ABRIDGED CONSOLIDATED CASH FLOW STATEMENT
Actual Actual Actual
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2001 2000 2000
(Unaudited) (Unaudited) (Audited)
R'000 R'000 R'000
Cash flow from operating activities
Cash generated by operations 5 928 4 744 11 741
Utilised to increase working capital (17 937) (12 465) (12 579)
Cash utilised by operating activities (12 009) (7 721) (838)
Financial revenue 90 1 309 2 403
Dividends paid (11 915) (5 780) (9 067)
Taxation paid (3 627) (5 446) (7 045)
(27 461) (17 638) (14 547)
Cash utilised in investing activities (6 040) (1 265) (4 130)
Cash effects of financing activities - - (260)
(Decrease) in cash and cash equivalents (33 501) (18 903) (18 937)
COMMENTS
Mixed signals continue to be received from the markets in which the Group
operates. Those in which custom engineered product and services are offered
have held up well over the six-month period, and prospects remain
encouraging moving forward. The standard product companies, however,
continue to experience difficult trading conditions.
RESULTS
In the six months ended June 2001, orders received of R244,8 million were up
53% on the corresponding period last year. Turnover of R172,3 million was
slightly down, due mainly to the completion in the corresponding period last
year of the long-term Majuba Power Station contracts.
In the six months to 30 June 2001 group operating profits of R2,8 million
are reported, against R2,4 million for the same period last year. As
announced previously, the Group remains committed to establishing itself in
markets outside South Africa. Costs associated with this initiative totalled
R2,5 million during the period, and are included in the results.
A net borrowed position of R3,2 million compares with the R30,3 million
net cash reported as at December 2000. An increase in debtors and
inventories associated mainly with our export drive, the payment of R3,6
million in corporate taxes, and R11,9 million in dividends, account for the
major part of outflows over the period.
Headline earnings per share of 2,15 cents compare with 2,03 cents last
year, despite taxation being increased by R0,6 million. The high tax charge
is as a result of tax associated with a dividend received from a joint
venture subsidiary.
In January of this year a small centrifugal chiller business was acquired
in order to expand the range of mine cooling options offered by Group
companies. This gave rise to goodwill of R1,5 million reported in the
balance sheet. In addition, an investment has been made in an electric motor
company for purposes of reinforcing the Group's mining and export market
focus.
REVIEW OF OPERATIONS
Fans and heat exchangers
Order intake for fans and heat exchangers totalled R86,6 million compared to
R79,2 million in the corresponding period last year. Measures taken over the
last year to improve the division's competitiveness have resulted in lost
market share being regained, especially in the mining sector. Good results
were also achieved in the boiler market where emphasis is being concentrated
on increasing the value added content associated with products on offer.
Standard fan orders, however, remained depressed.
Indications are that the order intake in the second half will be slightly
down on that achieved in the first half.
Environmental control
The environmental control business received orders totalling R111,1 million
compared to R35,5 million last year. This achievement included an order
worth R73 million received by Bateman Howden for the supply of fabric
filters to Hendrina Power Station. Delivery is scheduled over three years. A
number of order prospects are being targeted and the division is well placed
to continue improving its contribution to group results.
Business in the second half of the year, excluding the aforementioned
fabric filter order, is expected to reflect an improvement on that achieved
in the first half.
Pumps
Order intake for the pumps business totalled R47,1 million against the R45,3
million achieved last year, a general improvement being recorded in all
markets served. Results year to date reflect an improvement on those
reported last year and the division continues its efforts in restoring the
business to profitability.
Outlook
The refocusing of certain businesses into dedicated markets, coupled with
the drive to increase the Group's international presence, should result in
improved returns being reported in due course. Gross domestic fixed
investment growth over the next three years is being forecast to recover to
levels in excess of that being predicted for GDP growth. Should this
materialise, group businesses would be well placed to take advantage of
opportunities as they arise in the markets served.
Dividend
At the Annual General Meeting held in June 2001 it was announced that future
dividend policy would be set in the light of earnings and cash flow, also
taking into account the need to invest in the Group's future. In the light
of this, no interim dividend is being proposed.
Basis of preparation
These financial statements have been prepared in accordance with GAAP. There
has been no change in accounting policies since the annual report of 31
December 2000.
Directorate
Mr David Gawler, Chairman and Chief Executive Officer of Charter plc, was
appointed non-executive director and Chairman with effect from 24 May 2001.
Mr Jeffrey Herbert and Mr Nigel Smith have resigned from the Board. The
Board wishes to express its thanks to Mr Herbert and Mr Smith for the
contributions made during their time with the Company.
For and on behalf of the Board
D Gawler
(Chairman)
3 September 2001
DIRECTORS: D Gawler (Chairman)**, CJ Ferreira (Managing Director), RJ
Cleland#**, Dr TV Maphai**, S Meyer, Dr R Mokate**,
(# 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
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