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Unaudited condensed interim consolidated results of the group for the six months ended 31 March 2014
WINHOLD LIMITED
(Registration number 1945/019679/06)
Incorporated in the Republic of South Africa
Share code: WNH ISIN number: ZAE000033916
Statement of results
Unaudited condensed interim consolidated results of the
group for the six months ended 31 March 2014
Condensed Consolidated Statement Of Comprehensive Income
Six
12 months months Six Six
ended ended months Months
30 31 ended ended 31
September March 30 March
2013 2014 Sept.2013 2013
R'000 R'000 R'000 R'000
External Revenue
988 350 (continuing operations) 524 784 546 581 441 769
13 448 Operating profit 10 554 3 855 9 593
14 621 Investment income 3 684 9 336 5 285
4 023 Profit on sale of property - 3 904 119
(15 982) Net finance costs (8 440) (7 262) (8 720)
Profit before taxation
16 110 (continuing operations) 5 788 9 833 6 277
(1 415) Taxation (615) (1 039) (376)
581 Share of associates PAT 246 179 402
Profit for the period
15 276 (continuing operations) 5 419 8 973 6 303
Loss from discontinued
(3 628) operations - (1 006) (2 622)
Actuarial remeasurement
1 682 Pension Fund - 1 682 -
Total comprehensive income
13 330 for the period 5 419 9 649 3 681
Attributable to non-
(2 312) controlling interests (110) (245) (2 067)
(1 246) - Continuing operations (110) 163 (1 409)
(1 066) - Discontinued operations - (408) (658)
Attributable to equity
15 642 holders of the parent 5 529 9 894 5 748
18 204 - Continuing operations 5 529 10 492 7 712
(2 562) - Discontinued operations - (598) (1 964)
Earnings and diluted
earnings per ordinary
11.12 share (cents) 4.41 6.54 4.58
13.16 - Continuing operations 4.41 7.02 6.14
(2.04) - Discontinued operations 0.00 (0.48) (1.56)
Headline and diluted
earnings per ordinary
8.53 share (cents) 4.37 4.12 4.42
15.10 - Continuing operations 4.37 9.12 5.98
(6.57) - Discontinued operations 0.00 (5.00) (1.56)
Weighted average ordinary
shares adjusted for
125 506 treasury stock (000’s) 125 506 125 506 125 506
Total Ordinary shares
126 215 issued (000's ) 126 215 126 215 126 215
Total depreciation and
14 099 amortisation 7 638 5 909 7 288
27 547 EBITDA 18 182 9 764 16 881
Reconciliation of headline
earnings
- Comprehensive Income
15 642 for the period 5 529 9 894 5 748
- Other comprehensive
(1 682) income - (1 682) -
0 Impairments - 119 (119)
Profit on disposal of
(4 023) fixed assets (61) (3 903) (120)
Taxation effects of the
774 above 17 740 34
10 711 Total Headline earnings 5 485 5 168 5 543
Condensed Consolidated Statement of Financial Position
Six
12 months months Six Six
ended ended months months
30 31 ended ended 31
September March 30 Sept. March
2013 2014 2013 2013
R'000 R'000 R'000 R'000
ASSETS
127 094 Fixed Assets 136 119 127 094 146 223
86 293 Unlisted investments 36 961 86 293 97 820
19 541 Goodwill 19 541 19 541 19 541
11 756 - (Net) Deferred taxation 12 110 11 756 6 804
319 101 Current assets 380 194 319 101 304 828
145 431 - inventory 166 002 145 431 133 854
137 771 - receivables 163 779 137 771 134 097
28 664 - unlisted investments 48 499 28 664 25 573
1 039 - assets of disposal group 705 1 039 8 525
- non-current assets held
2 615 for sale 2 260 2 615 2 946
6 196 - bank and cash 2 209 6 196 2 779
563 785 Total assets 584 925 563 785 575 216
EQUITY AND LIABILITIES
Ordinary share capital and
122 793 premium 122 793 122 793 122 793
132 947 Retained earnings 138 476 132 947 122 706
Equity attributable to
255 740 owners of the parent 261 269 255 740 245 499
6 835 Non-controlling interests 6 726 6 835 8 830
262 575 Total Equity 267 995 262 575 254 329
Non-current liabilities
100 518 - interest bearing 56 997 100 518 107 606
2 995 - interest free - 2 995 17 890
197 697 Current liabilities 259 933 197 697 195 391
interest bearing
578 - bank overdraft 37 986 578 26 606
45 994 - short term borrowings 57 304 45 994 34 055
Liabilities of disposal
- group - - 3 003
interest free
151 125 - payables and provisions 164 643 151 125 1317
- - Taxation - - -
563 785 Total Equity and Liabilities 584 925 563 785 575 216
Supplementary information
795 Capital Commitments 2 515 795 2 000
10 236 Capital expenditure 16 705 7 437 2 799
147 090 Interest bearing borrowings 152 287 147 090 168 267
114 957 Interest earning deposits 85 460 114 957 123 393
Net asset value per ordinary
203.8 share (cents) 208.2 203.8 195.6
19 541 Total intangible assets 19 541 19 541 19 541
Tangible net asset value per
188.2 ordinary share(cents) 192.60 188.20 180.04
4.2 Return on Equity (%) 4.2 4.0 4.5
2.3 Return on Assets (%) 1.8 3.4 1.1
Condensed consolidated statements of changes in equity
Six Six Six
Year ended months months Months
30 ended ended ended 31
September 31 30 Sept. March
2013 March 2013 2013
2014
R'000 R'000 R'000 R'000
Equity attributable to
holders of the parent
241 464 - Opening balance 255 740 245 499 241 464
- Total comprehensive
15 642 income for the period 5 529 9 894 5 748
- Change in minority
(1 367) interest - - (1 367)
1 - Dividends paid - 347 (346)
Balance at the end of the
255 740 year 261 269 255 740 245 499
Condensed Consolidated Statements of Cash Flows
Six Six
Year ended Six months Months
30 months ended ended 31
September ended 31 30 Sept. March
2013 March 2013 2013
2014
R'000 R'000 R'000 R'000
Cash flow from operating
(14 053) activities (19 331) (31 925) 17 872
Profit before interest,
29 373 tax and non-cash items 21 805 7 178 22 195
23 849 Changes in working capital (31 981) (41 477) 17 628
(15 972) Net finance costs (8 440) 3 524 (19 226)
393 Dividends from associates 0 (9) 402
(3 616) Taxation paid (715) (836) (2 780)
(382) Dividends paid 0 (35) (347)
Cash flow from investing
84 382 activities 13 141 54 419 29 963
Net Investment in fixed
11 961 assets (16 602) 11 077 884
Realisation of assets held
41 078 for sale 0 46 347 (5 269)
Redemption unlisted
31 343 investments 29 743 (3 005) 34 348
Cash flow used in
(27 000) financing activities (35 206) 6 951 (33 951)
Interest bearing
13 000 borrowings raised 12 305 11 425 1 575
Interest bearing
(40 000) borrowings repaid (47 511) (4 474) (35 526)
Net increase/(decrease) in
43 329 cash (41 396) 29 445 13 884
CONDENSED CONSOLIDATED STATEMENT OF 6 MONTHLY SEGMENT RESULTS
Mining Consumables Industrial Consumables Flexible Plastics
First Half 2014 First Half 2013 First Half 2014 First Half 2013 First Half 2014 First Half 2013
R’000 R’000 R’000 R’000 R’000 R’000
Revenue external 159 269 124 154 109 989 76 325 255 517 241 292
Revenue Inter Segment 73 255 60 268 35 533 31 129 7 027 7 305
Depreciation 4 526 4 362 2 040 1 660 900 943
Profit before Tax (1 641) (1 011) 3 758 5 085 7 123 7 505
Capital Expenditure 9 774 606 6 188 1 048 650 1 108
Total Assets 223 528 199 949 121 413 82 676 189 987 167 062
Total Liabilities 124 542 105 437 72 791 47 449 127 750 104 957
GROUP PROFILE
Winhold Limited (“Winhold”) is a holding company with its main
investments being 74,9% investments in Gundle and Inmins.
Gundle comprises two plastics manufacturing and distribution
operations in Gauteng and one in Swaziland, a dam lining operation
as well as five distribution centres in the main coastal cities,
Lowveld and Bloemfontein. Gundle manufactures a wide range of
polyethylene and polypropylene 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.
Inmins comprises 17 strategically located trading operations
throughout South Africa servicing the mining and industrial
sectors with a wide range of consumable and maintenance products,
and includes divisions specialising in hose, chain and sprocket
systems and conveyor belting.
Commentary
Market Conditions
A major manufacturer of flexible plastics significantly
downsized its operations during the reporting period resulting
in the previously reported overcapacity in this market sector
being reduced. Polymer raw material prices have increased in
excess of 25% compared to the same period last year. The high
polymer prices have led to increased demand for recycled
polymers in both the domestic and export markets, exacerbating
the recycled polymer capacity constraints reported on
previously.
The protracted strike in the platinum belt is having a
devastating effect on the largest of our mining supplies
businesses.
The industrial market showed marginal growth, however margins
remain tight as a result of the weakening of the Rand.
Review of operations
Gundle
Revenue increased by 31% on the back of the substantial increase
in polymer prices as well as a 5.5% increase in production
volumes. As a result of the high increase in polymer prices,
gross margin percentages reduced by 2 percentage points. The
consumer packaging division continues to focus on higher value-
add products resulting in increased turnover in this segment.
Production of Construction and Agricultural products was
curtailed by the continuing shortage of recycled polymers. The
Gundle dam lining division was successful in securing good
orders both in South and Sub-Saharan Africa. The dam lining
installation work has, however, been delayed by the high
rainfall in the region and the revenue has not yet been earned.
A substantial sale of traded dam lining material is included in
the 44% increase in the revenue of the flexible construction
segment. In the flexible packaging segment the previous year’s
loss in the Germiston manufacturing operation was eliminated,
however this improvement was negated by a disappointing
performance in Swaziland, where volumes reduced by 3.4% from an
already low base. The Gundle trading branches managed to improve
their contribution for the period.
Inmins
The Inmins Industrial division showed revenue growth of 13.8%
and a profit before tax growth of 6.2% in a difficult market. In
line with the horizontal integration strategy reported on
before, the interdivisional sales increased in excess of 50%
over the comparative period. The strikes in the platinum mines
resulted in a severe revenue loss in the Mining Supplies
division leading to an operating loss for the period negating
the otherwise good results achieved by the Industrial division.
Prospects
Under the guidance of a strengthened management team, the
turnaround in Gundle Germiston is expected to continue for the
rest of the year. Contracts to supply major customers with
packaging material, both plain and printed, have been secured
which will result in the extrusion capacity being sold out.
Certain work will have to be diverted to Swaziland and together
with regaining lost market share should see this operation
return to profitability.
New recycling capacity is expected to come on line from June
2014, substantially alleviating the shortage of recycled
polymers. The Flexible Construction segment will benefit by the
increased supply. It is expected that the dam lining division
will be able to complete the installation work postponed due to
rain, resulting in increased profit during the second half of
the financial year.
The SEIFSA three yearly wage negotiations are scheduled to take
place during June / July 2014 which will hopefully not result in
industrial action.
The Inmins Industrial division should continue its good
performance. The recovery of the Mining Supplies division will
largely depend on an end to the strikes in that sector.
The borrowings taken out to fund the significant technological
upgrade of the Gundle factories are maturing over the next 6
months which will reduce loan repayments.
BASIS OF PREPARATION AND ASSURANCE
These condensed consolidated preliminary Group interim financial
statements for the six months ended 31 March 2014 have been
prepared in accordance with the International Financial Reporting
Standards (“IFRS”) Interim Financial Reporting Standard (“IAS
34”), the SAICA Financial Reporting Guidelines as issued by the
Accounting Practices Committee and Financial Pronouncements as
issued by the Financial Reporting Standards Council, in compliance
with the Companies Act, as amended, and the Listings Requirements
of the Johannesburg Stock Exchange Limited (“the Listings
Requirements”). The accounting policies are consistent with those
used in the prior year. The preparation of the financial
statements has been supervised by the CFO, Mr G M Scrutton CA(SA).
These interim financial statements have not been audited or
reviewed by the group’s auditors. The results for the year ended
30 September 2013 were audited and the auditor’s unqualified audit
report is included in the Annual Financial statements distributed
to Shareholders’ in December 2013.
CORPORATE GOVERNANCE
The Group subscribes to the highest value of good corporate
governance and 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. The Consolidated interim financial
statements are the responsibility of the directors. The directors
take full responsibility for the preparation of these statements.
DIRECTORATE
Ms Ramani Naidoo was appointed to the board as Lead Independent
Director on 1 November 2013 and her appointment was confirmed at
the annual general meeting held on 27 February 2014. There were no
other changes to the board during the six months ended 31 March
2014.
DIVIDENDS
In line with past practice, no interim dividend has been declared.
For and on behalf of the board
WAR WENTELER W FOURIE
Chairman Chief Executive Officer
Date: 19 May 2014
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: W A R Wenteler (Chairman) ‡, W Fourie, N P Mnxasana
†‡, R Naidoo †‡, P. Nash‡, G M Scrutton (Financial) (‡non-
executive), († independent) Company Secretary: G J O’Connor
johnoc@winhold.co. Fax: +2711 345 9881
Date: 20/05/2014 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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