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Statement of Results
WINHOLD LIMITED
(Registration number 1945/019679/06)
Incorporated in the Republic of South Africa
Share code: WNH ISIN: ZAE000033916
STATEMENT OF RESULTS
Preliminary Audited (and related comparative) Consolidated Results for the
year ended 30 September 2012
Condensed Statement of Comprehensive Income
Year ended Year ended
30 Sept 2012 30 Sept 2011
R000's R000's
Continuing operations
External revenue 916 899 881 348
Operating profit 23 474 35 682
Investment income 13 594 15 556
Impairments (4 500) (2 500)
Net finance costs (19 988) (21 054)
Profit before taxation 12 580 27 684
Taxation (560) (3 654)
Share of associates PAT 804 431
Profit for the period (continuing operations) 12 824 24 461
Loss for discontinued operations (24 045) (6 050)
(Loss)/profit for the year (11 221) 18 411
Other comprehensive income
-actuarial remeasurement of pension fund (623) (1 021)
Total comprehensive (loss) /income for the year (11 844) 17 390
Attributable to non controlling interests (8 842) 752
Attributable to equity holders of the parent (3 002) 16 638
-Continuing operations 14 139 21 169
-Discontinued operations (17 141) (4 531)
Earnings and diluted earnings per share (Cents) (1.9) 14.1
-Continuing operations 11.8 17.7
-Discontinued operations (*) (13.7) (3.6)
Headline and diluted headline earnings/share 1.4 16.1
-Continuing operations 15.1 19.6
-Discontinued operations (*) (13.7) (3.5)
Weighted average ordinary shares
adjusted for treasury stock (000’s) 125 506 125 506
Total ordinary shares issued (000’s) 126 215 126 215
Total depreciation and amortisation 14 099 13 241
EBITDA (continuing Operations) 37 573 48 923
Reconciliation of headline earnings
-Comprehensive income for the period (3 002) 16 638
-Reverse other comprehensive income 623 1 021
Year ended Year ended
30 Sept 2012 30 Sept 2011
R000’s R000's
-Impairments 4 500 2 500
-Profit on disposal of fixed assets (375) (55)
-Taxation effects of the above 44 15
Total headline earnings 1 790 20 119
-Continuing operations 18 931 24 650
-Discontinued operations (*) (17 141) (4 531)
Year ended Year ended Year ended
30 Sept 2012 30 Sept 2011 30 Sept 2010
R000’s R000's R000's
Condensed Statement of Financial
Position
ASSETS
Fixed assets 149 178 157 580 147 121
Investments and loans 121 926 140 785 170 368
Intangible assets 19 541 24 064 26 570
Deferred Tax 10 698 538 1 882
Current assets 352 886 373 244 356 764
-Inventory 121 568 105 794 96 618
-Receivables 163 212 184 785 144 280
-Bank and cash 12 944 8 565 12 815
-Assets of disposal group 55 162 74 100 103 051
654 229 696 211 702 705
EQUITY AND LIABILITIES
Ordinary share capital and premium 122 793 122 793 122 793
Retained earnings and Reserves 118 671 130 757 126 979
Equity attributable to owners of
the parent 241 464 253 550 249 772
Non controlling interests 9 530 18 372 17 620
Total Equity 250 994 271 922 267 392
Non current liabilities
-Interest bearing 139 736 164 269 187 976
-Interest free 23 067 20 743 15 907
-(Net)Deferred taxation 4 593 4 461 6 895
Current liabilities 235 839 234 816 224 535
Interest-bearing
- Bank overdraft 50 655 37 448 18 477
- Short-term borrowings 33 776 31 278 19 022
Liabilities of disposal group 13 045 16 376 30 932
Interest free
- Payables and provisions 138 363 149 714 156 104
654 229 696 211 702 705
Supporting information
Year ended Year ended
30 Sept 2012 30 Sept 2011
- Capital commitments at period end 795 1 240
- Capital expenditure during the period 10 235 24 594
- Total interest-bearing borrowings 224 167 232 995
- Total interest-earning deposits 12 944 8 565
- Net asset value per share (cents) 192.39 202.02
- Total intangible assets 19 541 24 064
- Tangible net asset value per share (Cents) 176.82 182.85
- Return on equity (%) 0.7 7.9
- Return on assets (%) (1.7) 2.6
Condensed Statement of Changes in Equity
Equity attributable to holders of the parent
- Opening balance 253 550 249 772
- Total comprehensive income for the year (3 002) 16 638
- Dividends paid (9 084) (12 860)
Balance at the end of the year 241 464 253 550
Condensed Statement of Cash Flows
Year ended Year ended
30 Sept 2011 30 Sept 2010
R000's R000's
Cash flow from operating activities 398 8 071
Profit before interest, tax and non-cash items 19 115 55 601
Changes in working capital 13 820 (9 907)
Net finance costs (21 679) (21 471)
Dividends from associates 639 378
Taxation paid (2 412) (3 670)
Dividends paid (9 085) (12 860)
Cash flow from investing activities (6 795) (20 859)
Investment in fixed assets (10 236) (24 594)
Investment in loans receivable 3 441 3 735
Cash flow from financing activities (2 431) (10 433)
Interest-bearing borrowings repaid (32 918) (24 575)
Interest-bearing loans raised 12 983 11 926
Reduction in Loans receivable 15 367 (2 522)
Interest free borrowings raised 2 137 4 738
Net decrease in cash (8 828) (23 221)
Condensed Statement of Segment Results to 30 September
Mining Consumables Industrial Consumables
2012 2011 2012 2011
R000's R000's R000's R000's
Revenue (&) 192 610 185 028 135 042 120 889
Operating profit (&) 4 288 2 451 4 103 3 877
Depreciation (&) (512) (545) (586) (562)
Impairments (&) (3 655) (2 000) (845) (500)
Taxation (&) (1 007) (130) (824) (482)
Loss discontinued operations (21 160) (5 324) (2 885) (726)
Capital expenditure 3 230 1 330 851 513
Total assets 101 024 110 866 61 347 49 480
Total liabilities 55 736 67 758 26 254 26 577
Total assets (&) 52 481 45 658 54 728 40 588
Total liabilities (&) 44 257 53 347 24 689 24 612
Flexible Plastics
2011 2010
R000's R000's
Revenue (&) 588 653 567 625
Operating profit (&) 13 232 27 543
Depreciation (&) (12 752) (11 983)
Impairments (&) - -
Taxation (&) 2 027 (2 154)
Loss discontinued operations - -
Capital expenditure 5 652 22 641
Total assets 314 776 328 569
Total liabilities 210 714 194 418
Total assets (&) 314 776 328 569
Total liabilities (&) 210 714 194 418
Note – (&) denotes continuing operations only
- The “property and other” segment does not trade and comprises the
balance of the disclosure items not disclosed in the segmental report
above
- There are no material inter-segment revenues
- (*) net of amount attributable to non controlling interests
GROUP PROFILE
Winhold Limited ("Winhold") is a holding company with its main investments
being in its subsidiaries Gundle Limited ("Gundle") and Inmins Limited
("Inmins").
Gundle comprises two manufacturing and distribution operations in Gauteng and
one in Swaziland, as well as a further five distribution centres in the main
coastal cities, Bloemfontein and Mbombela.
Gundle manufactures polyethylene bags, construction sheeting, consumer and
industrial packaging, agricultural film and dam linings and distributes to the
agricultural, chemical, construction, food processing, industrial and consumer
markets, as well as installing dam linings in sub-Sahara Africa.
Inmins comprises 19 strategically located operations servicing the mining and
industrial sectors with a wide range of consumable and maintenance products,
and includes divisions specialising in hose, mining pipe systems, chain and
sprocket systems and conveyor belting.
MARKET OVERVIEW
A significant amount of new production capacity came on stream in the flexible
plastic industry as competitors invested heavily in new plant and equipment
over the last two years. Our estimates are that almost R1 billion of new
investment has occurred in the last few years and there is now an excess of
efficient production capacity in the country. In addition, a strong Rand
encouraged imports of finished product at very competitive prices which also
generated pressure on margins in an over traded market.
The demand in industries serviced by the businesses of the group was more
subdued than 2011. The turmoil in the mining and transport industries as a
result of the unprotected strikes and stayaways negatively affected sales in
the latter part of the financial year. Mines procurement is also being
aggressively managed and more pressure is being put on margins and suppliers
to hold stock for them. More South African manufacturers are now supplying
the mines directly and our challenge is to find new products and agencies to
replace them.
REVIEW OF OPERATIONS
Turnover from continuing operations increased by 4% to R916 million, mainly as
a result of volume growth. Gundle and Inmins contributed equally to this
growth. The group is rolling out a strategy to grow these volumes further in
the coming year levered off our investment in new technologies and new
products and agencies. Profit from continuing operations decreased 48% to
R12,8 million as a result of decreased margin, itself a result of an
increasingly competitive market and consequently also an inability to pass on
cost increases to customers. Impairments of Goodwill (R4,5 million) are
attributable mainly to Inmins’s Witank branches. Investment income comprises
predominantly preference dividend income. The reduction in interest is
attributable to reduction in prime overdraft rates. The taxation credit
arises from deferred tax assets being created.
Gundle
The operating profit reduced by 52% as a result of the loss suffered at the
Industrial and Consumer division and reduced profits of our trading branches.
The industrial and consumer packaging markets experienced a volume drop of 8%
with margins under severe pressure as competitors chased volumes with price.
Although the home building industry is still depressed the construction and
agriculture division maintained profits at 2011 levels on lower sales. The
Dam Lining division which specialises in the in situ welding and installation
of plastic linings for dams, hazardous waste sites and bulk water management
systems once again performed exceptionally well increasing sales by 25% with
projects successfully completed in Mozambique, DRC, Botswana as well as South
Africa. Foreign business in sub-Sahara Africa accounted for 47% of sales with
much potential remaining.
Inmins
The losses associated with the discontinuance of the Value Added division
(“T&E”) operation overshadowed the good performance of both the mining and
industrial divisions. Revenue from these divisions increased by 7,1% while
operating income increased by 32,6%. All of the trading branches with one
exception were profitable and most improved on 2011.
As most local manufacturers now supply direct to the mines and large
industrial customers, Inmins is reinventing itself by actively finding and
developing new higher margin product ranges to meet these customers. The key
to the long term success of the Inmins business is to expand its range of “own
products” to compete with local manufacturers that now supply to these large
users directly, while making the required returns from the smaller industrial
and DIY consumer market. A distribution agreement with a major local
manufacturer was concluded at the end of the financial year which will add to
revenue and operating profit. The “cross selling” of products between Inmins
branches grew by more than 50%.
After many years of trying to turn T&E to consistent profitability, the board
decided to discontinue the business. The board believes that with the current
turmoil in the gold mining industry, the prospects of new “projects” being
undertaken were low and at closure was the only viable alternative.
Negotiations to dispose of this stock and assets are under way with several
industry participants and, as part of this decision, inventory and receivables
were impaired to net realisable value on an urgent sale basis requiring a
significant provision. The T&E property is also being actively marketed and a
conditional offer is awaiting finance approval.
PROSPECTS
Inmins
The good performance of the trading operations should continue as mine
disruptions and strikes are resolved and the weaker Rand boosts mining and
industrial activity. The negative effect of T&E has been eliminated. The
distribution agreement with a major South African manufacturer, various new
products and agencies and improved market penetration should improve the
returns of Inmins. The sale of the specialist products of the group through
the whole network is gaining momentum. It is expected to increase both the
revenue and margins in the year ahead. The efforts to find additional
products continue.
Gundle
The return to profitability of the Industrial and Consumer division is key to
Gundle achieving acceptable returns. The operation is currently profitable
and management is confident that profits will be maintained for the year.
As was the case last year, it is not expected that the home building market
will recover significantly in 2013. It is expected that we will at least
retain our market share, with some growth in the new products launched during
the last 12 months.
Opportunities in Africa, where new mining developments are taking place will
be exploited by the dam lining business and a good contribution is expected
again.
The board and management are determined to return the group to profitability
in the short term.
APPRECIATION
The support from customers, suppliers, financial institutions and
shareholders’ in a very difficult year is highly appreciated. The commitment
of the management team and staff was once again noted.
CAPITAL COMMITMENTS
The amount of R0,8 million (2011: R1,2 million) reflected in the supplementary
information, relates to vehicles (2011: plant and vehicles) for existing
operations.
BASIS OF PREPARATION AND AUDIT OPINION
These condensed consolidated preliminary Group results have been prepared in
accordance with the framework concepts and measurement recognition
requirements of International Financial Reporting Standards ("IFRS") and the
AC 500 standards and contain the information required by International
Accounting Standard 34 ("IAS 34"), the Listings Requirements of the
Johannesburg Stock Exchange ("the Listings Requirements") and comply with the
South African Companies Act (2008). The accounting policies applied are
consistent with those used in the prior year other than the early adoption of
IAS 19 – Pension Fund accounting. The preparation of the preliminary financial
information has been supervised by the CFO, Mr GM Scrutton CA(SA). BDO South
Africa Inc has audited the preliminary financial information and their
unmodified report is available for inspection at the company’s registered
office. The group Integrated Annual Report will be distributed to shareholders
in December 2012.
CORPORATE GOVERNANCE
The Group subscribes to the value of good corporate governance and, where
appropriate, is committed to continued implementation of the recommendations
of the King III Report and the Listings Requirements. The Group continues to
endeavour to conduct its business in accordance with the principles of
accountability, transparency and integrity.
CONTINGENT LIABILITY, LITIGATION AND SUBSEQUENT EVENTS
There is no material pending litigation and the directors are not aware of any
material contingent liabilities or post-balance sheet events between the
balance sheet date and the date of this report.
DIRECTORATE
There has been no change in the board of directors during the year under
review.
DECLARATION OF DIVIDEND
As a result of the losses incurred in the discontinued operation and Gundle
Industrial and Consumer division and the need to retain cash in the group, the
directors regret that no dividend was declared for the year.
For and on behalf of the board
WAR WENTELER W FOURIE
Chairman Chief Executive Officer
14 December 2012
Winhold Limited
Share code: WNH
ISIN ZAE000033916
Registration number 1945/019679/06
Incorporated in the Republic of South Africa
884 Linton Jones Street, Industries East, Germiston
Tel +2711 345 9800
Directors
WAR Wenteler (Chairman)*, DB Mostert (Deputy Chairman*+), W Fourie,
PJ Kruger*, NP Mnxasana*+, P Nash*, GM Scrutton (Financial) (*Non-executive),
(+Independent)
Company Secretary
GJ O'Connor
johnoc@inmins.co.za
fax: +2711 345 9881
Date: 14/12/2012 05:50:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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