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MTA - Metair Investments Limited - Abridged audited results for the year ended

Release Date: 15/03/2011 08:00
Code(s): MTA
Wrap Text

MTA - Metair Investments Limited - Abridged audited results for the year ended 31 December 2010 METAIR INVESTMENTS LIMITED (INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA) (Reg No. 1948/031013/06) ISIN code: ZAE000090692 Share code: MTA ("Metair" or "the group") ABRIDGED AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2010 HEPS increased 182% to 189 cps EBITDA R501 million Final ordinary dividend of 65 cps ABRIDGED GROUP INCOME STATEMENTS 31 December 31 December 2010 2009 R`000 R`000
Revenue 3 753 236 3 342 053 Cost of sales (2 958 998) (2 807 100) Gross profit 794 238 534 953 Other operating income 48 972 109 711 Impairment reversals/(charges) 19 687 (47 082) Distribution, administrative and other expenses (459 948) (455 665) Operating profit 402 949 141 917 Interest income 18 913 13 243 Interest expense (14 075) (37 360) Share of results of associates 16 759 419 Profit before tax 424 546 118 219 Taxation (121 009) (55 023) Profit for the year 303 537 63 196 Attributable to: Equity holders of the company 277 682 52 210 Non-controlling interests 25 855 10 986 303 537 63 196 Depreciation and amortisation (101 257) (108 468) Basic earnings per share (cents) 198 37 Headline earnings per share (cents) 189 67 Ordinary dividend per share (cents) 15 Special dividend per share (cents) 60 Number of shares in issue (`000) 152 532 152 532 Number of shares in issue excluding treasury shares (`000) 141 058 140 097 Weighted average number of shares in issue (`000) 140 363 142 352 Calculation of headline earnings per share (R`000) Net profit attributable to ordinary shareholders 277 682 52 210 Net impairments (reversals)/charges (19 687) 47 082 Tax effect of impairment reversals/(charges) 4 562 (5 620) Impairment reversals/(charges) attributable to non-controlling shareholders 2 945 (3 628) Loss on disposal of property, plant and equipment 101 5 342 Headline earnings 265 603 95 386 Diluted earnings per share Basic earnings per share (cents) 195 Headline earnings per share (cents) 187 Weighted average number of shares in issue (`000) 140 363 Adjustment for dilutive share options (`000) 1 990 Number of shares used for diluted earnings calculation (`000) 142 353 No diluted earnings per share is reflected for 2009 as the strike price of the options was higher than the share price as at 31 December 2009. ABRIDGED GROUP STATEMENTS OF COMPREHENSIVE INCOME 31 December 31 December
2010 2009 R`000 R`000 Profit for the year 303 537 63 196 Other comprehensive income: Actuarial (losses)/gains recognised directly in equity - Gross (15 626) 21 118 - Deferred tax 3 990 (5 910) Net other comprehensive income (11 636) 15 208 Total comprehensive income for the year 291 901 78 404 Attributable to: Equity holders of the company 266 880 66 932 Non-controlling interests 25 021 11 472 291 901 78 404 ABRIDGED GROUP STATEMENTS OF CASH FLOWS 31 December 31 December
2010 2009 R`000 R`000 Operating activities Profit before tax 424 546 118 219 Non-cash items 56 990 149 394 Working capital changes 3 085 145 642 Cash generated from operations 484 621 413 255 Finance charges (14 075) (37 360) Taxation paid (112 123) (70 663) Dividends paid (113 769) (8 441) Dividend income from associate 3 920 20 695 Net cash inflow from operating activities 248 574 317 486 Investing activities Investment income 18 913 13 243 Net cash used in other investing activities (121 232) (94 043) Net cash outflow from investing activities (102 319) (80 800) Net cash outflow from financing activities (88 974) (22 493) Net increase in cash and cash equivalents 57 281 214 193 Cash and cash equivalents at beginning of the year 232 543 18 350 Cash and cash equivalents at end of the year 289 824 232 543 ABRIDGED GROUP BALANCE SHEETS 31 December 31 December 2010 2009
R`000 R`000 ASSETS Non-current assets Property, plant and equipment 699 190 657 892 Intangible assets 26 367 29 514 Investment in associates 34 236 20 147 Defined benefit asset 6 504 19 962 Deferred taxation 34 970 766 297 762 485 Current assets Inventory 606 547 518 091 Trade and other receivables 397 326 428 076 Derivative financial assets 23 160 Taxation 12 431 9 700 Cash and cash equivalents 305 572 282 205 1 321 899 1 238 232
Total assets 2 088 196 2 000 717 EQUITY AND LIABILITIES Capital and reserves Share capital and premium 42 876 42 876 Treasury shares (116 084) (124 289) Share-based payment reserve 2 813 3 389 Non-distributable reserves 29 148 16 309 Retained earnings 1 297 256 1 148 964 Ordinary shareholders` equity 1 256 009 1 087 249 Non-controlling interests 113 910 96 772 Total equity 1 369 919 1 184 021 Non-current liabilities Borrowings 31 912 54 217 Post-employment medical benefits 21 329 19 246 Deferred taxation 52 959 83 778 106 200 157 241
Current liabilities Trade and other payables 502 639 441 784 Borrowings 22 424 97 298 Taxation 3 476 Provisions for liabilities and charges 53 183 60 876 Derivative financial liabilities 14 607 9 835 Bank overdrafts 15 748 49 662 612 077 659 455
Total liabilities 718 277 816 696 Total equity and liabilities 2 088 196 2 000 717 Net asset value per share (cents) attributable to ordinary shareholders 890 776 Capital expenditure 124 153 116 156 Capital commitments - contracted 58 513 28 398 - authorised but not contracted 108 812 24 986 NOTES TO THE CONSOLIDATED ABRIDGED FINANCIAL STATEMENTS Accounting policies The condensed abridged financial information has been prepared in accordance with the recognition and measurement criteria of all applicable statements and interpretations of International Financial Reporting Standards ("IFRS") and is presented in terms of the disclosure requirements set out in IAS 34 - Interim Financial Reporting and the AC 500 standards as issued by the Accounting Practices Board, or its successor. The accounting policies applied to the condensed abridged financial information are consistent with those as set out in the annual financial statements for the year ended 31 December 2009. Contingencies The bank and other guarantees given by the group to third parties amounted to R6,1 million as at 31 December 2010 (R6,6 million as at 31 December 2009). Borrowings 31 December 31 December 2010 2009 R`000 R`000
Current (22 424) (97 298) Overdrafts (15 748) (49 662) Non-current (31 912) (54 217) (70 084) (201 177)
Cash 305 572 282 205 Total 235 488 81 028 During the year the group repaid borrowings of R97,2 million 2009: R22,7 million. Fair value adjustments on financial instruments 31 December 2010 31 December 2009 Assets Liabilities Assets Liabilities Forward exchange contracts - fair value hedges 23 14 607 160 9 835 Total 23 14 607 160 9 835 ANNUAL GENERAL MEETING The annual report will be mailed to shareholders by 31 March 2011 along with the notice of the annual general meeting. The annual general meeting will be held on 4 May 2011 at 14:00 at Metair Investments Limited, 10 Anerley Road, Parktown, Johannesburg. Declaration of Ordinary Dividend No. 60 Notice is hereby given that a final ordinary dividend of 65 cents per ordinary share has been declared in respect of the year ended 31 December 2010. The last date to trade cum dividend will be Friday 8 April 2011. Trading will commence ex dividend from Monday, 11 April 2011 and the record date will be Friday, 15 April 2011. The date of payment will be Monday, 18 April 2011. Share certificates may not be dematerialised or rematerialised between Monday, 11 April 2011, and Friday, 15 April 2011, both days inclusive. AUDITORS` REPORT The abridged results of the group as set out above have been audited by the group`s auditors PricewaterhouseCoopers Inc. Their unqualified report is available for inspection at the company`s registered office (address details above). ABRIDGED GROUP STATEMENTS OF CHANGES IN EQUITY Share capital Share-based Non-distri- and Treasury payment butable
R`000 premium shares reserve reserve Year ended 31 December 2010 Balance as at 1 January 2010 42 876 (124 289) 3 389 16 309 Net profit for the year Other comprehensive income: Actuarial losses Total comprehensive income for the year Employee share option scheme: Value of service provided 3 098 - Loss on settlement (3 674) Net movement in treasury shares 8 205 Transfer of associate profit and dividend 12 839 Dividends Balance as at 31 December 2010 42 876 (116 084) 2 813 29 148 Year ended 31 December 2009 Balance as at 1 January 2009 42 876 (124 532) 3 389 36 585 Net profit for the year Other comprehensive income: Actuarial gains Total comprehensive income for the year Net movement in treasury shares 243 Transfer of associate profit and dividend (20 276) Dividend Balance as at 31 December 2009 42 876 (124 289) 3 389 16 309 ABRIDGED GROUP STATEMENTS OF CHANGES IN EQUITY Attributable
to equity Retained holders of Minority Total R`000 earnings the company interest equity Year ended 31 December 2010 Balance as at 1 January 2010 1 148 964 1 087 249 96 772 1 184 021 Net profit for the year 277 682 277 682 25 855 303 537 Other comprehensive income: Actuarial losses (10 802) (10 802) (834) (11 636) Total comprehensive income for the year 266 880 266 880 25 021 291 901 Employee share option scheme: - Value of service 3 098 137 3 235 - Loss on settlement (3 674) (3 674) Net movement in treasury shares 8 205 8 205 Transfer of associate profit and dividend (12 839) Dividends (105 749) (105 749) (8 020) (113 769) Balance as at 31 December 2010 1 297 256 1 256 009 113 910 1 369 919 Year ended 31 December 2009 Balance as at 1 January 2009 1 061 756 1 020 074 93 590 1 113 664 Net profit for the year 52 210 52 210 10 986 63 196 Other comprehensive income: Actual gains 14 722 14 722 486 15 208 Total comprehensive income for the year 66 932 66 932 11 472 78 404 Net movement in treasury shares 243 243 Transfer of associate profit and dividend 20 276 Dividend (8 290) (8 290) Balance as at 31 December 2009 1 148 964 1 087 249 96 772 1 184 021 ABRIDGED SEGMENTAL REVIEW Local Direct exports Original after- Non- original equipment market auto equipment
Revenue 2 273 233 895 384 353 710 84 560 Profit/(loss) before interest and tax 150 418 159 903 35 972 873 Net finance costs Profit before tax For the year ended 31 December 2009 Revenue 2 029 137 748 355 323 168 73 494 (Loss)/profit before interest and tax (92 848) 95 099 53 697 8 471 Net finance costs Profit before tax ABRIDGED SEGMENTAL REVIEW Direct exports Recon- After- Non- Property ciling R`000 Market auto rental items* Total Revenue 111 223 35 126 58 650 (58 650) 3 753 236 Profit/(loss) before interest and tax 8 770 (8 012) 57 774 14 010 419 708 Net finance costs 4 838 Profit before tax 424 546 Included in the above is depreciation and amortisation of R101,3 million and impairment reversals of R19,7 million. For the year ended 31 December 2009 Revenue 111 833 56 066 54 447 (54 447) 3 342 053 Loss)/profit before interest and tax 4 807 (836) 54 447 19 499 142 336 Net finance costs (24 117) Profit before tax 118 219 Included in the above is depreciation and amortisation of R108,5 million and impairment charges of R47,1 million. * The reconciling items relate to Metair head office companies and property rental. METAIR ABRIDGED RESULTS 2010 COMMENTARY Metair has produced an excellent set of financial results for the year ended December 2010. Headline earnings per share (HEPS) increased by 182% to 189 cents per share and the group achieved a return on equity (ROE) of 23,8% (2009: 5,5%). Earnings before interest, tax, depreciation and amortisation (EBITDA) of R501,3 million exceeded the R500 million mark for the first time in the group`s history. From a macroeconomic perspective, the 2008 financial crisis resulted in a substantial decline in worldwide demand for motor vehicles. Against this backdrop, in 2009 original equipment (OE) production in South Africa declined by over 25%. Metair responded decisively to the downturn by, inter alia: - Closing selected loss-making businesses; - Consolidating businesses that were not viable on a stand-alone basis; - Focusing intently on cash flow and working capital management; and - Controlling costs and operating efficiencies. When we released our 2009 results we stated that "Metair has emerged from the crisis as a lean organisation with a robust balance sheet, is cash generative and is well positioned to take advantage of the upturn in economic conditions". The 2010 financial results bear testament to this statement and to the decisive actions taken in 2009. Cash generated by operations was R484,6 million, we achieved record earnings of R277,7 million, settled preference share debt of R75 million, paid a preference dividend of R26 million and returned R84,9 million to shareholders as a special dividend. DETAILED GROUP RESULTS - Group turnover improved by 12,3% to R3 753 million from R3 342 million in 2009. - EBITDA improved by 68% to R501,3 million compared to R297,9 million in the previous period. - Profit before tax improved by 259% to R424,5 million from R118,2 million in the previous period. - Net asset value increased from 776 cents per share to 890 cents per share. Return on equity of 23,8% was achieved. - Cash generated by operations for the year was R484,6 million. The net cash position after borrowings at year-end was R235,5 million (2009: R81 million). REVIEW OF OPERATIONS Original equipment During the year the group continued to focus on cash management, cost competitiveness and manufacturing and logistical excellence. In the SA industry OE production totalled 449 167 vehicles compared to 354 158 in 2009. The restructuring initiatives that were implemented during the 2009 financial year enabled the group to benefit from improved OE volumes. In August and September 2010 we experienced the effects of industrial action but, despite this, the automobile industry was fortunately able to catch up on the three weeks of production that were lost. A three-year wage agreement has been reached which is positive for stability in the industry. Aftermarket, non-automotive and export segments The aftermarket and non-automotive business, and in particular First National Batteries (FNB), continues to exceed expectations. Our brake pad and brake systems business was re-engineered to mostly service the aftermarket with limited retained OE business. FNB, the largest lead-acid battery manufacturer in Africa, has world-class proprietary technology and products and through its combination of retail parts distribution customers and Battery Centre network, is able to service the whole of southern Africa. Three years of intense design and testing culminated in the recent launch of the "stop-start" battery. This product will be able to fulfil future requirements in both the OE and aftermarket segments, with anticipated increased demand for improved emission-efficient vehicles utilising "stop-start" systems. Additionally, FNB is also exploring additional export markets in sub- Saharan Africa. Export profitability has come under pressure due to the strong Rand. INDUSTRY REVIEW Original equipment Local vehicle production increased by 27% in 2010, from 354 158 vehicles to 449 167 vehicles. Exports increased by 37% to 239 465 vehicles from 174 947 vehicles. The National Association of Automobile Manufacturers of South Africa (NAAMSA) is forecasting 2011 local vehicle production of 530 000 vehicles, which represents growth of 15% over 2010. The local OE industry is optimistic on the outlook for vehicle production for 2012 and beyond as the Government incentive programme transforms from the Motor Industry Development Programme (MIDP) to the Automotive Production and Development Programme (APDP) over the next two years. Total vehicle sales for 2010 was 470 934, with the imported market share being 62%. The APDP has provided certainty to the industry until at least 2020 and in Metair`s view is an improvement on the MIDP programme. Metair`s plastics, lights, battery and springs business, will participate in three new models from two new customers, by way of the successful launch of the two new VWSA product offerings during the period under review, and the planned launch of a new product offering from Ford during the next full year reporting period. Aftermarket and non-automotive There is generally a time lag of between two and four years before new vehicle sales vest in annuity income for our aftermarket product range. Therefore, the group expects the high level of vehicle sales in 2007 and 2008 to support growth in the aftermarket sector. Consequently, the group has expanded its product offering in this segment. In addition, Metair is well positioned to benefit from the increase in imported vehicles as it offers generic products in its battery, brakes, filter, sparkplug and air-conditioning products that target both locally produced and imported vehicle ranges. Improved activity in the mining, utility, telecommunication and warehousing industries should sustain growth in this sector. PROSPECTS There is an improved outlook in the short to medium term for the OE industry, and the high vehicle sales in 2007 and 2008 have laid the platform for growth in the aftermarket sector. Through the focus on a balance between our OE and aftermarket businesses, selective capacity expansion and new products, Metair is well positioned to benefit from this improved industry outlook. Although much depends on OE volumes, the Rand exchange rate and a sustained economic recovery, management is cautiously optimistic that it can build on the performance achieved in 2010. Management remains committed to a continued improvement in cost competitiveness and manufacturing and logistical excellence including further rationalisation and consolidation in our plastics business. Strategic acquisitions to expand the group`s product offering, particularly in the aftermarket sector, will be actively pursued where the group can take advantage of its technological advantages and robust balance sheet. We have returned balance to our businesses and we are now well positioned to respond to market and customer requirements, with small effective and efficient alignments rather than large interventions. The information in the commentary above has not been reviewed or reported on by the group`s auditors. APPRECIATION It is with great appreciation to all our stakeholders that we bring the 2010 results to you as all stakeholders had to make adjustments and sacrifices during the last two years, especially in light of our cost-reduction activities. Signed on behalf of the Board O M E Pooe C T Loock Chairman Managing Director JOHANNESBURG, 10 March 2011 REGISTRARS Computershare Investor Services (Pty) Limited 70 Marshall Street JOHANNESBURG 2001 SPONSOR Barnard Jacobs Mellet Corporate Finance (Pty) Limited EXECUTIVE DIRECTORS: CT Loock (Managing); BM Jacobs (Finance) NON-EXECUTIVE DIRECTORS: OME Pooe (Chairman); A Joffe; B Molotlegi INDEPENDENT NON-EXECUTIVE DIRECTORS: RS Broadley; L Soanes*; A Galiel; JG Best COMPANY SECRETARY: SM Vermaak *British Johannesburg 15 March 2011 Date: 15/03/2011 08:00:07 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). 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