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Argent Industrial Limited - Audited Results For The Year Ended 31 March 2003

Release Date: 02/06/2003 17:55
Code(s): ART
Wrap Text

Argent Industrial Limited - Audited Results For The Year Ended 31 March 2003 Argent Industrial Limited (Reg no 1993/002054/06) (Incorporated in the Republic of South Africa) ("The Group" or "The Company")) Share code :ART ISINcode : ZAE000019188 AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2003 REVENUE UP 67% ATTRIBUTABLE EARNINGS UP 90% HEADLINE EARNINGS UP 87% HEADLINE EARNINGS per share UP 63% ABRIDGED CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2003 Audited at Audited at 31 March 31 March 2003 2002 R000 ASSETS Non-current assets Property, plant and equipment 134 609 94 719 Intangibles 25 843 3 455 Employee share incentive scheme 1 325 695 161 777 98 869 Current assets Inventories 112 403 60 944 Trade and other receivables 156 381 101 378 Bank balance and cash 6 599 10 493 275 383 172 815 Total assets 437 160 271 684 EQUITY AND LIABILITIES Capital and reserves Share capital and premium 106 566 73 559 Reserves 24 045 24 045 Accumulated profits 73 302 35 514 Ordinary shareholders" funds 203 913 133 118 Minority interest 4 722 3 824 Total shareholders" funds 208 635 136 942 Non-current liabilities Interest-bearing borrowings 30 608 18 416 Deferred taxation 6 583 3 624 37 191 22 040
Current liabilities Trade and other payables 165 200 98 255 Taxation 5 490 3 902 Shareholders for dividends 3 108 Current portion of interest-bearing borrowings 20 644 7 437 191 334 112 702 Total equity and liabilities 437 160 271 684 Net asset value per share (cents) 349,7 299,8 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2003 Reserve on
Share Share Revaluation subsidiary Accumulated capital premium reserve acquisition profits Total R000 Balance at 31 March 2001 2 024 66 435 2 804 23 209 19 851 114 323 Shares issued 196 4 904 5 100 Reversal of revaluation of properties (1 968) (1 968) Profit for the year ended 31 March 2002 22 116 22 116 Dividends - interim and final (6 453) (6 453) Balance at 31 March 2002 2 220 71 339 836 23 209 35 514 133 118 Shares issued 695 32 312 33 007 Profit for the year ended 31 March 2003 42 000 42 000 Dividends - interim (4 212) (4 212) Balance at 31 March 2003 2 915 103 651 836 23 209 73 302 203 913 ABRIDGED CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 MARCH 2003 Audited Audited year ended year ended
31 March 31 March 2003 2002 R000 Revenue 621 381 371 644 Operating profit before financing costs 63 759 35 486 Financing costs 9 089 8 267 Profit before taxation 54 670 27 219 Taxation 11 772 4 502 Profit after taxation 42 898 22 717 Earnings attributable to outside shareholders 898 601 Earnings attributable to ordinary shareholders 42 000 22 116 Attributable earnings per share (cents) 83,0 50,2 Headline earnings per share (cents) 83,6 51,3 Dividends per share (cents)* 17,0 14,0 Interim 8,0 7,0 Final 9,0 7,0 *In accordance with AC107, the final dividend of 9 cents per share proposed by the directors has not been reflected in the annual financial statements Shares in issue (000) - at end of period 58 308 44 409 - weighted average for the year 50 580 44 082 Calculation of Headline Earnings (R000) Attributable earnings 42 000 22 116 Adjustments for: Attributable earnings 42 000 22 116 Goodwill amortisation 579 150 Profit on disposal of property, plant and equipment (538) (780) Loss on disposal of property, plant and equipment 268 1 126 Headline adjustments 309 496 Headline earnings 42 309 22 612 ABRIDGED CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2003 Audited Audited year ended year ended 31 March 31 March 2003 2002
R000 Cash generated from operations 41 714 30 470 Interest paid (9 089) (8 267) Interest received 3 455 3 626 Dividends paid (7 320) (5 774) Taxation paid (5 993) (62) Cash flows from operating activities 22 767 19 993 Cash flows from investing activities (84 740) (15 322) Cash flows from financing activities 58 079 5 464 Net (decrease)/increase in cash and cash equivalents (3 894) 10 135 Cash and cash equivalents at beginning of year 10 493 358 Cash and cash equivalents at end of year 6 599 10 493 SEGMENT REPORT FOR THE YEAR ENDED 31 MARCH 2003 BUSINESS SEGMENTS Revenue Results Revenue Results audited audited audited audited 31 March 31 March 31 March 31 March 2003 2003 2002 2002
R000 Steel & Steel Related Products 377 013 50 513 262 870 26 174 Project Management & Materials Handling 243 975 3 896 108 097 1 799 Properties 393 261 677 (754) Total 621 381 54 670 371 644 27 219 COMMENTARY CHIEF EXECUTIVE"S REVIEW On behalf of the board of directors of Argent Industrial Limited , the audited results for the year ended 31 March 2003 are hereby presented. The Group has achieved excellent results and evidence of this success can be found in almost every part of our business. The Group continues to achieve its strategy to deliver outstanding shareholder value. SALIENT FEATURES - Attributable earnings increased by 90% to R42 million (2002 - R22,1 million) - Headline earnings per share increased by 63% to 83,6 cents per share (2002 - 51,3 cents per share) - Revenue increased by 67% to R 621 million (2002 - R 371 million) - Gearing increased to 24,6% (2002 - 18,6%) DIVISIONAL PERFORMANCE STEEL AND STEEL RELATED PRODUCTS The Group"s Steel companies had an excellent year. The upward trend of the local steel prices increased the Group"s turnover, and with the strength of the local economy enabled them to maintain their margins. The local prices have now started decreasing. However, our acquisition of a tube mill in January 2003 should enable the steel and steel related products companies to maintain turnover levels and margins. The Group is reaping the export fruits of the Jetmaster acquisition. Having a recognized brand name on board has proved to be of great value. The steel and manufacturing businesses in the Group have benefited from this acquisition as the supply of steel and manufactured components were previously sourced elsewhere by Jetmaster. Jetmaster has enormous potential both locally and internationally and will play a major role in the Group"s future success. Jetmaster"s contributions to the period"s results were turnover of R29,1 million and net profit before tax of R6,4 million. (acquired with effect from 16 August 2002.) Jetmaster is a seasonal business and therefore the Group will benefit from the winter season for the first time during the first six months of the 2004 financial year. Bavarian Metal Industries had an exceptional year and with the current order book should continue the trend into 2004. Giflo Engineering has a full order book and has now expanded into the manufacturing of seat frames for the automotive market. New Joules Engineering North America had an excellent year, but the downturn in the American economy has adversely affected the first two months of the 2004 financial year. The company has a record number of tenders awaiting adjudication and expects to catch up the slow start to the year. The increased steel prices had a negative effect on Hendor Mining Supplies" margins. However, non-contractual price increases from its customers and Hendor is back on track to produce a solid set of results for 2004. During the period the Group acquired 100% of Excalibur Vehicle Accessories (Pty) Ltd. (effective 31 January 2003) The fair value of the assets acquired and liabilities assumed were as follows: R000 Current assets 4 877 Non-current assets 2 936 Current liabilities (2 600) Non-current liabilities (393) Goodwill 13 680 Total purchase price 18 500 Deduct bank balance on acquisition (483) Cash flow on acquisition net of cash acquired 18 017 Excalibur has fitted in very well with the Group and will benefit from Giflo Engineering"s marketing, quality and tooling expertise. Excalibur has already secured additional work from Delta Motor Corporation and Toyota South Africa. Excalibur"s contribution to the period"s results were turnover of R4,6 million and net profit before tax of R1,7 million. PROJECT MANAGEMENT AND MATERIALS HANDLING Megamix and Villiersdorp Quarries have performed admirably in a very competitive industry. Megamix, the concrete supplier, has greatly increased its market share and has become a major player in its industry. Villiersdorp Quarries has proved itself to be a viable business and is generating consistent returns. Both businesses are weather dependent and hope to maintain their turnover levels during the wet winter months. Barker Flynn Associates continued to encounter difficulties with completing the Ticor Reductant and Slag Treatment Plants at Empangeni. A beneficial occupation certificate and commencement of the defects liability period certificate backdated to the 01/12/2002 have, however, been issued by the client for the Reductant Pant. Hot commissioning and performance tests have commenced on the Slag Treatment Plant. Handover of this plant is expected shortly. The claims for extra costs on both projects submitted to the client are currently under evaluation by the client and negotiations to resolve the outstanding financial issues are in progress. All costs relating to the contract have been written off in the current period. The construction of the rock phosphate handling project for Navitrade is nearing completion with commissioning and beneficial handover to be achieved by the end of July 2003. This project is within budget and on schedule. Barker Flynn Associates is in the process of consolidating its resources and refocusing its marketing and project management activities towards existing and niche market clients with emphasis on the supply of materials handling equipment and related services. APPOINTMENT OF DIRECTOR Mr Peter Hector Lawson has been appointed to the board of Argent Industrial Limited. Mr Lawson brings to the Company 36 years of experience in the steel industry. PROSPECTS The Group"s focus will continue to be on the various export markets. The Group is geared to deliver above average returns on shareholders funds and has a strong platform for future growth. DIVIDEND Final dividend of 9 cents per share has been declared, payable on Monday 18 August 2003 to shareholders recorded in the register at the close of business on Friday 15 August 2003, being the record date in order to participate in such dividend. The last day to trade cum div is Friday 8 August 2003. The share will trade ex div on Monday 11 August 2003. Share certificates may not be dematerialised or rematerialised between Monday 11 August 2003 and Friday 15 August 2003, both days inclusive. ACCOUNTING POLICIES The financial statements for the year under review are prepared in accordance with South African Statements of Generally Accepted Accounting Practice and incorporates accounting policies which are consistent with those of the previous year. AUDIT OPINION Our Auditors, Etchells, James Kruger & Associates Inc. have issued their opinion on the Group"s financial statements for the year ended 31 March 2003. A copy of their unqualified report is available for inspection at the company"s registered office. On behalf of the board T.R. HENDRY CA(SA) Germiston Chief Executive Officer 2 June 2003 Directors: T. Scharrighuisen (Chairman), T.R. Hendry (Chief Executive Officer), Ms. S.J. Cox (Financial), P.A. Day (Executive), M.J. Antonic (New Business Development), G.K. Youngman (Alt. Executive), D. Smith (Alt. New Business Development) REGISTERED OFFICE: 13 Jack Pienaar Road Germiston South Extension 7 Germiston 1411 Tel:(011) 876-4000 (PO Box 14461, Wadeville 1422) TRANSFER SECRETARIES: Ultra Registrars Ground Floor 11 Diagonal Street Johannesburg, 2001 (PO Box 4844, Johannesburg 2000) Company Secretary: Mrs N Glover AUDITOR: Etchells James Kruger &Associates Inc. SPONSOR: LPC Manhattan LPC Manhattan Sponsors (Pty) Ltd (Registration number 1999/024792/07) Website: www.argent.co.za e-mail: argent3@argent.co.za Date: 02/06/2003 05:55:46 PM Supplied by www.sharenet.co.za Produced by the JSE SENS Department

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