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Abridged Audited Financial Results for the years ended 31 December 2012
Howden Africa Holdings Limited (HAHL)
(Incorporated in the Republic of South Africa)
(Registration number 1996/002982/06)
Share code: HWN
ISIN: ZAE 000010583
(Howden or the Company or the Group)
Abridged audited financial results for the year-ended 31 December 2012 of Howden Africa Holdings Limited (Howden)
- Earnings per share of 244,05 cents. Increased by 25,8% from 193,97 cents in 2011
- Operating profit of R220,4 million. Increased by 29,8% from R169,9 million in 2011
- Revenue of R1 317,2 million. Increased by 33,3% from R988,4 million in 2011
COMMENTARY
OVERVIEW
The Group has benefited from a continuation of improved market conditions and increased efficiencies to generate
significant improvements in revenue and operating profits for the year ended 31 December 2012. The Environmental Control and
Fan and Heat Exchanger divisions both delivered strong growth in revenue and operating profit compared to the
corresponding period in 2011.
RESULTS
In 2012, Howden achieved a 25,8% improvement in earnings following on from the good interim results posted in August
2012.
Revenue rose by 33,3% to R1 317,2 million (2011: R988,4 million) as the market for goods and services provided by the
group remained strong.
Operating profit for the year increased by 29,8% to R220,4 million (2011: R169,9 million), mainly as a result of a
general improvement in activity levels, operating efficiencies across the business and the execution of major projects
awarded to the Environmental Control Division in 2011.
Cash generated from operating activities for the year of R20,7 million (2011: R175,3 million) is down from the prior
year due to a requirement to fund growth resulting from major contracts received. The business remains focused on
managing its working capital and generating operating cash.
ACCOUNTING POLICIES
The condensed consolidated annual financial statements for the year ended 31 December 2012 have been prepared in
accordance with International Financial Reporting Standards (IFRS), IAS 34 Interim Financial Reporting, the AC 500 series of
Accounting Standards, JSE Listings Requirements and the Companies Act of South Africa, 2008. The accounting policies are
consistent with those applied in the prior year annual financial statements.
REVIEW OF OPERATIONS
Fans and Heat Exchangers Division
The Fan and Heat Exchangers Division had a successful year in 2012, increasing both revenue and operating profit
compared to the corresponding period in 2011. Revenue was up 15,2% to R990,2 million (2011: R859,2 million). This increase in
revenue, combined with enhanced project management and improved cost efficiencies have resulted in a 15,9% increase in operating
profit to R196,0 million (2011: R169,1 million) and includes a once-off exceptional warranty provision for R21,5 million.
The division has continued to support the key market sectors of power generation, mining and petrochemical during
2012, particularly in provision of long-term maintenance support.
Environmental Control Division
The Environmental Control divisions results significantly improved in 2012 with revenue increasing to R327,0 million
(2011: R129,2 million), a 153,2% increase on 2011. Operating profit increased by 351,5% to R39,6 million, this performance was
underpinned by improvements in project management and the successful execution of major orders awarded in 2011.
Orders received during 2012 of R157,8 million however, declined from R326,9 million in 2011. Bidding activity for the
division is at a record high as South African companies consider their options to meet requirements under the new South
African clean-air legislation. Customers have however, delayed order placement for large environmental control orders
beyond 2012.
OUTLOOK
The trading outlook remains cautiously optimistic for the Group. Aftermarket and export revenue continue to remain a
strategic focus and the Group is well positioned to take advantage of further opportunities on the African continent.
Increasing environmental pressure and awareness in South Africa coupled with stricter legislation is expected to provide
opportunities for the Environmental Control division.
SUBSEQUENT EVENTS
There are no known material events under this category.
DIVIDENDS
The directors have resolved to declare a final dividend of 30 cents per share. The last date to trade cum dividend is
Friday, 17 May 2013. Shares start trading ex dividend on Monday, 20 May 2013. The record date is Friday, 24 May 2013,
and payment will be on Monday, 27 May 2013. No share certificates are to be dematerialised or rematerialised between
Monday, 20 May 2013 and Friday, 24 May 2013, both days inclusive.
In terms of the dividend tax amendments effective 1 May 2012, the following additional information is disclosed:
(a) Local dividend tax rate is 15%.
(b) No STC credits available for utilisation.
(c) In respect of the final dividend the net local dividend amount is:
(i) 25,5 cents per share for shareholders liable to pay the new dividends tax; and
(ii) 30 cents per share for shareholders exempt from paying the new dividends tax.
(d) The issued share capital of Howden is 65 729 109 ordinary shares.
(e) The Howden tax reference number is 9624/001/71/6.
The dividend has been declared from income reserves.
DIRECTORATE
There were a number of changes in the directorate and officers during the period. Arthur Mashiatshidi passed away on
18 February 2012, and will be sadly missed by the Group. Kevin Johnson was appointed to the Board as an executive
director with effect from 1 March 2012. Humphrey Mathe was appointed to the Board as an independent non-executive director with
effect from 1 July 2012.
AUDITED RESULTS
Ernst & Young Inc., the Groups independent auditors, have audited the condensed consolidated annual financial
information for the year ended 31 December 2012, that comprises the condensed consolidated statement of financial position as
at 31 December 2012, and the condensed consolidated statements of comprehensive income, changes in equity, and cash
flows for the year then ended, and have expressed an unqualified opinion on this reviewed condensed consolidated annual
financial information. The unqualified audit report is available for inspection at the Companys registered office.
The Groups financial results were prepared under the supervision of the Chief Financial Officer, K Johnson CPA(Australia).
NOTICE OF THE ANNUAL GENERAL MEETING
Further to HAHLs reviewed results for the year ended 31 December 2012, published on 8 March 2013, shareholders are advised that
the integrated annual report was posted today.
The annual general meeting (AGM) of the Companys shareholders will be held at 13:00 on Thursday, 30 May 2013 at the registered
office, 1A Booysens Road, Booysens, Johannesburg, to transact the business as stated in the notice of the AGM forming part of the
integrated annual report.
The record date for the purposes of determining the shareholders of the Company entitled to receive the AGM notice is
Friday, 22 March 2013.
The record date for purposes of determining which shareholders of the Company are entitled to attend, participate in, and to vote
at this AGM is Friday, 24 May 2013.
Accordingly, the last date to trade in the Companys shares on JSE Limited ("JSE") to be eligible to attend, participate in and vote
at this AGM is Friday, 17 May 2013.
For and on behalf of the Board of Directors.
IH Brander T Bärwald
Chairman Chief Executive Officer
20 March 2013
Condensed consolidated statement of financial position
as at 31 December 2012
31 December 2012 31 December 2011
(Audited) (Audited)
R000 R000
Assets
Non-current assets* 214 055 211 669
Property, plant and equipment and intangible assets 132 617 123 255
Pension fund plan asset 27 698 30 424
Cash and cash equivalents - 20 012
Other non-current assets 53 740 37 978
Current assets* 907 381 764 739
Inventories 369 209 263 538
Trade and other receivables 389 797 278 129
Cash and cash equivalents 148 375 223 072
Total assets 1 121 436 976 408
Equity
Share capital and reserves
Share capital and reserves 301 252 275 316
Total equity 301 252 275 316
Liabilities
Non-current liabilities* 110 677 120 161
Current liabilities* 688 280 580 931
Bank overdraft 21 227 -
Total liabilities 820 184 701 092
Total equity and liabilities 1 121 436 976 408
*The following line items have changed from the previous publication: Current and non-current assets and liabilities
have changed due to the reclassification of amounts due to/from customers for construction contracts which resulted
in an increase in both assets and liabilities by R7,2million.
Condensed consolidated statement of comprehensive income
for the year ended 31 December 2012
31 December 2012 31 December 2011
(Audited) Change (Audited)
R000 % R000
Revenue 1 317 200 33,3 988 400
Operating profit 220 386 29,8 169 853
Finance income 15 659 5,9 14 791
Finance costs (6 676) 144,2 (2 734)
Profit before income tax 229 369 26,1 181 910
Income tax expense (68 957) (54 414)
Profit for the period 160 412 25,8 127 496
Other comprehensive loss:
Pension fund plan loss (4 192) (2 473)
Income tax relating to components of other comprehensive loss 1 174 692
Other comprehensive loss for the period, (3 018) (1 781)
net of tax
Total comprehensive income for the period 157 394 25,2 125 715
Cents Cents
Earnings per share
- basic and diluted 244,05 25,8 193,97
Other group salient features
for the year ended 31 December 2012
31 December 31 December
2012 2011
(Audited) Change (Audited)
R000 % R000
Net asset value per share (cents) 458,32 22,3 418,87
Depreciation 9 385 6 541
Amortisation 1 986 2 308
Capital expenditure 21 040 10 698
Capital commitments
- Authorised and contracted 17 489 1 562
Number of shares in issue (000's) 65 729 65 729
Earnings per share (cents) 244,05 86,9 193,97
Headline earnings per share (cents) 244,15 86,8 194,00
Dividends per share
- dividend paid (cents) 29,00 15,00
- special dividend paid (cents) 146,00 -
- interim dividend paid (cents) 25,00 20,00
Reconciliation of headline earnings
Profit for the period 160 412 127 496
Loss on disposal of property, plant and equipment 67 17
Headline earnings 160 479 86,9 127 513
Condensed consolidated statement of changes in equity
for the year ended 31 December 2012
31 December 2012 31 December 2011
(Audited) (Audited)
R000 R000
Share capital and reserves at the beginning of the period 275 316 172 606
Total comprehensive income for the period 157 394 125 715
Dividends declared and paid (131 458) (23 005)
Share capital and reserves at the end of the period 301 252 275 316
Condensed consolidated statement of cash flows
for the year ended 31 December 2012
31 December 2012 31 December 2011
(Audited) (Audited)
R000 R000
Cash flow from operating activities
Cash generated from operations 102 234 220 912
Interest paid (6 676) (2 551)
Income tax paid (75 403) (43 085)
Share-based payment 534 -
Net cash generated from operating activities 20 689 175 276
Cash flow from investing activities
Interest received 15 659 9 710
Purchases of property, plant and equipment (20 998) (10 338)
Purchases of intangible assets (42) (360)
Proceeds from disposal of property, plant and equipment 214 337
Net cash utilised from investing activities (5 167) (651)
Cash flow from financing activities
Repayment of borrowings - (35 000)
Dividends paid (131 458) (23 005)
Net cash used in financing activities (131 458) (58 005)
Net increase/(decrease) in cash and cash equivalents (115 936) 116 620
Cash and cash equivalents at the beginning of the period 243 084 126 464
Cash and cash equivalents at the end of the period 127 148 243 084
Segmental analysis by operating division
for the year ended 31 December 2012
31 December 31 December
2012 2011
(Audited) Change (Audited)
R000 % R000
Revenue
Fans and Heat Exchangers 990 151 15,2 859 246
Environmental Control 327 049 153,2 129 154
1 317 200 33,3 988 400
Orders received
Fans and Heat Exchangers 1 050 421 14,8 914 972
Environmental Control 157 762 (51,7) 326 877
1 208 183 (2,7) 1 241 849
Operating profit
Fans and Heat Exchangers 195 981 15,9 169 108
Environmental Control 39 563 351,5 8 763
235 544 32,4 177 871
Central operations (15 158) 89,0 (8 018)
Total operating profit 220 386 29,8 169 853
Intersegmental sales
Fans and Heat Exchangers 42 148 143,6 17 300
Environmental Control 19 674 (58,7) 47 660
61 822 (4,8) 64 960
Registered office
1a Booysens Road, Booysens, 2091
Postal address: PO Box 2239, Johannesburg, 2000
Directors
IH Brander (Chairman)#*, T Bärwald (Chief Executive Officer),
H Mathe*, J Brown#*, M Malebye*, S Badat*, K Johnson#
(#British German *Non-executive)
Company secretary
C Miller
Transfer secretaries
Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg, 2001
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Limited
www.howden.co.za
Date: 28/03/2013 03:38:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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