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AER - Amalgamated Electronic Corporation Limited - Group condensed

Release Date: 25/06/2012 16:59
Code(s): AER
Wrap Text

AER - Amalgamated Electronic Corporation Limited - Group condensed consolidated reviewed results for the year ended 31 March 2012 and dividend declaration AMALGAMATED ELECTRONIC CORPORATION LIMITED (Incorporated in the Republic of South Africa) (Registration number 1997/010036/06) Share code: AER ISIN: ZAE000070587 ("Amecor" or "the Company") GROUP CONDENSED CONSOLIDATED REVIEWED RESULTS FOR THE YEAR ENDED 31 MARCH 2012 AND DIVIDEND DECLARATION GROUP CONDENSED STATEMENT OF COMPREHENSIVE INCOME Year ended Year ended
31 March 2012 31 March 2011 (Reviewed) (Audited) Note R`000 R`000 Revenue 218 474 142 810 Turnover 214 982 140 732 Cost of sales (126 329) (77 410) Gross profit 88 653 63 322 Operating cost excluding depreciation (51 805) (27 574) and amortisation EBITDA 36 848 35 748 Depreciation and amortisation (3 554) (3 279) Operating profit 33 294 32 469 Finance income 1 857 1 435 Finance expenses (3 190) (962) Profit before taxation 31 961 32 942 Taxation (10 616) (9 598) Profit 21 345 23 344 Other comprehensive income - - Total comprehensive income 21 345 23 344 Attributable to: Ordinary shareholders of Amecor 18 632 21 360 Non-controlling interest 2 713 1 984 Profit and total comprehensive income 21 345 23 344 for the year Earnings per share (cents) 3 25,0 28,3 Diluted earnings per share (cents) 3 25,0 28,3 GROUP CONDENSED STATEMENT OF FINANCIAL POSITION 31 March 2012 31 March 2011
(Reviewed) (Audited) Note R`000 R`000 ASSETS Non-current assets 101 749 85 939 Property, plant and equipment 5 22 497 16 811 Intangible assets 17 838 14 756 Goodwill 59 661 54 034 Deferred tax asset 1 753 338 Current assets 166 761 87 636 Inventories 44 931 22 325 Trade and other receivables 58 870 27 450 Taxation 3 328 2 837 Cash and cash equivalents 59 632 35 024 Total assets 268 510 173 575 EQUITY AND LIABILITIES Issued capital 70 843 72 560 Retained earnings 75 506 62 915 Non-controlling interest 18 222 16 007 Total equity 164 571 151 482 Non-current liabilities 62 834 6 551 Borrowings 57 684 3 143 Deferred tax liabilities 5 150 3 408 Current liabilities 41 105 15 542 Trade and other payables 39 831 12 895 Borrowings 1 274 2 647 Total equity and liabilities 268 510 173 575 GROUP CONDENSED STATEMENT OF CASH FLOWS Year ended Year ended
31 March 2012 31 March 2011 (Reviewed) (Audited) R`000 R`000 Net inflow from operating activities 11 325 21 924 Cash generated from operations 29 975 39 256 Net finance (expense)/income (1 333) 473 Taxation paid (10 778) (10 710) Dividends paid (6 539) (7 095) Net outflow from investing activities (38 168) (9 105) Net inflow/(outflow) from financing 51 451 (4 640) activities Net movement in cash balances 24 608 8 179 Cash and cash equivalents at the beginning 35 024 26 845 of the year Cash and cash equivalents at the end of 59 632 35 024 the year GROUP CONDENSED STATEMENT OF CHANGES IN EQUITY Attributable Issued capital to ordinary Non- (share capital and shareholders controlling Total
share premium) of Amecor interest equity R`000 R`000 R`000 R`000 Balance at 1 72 610 47 576 15 097 135 283 April 2010 Dividends paid - (6 021) (1 074) (7 095) Profit for the - 21 360 1 984 23 344 year in total comprehensive income Treasury share (50) - - (50) purchase Total changes (50) 15 339 910 16 199 Balance at 1 72 560 62 915 16 007 151 482 April 2011 Dividends paid - (6 041) (498) (6 539) Profit for the - 18 632 2 713 21 345 year in total comprehensive income Treasury share (1 717) - - (1 717) purchase Total changes (1 717) 12 591 2 215 13 089 Balance at 31 70 843 75 506 18 222 164 571 March 2012 Dividend declaration The directors have elected to pay a single annual dividend in the amount of 8,0 cents (F2011: 8,0 cents) per ordinary share in respect of the year ended 31 March 2012. This is a dividend as defined in the Income Tax Act, 1962, and is payable from income reserves. The South African Dividend Witholding Tax ("DWT") rate is 15% and no credits in terms of Secondary Tax on Companies have been utilised. The net amount payable to shareholders who are not exempt from DWT is 6,8 cents per share, while it is 8,0 cents per share to those who are exempt from DWT. Amecor tax number is 9381483842. The 77 985 337 ordinary shares in issue; the total dividend amount payable is R6 238 827. F2013 F2012
Distributable dividend (R`000) 6 239 6 239 Total number of shares in issue (`000) 77 986 77 986 Dividend payable per share (cents) 8,0 8,0 Declaration date Wednesday, 27 June 2012 Last day to trade cum dividend Friday, 13 July 2012 Trading ex dividend commences Monday, 16 July 2012 Record date Friday, 20 July 2012 Payment date Monday, 23 July 2012 Share certificates may not be dematerialised or rematerialised between Monday, 16 July 2012 and Friday, 20 July 2012, both dates inclusive. MANAGEMENT COMMENTARY General review Amecor and its subsidiaries (collectively "the Amecor Group" or "the Group") is a South African group of companies specialising in the design, manufacture and distribution of leading brands within the electronic security and alternative energy industries. During the year under review Amecor acquired the business ("the Secequip business") of Secequip Supplies Proprietary Limited registration number 1999/025079/07 ("Secequip"). The effective date of the acquisition of the Secequip business ("the Secequip transaction") was 1 October 2011. The Secequip business is the business of an importer and distributor of electronic products through its established national network of 13 branches. Details of the Secequip transaction are summarised below in note 4. Financial review Turnover increased by 53% to R215,0 million (F2011: R140,7 million). The increase on last year resulted primarily from the Secequip transaction and a growth in annuity income in Sabre Radio Networks. EBITDA increased by 3% to R36,8 million (F2011: R35,7 million). The production and sales element of the Group faced challenges in the current economic conditions, resulting in reduction in margins to remain competitive in the market. The Group, as a whole, experienced an increase in operating costs as a direct result of electricity rate hikes, higher salaries and wages, and increasing fuel prices. In addition, non-recurring costs were incurred in effecting the integration of the Secequip business into the Group. Finance income increased by R0,5 million from R1,4 million in F2011 to R1,9 million, while finance costs rose to R3,2 million (F2011: R1,0 million). Both were attributable to the Bond issued by Amecor in the amount of R60,0 million as R17,0 million remains in treasury, attracting interest income. Quarterly interest payments are processed at an interest rate of 3-month JIBAR + 5%. Income attributable to Amecor shareholders reduced from R21,4 million to R18,6 million and earnings per share was down 11,7% to 25,0 cents (F2011: 28,3 cents). Cash generated from operations reduced from R39,3 million (F2011) to R30,0 million in the year under review. Working capital changes, as a direct result of the Secequip transaction, is the primary reason for this movement, resulting in an additional investment in working capital of R11,1 million. Total interest-bearing debt of R59,0 million (F2011: R5,8 million) represents a Group debt to equity ratio of 35,8% (F2011: 3,8%). The Company issued a corporate bond through its Private Placement Programme in November 2011 raising R60,0 million ("the Bond issue"). The bond is repayable in 2016. The majority of the proceeds were used to acquire the Secequip business (R27,0 million), settle short-term debt and provide additional working capital within the Group. Fixed assets increased by 33,8% to R22,5 million (F2011: R16,8 million) as a result of the purchase of a further property adjoining the existing premises, an additional Surface Mount production line and the replacement of several vehicles. A further R4,2 million was invested in research and development, and additional treasury shares to the value of R1,7 million were acquired on the open market at an average price of R1,80 per share. Future capital commitments To ensure the ongoing success of the Group through new and improved product development, the Group has budgeted a further R4,0 million to invest in product development in F2013. Amecor, through its wholly-owned subsidiary Amecor Property Development Proprietary Limited, recently acquired the property adjoining the existing business premises in Industria. The Company intends to construct a new production plant adjoining the existing building out of the remaining proceeds of the Bond issue and to invest in additional stock items and products which will be distributed through the Secequip branch network. The plan is to extend the existing building and accommodate the Group`s principal activities in one corporate campus. The estimated cost of this project is approximately R20,0 million. Prospects It is expected that the full economic benefits of the Secequip acquisition and integration will begin to be reflected in F2013. The FSK and PDS divisions are collectively expected to contribute steady income in line with the general economy and the modest recovery in infrastructure and security spend. NOTES TO THE CONDENSED CONSOLIDATED REVIEWED FINANCIAL STATEMENTS 1. Significant accounting policies Amecor is a company domiciled in South Africa. These condensed consolidated reviewed annual financial statements of the Amecor Group for the year ended 31 March 2012 comprise condensed consolidated reviewed annual financial statements of Amecor and its subsidiaries. These condensed consolidated annual financial statements were authorised for issue by the board of directors on 25 June 2012. The reviewed condensed consolidated financial statements for the year ended 31 March 2012 were prepared by the financial director, Mrs Kerry Colley and have been reviewed by the Company`s auditors, Mazars. Basis of preparation These condensed consolidated reviewed results have been prepared in accordance with the Framework concepts and the measurement and recognition requirements of the International Financial Reporting Standards ("IFRS") and contain information required by the International Accounting Standards 34 - Interim Financial Reporting, the AC 500 standards issued by the Accounting Practices Board, and in compliance with the Listings Requirements of the JSE Limited. The review of the reviewed condensed consolidated financial statements has not been performed in terms of the requirements of the South African Companies Act, 71 of 2008, as amended. These condensed consolidated reviewed financial statements are prepared on the historical cost basis and do not include all of the information required for full financial statements. This announcement should be read in conjunction with the consolidated annual financial statements for the year ended 31 March 2011. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. The accounting policies and methods of computation have been applied consistently by Group companies and have been applied consistently to all periods presented in these condensed consolidated reviewed financial statements. The new IFRS and interpretations that became effective for the year under review, have not had an effect on the Group`s accounting policies. The comparative figures referred to in the commentary relate to the prior year equivalent period. 2. Review of results Mazars has signed an unqualified review opinion on these condensed consolidated financial statements, as required by the JSE Limited. These financial statements have been approved by the board and condensed for the purposes of this report. The auditors review opinion is available for inspection at Amecor`s registered office. 3. Earnings per share ("EPS") EPS is based on the Group`s profit for the year ended 31 March 2012, divided by the weighted average number of shares in issue during the year. Weighted
average number Profit attributable of shares in to equity holders issue (net of of Amecor treasury shares Earnings
(Reviewed) of 3,3 million) per share F2012 R`000 `000 Cents Earnings 18 632 74 677 25,0 Diluted earnings 18 632 74 677 25,0 Headline earnings reconciliation Basic earnings 18 632 Less: Profit on sale of (115) assets Add back: Taxation on 32 the above (28%) Headline earnings 18 549 74 677 24,8 Diluted headline 18 549 74 677 24,8 earnings Weighted average number
Profit attributable of shares in to equity holders issue (net of of Amecor treasury shares Earnings (Audited) of 2,4 million) per share
F2011 R`000 `000 Cents Earnings 21 360 75 553 28,3 Diluted earnings 21 360 75 553 28,3 Headline earnings reconciliation Basic earnings 21 360 Less: Profit on sale of (248) assets Add back: Taxation on 69 the above (28%) Headline earnings 21 181 75 553 28,0 Diluted headline 21 181 75 553 28,0 earnings 4. Acquisition of the Secequip business from Secequip On 18 August 2011 Amecor entered into an agreement with Secequip to purchase the Secequip business consisting of the plant and equipment, stock, the customers, the intellectual property, the goodwill and the business name and logo ("the business assets"), and the continuing contracts, the employee liabilities and the employees, but excluding the debtors and other business liabilities of Secequip, as a going concern. The Secequip business is that of an importer and distributor of electronic products, including the well-known Texecom range of products and related services and solutions to primarily the security industry and secondarily, the broader electronics industry. The Secequip business has an established network of 13 branches across South Africa together with a central warehouse and a country-wide sales and marketing team. Details of the transaction Amecor advanced a loan of R27 million (twenty seven million Rand) ("the loan") to Greater Gauteng Alarm Networks Proprietary Limited, registration number 2000/023652/07 ("GGAN"), an existing dormant subsidiary company of Amecor. GGAN`s 1 000 ordinary shares are held as follows: No. of shares %
Amecor 790 79 Non-controlling shareholder (Secequip) 210 21 The 21% non-controlling interest formed part of the transaction agreement, and the shares were issued at no value. Purchase price allocation summary Secequip business Acquisition date 1 October 2011 Effective voting rights 100% At acquisition fair value R`000 Plant and equipment 1 733 Inventory 19 640 Net asset value ("NAV") 21 373 Less: Total purchase price discharged - cash 27 000 Goodwill on acquisition 5 627 Acquisition costs included in net administration and 137 other operating expenses Revenue since acquisition 1 October 2011 70 262 Net profit since acquisition 1 October 2011 2 777 It is impracticable to determine the revenue or the net profit for the combined entity from the beginning of the financial period, as only certain assets were acquired from Secequip. At the time of this announcement, the purchase price allocation had not yet been completed; an independent party has been assigned to attribute a value to the business name, logo and customer base acquired. Until such valuation has been concluded, the goodwill component of the purchase price allocation will assume the value of the business name, logo and customer base. Acquisition expenses incurred were expensed in operating expenses in the statement of comprehensive income. GGAN has subsequently changed its name to Secequip Proprietary Limited. 5. Property, plant and equipment During the year under review, the Group purchased property, plant and equipment to the value of R6,9 million and recognised R1,7 million additions due to the acquisition of the Secequip business (note 4). There were no material disposals during the year. 6. Net asset value per share Year ended Year ended
31 March 2012 31 March 2011 (Reviewed) (Audited) Net asset value per share (cents) 220,8 200,5 Net number of shares in issue (`000) 74 548 75 553 7. Segmental analysis The Group`s operating segments and segmental information presented in the condensed consolidated reviewed results for the year ended 31 March 2012 represents the Group`s management and internal reporting structure. Inter- segment transactions are concluded at arm`s length terms and conditions. Year ended Year ended 31 March 2012 31 March 2011 (Reviewed) (Audited)
R`000 R`000 Segment turnover Security and related production and sales 115 809 45 410 Network and annuity income 20 374 18 968 Supply and maintenance of alternative 88 687 76 354 power sources Holding and management subsidiary 16 106 8 668 companies Consolidation adjustments (25 994) (8 668) Total turnover 214 982 140 732 Comprehensive income Security and related production and sales 11 137 10 930 Network and annuity income 11 222 10 457 Supply and maintenance of alternative 4 275 3 718 power sources Holding and management subsidiary 3 817 5 145 companies Consolidation adjustments (9 106) (6 906) Total comprehensive income 21 345 23 344 Comprehensive income attributable to non- controlling shareholders Supply and maintenance of alternative 2 713 1 984 power sources Assets Security and related production and sales 114 159 48 026 Network and annuity income 39 454 32 527 Supply and maintenance of alternative 53 172 43 848 power sources Holding and management subsidiary 143 659 104 698 companies Consolidation adjustments (81 934) (55 524) Total assets 268 510 173 575 Liabilities Security and related production and sales (62 267) (4 895) Network and annuity income (1 033) (1 966) Supply and maintenance of alternative (17 797) (11 750) power sources Holding and management subsidiary (90 233) (54 408) companies Consolidation adjustments 67 391 50 926 Total liabilities (103 939) (22 093) 8. Related party transactions F2012 F2011 R`000 R`000
The Company and its subsidiaries do have dealings with each other but these are eliminated on consolidation. Purchases between subsidiary companies 15 126 11 348 Management fees 10 420 7 928 Operating lease 578 874 Other related parties: Property rental agreements - The Company relocated to the offices - 200 situated in Industria resulting in no further rent being paid to a related party 9. Directors HS Courtney (Non-executive chairman), DH Alexander (Chief executive officer), KA Colley (Financial director and Company secretary), KA Vieira (Operational director), M Noge (Independent non-executive director), CH Boulle (Independent non-executive director), PFC Ying (Independent non-executive director) (appointed 16 March 2012) All of the above directors are South African and are resident in South Africa. On behalf of the board HS Courtney DH Alexander Chairman Chief executive officer Roodepoort 25 June 2012 Registered Office Amecor House, 14 Richard Road, Industria North, Roodepoort, 1709 (PO Box 720, Florida Hills, 1716) Auditors Mazars, 2nd Floor Mazars House 5 St Davids` Place, Parktown, 2193 (PO Box 6697, Johannesburg, 2000) Transfer Secretaries Link Market Services South Africa Proprietary Limited 13th Floor, Rennies House, 19 Ameshoff Street, Braamfontein, 2001 (PO Box 4844, Johannesburg, 2000) Sponsor Sasfin Capital Limited (A division of Sasfin Limited) 29 Scott Street, Waverley, 2090 (PO Box 95104, Grant Park, 2051) Visit us at www.amecor.com INNOVATION THROUGH TECHNOLOGY Date: 25/06/2012 16:59:19 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`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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