Wrap Text
Condensed Consolidated Unaudited Results for the six months ended 28 February 2013
AUSTRO GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2001/029771/06)
Share code: ASO ISIN: ZAE000090882
(“Austro” or “the Group”)
Condensed Consolidated Unaudited Results for the six months ended 28 February
2013
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
For the six For the six For the
months ended months ended twelve months
28 February 29 February ended 31
2013 2012 August 2012
R’000 R’000 R’000
Revenue 261,142 194,205 417,531
Cost of sales (181,692) (127,322) (289,374)
Gross profit 79,450 66,883 128,157
Other operating income 2,962 1,948 4,523
Net operating expenses (66,073) (75,437) (149,714)
Onerous lease expense effect - (8,976) (8,647)
Operating expenses excluding onerous (66,073) (66,461) (141,067)
lease effect
Profit/(loss) from operations before
impairment of goodwill 16,339 (6,606) (17,034)
Impairment of goodwill - (134,197) (134,197)
Profit/(loss) from operations before
interest and taxation 16,339 (140,803) (151,231)
Net interest received 19 1,455 1,950
Interest received 1,048 3,224 6,015
Interest paid (1,029) (1,769) (4,065)
Profit/(loss) before taxation 16,358 (139,348) (149,281)
Taxation expense (5,746) (8,250) (5,132)
Total comprehensive income/(loss) 10,612 (147,598) (154,413)
for the period
Attributable to
Owners of Austro Group Limited 10,737 (147,437) (154,412)
Non-controlling interest in
subsidiary (125) (161) (1)
Total comprehensive income/(loss)
for the period 10,612 (147,598) (154,413)
Unaudited Unaudited Audited
For the six For the six For the
months ended months ended twelve months
28 February 29 February ended 31
2013 2012 August 2012
Numbers of shares in issue 395,292,923 395,693,678 395,292,923
Weighted average number of shares 395,292,923 395,295,125 395,294,018
Earnings/(loss) per share (cents) 2.7 (37.3) (39.1)
Diluted earnings/(loss) per share
(cents) 2.7 (37.3) (39.1)
Headline earning/(loss) per share
cents) 2.8 (3.4) (5.3)
Diluted headline earnings/(loss) per
share (cents) 2.8 (3.4) (5.3)
Reconciliation of income/(loss) to
headline earnings/(loss): R’000 R’000 R’000
Total comprehensive income/(loss)
for the period 10,737 (147,437) (154,412)
Net loss/(profit) on disposal of
plant and equipment 563 (99) (693)
Impairment of goodwill - 134,197 134,197
Tax effect thereof (104) 14 97
Headline earnings/(loss) 11,196 (13,325) (20,811)
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Unaudited Unaudited Audited
As at 28 As at 29 As at 31
February 2013 February 2012 August 2012
R’000 R’000 R’000
ASSETS
Non-current assets 147,220 138,986 152,650
Plant and equipment 41,019 38,300 43,043
Goodwill 95,544 95,544 95,544
Deferred taxation 10,657 5,142 14,063
Current assets 356,061 312,255 341,453
Inventories 191,248 205,905 197,117
Trade and other receivables 105,157 86,101 105,384
Taxation receivable 4,318 591 4,537
Cash and cash equivalents 55,338 19,658 34,415
Total assets 503,281 451,241 494,103
EQUITY AND LIABILITIES
Capital and reserves 373,105 369,306 362,493
Stated capital 295,497 - 295,497
Share capital - 4 -
Share premium - 295,491 -
Accumulated profits 77,733 73,972 66,997
Non-controlling interest in
(125) (161) (1)
subsidiary
Non-current liabilities 17,047 287 17,554
Finance lease obligation 5,416 - 5,263
Provision for onerous lease 11,631 - 12,291
Deferred taxation - 287 -
Current liabilities 113,129 81,648 114,056
Trade and other payables 109,751 67,504 110,559
Finance lease obligation 2,280 - 2,523
Provision for onerous lease 1,098 13,587 967
Taxation payable - 557 7
Total equity and liabilities 503,281 451,241 494,103
Net asset value per share (cents) 94.4 93.3 91.7
Tangible net asset value per share 70.2 69.2 67.5
(cents)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited Unaudited Audited
As at 28 As at 29 As at 31
February 2013 February 2012 August 2012
R’000 R’000 R’000
Cash inflows/(outflows) from
operating activities 24,175 (22,021) 3,743
Cash generated/(utilised) by
operations 26,284 (20,411) 15,444
Interest received 1,048 3,224 6,015
Interest paid (1,029) (1,769) (4,065)
Taxation paid (2,128) (3,065) (13,651)
Cash outflows from investing
activities (2,699) (3,678) (14,387)
Cash outflows from financing
activities (553) (3,631) (3,929)
Net increase/(decrease) in cash and
cash equivalents 20,923 (29,330) (14,573)
Cash and cash equivalents at
beginning of period 34,415 48,988 48,988
Cash and cash equivalents at end of
55,338 19,658 34,415
period
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Unaudited Unaudited Audited
As at 28 As at 29 As at 31
February 2013 February 2012 August 2012
R’000 R’000 R’000
Stated capital 295,497 295,495 295,497
Balance at beginning of period 295,497 295,701 295,701
Share premium reduction due to share - (206) (204)
buy back
Accumulated profits 77,733 73,972 66,997
Balance at beginning of period 66,996 221,409 221,409
Total comprehensive income/(loss) 10,737 (147,437) (154,412)
for the period
Non-controlling interest in (125) (161) (1)
subsidiary
Total capital and reserves 373,105 369,306 362,493
CONDENSED SEGMENTAL ANALYSIS
Unaudited Unaudited Audited
For the six For the six For the
months ended months ended twelve months
28 February 29 February ended 31
2013 2012 August 2012
R’000 R’000 R’000
Revenue (external)
Power 167,076 123,075 257,586
Gross 169,782 123,075 257,586
Inter-segment (2,706) - -
Wood 94,066 71,130 159,945
Gross 94,066 71,130 160,443
Intersegment - - (498)
Total 261,142 194,205 417,531
Profit/(loss) before taxation
Power 17,204 (79,049) (74,750)
Gross 18,752 (79,049) (74,750)
Inter-segment (1,548) - -
Wood (846) (60,299) (74,531)
Gross (846) (60,299) (74,421)
Intersegment - - (110)
Total 16,358 (139,348) (149,281)
Taxation expense
Power (4,870) (5,311) (6,262)
Wood (876) (2,939) 1,130
Total (5,746) (8,250) (5,132)
Capital and reserves
Power 329,183 340,329 320,520
Assets 401,193 383,879 386,225
Liabilities (72,010) (43,550) (65,705)
Wood 43,922 28,977 41,973
Assets 102,088 67,362 107,878
Liabilities (58,166) (38,385) (65,905)
Total 373,105 369,306 362,493
COMMENTARY
INTRODUCTION
Austro is listed in the “Industrial Engineering” sector and “Industrial Machinery” sub-sector
of the JSE Limited (“JSE”). The Group supplies specialised and quality branded industrial
equipment to corporate, commercial and infrastructure markets in South Africa and other
African countries. The Group services clients ranging from heavy industrial, mining and
construction groups to wholesalers, retailers and manufacturers.
Austro has two distinct and focused business offerings:
– the production, supply, installation and rental of generators and related components such
as industrial engines, marine engines, alternators, switchgear and components to the
generator manufacture and supply industry; and
– the distribution of professional woodworking equipment and tooling.
Group subsidiaries include:
– New Way Power Proprietary Limited (“Power”) housing the energy and power related interests
of the Group.
– Austro Proprietary Limited (previously Austro Wood Proprietary Limited) (“Wood”) housing
the woodworking and related interests of the Group.
– Power owns 49,9% of Matase Power Systems Proprietary Limited (“Matase”).
FINANCIAL REVIEW
Consolidated statements of comprehensive income
Following a year of significant write-downs, the Group has returned to profitability and has
grown tangible net asset value per share. Austro delivered significantly improved operating
and financial performance for the interim period ended 28 February 2013. Demand at both Power
and Wood was strong, driven by increased development and tender project work at Power and
Wood’s in-house trade show held in August 2012. Revenues increased 34,5% to R261,1 million
compared to the prior corresponding period’s R194,2 million. The gross profit margin decreased
by 4,0% from 34,4% to 30,4% as a result of reduced tender project margins at Power. Operating
expenses, excluding the onerous lease expense effect, declined by 0,6%, driven by a material
reduction in operating expenses at Wood. As a percentage of revenue, operating expenses
declined from 34,2% to 25,3%.
The increase in other operating income of 52,1% is primarily due to the rental income earned
through a sub-lease at one of Wood’s premises. This sub-lease expires in August 2013 and
Austro is currently in the process of trying to cancel the head-lease due to the onerous
nature thereof (refer to Post-Statement of Financial Position below).
The result of these movements is a net profit from operations before impairment of goodwill of
R16,3 million (2012: R6,6 million loss).
Consolidated statements of financial position
The Group’s net working capital, which includes inventories, accounts receivable and accounts
payable, decreased by R37,8 million from R 224,5 million to R186,7 million. This reduction was
achieved through reduced inventories at Power and improved terms with trade creditors.
Additional finance lease obligations of R7,7 million were incurred to finance fleet vehicles.
In accordance with IAS36 (Impairment of Assets), the Group tests goodwill for impairment.
These tests are based on cash flow forecasts for the following five years using the cash-
generating units’ results and management forecasts. No additional impairment was required at
28 February 2013.
Cash and cash equivalents increased to R55,3 million at 28 February 2013. This R20,9 million
increase was primarily generated from operations.
POST-STATEMENT OF FINANCIAL POSITION
During the previous corresponding period the Group raised a provision in respect of an onerous
lease at Wood, giving rise to a pre-tax impact of R8,9 million. Austro is in the process of
trying to cancel this lease at a cost of R10 million which, if concluded, will result in the
release of the onerous lease provision. Due to the lease being with a related party, any
settlement thereof requires a fair and reasonable opinion to be obtained and the conclusion of
any settlement with the related party will be communicated to shareholders in due course.
Other than the above, there have been no material events subsequent to the end of the interim
period that have not been taken into account in the financial statements for the period.
PROSPECTS
Locally, economic growth prospects remain muted. There do not appear to be any immediate
catalysts that will accelerate growth globally while substantial downside risks remain. Power
is likely to benefit from any potential load-shedding that Eskom has warned about, resulting
in increased base demand for generator sets but competition to win business will remain
intense. The pace of revenue growth at Wood is unlikely to be sustained but the board still
expects to show real revenue growth for the financial year. Volatile exchange rates continue
to put pressure on margins. A new management team has been appointed to drive the development
of the Group going forward.
DIVIDEND DISTRIBUTION
No dividend has been declared for the interim period.
BASIS OF PREPARATION
These condensed consolidated unaudited interim results were prepared by Tania le Roux
(Chartered Accountant (SA)), under the supervision of the Financial Director, Jarrod Friedman
(Chartered Accountant (SA)).
These condensed consolidated unaudited interim results have been prepared in accordance with
International Financial Reporting Standards (“IFRS”), Interim Financial Reporting (IAS34), the
SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial
Reporting Pronouncements as issued by The Financial Reporting Standards Council, the JSE
Listings Requirements and comply with the South African Companies Act (2008), as amended. The
accounting policies applied are consistent with those applied in the annual financial
statements for the year ended 31 August 2012. These results have not been reviewed or reported
on by the Group’s auditors.
CHANGES TO THE BOARD OF DIRECTORS
Dismissal: C Jacobs (11 December 2012)
Appointment: PD Mansour (15 April 2013)
Appointment: JS Friedman (15 April 2013)
Resignation: JO Freed as executive director (30 April 2013)
Resignation: JR Freed as alternate executive director to JO Freed (30 April 2013)
Appointment: JO Freed as non-executive director (30 April 2013)
For and on behalf of the board
PD Mansour JS Friedman
Chief Executive Officer Financial Director
Johannesburg
20 May 2013
Non-executive directors: AJ Phillips* (Chairman), DS Brouze, JO Freed, GS Nzalo*, U
Schäckermann* (German) *Independent
Executive directors: PD Mansour (Chief Executive Officer), JS Friedman (Financial Director)
Registration number: 2001/029771/06
Registered and business address: 1125 Leader Avenue, Stormill Ext 4, Roodepoort, 1724
Business postal address: PO Box 1914, Florida, 1710
Company secretary: Probity Business Services Proprietary Limited
Transfer secretaries: Computershare Investor Services Proprietary Limited
Sponsor: Java Capital
Date: 20/05/2013 10:51:00 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.
Sharenet Sites 
