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KAP - KAP International Holdings Ltd - Audited Results for the year ended 30
June 2011
KAP International Holdings Ltd
Registration number: 1978/000181/06
Share code: KAP
ISIN: ZAE000059564
Audited Results for the year ended 30 June 2011
Highlights
* Headline earnings from continuing operations improve by 44% to 32,7 cents per
share
* Earnings improve from 20,6 cents to 30,9 cents per share
* Further improvement of interest bearing debt/equity ratio to 9,1%
* Free cash flow of R223,5m
* Capital distribution of 10 cents per share
PERFORMANCE
We submit our report to shareholders for the year ended 30 June 2011.
Revenue and earnings
Revenue for the year from continuing operations increased to R4,22 billion
(2010: R3,84 billion) due to good growth in the automotive and PET divisions.
Operating pro't before restructuring costs improved by 34% to R265,9 million,
which includes a profit of R41,7 million on the disposal of property, plant and
equipment. Coupled with a reduction in interest, this resulted in headline
earnings per share improving to 24,7 cents from 21,0 cents. Headline earnings
per share from continuing operations also increased signi'cantly to 32,7 cents
from 22,7 cents in 2010.
Earnings per share increased by 49% from 20,6 cents to 30,9 cents.
Financial position and cash flow
Net interest-bearing borrowings decreased by a further R191,0 million to R134,6
million (2010: R325,6 million), and the year-end interest-bearing debt/equity
ratio was 9,1% (2010:23,9%).
Focus remains on operating cash flows and strict control of capital expenditure.
Capital distribution
In light of the improved cash 'ow, the board has declared a 'nal capital
distribution of 10 cents per share, (2010:7 cents).
Operational overview
Industrial segment
Feltex Automotive
Globally, vehicle sales have recovered but are still off their peak,
particularly in Europe and the USA. South African vehicle sales are showing a
trend towards imported vehicles which now comprise 51% of local sales. However,
South African produced vehicles for the financial year have increased from 392
299 to 471 847 units. Exports account for 56% of the vehicles produced in South
Africa. Most vehicles exported are destined for customers in Europe and North
America - markets where sustained future economic growth is uncertain.
Industrial Footwear
Wayne Plastics continued to deliver satisfactory returns. United Fram remains
under pressure, but management is confident that the initiatives put in place
will counter the reduced demand. Mossop is still feeling the effects of the
downturn in the global leather market.
Hosaf
The Polymer Plant in Durban continues to run at targeted production capacities
giving consistent yields and quality. Sales increased by 10% over the previous
period as a result of favourable market conditions and further market
penetration. Margins were supported by gains on inventory due to rising
commodity prices over the period.
Consumer segment
Bull Brand Foods
Although strong cost control and improved plant efficiencies offset some of the
increased input costs, margins remained under pressure.
Brenner Mills
2011 was a challenging year for the maize industry as a whole, and for Brenner.
Although local yields were reasonable, world foods stocks are low. Global demand
is out-pacing production, which has resulted in the depletion of stocks and
rising prices. Sales in the white maize division are still under pressure, and
Brenner has rationalised its cost base to compensate.
Jordan
Pairs sold increased by some 21% from 2,085 million in 2010 to 2,530 million in
2011. Increased sales occurred across all divisions, with our strong brands
performing well, particularly in the Sports, Ladies and Corporate divisions.
Glodina
Glodina improved operating profit despite the price of cotton escalating by
nearly 400% over the past 12 months and the slowdown in consumer spending.
Operating expenses were cut by 10% and investments in capital upgrades ensured
that costs were further reduced and efficiencies improved.
Corporate activity
During the period under review the group sold its polyester staple fibre
business in Cape Town. As a consequence of this sale the recycling plant in
Alrode, which supplied feedstock to Cape Town Fibres, was closed.
Outlook
The group will continue to focus on strong cash generation and strict cost
control. We are confident that our investment in the PET division, coupled with
the good competitive positioning of our industrial businesses will continue to
support earnings growth in future.
Appreciation
As always, we are grateful to our shareholders, employees and other
stakeholders, and thank them for their continued support.
Claas Daun Paul Schouten John Haveman
Non-executive Chief executive Chief financial
chairman officer officer
5 September 2011
Capital distribution
The directors of the company have declared a final capital distribution out of
share premium of 10 cents per share in respect of the period ended 30 June 2011.
Prior to declaring the final capital distribution, the board complied with all
relevant provisions of section 46 of the Companies Act 71 of 2008, as amended
("the Companies Act"). In particular, the board applied the solvency and
liquidity test in accordance with section 46 of the Companies Act and reasonably
concluded that the company will satisfy the solvency and liquidity test
immediately after completing the capital distribution.
The distribution will be payable on Monday, 3 October 2011 to shareholders
recorded in the register at the close of business on Friday, 30 September 2011.
To comply with the requirements of Strate the following dates are applicable:
Last day to trade cum-distribution Friday, 23 September 2011
Trading commences ex-distribution Monday, 26 September 2011
Record date Friday, 30 September 2011
Posting of cheques/electronic bank transfers Monday, 3 October 2011
Accounts credited at CSDP or broker in respect of shareholders who have
dematerialised their shares Monday, 3 October 2011
Share certificates may not be dematerialised or rematerialised between Monday,
26 September 2011 and Friday, 30 September 2011, both days inclusive.
Any changes to the above dates will be advised by notification on SENS and in
the press.
Condensed Statements of Comprehensive Income
Condensed Statements of Comprehensive Income
Jun 2011 Jun 2010
12 months 12 months
Rm Rm
Continuing operations
Revenue 4 217,1 3 842,9
Operating profit before restructuring costs 231,6 202,8
Restructuring costs (2,9) (0,6)
Operating profit 228,7 202,2
Net finance costs (25,6) (52,8)
Share of results of joint ventures 2,0 3,0
Profit before taxation 205,1 152,4
Taxation (59,1) (51,4)
Profit after taxation from continuing operations 146,0 101,0
Discontinued operations
Revenue 134,6 157,3
Operating profit/(loss) before restructuring costs 34,3 (4,1)
Restructuring costs (31,4) (7,1)
Operating profit/(loss) after restructuring costs 2,9 (11,2)
Net finance costs (7,1) (1,4)
Loss after taxation from discontinued operations (7,8) (7,3)
Total profit for the period 138,2 93,7
Other comprehensive income
Movement in foreign currency translation reserve 0,2 -
Total comprehensive income 138,4 93,7
Total profit for the period 138,2 93,7
Owners of the company 131,0 87,4
Non-controlling interest 7,2 6,3
Total comprehensive income 138,4 93,7
Owners of the company 131,2 87,4
Non-controlling interest 7,2 6,3
Rm Rm
Reconciliation of headline earnings
Net profit attributable to owners of the company 131,0 87,4
Profit on sale of property, plant and equipment (39,0) (2,2)
Impairment of sale assets 12,7 4,0
Headline earnings 104,7 89,2
Loss after taxation from discontinued operations 7,8 7,3
Profit on sale of property, plant and equipment -
discontinued operations 38,8 -
Impairment - discontinued operations (12,7) -
Headline earnings - continuing operations 138,6 96,5
Weighted average shares in issue 424,5 424,5
Earnings Per Share
Jun 2011 Jun 2010
cents cents
Earnings per share (basic and diluted) 30,9 20,6
Earnings per share - continuing operations 32,7 22,4
Headline earnings per share (basic and diluted) 24,7 21,0
Headline earnings per share - continuing operations 32,7 22,7
Condensed Statements of Financial Position
Jun 2011 Jun 2010
Rm Rm
ASSETS
Non-current assets 1 017,9 1 128,5
Property, plant and equipment and investment properties 902,6 945,7
Goodwill 66,7 66,7
Interest in joint ventures 24,4 22,7
Pension fund surplus 3,8 25,1
Deferred taxation assets 20,4 68,3
Current assets 1 617,7 1 381,7
Inventories 729,8 646,3
Receivables, prepayments and other receivables 750,0 621,1
Bank balances and cash 128,7 101,8
Assets held for sale 9,2 12,5
Total assets 2 635,6 2 510,2
EQUITY AND LIABILITIES
Capital and reserves 1 471,8 1 364,7
Equity holders` interest 1 429,7 1 327,0
Non-controlling interest 42,1 37,7
Non-current liabilities 56,6 61,7
Long-term interest-bearing borrowings 22,5 30,5
Retirement benefit obligations 9,7 10,6
Deferred taxation liabilities 24,4 20,6
Current liabilities 1 107,2 1 083,8
Short-term interest-bearing borrowings 22,2 72,7
Trade and other payables 813,1 636,8
Provisions 53,3 50,1
Bank overdrafts 218,6 324,2
Total equity and liabilities 2 635,6 2 510,2
Number of shares in issue (millions) 424,5 424,5
Net asset value per share (cents) 336,8 312,6
Net interest-bearing debt to equity (%) 9,1% 23,9%
Condensed Statements of Cash Flow
Jun 2011 Jun 2010
12 months 12 months
Rm Rm
Cash flows from operating activities 223,5 233,9
Cash generated by operations before working capital
changes 288,3 268,6
Net working capital changes (18,3) 28,4
Cash generated from operations 270,0 297,0
Net finance costs (32,7) (54,2)
Taxation paid (13,8) (8,9)
Cash flows to investing activities - (42,5)
Purchase of property, plant and equipment
Expansion (11,9) (29,1)
Replacement (49,6) (34,2)
Government capital incentives 4,5 -
Proceeds on disposals 56,6 18,4
Other investing activities 0,4 2,4
Cash flows from operating and investing activities 223,5 191,4
Cash flows to financing activities (91,0) (130,3)
Dividends paid to minorities (2,8) (2,1)
Capital distribution to shareholders (29,7) -
Decrease in borrowings (58,5) (128,2)
Net increase in cash and cash equivalents 132,5 61,1
Cash and cash equivalents at the beginning of the
period (222,4) (283,5)
Cash and cash equivalents at the end of the period (89,9) (222,4)
Condensed Statements of Changes in Equity
Jun 2011 Jun 2010
12 months 12 months
Rm Rm
Balance at the beginning of period 1 364,7 1 272,1
Other comprehensive income 0,2 -
Movement in share-based payment reserve 1,2 1,0
Total profit for the period 138,2 93,7
Distribution to shareholders (29,7) -
Dividends to minorities (2,8) (2,1)
Balance at the end of the period 1 471,8 1 364,7
Owners of the company 1 429,7 1 327,0
Non-controlling interest 42,1 37,7
Condensed Segmental Analyses
Operating
profit before
restructuring
Revenue costs Depreciation Total assets
Rm Rm Rm Rm
4 351,7 265,9 69,9 2 635,6
June 2011
(12 months)
Industrial 2 847,3 224,6 51,2 1 841,7
Consumer 1 504,4 41,3 18,7 779,4
Other - - - 14,5
4 000,2 198,7 70,8 2 510,2
June 2010
(12 months)
Industrial 2 495,2 142,4 56,0 1 675,3
Consumer 1 505,0 56,3 14,8 721,8
Other - - - 113,1
Notes
Jun 2011 Jun 2010
12 months 12 months
Rm Rm
1 Net finance costs - continuing operations 25,6 52,8
Interest received (3,3) (3,7)
Interest paid 28,9 56,5
Net finance costs - discontinued operations 7,1 1,4
2 Capital expenditure commitments 110,9 57,4
Contracted 30,0 8,0
Approved but not yet contracted 80,9 49,4
3 Operating lease commitments 81,6 72,8
4 Guarantees and contingent liabilities 10,9 11,1
5 Taxation
The taxation rate is higher than the statutory rate mainly due to permanent
differences in respect of the group`s pension fund surplus and derecognition of
deferred tax assets of discontinued operations. Tax cash paid is less than the
tax charge due to utilisation of assessed losses.
6 Basis of preparation of results
The condensed financial information has been prepared in accordance with the
framework concepts and the measurement and recognition requirements of IFRS, the
AC 500 Standards as issued by the Accounting Practices Board and the information
as required by IAS 34 - Interim Financial Reporting. The report has been
prepared using accounting policies that comply with International Financial
Reporting Standards which are consistent with those applied in the financial
statements for the year ended 30 June 2011. The preparation of the group`s
consolidated final results for the year ended 30 June 2011 was supervised by JP
Haveman, the chief financial officer.
7 Audit opinion
The auditors, Deloitte & Touche, have issued their opinion on the group`s annual
financial statements for the year ended 30 June 2011. The audit was conducted in
accordance with International Standards on Auditing. They have issued an
unmodified audit opinion. These condensed financial statements have been derived
from the group financial statements and are consistent in all material aspects,
with the group financial statements. A copy of their audit report is available
for inspection at the company`s registered office. Any reference to future
financial performance included in this announcement, has not been reviewed or
reported on by the company`s auditors.
These results can be viewed on: www.kapinternational.com
Corporate information
Non-executive directors: C E Daun* (Chairman), M J Jooste, J B Magwaza (Lead
Independant Director), I N Mkhari, F Moller*, S H Nomvete, U Schackermann*, K E
Schmidt, D M van der Merwe * German Executive directors: P C T Schouten (CEO), J
P Haveman (CFO)
Registered address: 1st Floor, New Link Centre, 1 New Street,Paarl, 7646
Postal address: PO Box 3639, Paarl, 7620 Telephone: 021 872 8726
Facsimile: 021 872 9064
Transfer secretaries: Computershare Investor Services (Proprietary) Limited
Address: 70 Marshall Street, Johannesburg, 2001 Postal address: PO Box 61051,
Marshalltown, 2107
Telephone: 011 370 5000
Facsimile: 011 688 7710
Sponsor: PSG Capital (Proprietary) Limited
Date: 06/09/2011 08:00:02 Supplied by www.sharenet.co.za
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