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Condensed provisional report of audited consolidated results for the year ended 30 June 20915
BOWLER METCALF LIMITED
(Registration number 1972/005921/06)
Share code: BCF ISIN number: ZAE0000308797
(“Bowler Metcalf” or “the company”)
CONDENSED PROVISIONAL REPORT OF AUDITED CONSOLIDATED RESULTS FOR THE YEAR ENDED 30 JUNE 2015
CONDENSED STATEMENT OF FINANCIAL POSITION
%
R mil 30 June 15 Change 30 June 14
Non-current Assets 405.2 196.6
Property, plant & equipment 122.4 173.0
Investment properties 6.7 -
Investment in associates 270.4 -
Deferred tax 0.8 7.7
Intangible assets 4.9 15.9
Current Assets 365.4 356.9
Inventories 56.9 100.2
Trade and other receivables 103.1 95.1
Prepayments 19.2 24.2
Cash and cash equivalents 139.6 126.2
Loan - 9.5
Related party loan 46.5 -
Taxation 0.1 1.7
Total Assets 770.6 + 39 553.5
Total Equity 667.7 + 45 459.9
Non-current liabilities 53.4 15.0
Deferred Tax 53.4 13.2
Borrowings - 1.8
Current Liabilities 49.5 78.6
Trade and other payables 45.1 62.4
Borrowings 1.2 13.8
Taxation 3.2 2.4
Total Equity & Liabilities 770.6 553.5
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
Continuing operations
%
R mil 30 June 15 Change 30 June 14
Revenue 498.0 + 18 423.3
Other income 2.6 7.2
Operating costs (408.3) (364.1)
Associated company loss (4.3) -
Profit from operations 88.0 + 33 66.4
Net interest 13.1 9.2
Net profit before tax 101.1 75.6
Taxation (29.1) (20.0)
Total profit - continuing operations 72.0 + 29 55.6
Discontinued operations
Net profit before tax 12.2 4.9
Profit on disposal of subsidiary 194.1 -
Taxation (43.0) (0.3)
Total profit - discontinued operations 163.3 4.6
TOTAL COMPREHENSIVE INCOME
ATTRIBUTABLE TO PARENT 235.3 + 291 60.2
Earnings & diluted earnings per share
(c) 285.28 + 289 73.26
- continuing operations 87.28 67.71
- discontinued operations 198.00 5.55
CONDENSED STATEMENT OF CHANGES IN EQUITY
Share Retained Treasury Based Total
Capital Earnings Shares Payments Equity
30 June 13 21.5 436.9 (35.0) 1.0 424.4
Comprehensive Income - 60.2 - - 60.2
Dividends - (28.2) - - (28.2)
Disposals - - 3.4 - 3.4
Other - 0.7 - (0.6) 0.1
30 June 14 21.5 469.6 (31.6) 0.4 459.9
Comprehensive Income - 235.3 - - 235.3
Dividends - (28.8) - - (28.8)
Disposals - - 1.4 - 1.4
Other - 0.3 - (0.4) (0.1)
30 June 15 21.5 676.4 (30.2) - 667.7
%
R mil 30 June 15 Change 30 June 14
HEADLINE EARNINGS (R mil)
Earnings attributable to parent:
Continuing operations 72.0 55.6
Disposal of assets - 1.2
- gross - 1.5
- tax - (0.3)
-
Headline earnings - continuing
operations 72.0 + 27 56.8
Discontinued operations 163.3 4.6
Disposal of assets (154.3) 0.1
- gross (194.1) 0.2
- tax 39.8 (0.1)
Headline earnings - discontinued
operations 9.0 + 91 4.7
Headline earnings (R'mil) 81.0 + 32 61.5
%
R mil 30 June 15 Change 30 June 14
HEADLINE EARNINGS PER SHARE (HEPS)
Earnings attributable to parent:
Continuing operations 87.28 67.71
Disposal of assets - net 0.05 1.43
HEPS - continuing operations (cents) 87.33 69.14
Discontinued operations 198.00 5.55
Disposal of assets - net (187.11) 0.18
- -
HEPS - discontinued operations 10.89 5.73
Basic & diluted headline earnings (c) 98.22 + 31 74.87
ADDITIONAL INFORMATION
Ordinary dividend/share paid (c) 35.00 34.20
Ordinary dividend/share proposed (c) 41.40 + 18 35.00
Basic dividend cover (times) 2.10 2.10
Weighted shares in issue (mil) 82.481 82.179
Capital expenditure (Rmil) 32.92 + 14 28.97
Capital commitments (Rmil) 6.74 -4 6.99
R mil
CONDENSED SEGMENTAL ANALYSIS
Plastic Unallocated/
Packaging Beverages Property Eliminations Total
2015
Continuing Operations
Revenue 493.9 - 4.1 - 498.0
Intersegment revenue - - 16.0 (16.0) -
Loss of associate - (4.3) - - (4.3)
Other income 4.7 - - (2.1) 2.6
Expenses (418.8) - (5.5) 16.0 (408.3)
Operating income 79.8 (4.3) 14.6 (2.1) 88.0
Net finance income 12.7 - 0.4 - 13.1
Taxation (24.9) - (4.2) - (29.1)
Profit for the year -
continuing operations 67.6 (4.3) 10.8 (2.1) 72.0
Discontinued Operations
Disposal of subsidiary - 194.1 - - 194.1
Profit - discontinued ops - 12.2 - - 12.2
Taxation - (43.0) - - (43.0)
Profit for the year -
discontinued operations - 163.3 - - 163.3
Attributable to parent 67.6 159.0 10.8 (2.1) 235.3
Total assets 464.4 270.7 69.4 (33.6) 770.9
Total liabilities 96.0 39.8 7.0 (40.0) 102.8
2014
Continuing Operations
Revenue 419.3 - 4.0 - 23.3
Intersegment revenue - - 15.8 (15.8) -
Other income 5.1 - - 2.1 7.2
Expenses (374.9) - (5.0) 15.8 (364.1)
Operating income 49.5 - 14.8 2.1 66.4
Net finance income 9.5 - 0.1 (0.4) 9.2
Taxation (15.8) - (4.2) - (20.0)
Profit for the year -
continuing operations 43.2 - 10.7 1.7 55.6
Discontinued Operations
Profit - discontinued ops - 4.9 - - 4.9
Taxation - (0.3) - - (0.3)
Profit for the year -
discontinued - 4.6 - - 4.6
Attributable to parent 43.2 4.6 10.7 1.7 60.2
Total assets 398.9 148.2 104.1 (97.7) 553.5
Total liabilities 114.8 88.7 5.0 (114.8) 93.7
CONDENSED STATEMENT OF CASH FLOWS
%
30 June 15 Change 30 June 14
Operating Activities 42.0 44.6
Profit before tax 307.7 80.6
Non-cash items (164.6) 28.6
Working capital changes (44.3) (14.1)
Taxation paid (28.2) (22.3)
Dividends paid (28.6) (28.2)
Investing Activities (17.2) 8.8
Property plant and equipment (27.7) (42.5)
Disposal of subsidiary 4.8 -
Loan repayments 5.7 -
Transfer from income funds - 51.3
Financing Activities (11.4) (1.5)
Borrowings (12.9) (4.9)
Treasury shares - disposals 1.5 3.4
Net Cash Flow 13.4 51.9
Opening balance 126.2 74.3
Closing balance 139.6 126.2
Comprising:
Cash & cash equivalents 139.6 126.2
PROFIT ON DISPOSAL OF SUBSIDIARY
Consideration 274.8 -
Costs (3.1) -
Goodwill derecognised on dispos (11.1) -
Net assets disposed of (66.5) -
194.1 -
Net assets disposed of comprise:
Current assets 126.2 -
Inventories 41.0 -
Trade and other receivables 83.8 -
Cash and cash equivalents 0.6 -
Taxation 0.8 -
Non-current assets 54.2 -
Property, plant and equipment 48.5 -
Deferred taxation 5.7 -
Current liabilities (112.6) -
Trade and other payables (60.0) -
Borrowings (47.2) -
Bank overdraft (5.4) -
Non-current liabilities (1.3) -
Borrowings (0.2) -
Deferred taxation (1.1) -
66.5 -
Net cash flow on disposal
Net overdraft disposed of 4.8 -
On 20 May 2015 the shareholders ratified a sale agreement disposing of the beverages segment, comprising
Quality Beverages 2000 Proprietary Limited and its operating subsidiaries, Quality Beverages Jhb Proprietary
Limited and Quality Softdrinks Proprietary Limited, resulting in a substantial gain. The effective date of the
disposal was 31 May 2015, on which date control passed to the acquirer. The sale consideration was settled
through the issue of shares in SoftBev Proprietary Limited.
CEO'S COMMENTARY
The year under review has been a watershed one for the Group. We undertook a corporate action which
resulted from the reassessment of our strategy of vertical integration into the beverage industry. This resulted
in a shift from full ownership of the integrated beverage facility to a minority holding in a much expanded
beverage company called SoftBev Proprietary Limited.
The traditional business of rigid plastic packaging has emerged as a beneficiary of both the sustained
financial pressures that the plastic packaging industry has been forced to bear over the last two reporting
periods and also by the measures that were undertaken to prosper within those constraints. These pressures
have caused the demise/realignment of certain competitors and the Group was able to benefit under
these conditions. In a “less than buoyant” market this prosperity manifested in an 18% revenue growth to
R498 million and a concomitant growth in earnings of 30% to R72 million. Dividends per share were
increased by 18% on a dividend cover of 2.1 times.
Corporate Action – SoftBev
Corporate action was undertaken during the year whereby Shoreline Sales and Distribution Proprietary
Limited (brands Coee, Reboost) and Quality Beverages (brands Jive and Dixie) were merged into SoftBev.
SoftBev immediately became the largest wholly South African owned non-alcoholic beverage company,
with production facilities in Durban, Cape Town and Gauteng. As a result of the merger, Bowler Metcalf
owns 43% of SoftBev. International technological advances in production methods had assured the
inevitability of Bowler Plastics relinquishing all bottle manufacturing requirements to Quality Beverages if they
were to remain competitive in the market. Pursuant with the merging conditions, Bowler Metcalf had an
obligation to convert the Quality Beverages Cape Town factory to in-house bottle blowing and this will be
successfully implemented by Q2 2016 with performance conditions attached. No material negative
consequences are anticipated at this stage.
Subsequent to the formalisation of the merger SoftBev successfully negotiated with both Capri-Sonne and
PepsiCo to produce and market their products in South Africa. Capri-Sonne are the purveyors of a drink
pouch aimed at the children’s market, sold in 200 ml sachets with an integrated straw. They are operational
in 42 countries. SoftBev were selected by PepsiCo to be the sole bottlers of Pepsi Cola, Mirinda, Mountain
Dew and 7Up in South Africa for the next five years. It is believed that these global brands should have a
similar penetration into the South African market as in other countries of the world, but the challenge to
deliver on this potential is not taken lightly.
Continued Operations – Bowler Plastics
The rise of 18% in revenue and 30% in earnings respectively for Bowler Plastics fairly reflects the dual benefits
that we have gained in a transition from a discontinued business exit and new business growth. We have
witnessed a significant growth in our customer base over the last eighteen months and have partnered with
those customers who value technical innovation, quality of production and consistency of supply above
price alone. We have been fortunate to be awarded long term contracts at a value exceeding R360
million which provides us with the impetus to maintain and accelerate out technical offering. We are
currently industrialising several new processes which will be bought in to play in three of our manufacturing
plants. Capital expenditure of R55 million has been earmarked for these technological and capacity
upgrades.
Discontinued operations – Quality Beverages
In the Western Cape, volume growth of 7% was recorded to the end of May. Prior to the SoftBev merger,
the Gauteng operation was unable to operate profitably, despite growing revenue by 15%. Under the
SoftBev banner, and post-merger, it is believed that Gauteng will show the greatest growth.
Prospects
The current state of the rigid plastic packaging landscape bodes well for Bowler Metcalf. The execution of
this opportunity falls squarely on my management team, who have already displayed resilience,
determination and ability. I have no reason to believe that they would not continue so to do.
While SoftBev is now an associated company and will be reported as such, Bowler Metcalf is intimately
involved in the strategy and leadership of this exciting opportunity. The incumbent executive team of
SoftBev have demonstrated extremely strong professionalism, expertise and, in particular, urgency in
managing massive changes in the dynamics of their business in a very short space of time. I have every
reason to believe that they are very well placed to continue the success story of SoftBev.
BASIS OF PREPARATION AND AUDIT REPORT
The condensed consolidated results have been prepared in accordance with the Framework concepts, the
measurement and recognition requirements of International Financial Reporting Standards and the SAICA
Financial Reporting Guides as issued by the Accounting Practices Committee. They contain the information
required by IAS 34 Interim Financial Reporting and have been prepared in the manner required by the
Companies Act and the Johannesburg Stock Exchange Listings Requirements.
This condensed report has been prepared using the same accounting policies and methods of
computation as used in the audited annual financial statements from which the condensed report is
extracted, and should be read in conjunction with the annual financial statements.
Comparative figures in the statement of comprehensive income have been restated in line with the
requirements of IFRS 5, with specific reference to discontinued operations.
This results announcement, itself not audited, is extracted from the audited Annual Financial Statements
(AFS). The AFS, together with the unqualified audit report of the company's auditors, Mazars, is available for
inspection at the company's registered office. The auditor’s report does not necessarily report on all of the
information contained in this condensed report. Shareholders are therefore advised that in order to obtain a
full understanding of the nature of the auditor’s engagement they should obtain a copy of the auditor’s
report together with the accompanying financial information from the company’s registered office. The
directors take full responsibility for this report extracted from the underlying audited AFS.
CHANGES TO THE BOARD
There were no changes to the Board during the year.
TREASURY SHARES
Disposals of treasury shares were in respect of the exercise of share options.
CASH DIVIDEND DECLARATION
A final gross cash dividend, as defined by the Income Tax Act, of 23.0 cents per share ("cps") for the year
ended 30 June 2015 (2014: 16.6 cps) has been declared and is payable to shareholders on Monday,
2 November 2015. The last day to trade will be Friday, 23 October 2015, "Ex" dividend trading begins on
Monday, 26 October 2015 and the record date will be Friday, 30 October 2015. Share certificates may not
be dematerialised or re-materialised between Monday, 26 October 2015 and Friday, 30 October 2015, both
days inclusive. Directors confirm that the solvency and liquidity test is satisfied at the date of this report. The
test will be performed again at the payment date.
This dividend will be made from income reserves. The gross dividend is 23.0 cps. Dividend Withholding Tax
(DWT) is 15%. The net local cash dividend to shareholders liable for DWT will therefore be 19.550 cps.
Number of shares in issue at the date of declaration is 88 428 066 shares.
Unless otherwise requested in writing, individual dividend cheques of less than R50 will not be paid but
retained in the company's unclaimed dividend account. Accumulated unpaid dividends in excess of R200
may be claimed in writing from the Transfer Secretaries.
ANNUAL REPORT
The company is preparing the Annual Report and will announce details of the Annual General Meeting in
due course.
B.J. Frost (Non-Exec Chairman)
P.F. Sass (Chief Executive Officer)
Cape Town
29 September 2015 Prepared by: LV Rowles CA(SA)
REGISTERED AUDITOR
Mazars - Partner Jaco Cronje - Registered Auditor
Mazars House, Rialto Road,
Grand Moorings Precinct, Century City, 7441
SPONSOR
Arbor Capital Sponsors (Pty) Ltd
Ground floor, Woodmead North Office Park
54 Maxwell Dr, Woodmead, 2157
TRANSFER SECRETARY
Computershare Investor Services (Pty) Ltd
PO Box 61051, Marshalltown, 2108
COMPANY TAX NUMBER
9775130710
Date: 29/09/2015 05:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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