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HWN - Howden - Unaudited Interim Financial Results for the six months ended 30
June 2009
Howden Africa Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1996/002982/06)
Share code: HWN
ISIN Code: ZAE 000010583
("the Company" or "the Group")
Unaudited Interim Financial Results
for the six months ended 30 June 2009
Condensed consolidated statement of comprehensive income
for the period ended 30 June 2009
Six Six % Twelve
months months months
ended ended change ended
30 June 30 June 31 December
2009 2008 2008
(Unaudited) (Unaudited) (Audited)
R`000 R`000 R`000
Revenue 472 721 387 111 22,1 849 795
Operating profit 68 163 46 576 46,3 95 833
Finance income 5 524 6 747 13 310
Finance costs (4 180) (3 698) (9 988)
Profit before income 69 507 49 625 40,1 99 155
tax
Income tax expense (20 655) (20 771) (38 414)
Profit for the 48 852 28 854 69,3 60 741
period
Currency translation - (1 345) (924)
differences
Total comprehensive 48 852 27 509 59 817
income for the
period attributable
to equity holders of
the Company
Number of shares in 65 729 65 729 65 729
issue (000`s)
Earnings per share 74,32 43,90 69,3 92,41
(cents)
Headline earnings 74,34 43,88 69,4 93,22
per share (cents)
Dividends per share
- dividend paid 15,00 15,00 15,00
(cents)
- special dividend - 100,00 100,00
paid (cents)
- interim dividend - - 10,00
paid (cents)
Reconciliation of
headline earnings
attributable to the
equity holders of
the Company'
Net profit 48 852 28 854 60 741
attributable to
equity holders
Loss/(profit) on 14 (11) 532
disposal of
property, plant and
equipment
Headline earnings 48 866 28 843 69,4 61 273
attributable to
equity holders
Condensed consolidated statement of financial position
as at 30 June 2009
Six Six % Twelve
months months months
ended ended change ended
30 June 30 June 31 December
2009 2008 2008
(Unaudited) (Unaudited) (Audited)
R`000 R`000 R`000
ASSETS
Non-current assets 186 280 146 300 192 850
Property, plant and 59 225 44 686 56 393
equipment
Intangible assets 57 287 58 066 58 214
Deferred income tax 29 993 21 069 27 908
assets
Amounts due from 14 583 19 455 24 875
customers for
contract work
Trade and other 7 468 3 024 8 489
receivables
Cash and cash 17 724 - 16 971
equivalents
Current assets 406 564 334 159 308 023
Inventories 54 445 44 526 44 816
Trade and other 186 618 186 965 169 750
receivables
Amounts due from 84 741 33 364 41 089
customers for
contract work
Derivative financial - 357 -
instruments
Cash and cash 80 760 68 947 52 368
equivalents
Total assets 592 844 480 459 500 873
EQUITY
Capital and reserves 104 699 39 970 65 706
attributable to
equity holders of
the Company
Total equity 104 699 39 970 65 706
LIABILITIES
Non-current 191 651 67 012 136 542
liabilities
Borrowings 50 000 47 141 50 000
Deferred income tax 1 244 5 342 5 118
liabilities
Amounts due to 134 657 1 640 74 550
customers for
contract work
Provisions 5 750 12 889 6 874
Current liabilities 296 494 373 477 298 625
Trade and other 197 500 186 029 165 961
payables
Amounts due to 73 108 89 529 100 339
customers for
contract work
Current income tax 17 881 19 991 21 479
liabilities
Borrowings 1 318 4 455 1 759
Derivative financial - 87 -
instruments
Provisions 6 687 7 657 9 087
Shareholders for - 65 729 -
dividends
Total liabilities 488 145 440 489 435 167
TOTAL EQUITY AND 592 844 480 459 500 873
LIABILITIES
Condensed consolidated statement of cash flows
for the period ended 30 June 2009
Six Six Twelve
months months months
ended ended ended
30 June 30 June 31 December
2009 2008 2008
(Unaudited) (Unaudited) (Audited)
R`000 R`000 R`000
Cash flow from
operating activities
Cash generated from 73 298 33 920 144 904
operations
Interest paid (4 180) (3 698) (9 988)
Income tax paid (30 557) (5 887) (29 105)
Net cash generated 38 561 24 335 105 811
from operating
activities
Cash flow from
investing activities
Interest received 5 524 6 747 13 310
Purchases of (5 088) (3 709) (18 879)
property, plant and
equipment and
intangible assets
Proceeds from 7 551 212
disposal of
property, plant and
equipment and
intangible assets
Net cash generated 443 3 589 (5 357)
from/(used in)
investing activities
Cash flow from
financing activities
Proceeds from - 30 980 31 143
borrowings
Dividends paid (9 859) (9 859) (82 160)
Net cash (used in)/ (9 859) 21 121 (51 017)
generated from
financing activities
Net increase in cash 29 145 49 045 49 437
and cash equivalents
Cash and cash 69 339 19 902 19 902
equivalents at the
beginning of the
period
Cash and cash 98 484 68 947 69 339
equivalents at the
end of the period
Condensed consolidated statement of changes in equity
for the period ended 30 June 2009
Six Six Twelve
months months months
ended ended ended
30 June 30 June 31 December
2009 2008 2008
(Unaudited) (Unaudited) (Audited)
R`000 R`000 R`000
Share capital and 65 706 88 049 88 049
reserves at the
beginning of the
period
Total comprehensive 48 852 27 509 59 817
income attributable
to equity holders of
the Company
Dividends paid (9 859) (75 588) (82 160)
Share capital and 104 699 39 970 65 706
reserves at the end
of the period
Other Group salient features
Six Six % Twelve
months months months
ended ended change ended
30 June 30 June 31 December
2009 2008 2008
(Unaudited) (Unaudited) (Audited)
R`000 R`000 R`000
Net asset value per 159,29 60,81 161,9 99,97
share (cents)
Depreciation 2 146 1 579 3 511
Amortisation 1 016 988 2 167
Capital expenditure 5 088 3 709 18 879
Capital commitments
- Authorised and - 6 696 2 842
contracted
- Authorised not 2 397 1 789 -
contracted
Segmental analysis by operating division
for the period ended 30 June 2009
Six Six % Twelve
months months months
ended ended change ended
30 June 30 June 31 December
2009 2008 2008
(Unaudited) (Unaudited) (Audited)
R`000 R`000 R`000
Revenue
Fans and Heat 288 981 269 126 587 662
Exchangers
Environmental 183 740 117 985 262 133
Control
472 721 387 111 22,1 849 795
Orders received
Fans and Heat 466 421 307 363 849 264
Exchangers
Environmental 193 178 299 346 406 976
Control
659 599 606 709 8,7 1 256 240
Operating profit
Fans and Heat 58 817 47 050 84 204
Exchangers
Environmental 15 315 4 636 16 836
Control
74 132 51 686 101 040
Central operations (5 969) (5 110) (5 207)
68 163 46 576 46,3 95 833
Inter-segmental
sales
Fans and Heat 39 697 26 476 59 339
Exchangers
Environmental 9 220 15 781 18 559
Control
48 917 42 257 15,8 77 898
Commentary
OVERVIEW
Order intake for the six months to June 2009 is reported at R659,6 million
compared to R606,7 million for the corresponding period last year, an
improvement of 9%. Order book levels have continued to grow over the period
under review, assisted by new build orders connected to Eskom`s capacity
expansion programme and continued after market growth.
RESULTS
In the six months ended 30 June 2009 revenue of R472,7 million compares to
R387,1 million in the corresponding period last year. Growth in revenue is
supported by good progress on large value projects and increased sales volume of
aftermarket products and services.
Group operating profit from operations of R68,2 million is reported for the
period to 30 June 2009, against R46,6 million reported for the six months to
June last year. Higher revenue volumes, and improved margins on several key
contracts, assisted in generating the improved operating profit.
Earnings per share of 74,32 cents compare with 43,90 cents last year. Earnings
for the six months ended 30 June 2008 were affected by the secondary tax on
companies charge of R6,6 million (10,00 cents per share) in respect of the
special dividend of 100,0 cents per share declared on 5 June 2008. Excluding the
effect of STC, earnings per share reflect an increase of 38% over last year.
A net cash position of R47,2 million compares with R17,6 million reported at the
end of December 2008. Cash generated from operations of R73,3 million compares
to R33,9 million generated in the period to 30 June 2008.
COMPARATIVES
The comparative figures for deferred tax have been restated retrospectively to
show the net deferred tax asset or liability per underlying entity.
ACCOUNTING POLICIES
The interim results to June 2009 have been prepared in accordance with
International Financial Reporting Standards (IFRS), in a manner consistent with
the prior year and in accordance with (IAS) 34 `Interim Financial Reporting`,
except for the adoption of IAS 1 (revised 2007) `Presentation of Financial
Statements`.
REVIEW OF OPERATIONS
FANS AND HEAT EXCHANGERS
Order intake for fans and heat exchangers totalled R466,4 million compared to
R307,4 million in the corresponding period last year. Orders totalling R103
million were processed in the period for the supply of fans and airheater
elements to Kusile Power Station, delivery scheduled to take place over a period
of five years. A strong opening order book in terms of new equipment for the
mining market and continuing business associated with Eskom`s Return to Service
programme helped increase revenue over the period under review. There has,
however, been a reduction in new equipment orders from the mining market during
the first half of the year.
It is pleasing to announce the successful conclusion of negotiations for a five
year National Draught Plant Framework Agreement with Eskom. The agreement covers
the supply of general spares and maintenance on air heaters and draught plant
fans installed at Eskom`s coal fired power stations, and replaces individual
contracts previously in place at the respective stations. This will enable
business sustainability and a more focused effort on skills development and
training to support Eskom`s drive to improve efficiencies and plant
availability.
ENVIRONMENTAL CONTROL
The environmental control business received orders totalling R193,2 million
compared to R299,3 million last year. Larger value contracts booked in the
period to 30 June 2008 were not repeated this year, the division witnessing
postponements in this regard. There was, however, a satisfactory outcome
reported on smaller contracts which contributed to incoming orders for the
period. The status of contracts in progress at end June 2009 is sound but a
challenge remains to replace these contracts as they reach completion through
the year.
OUTLOOK
Order book levels have continued to grow over the first half of this year and
include orders for delivery in subsequent years through to 2013. The intake of
orders for new equipment, however, has slowed as customers` expenditure
decisions are deferred. The outlook for the remainder of this year will be
underpinned by the strong order book existing at end June 2009.
DIVIDENDS
The Directors have resolved to declare an interim dividend of 12 cents per share
payable to shareholders. The last date to trade cum dividend is Friday, 11
September 2009. Shares start trading ex dividend on Monday, 14 September 2009.
The record date is Friday, 18 September 2009. Payment will be on Monday, 21
September 2009. No share certificates are to be dematerialised or rematerialised
between Monday, 14 September 2009 and Friday, 18 September 2009, both days
inclusive.
DIRECTORATE
There were no changes in directorate during the period.
REVIEWED INTERIM RESULTS - AUDITORS` OPINION
The Company`s auditors, PricewaterhouseCoopers Inc, have not reviewed or audited
these results for the six months ended 30 June 2009.
For and on behalf of the Board of Directors
RJ Cleland T Barwald
(Chairman) (Chief Executive Officer)
28 August 2009
Directors:
RJ Cleland (Chairman)#**T Barwald (Chief Executive Officer)+S MeyerAB
Mashiatshidi**J Brown#**M Malebye**(#British +German **Non-executive)
Company Secretary:
M Luthuli
Registered office:
1a Booysens Road, Booysens, 2091
Postal address:
PO Box 2239, Johannesburg, 2000
Transfer secretaries:
Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg, 2001
Sponsor:
PricewaterhouseCoopers Corporate Finance (Pty) Limited
Date: 28/08/2009 15:30:01 Supplied by www.sharenet.co.za
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