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BOWLER METCALF LIMITED - Condensed unaudited consolidated results for the six months ended 31 Dec 2015

Release Date: 29/03/2016 17:48
Code(s): BCF     PDF:  
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Condensed unaudited consolidated results for the six months ended 31 Dec 2015

Bowler Metcalf Limited
REG NO : 1972/005921/06                             ALPHA CODE : BCF                            ISIN CODE : ZAE000030797

CONDENSED UNAUDITED CONSOLIDATED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2015 AND DIVIDEND DECLARATION



Revenue + 6%                Headline Earnings  + 36%            Dividend  18.4 cps

                                                                                                                R mil               %                             R mil
AS AT                                                                                                         31/12/15            Change                       30/06/15
 
CONDENSED STATEMENT OF FINANCIAL POSITION
Non-current Assets                                                                                               435.9                +8                          405.2
Property, plant & equipment                                                                                      138.8                                            122.4
Investment properties                                                                                              6.4                                              6.7
Investment in associates                                                                                         285.0                                            270.4
Deferred tax                                                                                                       0.8                                              0.8
Intangible assets                                                                                                  4.9                                              4.9
Current Assets                                                                                                   352.2               -4                           365.4
Inventories                                                                                                       53.1                                             56.9
Trade and other receivables                                                                                      119.8                                            103.1
Prepayments                                                                                                        4.4                                             19.2
Cash and cash equivalents                                                                                        124.5                                            139.6
Related party loan                                                                                                50.3                                             46.5
Taxation                                                                                                           0.1                                              0.1
                                                                                                     -----------------                                  ---------------
Total Assets                                                                                                     788.1              +2                            770.6
                                                                                                          ============                                     ============

Total Equity                                                                                                     685.5              +3                            667.7
Non-current liabilities                                                                                           62.5                                             53.4
Deferred Tax                                                                                                      62.5                                             53.4
Current Liabilities                                                                                               40.1            - 19                             49.5
Trade and other payables                                                                                          39.3                                             45.1
Borrowings                                                                                                           -                                              1.2
Taxation                                                                                                           0.8                                              3.2
                                                                                                      ----------------                                 ----------------
Total Equity & Liabilities                                                                                       788.1                                            770.6
                                                                                                          ============                                     ============

NOTES TO THE CONDENSED STATEMENT OF
FINANCIAL POSITION
Prepayments are comprised of:
- advance payments - capital                                                                                       4.4                                             18.1
- advance payments - expenses                                                                                        -                                              1.1
                                                                                                          ============                                     ============

CONDENSED STATEMENT OF CHANGES IN EQUITY (R mil)
                                                                                                                                          Share
                                                                  Share                Retained                Treasury                   Based                   Total
                                                                Capital                Earnings                  Shares                Payments                  Equity

30 Jun 14                                                          21.5                   469.6                   (31.6)                   0.30                   459.8
Comprehensive Income                                                  -                  235.30                       -                       -                   235.3
Dividends                                                             -                  (28.90)                    1.5                       -                   (27.4)
Other                                                                 -                    0.30                       -                   (0.30)                      -
                                                       ----------------         ----------------       ----------------         ----------------        ----------------
30 Jun 15                                                          21.5                   676.3                   (30.1)                      -                   667.7
Comprehensive Income                                                  -                    36.8                       -                       -                    36.8
Dividends                                                             -                   (19.0)                      -                       -                   (19.0)
                                                       ----------------        ----------------        ----------------        ----------------          ---------------
31 Dec 15                                                          21.5                   694.1                   (30.1)                      -                   685.5
                                                           ============             ============             ============           ============            ============

SIX MONTHS ENDED                                                        31/12/15         %               00/01/00
                                                                           R mil        Change              R mil
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
Continuing operations
Revenue                                                                    254.8            +6              240.8
Other income                                                                 1.1                              1.5
Operating costs                                                           (148.6)                          (137.2)
Depreciation                                                               (11.0)                           (10.3)
Rent & property finance                                                     (1.1)                            (1.0)
Staffing costs                                                             (61.6)                           (56.4)
Share of profit of associate                                                14.5                                -
                                                                 ----------------                  ---------------
Profit from operations                                                      48.1          + 29               37.4
Net finance income                                                           8.2                              6.0
- income                                                                     8.2                              6.0
                                                                 ----------------                 ----------------
Net profit before tax                                                       56.3          + 30               43.4
Income tax expense                                                         (11.5)                           (12.5)
                                                                 ----------------                 ----------------
Profit for the period from continuing operations                            44.8          + 45               30.9
                                                                 ----------------                 ----------------
Discontinued operations
Revenue                                                                        -                            240.4
Other income                                                                   -                              0.1
Expenses                                                                       -                           (237.5)
                                                                 ----------------                 ----------------
Pre-tax profit                                                                 -                              3.0
Income tax expense                                                          (8.0)                            (0.8)
                                                                 ----------------                 ----------------
Profit for the period from discontinued operations                          (8.0)                             2.2
                                                                 ----------------                 ----------------
                                                                       
Attributable to equity holders of parent                                    36.8          + 11               33.1
                                                                     ============                     ============

Earnings & diluted earnings per share (c)                                    CPS                              CPS
- Continuing operations                                                    54.11          + 44              37.48
- Discontinued operations                                                  (9.66)                            2.67
                                                                 ----------------                 ----------------
                                                                           44.44          + 11              40.14
                                                                     ============                     ============
NOTES TO THE CONDENSED STATEMENT OF
COMPREHENSIVE INCOME                                                     R mil                            R mil
Related party transactions
Quality Beverages 2000 (Pty) Ltd (Subsidiary of associate)
- revenue                                                                 33.1                                -
- rental income                                                            2.2                                -
- finance income                                                           2.9                                -
                                                                   ============                    ============
CONDENSED STATEMENT OF CASH FLOWS
Operating Activities                                                      13.6                             14.9
Profit before tax                                                         56.3                             46.4
Non-cash items                                                            (3.2)                            15.7
Working capital changes                                                  (7.90)                           (19.8)
Taxation paid                                                            (12.6)                           (13.7)
Dividends paid                                                           (19.0)                           (13.7)
Investing Activities                                                     (27.6)                           (23.9)
Property plant and equipment - additions                                 (37.5)                           (23.9)
Property plant and equipment - disposals                                   9.9                                -
Financing Activities                                                      (1.1)                            (3.5)
Borrowings                                                                (1.1)                            (3.5)
                                                                ----------------                ----------------
Net Cash Flow                                                            (15.1)                           (12.5)
Opening balance                                                          139.6                            126.2
                                                                ----------------                ----------------
Closing balance                                                           124.5                           113.7
                                                                    ============                    ============
Comprising:
Cash & cash equivalents                                                   124.5                           114.7
Bank Overdrafts                                                               -                            (1.0)
                                                                    ============                    ============
Net cash flows from discontinued operations
Operating Activities                                                          -                           (19.5)
Investing Activities                                                          -                             1.3
Financing Activities                                                          -                             9.5
                                                                ----------------                ----------------
                                                                              -                            (8.7)
                                                                    ============                    ============
 
                                                                                                      R mil               %                    R mil
                                                                                                   31/12/15          Change                 00/01/00
HEADLINE EARNINGS (Rmil)
Continuing operations
Profit for the period from continuing operations                                                      44.80                                    30.90
Profit on disposal of plant & equipment                                                                0.20                                     0.10
profit                                                                                                 0.30                                     0.20
tax                                                                                                   (0.10)                                   (0.10)
                                                                                            ----------------                         ----------------
Headline earnings - continuing operations                                                             45.00            + 45                    31.00
                                                                                            ----------------                         ----------------
Discontinued operations
Loss for the period from discontinued operations                                                      (8.00)                                    2.20
Tax rate adjustment - disposal of subsidiary                                                           8.00                                        -
                                                                                            ----------------                        -----------------
Headline earnings - discontinued operations                                                               -                                     2.20
                                                                                            ----------------                        -----------------
Headline earnings - attributable to holders of the parent                                             45.00            + 36                    33.20
                                                                                               ============                              ============

BASIC & DILUTED HEADLINE EARNINGS PER SHARE (c)                                                         CPS                                      CPS
Continuing operations
Earnings per share(c)                                                                                 54.11                                    37.48
Profit on disposal of plant & equipment (c)                                                            0.24                                     0.14
                                                                                           -----------------                        -----------------
Basic & diluted headline earnings per share-continuing operations (c)                                 54.35            + 44                    37.62
                                                                                           -----------------                        -----------------
Discontinued operations
Earnings per share(c)                                                                                 (9.66)                                    2.67
Tax rate adjustment - disposal of subsidiary (c)                                                       9.66                                        -
                                                                                           -----------------                         -----------------
Basic & diluted headline earnings per share-discontinued operations (c)                                   -                                     2.67
                                                                                           -----------------                          ----------------
                                                                                                            
Basic & diluted headline earnings per share -
attributable to holders of the parent (c)                                                             54.35           + 35                     40.28
                                                                                                ============                             ============
ADDITIONAL INFORMATION
Dividend/share paid (c)                                                                               23.00           + 39                     16.60
Ordinary dividend proposed (c)                                                                        18.40             +0                     18.40
Dividend cover (times)                                                                                 2.95                                     2.19
Weighted shares in issue (mil)                                                                        82.80                                    82.45
Capital commitments (Rmil)                                                                            10.90                                    20.50
Current ratio                                                                                          8.78                                     7.70
Return on equity (%)                                                                                  10.74                                    13.81
Closing share price (cents)                                                                           1,060                                      840

                                                              Plastic                            Property           Un-allocated
CONDENSED SEGMENTAL ANALYSIS (Rmil)                         Packaging      Beverages           Investment         & Eliminations               Total
Revenue
Jul-Dec 14                                                      178.4          240.4                  0.1                      -               418.9
- total revenue                                                 238.7          240.4                 10.1                      -               489.2
- intersegment                                                  (60.3)             -                (10.0)                     -               (70.3)
Jul-Dec 15                                                      252.6              -                  2.2                      -               254.8
- total revenue                                                 252.6              -                 10.7                      -               263.3
- intersegment                                                      -              -                 (8.5)                     -                (8.5)
                                                         ============   ============         ============            ============        ============
Operating Profit
Jul-Dec 14                                                      30.0             4.8                 7.6                    (0.1)               42.3
 - continuing operations                                        30.0               -                 7.6                    (0.1)               37.5
 - discontinued operations                                        -              4.8                   -                       -                 4.8
Jul-Dec 15                                                      26.9            14.5                 8.0                    (1.3)               48.1
 - continuing operations                                        26.9            14.5                 8.0                    (1.3)               48.1
 - discontinued operations                                         -               -                   -                       -                   -
                                                        ============    ============        ============             ============        ============
Attributable Profit
Jul-Dec 14                                                      25.6             2.2                 5.4                    (0.1)               33.1
 - continuing operations                                        25.6               -                 5.4                    (0.1)               30.9
 - discontinued operations                                         -             2.2                   -                       -                 2.2
Jul-Dec 15                                                      25.8             6.5                 5.8                    (1.3)               36.8
 - continuing operations                                        25.8            14.5                 5.8                    (1.3)               44.8
 - discontinued operations                                         -            (8.0)                  -                       -                (8.0)
                                                        ============    ============        ============             ============        ============
Total Assets
30 Jun 15                                                      464.4           270.7                69.4                   (33.9)              770.6
- total assets                                                 458.1           270.7                37.2                     4.6               770.6
- intersegment                                                   6.3               -                32.2                   (38.5)                  -
31 Dec 15                                                      470.9           285.0                73.2                   (40.8)              788.3
- total assets                                                 413.0           285.0                35.0                     0.1               733.1
- intersegment                                                  57.9               -                38.2                   (40.9)               55.2
                                                        ============    ============        ============             ============       ============
Capital Expenditure 
Jul-Dec 14                                                      22.2             1.3                 0.4                       -                23.9
Jul-Dec 15                                                      37.5               -                   -                       -                37.5
                                                        ============    ============        ============             ============       ============
CEO'S COMMENTARY
Despite restructuring activities to implement the Group’s realignment strategies, the business posted a pleasing 45% earnings growth from
continued operations, including profit from associates, on the back of a 6% revenue improvement.

Substantial improvements in total earnings are tempered to 11% by a CGT inclusion rate change, affecting deferred tax, on a transaction relating
to discontinued operations arising from the disposal of Quality Beverages in the prior year.

Plastic Packaging - Bowler Plastics
Notwithstanding a subdued FMCG market and the exit of the substantial SoftBev bottle blowing business (which was taken in-house), Plastics has
managed to not only replace this revenue, but also a 6% growth in revenue. Attributable profit remained unchanged at R25,8mil to the previous
year despite a provision for penalties related to the SoftBev Bottle Blowing Plan triggered by implementation delays. The project is ongoing and
the final outcome thereof will only unfold in the coming months.

Capex spend of R52,8 mil committed during this period to signed contracts illustrate the unprecedented activity levels. Additional new PET bottle
manufacturing capacity was commissioned in Johannesburg with more projects to follow. The Rand devaluation did not have a substantial impact
on the performance of the business during this period, however the negative cost impact was felt from January 2016. Bowler Plastics is continually
entrenching and expanding its premiere niche position in the rigid plastics packaging field.

Beverages - SoftBev

The good contribution by our newly-formed associate company, SoftBev Proprietary Limited, of R14,5mil was especially rewarding in the light of
considerable challenges resulting from the “smerger” of Quality Beverages 2000 Proprietary Limited with Shoreline Sales and Distribution
Proprietary Limited. The amalgamation of the KZN, Johannesburg and Cape Town businesses into a national unit was well achieved on various
operational and reporting levels in time for the summer season. Short term supplier and capacity challenges as well as organisational constraints
challenged productivity levels which affected stock availability. The hot weather contributed to favourable performances particularly in KZN.


Outlook
While the SoftBev business continues its focus on establishing and entrenching its national profile by implementing its strategies in commanding
significant “share of throat” for its wide range of offerings, the Bowler Group’s primary focus is directed to its Plastics packaging operations. The
FMCG market is experiencing a period of significant realignment and recapitalisation of the manufacturing capabilities and within this context the
next months will continue to see the implementation of long term projects by Bowler Plastics. The devaluation of the Rand is likely to strongly
influence further opportunities, as the aftermath effects are being felt at retailer level. This is resulting in a reassessment of the overall supply
chain which should favour South African manufacture.

BASIS OF PREPARATION
The condensed unaudited consolidated results have been prepared in accordance with and containing information required by IAS 34 Interim
Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and in the manner required by the
Companies Act and the Johannesburg Stock Exchange Listings Requirements. The condensed report has been prepared using accounting
policies and methods of computation that are in terms of IFRS and which are consistent with those of the previous annual financial statements.
The condensed report has not been audited or reviewed by the auditors.

ACQUISITIONS AND DISPOSALS
There have been no additions or disposals during the period under review.

CHANGES TO THE BOARD
There were no changes to the Board during the period.

ISSUE AND RE-PURCHASE OF TREASURY SHARES
There were no issues or re-purchases of treasury shares during the period.

CASH DIVIDEND DECLARATION
An interim gross cash dividend, as defined by the Income Tax Act, of 18.4 cents per share ("cps") (2014: 18.4 cps) has been declared for the six
months ended 31 December 2015 and is payable to shareholders on Monday, 25 April 2016. The last day to trade will be Friday, 15 April 2016.
"Ex" dividend trading begins on Monday, 18 April 2016 and the record date will be Friday, 22 April 2016. Share certificates may not be
dematerialised or re-materialised between Monday, 18 April 2016 and Friday, 22 April 2016, both days inclusive. Directors confirm that the
solvency and liquidity test is satisfied at the date of this report.

This dividend will be made from income reserves. The gross dividend is 18.4 cps. Dividend Withholding Tax (DWT) is 15%. The net local cash
dividend to shareholders liable for DWT will therefore be 15.640 cps.

The 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.

B.J. FROST (Non-Exec Chairman)
P.F. SASS (Chief Executive Officer)                                                                               Company Tax No: 9775130710

Cape Town, 29 March 2016                                                                                    Prepared by:   L.V. Rowles CA(SA)

REGISTERED AUDITOR                                    TRANSFER SECRETARIES                                                             SPONSORS
Mazars - Partner Jaco Cronje - Registered Auditor     Computershare Investor Services (Pty) Ltd                Arbor Capital Sponsors (Pty) Ltd
Mazars House, Rialto Road,                            P.O. Box 61051, Marshalltown, 2107                        Ground Flr, One Health Building
Grand Moorings Precinct, Century City, 7441                                                                    54 Maxwell Drive, Woodmead, 2157

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