Wrap Text
HWN - Howden Africa Holdings Limited - The summarised unaudited results for the
six months ended 30 June 2007 are as follows
HOWDEN AFRICA HOLDINGS LIMITED
Share code: HWN & ISIN: ZAE000010583
(Incorporated in the Republic of South Africa)
(Registration number 1996/002982/06)
("the Company" or "the Group")
The summarised unaudited results for the six months ended 30 June 2007 are as
follows
abridged consolidated income statement
Actual Actual
6 months 6 months
ended ended
30 June 30 June
2007 2006
(Unaudited) (Unaudited)
R`000 R`000
Sales 300 614 227 910
Operating profit from operations 36 770 17 165
Financial (cost)/income (2 353) 1 674
Foreign exchange profit 352 1 731
Loss on sale of associate (1 028) -
Share of results of associate 1 153 438
Profit before income tax 34 894 21 008
Income tax expenses (10 906) (21 698)
Net profit for the period 23 988 (690)
Attributable to:
Equity holders of the Company 23 229 (1 328)
Minority interest 759 638
23 988 (690)
Number of shares in issue (000`s) 65 729 65 729
Earnings per share (cents) 35,34 (2,02)
Headline earnings per share (cents) 36,89 (1,94)
Dividends per share (cents) - 6,00
Special dividend per share - 148,12
Return of share premium per share - 92,88
Reconciliation of headline
earnings attributable to the
equityholders
of the Company
Net profit for the period 23 229 (1 328)
attributable to equity holders
(Profit)/loss on sale of (9) 53
property, plant and equipment
Loss on disposal of associate 1 028 -
Headline earnings attributable to 24 248 (1 275)
equity holders
Actual Actual
% 12 months
change ended
31 December
2006
(Audited)
R`000
Sales 31,9 510 942
Operating profit from operations 114,2 52 154
Financial (cost)/income (1 483)
Foreign exchange profit 2 196
Loss on sale of associate -
Share of results of associate 3 056
Profit before income tax 66,1 55 923
Income tax expenses (35 349)
Net profit for the period 20 574
Attributable to:
Equity holders of the Company 16 542
Minority interest 4 032
20 574
Number of shares in issue (000`s) 65 729
Earnings per share (cents) 25,17
Headline earnings per share (cents) 25,25
Dividends per share (cents) 6,00
Special dividend per share 148,12
Return of share premium per share 92,88
Reconciliation of headline
earnings attributable to the
equityholders
of the Company
Net profit for the period 16 542
attributable to equity holders
(Profit)/loss on sale of 52
property, plant and equipment
Loss on disposal of associate -
Headline earnings attributable to 16 594
equity holders
abridged consolidated balance sheet
Actual Actual Actual
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2007 2006 2006
(Unaudited) (Unaudited) (Audited)
R`000 R`000 R`000
ASSETS
Non-current assets 114 080 136 495 138 133
Property, plant and equipment 35 585 33 881 35 181
Intangible assets 36 079 37 724 36 972
Investment in associate - 29 975 32 593
Deferred income tax assets 40 661 33 145 29 634
Retentions due 1 755 1 770 3 753
Current assets 244 964 251 296 202 711
Inventories 30 847 26 138 32 431
Trade and other receivables 146 918 125 026 127 626
Derivative financial 15 40 299
instruments
Cash and cash equivalents 67 184 100 092 42 355
Total assets 359 044 387 791 340 844
EQUITIES AND LIABILITIES
Capital and reserves 48 221 8 324 26 166
attributable to Company`s
equity holders
Minority interest 2 603 5 864 8 850
Total equity 50 824 14 188 35 016
LIABILITIES
Non-current liabilities
Borrowings 50 000 - 81 647
Deferred income tax 16 227 15 316 11 908
liabilities
Derivative financial 75 - -
instruments
Provisions for other 2 117 1 737 2 117
liabilities and charges
68 419 17 053 95 672
Current liabilities 239 801 356 550 210 156
Trade and other payables 216 670 178 567 193 142
Provisions for other 7 292 4 574 6 485
liabilities and charges
Derivative financial 640 662 25
instruments
Shareholders for dividend - 158 407 -
Current income tax liabilities 7 704 14 340 876
Borrowings 7 495 - 9 628
Total liabilities 308 220 373 603 305 828
Total equity and liabilities 359 044 387 791 340 844
other group salient features
Actual Actual Actual Actual
6 months 6 months % 12 months
ended ended change ended
30 June 30 June 31 December
2007 2006 2006
(Unaudited) (Unaudited) (Audited)
R`000 R`000 R`000
Net asset value per 73,36 12,66 479,3 39,81
share (cents)
Depreciation 1 740 1 289 2 540
Amortisation 952 954 1 834
Capital expenditure 2 034 2 365 5 120
Capital commitments
Authorised and 5 572 163 286
contracted
Authorised not 4 641 - 4 787
contracted
abridged consolidated cash flow statement
Actual Actual Actual
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2007 2006 2006
(Unaudited) (Unaudited) (Audited)
R`000 R`000 R`000
Cash inflow from operating 32 745 7 972 19 684
activities
Cash generated by operations 39 636 21 192 58 776
Utilised to decrease working 9 599 5 097 10 191
capital
Cash generated from operating 49 235 26 289 68 967
activities
Interest paid (5 704) (4 067) (8 021)
Income tax paid (10 786) (14 250) (41 262)
Cash inflow from investing 152 3 538 3 731
activities
Movement on loans to associate - 2 174 2 174
company
Interest received 3 351 5 741 9 048
Exchange differences on (1 174) (2 012) (2 448)
conversion of foreign
subsidiaries
Replacement of property, plant (2 034) (2 365) (5 120)
and equipment
Proceeds from sale of 9 - 77
property, plant and equipment
and intangible assets
Cash outflow from financing (8 012) (8 944) (78 642)
activities
Proceeds from borrowings - - 100 000
Repayment of borrowings (33 724) - (11 291)
Proceeds on sale of associate 32 718 - -
company
Dividends paid - (3 944) (162 351)
Dividends paid to minorities (7 006) (5 000) (5 000)
Net increase/(decrease) in 24 885 2 566 (55 227)
cash and cash equivalents
Cash and cash equivalents at 42 299 97 526 97 526
beginning of period
Cash and cash equivalents at 67 184 100 092 42 299
end of period
abridged consolidated statement of changes in equity
Attributable
to equity
holders
of the Minority Total
Company interest equity
Balance at 1 January 2006 174 015 10 226 184 241
Currency translation (2 012) - (2 012)
differences
(Loss)/profit for the period (1 328) 638 (690)
Dividends paid (3 944) (5 000) (8 944)
Dividend and return of share (158 407) - (158 407)
premium
Balance at 30 June 2006 8 324 5 864 14 188
Balance at 1 July 2006 8 324 5 864 14 188
Currency translation (436) - (436)
differences
Profit for the period 17 870 3 394 21 264
Minority interest acquired 408 (408) -
Balance at 31 December 2006 26 166 8 850 35 016
Balance at 1 January 2007 26 166 8 850 35 016
Currency translation (1 174) - (1 174)
differences
Profit for the period 23 229 759 23 988
Dividends paid - (7 006) (7 006)
Balance at 30 June 2007 48 221 2 603 50 824
segmental analysis by operating division
Actual Actual Actual
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2007 2006 2006
(Unaudited) (Unaudited) (Audited)
R`000 R`000 R`000
Sales
FANS AND HEAT EXCHANGERS 206 112 157 387 344 934
ENVIRONMENTAL CONTROL 94 502 70 523 166 008
300 614 227 910 510 942
Orders
FANS AND HEAT EXCHANGERS 272 741 204 037 407 582
ENVIRONMENTAL CONTROL 172 036 49 608 130 555
444 777 253 645 538 137
commentary
OVERVIEW
It is pleasing to report another satisfactory set of results for the half year
to June 2007, building on the improvements reported in the second half of last
year. Order book levels remain firm with order intake for the six months to June
2007 being 75% higher than the corresponding period last year, reflecting the
higher demand for capital equipment in the markets served by the Company.
RESULTS
In the six months ended 30 June 2007 Sales of R300,6 million compares to R227,9
million in the corresponding period last year. Strong growth in Sales in the
fans and heat exchangers division was largely driven by the robust mining market
and increased activity levels connected to the return to service (RTS) programme
within Eskom.
Group operating profit from operations of R36,8 million is reported for the
period to 30 June 2007, against R17,2 million reported for the six months to
June last year. Higher sales volumes account substantially for the favourable
movement in the results under review.
Earnings per share of 35,34 cents compare with (2,02) cents last year, the
secondary tax on companies relating to the special dividend of 148,12 cents per
share declared on 30 June 2006 negatively affecting last year`s earnings per
share by 18,52 cents. Excluding the effect of STC, earnings per share reflect an
increase of 114% over last year.
A net cash position of R9,7 million compares with the net borrowings of R48,9
million reported at the end of December 2006, boosted by the R32,7 million
proceeds received from the sale of shares in Pump Brands (Pty) Limited. Surplus
cash generated from operating activities has been used to accelerate repayments
against the R100 million loan facility made available by Standard Bank during
the course of last year.
Accounting Policies
The interim results to June 2007 have been prepared in accordance with
International Financial Reporting Standards (IFRS), and comply with IAS 34 -
`Interim Financial Reporting`. The accounting policies are consistent with those
applied in the annual financial statements for the year ended 31 December 2006.
The Group will apply IFRS7 - "Financial Instruments: Disclosures" in its
financial statements for the year ended 31 December 2007.
Review of operations
Fans and heat exchangers
Order intake for fans and heat exchangers totalled R272,7 million compared to
R204,0 million in the corresponding period last year. Strong commodity prices
over the period resulted in higher levels of business in the mining market
covering coal, gold and platinum. The RTS programme in Eskom continues to
generate increased volumes and together with the mining market this has led to
an increase in manpower resources in order to meet these challenges.
A strong order book exists at the half year and given a fair success ratio in
converting available prospects this position should be maintained.
ENVIRONMENTAL CONTROL
The environmental control business received orders totalling R172,0 million
compared to R49,6 million last year. Two large value orders totalling R90
million were processed in the period connected to Eskom`s ongoing efforts to
improve the efficiency of flue gas cleaning plant. Sales improvement compared to
last year is largely attributable to the sale of the rotary incineration
equipment previously reported as written off due to an aborted sale to the
Middle East.
Gas cleaning and combustion prospects in general are picking up and, with the
environmental division now wholly owned, the combining of resources should lead
to a business more competitively placed to improve its market standing.
POST BALANCE SHEET EVENT
On 6 July 2007 agreement was reached in acquiring the remaining 50,01%
shareholding in Bateman Howden South Africa (Pty) Limited for a consideration of
R26,3 million.
PUMPS
Shareholders were advised that the company`s disposal of its 42% shareholding in
Pump Brands (Pty) Limited had been satisfactorily concluded on 18 May 2007 for a
consideration of R32,7 million. The net effect of the sale transaction, and
share of results of associate up to the date of sale, result in a small surplus
being reported.
Outlook
The strong order book levels in place should ensure some continuity in
performance through to year-end. Maintaining present levels will be a challenge,
however, given the peak in the RTS programme over the coming months there is a
need to replace this with business volumes from other quarters. Fixed capital
formation growth is forecast to remain robust over the next three years and the
Company remains well placed to participate in this growth.
Dividends
The relatively high gearing ratio, coupled with the need to commit capital to
expanding the Group`s manufacturing facilities, leads the Board to resolve not
to declare an interim dividend this year.
Directorate
There were no changes in directorate during the period.
Review interim results - auditors` opinion
The company`s auditors, PricewaterhouseCoopers Inc, have not reviewed or audited
these results for the six months ended 30 June 2007.
For and on behalf of the Board of Directors.
RJ Cleland S Meyer
(Chairman) (Chief Operating Officer, acting)
31 August 2007
RJ Cleland (Chairman)#**
S Meyer (Chief Operating Officer, acting)
AB Mashiatshidi**, J Brown#**
(# British ** Non-executive)
Company secretary:
MJM Lake
Registered office:
1a Booysens Road, Booysens, 2091
Postal address:
PO Box 2239, Johannesburg, 2000
Transfer secretaries:
Computershare Investor Services 2004 (Pty) Limited,
70 Marshall Street
Johannesburg, 2001
Sponsor: PricewaterhouseCoopers
Corporate Finance (Pty) Limited
Date: 31/08/2007 17:05:03 Supplied by www.sharenet.co.za
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