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Preliminary Audited Condensed Consolidated Results for the Year Ended 30 September 2014
WINHOLD LIMITED
(Registration number 1945/019679/06)
Incorporated in the Republic of South Africa
Share code: WNH ISIN: ZAE000033916
STATEMENT OF FINANCIAL RESULTS
Preliminary Audited Condensed Consolidated Results for the
year ended 30 September 2014
Condensed Statement of Comprehensive
Income
Year ended Year ended
30 Sept 2014 30 Sept 2013
R 000's R 000's
Continuing operations
External revenue 1 099 159 988 350
Operating profit 21 408 17 471
Investment income 7 727 14 621
Net finance costs (13 075) (15 982)
Profit before taxation 16 060 16 110
Taxation (4 207) (1 415)
Share of associates PAT 548 581
Profit for the period (continuing operations) 12 401 15 276
Loss from discontinued operations - (3 628)
Profit for the year 12 401 11 648
Other comprehensive income
- Actuarial remeasurement defined benefit
(641) 1 682
pension fund
Total comprehensive income for the year 11 760 13 330
Attributable to non controlling interests (1 953) (2 312)
Attributable to equity holders of the parent 13 713 15 642
- Continuing operations 13 713 18 204
- Discontinued operations - (2 652)
Earnings and diluted earnings per share(Cents) 11.4 11.1
- Continuing operations 11.4 13.1
- Discontinued operations (*) - (2.0)
Headline and diluted headline earnings / share 10.9 8.6
- Continuing operations 10.9 10.6
- Discontinued operations (*) - (2.0)
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 12 616 14 146
EBITDA (continuing operations) 34 024 31 617
Reconciliation of headline earnings
- Comprehensive income for the period 13 713 15 642
- Reverse other comprehensive income /(loss) 641 (1 682)
Year ended Year ended
30 Sept 2014 30 Sept 2013
R 000's R 000's
- Profit on disposal of fixed assets (762) (4 018)
- Taxation effects of the above 182 774
Total headline earnings 13 744 10 716
- Continuing Operations 13 744 13 278
- Discontinued Operations (*) - (2 562)
(*)net of amount attributable to non-controlling interests
Year ended Year ended
30 Sept 2014 30 Sept 2013
R 000's R 000's
Condensed Consolidated Statement
of Financial Position
ASSETS
Fixed assets 136 252 127 094
Investments and loans 63 338 86 293
Goodwill 19 541 19 541
Deferred Taxation 16 954 16 192
Current assets 370 662 319 101
- Inventory 139 493 145 431
- Receivables 214 989 166 435
- Bank and cash 16 180 6 196
- Assets of disposal group - 1 039
TOTAL ASSETS 606 747 568 221
EQUITY AND LIABILITIES
Ordinary share capital and
122 793 122 793
premium
Retained earnings 146 660 132 947
Equity attributable to owners of
269 453 255 740
the parent
Non controlling interests 4 882 6 835
Total Equity 274 335 262 575
Non current liabilities
- Interest bearing 55 819 100 518
- Interest free 3 076 2 995
- Deferred taxation 4 379 4 436
Current liabilities 269 138 197 697
Interest-bearing
- Bank overdraft 423 578
- Short-term borrowings 57 131 45 994
Interest free –
- Payables and provisions 211 584 151 125
606 747 568 221
SUPPORTING INFORMATION
Year ended Year ended
30 Sept 2014 30 Sept 2013
R 000's R 000's
- Capital commitments at period end - 6 095
- Capital expenditure during the period 21 754 6 629
- Total interest-bearing borrowings 113 373 147 090
- Total interest-earning deposits 16 180 6 196
- Net asset value per share (cents) 214.7 203.8
- Total intangible assets(R000) 19 541 19 541
- Tangible net asset value per share (cents) 199.1 188.2
- Gearing (operational) (%) 19.6 26.6
- Gearing (total) (%) 42.1 65.2
- Return on equity (%) 5.1 4.2
- Return on assets (%) 2.0 2.0
Consolidated Statement of Changes in Equity
Equity attributable to holders of the parent
- Opening balance 255 740 241 464
- Total comprehensive income for the year 13 713 15 642
Change in minority holdings - (1 366)
Balance at the end of year 269 453 255 740
Condensed Consolidated Statement of Cash
Flows
Year ended Year ended
30 Sept 2014 30 Sept 2013
R 000's R 000's
Cash flow from operating activities 44 366 (14 053)
Cash flow from trading 41 892 29 383
Changes in working capital 19 677 (23 849)
Net finance costs (13 075) (15 982)
Dividends from associates 246 393
Taxation paid (4 404) (3 616)
Dividends paid - (382)
Cash flow from investing activities (635) 84 382
(Investment in)/proceeds from fixed assets (21 436) 11 961
Realisation of assets held for sale - 41 078
Redemption of unlisted investments 20 801 31 343
Cash flow from financing activities (33 562) (27 000)
Interest-bearing borrowings repaid (33 562) (40 000)
Interest-bearing loans raised - 13 000
Net increase in cash 10 139 43 329
Condensed Consolidated Statement of Segment Results to 30 September
Flexible Packaging Flexible Building
2014 2013 2014 2013
R 000's R 000's R 000's R 000's
Revenue–External 330 035 299 147 231 172 189 279
–Inter-segment 140 887 81 047 77 557 64 531
– Total 470 922 380 194 308 729 253 810
Depreciation 6 756 9 102 3 701 2 870
Investment Income - - - -
Profit before Tax (&) (13 288) (7 330) 10 777 9 003
Capital expenditure 10 888 949 9 308 3 423
Total assets 262 950 223 546 171 751 126 849
Total liabilities 135 279 125 746 140 587 71 108
Trading Property & Group
2014 2013 2014 2013
R 000's R 000's R 000's R 000's
Revenue–External 537 911 499 924 41 -
–Inter-segment 15 303 14 328 (233 747) (159 906)
Revenue - Total 553 214 514 252 (233 706) (159 906)
Depreciation 1 868 1 693 291 481
Investment Income - - 7 727 14 621
Profit Before Tax (&) 14 736 15 134 3 835 (697)
Capital expenditure 620 2 080 938 177
Total assets 166 584 149 680 5 462 68 146
Total liabilities 95 073 83 682 (38 527) 25 110
Notes to the Segmental Analysis –
(&)'Profit before Tax' is stated before allocated management fees
(1) The Flexible Packaging segment comprises the Flexible Consumer and
Industrial Packaging Divisions operating out of Germiston and Swaziland
(2) The Flexible Building segment comprises the Flexible Construction and
Agricultural Division and the GeoSynthetics dam lining divisions in Springs
(3) The Trading Division comprises the Gundle and Inmins Trading branches
(4) Property and Group relate to the elimination of inter-group
transactions and group costs
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.
AUDIT OPINION AND DISTRIBUTION OF INTEGRATED ANNUAL REPORT
BDO South Africa Inc has audited the consolidated financial statements and
their unmodified report is available for inspection at the company's
registered office. The announcement is itself not audited but is extracted
from the underlying audited information. The directors' take full
responsibility for the preparation of this preliminary report and that the
financial information has been correctly extracted from the underlying
financial statements. The Group Integrated Annual Report will be
distributed to shareholders in December 2014.
GROUP PROFILE
Winhold Limited (“Winhold”) is a holding company with its main
investments being in its 74,9% owned subsidiaries Gundle and Inmins.
Gundle comprises three divisions, the Industrial and Consumer Flexible
Packaging Division with its factories in Germiston and Swaziland, the
Flexible Building, Construction and Agricultural Division in Springs
(including the Geosynthetics Dam Lining Division) and the trading
division with branches 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 Trading 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, chain
and sprocket systems and conveyor belting.
HEADLINE NUMBERS
Group revenue increased by 11% and operating profit by 26% in a year
where business was negatively affected by the five-month long strike in
the platinum sector, as well as the subsequent NUMSA strike.
The Inmins revenue was flat, with the loss of turnover due to the
platinum sector strike being offset by growth in sales to the industrial
sector. Gundle sales increased by 17,5% on a 2% volume increase. The
revenue growth was limited by the NUMSA strike and the sporadic shortage
of certain raw materials. The limited supply of recycled polymers
continued from 2013 despite new recycling capacity being commissioned.
Headline earnings per share from continuing operations improved by 7,5%.
The prior year discontinued operations reported losses of 1,9 cents per
share were not repeated.
MARKET CONDITIONS
The markets of the group were depressed by the unprecedented strike in
the platinum mines as well as the four week NUMSA strike, closing down
our Springs factory for that period. International sentiment towards
South Africa was negative and the Rand continued to weaken inflating the
cost of imported product. Polymer prices increased in excess of 25%
making it difficult to pass the full cost increases on to the market.
The plastic sheet market continues to be very competitive and is
dominated by over capacity and competitors chasing volume with margin.
This, with the significant increase in raw material prices, has made it
very challenging to pass on cost increases.
In spite of the shortage of recycled polymers, a price war exists in the
KZN market for construction sheeting, putting further pressure on
margins. While electricity costs increased further, the group
experienced only limited power interruptions.
PERFORMANCE
Inmins Trading
The revenue from the Industrial Supplies Division of Inmins grew by 14,9%
resulting in an 18,0% growth in profit before tax after managing to
maintain margins. All of the businesses in this division contributed to
the growth.
The Inmins Mining Supplies Division was seriously affected by the
platinum mines strike in Rustenburg where the largest branch is located.
The Gold and Coal mining areas were also challenging as mines sought to
cut costs in the face of weaker commodity prices. Revenue contracted by
13,4% and this division reported a pre-tax loss for the first time in
years.
Gundle Plastics Group
Revenue increased by 17,5% mainly attributable to raw material price
increases. As noted above, due to competitive market conditions, full
cost increases for the year could not be passed on to the market
resulting in 1,3% reduction in the gross profit percentage.
During the second half of the year, there was an operational improvement
at the two flexible packaging factories, particularly with regard to
overtime and scrap control. However, both factories still reported
losses as the production mix was far from optimal. There have been a
number of management changes in these operations resulting in improved
productivity.
A major fraud is suspected in Germiston where it appears that material
has been stolen over an extended period and middle management has
falsified stock values. An independent forensic investigation has been
instituted, the results of which were not available at the time of
writing this report. The Board seconded the Group CFO to analyse the
existing control procedures and to implement improvements where
necessary. The loss has been provided for.
The shortage of recycled raw material continued during the year, even
after new capacity was introduced into the market. Management estimated
that Gundle API lost 1000 tons of production and sales due to the reduced
availability of raw material. Management has maximized the group's own
recycling capacity and has identified new suppliers. There has been a
significant increase in the exporting of recycled product due to
attractive export prices and, as long as the Rand remains weak, full
supply will remain uncertain.
Gundle GeoSynthetics, our geo-membrane supplier and installer, improved
its profits by 12,5% in a market where some global construction companies
have started doing their own dam lining installations. Following more
stringent environmental regulations, this market is still growing and
Gundle GeoSynthetics maintained its volumes.
Revenue of the Gundle distribution branches grew by 15% with pre-tax
profit up 73%. A turnaround from a loss to a profit in the Cape Town
branch was pleasing, whilst the Free State operation continued its
excellent performance, increasing its pre-tax profit. The KwaZulu-Natal
price war in construction sheeting had a negative effect on that branch
and it reported reduced profits.
Repi colourants
This business experienced greater competition from European manufacturers
which have opened manufacturing facilities in South Africa and have
aggressively attacked the market. With the support of our supplier the
business grew both its revenue (17,6%) and earnings (35,7%).
PROSPECTS
Gundle
All operations have budgeted profits for 2015. Major turnaround
strategies, including significant management changes, have been and are
being implemented in Germiston and Swazi Plastic Industries, the results
of which have been evident over the past few months. Subject to the
availability of adequate raw material, budgets should be achieved.
Inmins
With stability having been returned to the local mining industry, the
rolling out of new products and some GDP growth, returns are expected to
improve.
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. My
appreciation of the support of the chairman, board, management and
staff, customers and suppliers, cannot be overstated.
BASIS OF PREPARATION
These preliminary condensed consolidated financial statements have
been prepared in accordance with the framework concepts and
measurement recognition requirements of International Financial
Reporting Standards (“IFRS”) and the SAICA Financial Reporting
Guidelines as issued by the Accounting Practices Committee and
Financial Reporting Pronouncements issued by the Financial Reporting
Standards Council and contain the information required by
International Accounting Standard 34 ("IAS34")other than the
information required pursuant to paragraph 16A(j)of IAS34 which is not
required to be published through SENS, 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. The
preparation of the condensed consolidated financial statements has
been supervised by the CEO, Mr. W Fourie CA(SA).
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 compliance with the
Listings Requirements.
The Group endeavours to continue to conduct its business in accordance
with the principles of accountability, transparency and integrity.
DIRECTORATE
Other than the appointment of Ms R Naidoo on 1 November 2013, there were
no other changes to the board of directors during the financial year.
DIVIDEND
The director's regret that no dividend has been declared in order to
preserve cash within the Group.
For and on behalf of the board
WAR WENTELER W FOURIE
Chairman Chief Executive Officer
NP MNXASANA
Audit Committee Chairman
Date : 1 December 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. +2711 345 9800.
Directors: W A R Wenteler (Chairman) ‡, W Fourie (CEO),
N P Mnxasana †‡, R Naidoo †‡,P C Nash‡, G M Scrutton (CFO): (‡non-
executive), († independent)
Company Secretary: G J O'Connor johnoc@winhold.co.za
Sponsor: Arbor Capital Sponsors Proprietary Limited
Date: 01/12/2014 03:29:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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