Wrap Text
Condensed Consolidated Audited Results for the Year Ended 31 March 2016 and Dividend Declaration
Amalgamated Electronic Corporation Limited
(Incorporated in the Republic of South Africa)
Registration number 1997/010036/06
Share code: AER ISIN: ZAE000070587
("Amecor" or "the Company" or "the Group")
CONDENSED CONSOLIDATED AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2016
AND DIVIDEND DECLARATION
* Group revenue up 17% to R131.3 million
* EBITDA up 110% to R47.0 million
* EBITDA margin of 35.8%, up 15% on normalised prior-year EBITDA margin
* HEPS up 309% to 40.4 cents per share, the highest since listing on the
JSE in 2005
* Cash generated from operations of R42.1 million
* 90% cash conversion ratio (cash generated from operations : EBITDA)
* Final dividend up 131% to 18.5 cents per share
* Full-year dividend up 93% to 28.0 cents per share
COMMENTARY
GROUP OVERVIEW
Amecor is the leading provider of security network technology in southern Africa
with a growing presence in Africa. The two core businesses, Sabre Radio Networks
("Sabre") and FSK Electronics SA ("FSK"), complement one another in expanding
annuity revenue from data networking services.
Sabre is the largest security network provider in southern Africa. It has a
comprehensive network footprint of security communication equipment enabling
users, such as security companies, to route signals and data to their control
centres.
FSK is one of the leading designers and manufacturers of sophisticated data
networking equipment primarily used in the security industry, to provide signal
transmission networks to security companies.
Keith Vieira, Chief Executive Officer of Amecor, commented:
"Amecor's strong results for the year ended 31 March 2016 reflects our leading
position in the security industry with the largest data networking platform in
South Africa.
Our focus on the core business over the year has enabled the continued growth
of our annuity revenue and record headline earnings since listing in 2005.
We are confident that our annuity subscriber base will continue to show healthy
growth through new product innovation and a superior service offering in southern
Africa and further afield in our select African markets."
ENQUIRIES
Amecor: 011 477 2600
Keith Vieira (Chief Executive Officer) or Dean Colley (Chief Financial Officer)
CapitalVoice: 082 921 9110
Johannes van Niekerk
OPERATIONAL REVIEW
Amecor delivered record headline earnings per share ("HEPS") for the year ended
31 March 2016 of 40.4 cents, entrenching its position as the leading provider of
security network technology with an increasing annuity base of customers
utilising the Group's network infrastructure.
Sabre's product and service initiatives continued to expand its annuity billing
footprint. The launch of the new range of security products developed by FSK in
January 2016 is helping drive annuity billings. Management is confident that the
new security panels together with new product offerings will continue to yield
strong annuity revenue growth for the financial year ending 31 March 2017 and ensure
our industry leadership in this sector of the market. Continued emphasis on GSM
(Global System for Mobile Communications) technology should further augment the
Group's annuity billing.
Sabre is rolling out its data transmission technology services into select markets
in Africa. Revenue generation from the African region outside South Africa is
expected to show incremental growth for the 2017 financial year as the development
gains momentum.
FSK has commenced with the manufacture and distribution of the new range of security
products, which include control panels, home automation and integrated security
solutions for residential and commercial use. These products have been designed to
make Amecor more competitive and meet the requirements of our select African markets
and will further augment the Group's annuity revenue.
Amecor continues to invest in the expansion of products and new distribution capacity
for FSK, underpinned by unique technology, which is expected to enhance the positive
momentum of the Group in the 2017 financial year.
The return on investment in infrastructure and distribution is expected to improve
from the second half of the 2017 financial year as new products and distribution
platforms gain momentum.
The board of directors of the Company ("the board") are extremely pleased with the
performance of Amecor given the backdrop of difficult economic conditions.
FINANCIAL REVIEW
RESULTS SUMMARY
Group revenue for the year ended 31 March 2016 increased by 17% to R131.3 million
from the previous year as the core data networking business continues to gain
momentum.
Earnings before interest, tax, depreciation and amortisation ("EBITDA") increased by
110% to R47.0 million. After excluding once-off impairments and provisions in the
prior year the EBITDA increased 34% from R35 million, highlighting the Group's solid
annuity business platform.
HEPS increased by 309% to 40.4 cents for the year ended 31 March 2016 (F2015:
(19.3) cents), or by a pleasing 63% (F2015: 24.8 cents) after excluding once-off
impairments and provisions in the prior year.
Furthermore, HEPS upside is expected in the financial year ending 31 March 2017 as
the annuity networking business capitalises on its leading position in security
network technology.
The Amecor corporate bond of R27.5 million at 31 March 2016 which was issued in
2011 through a private placement programme is due to mature during November 2016.
GROUP STATEMENT OF CASH FLOWS
The strong cash conversion and generation of the Group is once again highlighted,
with cash of R42.1 million being generated from operations for the year ended
31 March 2016 for a 90% free cash conversion ratio when compared to the EBITDA of
R47.0 million.
This strong free cash flow and free cash flow conversion ratio is expected to
continue to underpin healthy dividend distributions going forward.
The Group remains highly cash-generative with cash and cash equivalents at
31 March 2016 amounting to R32.2 million.
GROUP STATEMENT OF FINANCIAL POSITION
Amecor's financial position continues to be both solvent and liquid, with
interest-bearing debt:equity at 25% at 31 March 2016 (57% at 31 March 2015).
The return on equity and return on assets for the year ended 31 March 2016 was
26.1% and 17.8% respectively, illustrating the Group's ability to generate
healthy returns.
Investment in new plant and equipment of approximately R5 million to R7 million
is anticipated in the medium term which will enhance the Company's competitiveness
and entrench its leadership position.
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Earnings per share ("EPS") and HEPS for the year ended 31 March 2016 amounted
to 40.0 and 40.4 cents respectively, reflecting a 158% and 309% increase from
the previous corresponding year.
More relevant is the continuing HEPS, after excluding once- off impairments, that
increased 63% to 40.4 cents on the previous corresponding period
(F2015: 24.8 cents).
SIGNIFICANT ACCOUNTING POLICIES
These condensed consolidated audited financial statements of Amecor for the year
ended 31 March 2016 comprise those of the Company and its subsidiaries.
These condensed consolidated audited financial statements for the year ended
31 March 2016 have been prepared under the supervision of the Chief Financial
Officer, Mr Dean Colley, and are extracted from audited information. The
underlying Group financial statements have been audited by the Company's
auditors, Grant Thornton. The audited underlying Group financial statements and
the unqualified audit report are available for inspection at Amecor's registered
office.
The auditor's report does not necessarily report on all the information contained
in this 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 Company financial information
from the Company's registered office.
BASIS OF PREPARATION
The accounting policies applied in the preparation of these condensed
consolidated audited financial statements, which are based on reasonable
judgments and estimates, are in accordance with International Financial
Reporting Standards ("IFRS") and are consistent with those applied in the
financial statements for the year ended
31 March 2015. These condensed consolidated audited financial statements as
set out in this report have been prepared in terms of IAS 34 Interim Financial
Reporting, the Companies Act, 2008 (Act 71 of 2008), as amended, the SAICA
Financial Reporting Guides as issued by the Accounting Practices Committee, and
Financial Reporting Pronouncements as issued by the Financial Reporting
Standards Council and the Listings Requirements of the JSE Limited.
The directors take full responsibility for the preparation of the provisional
report and the financial information has been correctly extracted from the
underlying financial statements.
CHANGE IN DIRECTORS
Danna Booyens Strydom was appointed as a independent non-executive director
on 29 June 2015.
CHANGE OF COMPANY SECRETARY
In compliance with paragraph 3.59 of the JSE Listings Requirements, with effect
from 7 September 2015, Acorim Proprietary Limited was appointed as Company
Secretary of Amecor, replacing Ms Kerry Colley.
OUTLOOK
Amecor is confident that its entrenched position as the leading provider of
security network technology supported by the new range of products will
continue to yield healthy returns in the 2017 financial year. Currency
weakness will, however, place pressure on FSK's margins in the foreseeable
future but any margin erosion is expected to be offset by higher annuity
revenue from Sabre.
Further product expansion is expected in the second half of the 2017 financial
year, which will continue to place Amecor in a competitive and market-leading
position.
Excellent free cash flow generation is expected to continue and will be utilised
in value-enhancing growth initiatives or returned to shareholders through share
buy-backs and dividend distributions.
Amecor continues to evaluate potential synergistic acquisitions in select markets
with a bias towards enhancing its annuity income.
The Company is extremely well positioned strategically and financially for the
future.
DIVIDEND DECLARATION
The directors have elected to pay a gross final dividend in the amount of
18.5 cents per share (F2015 final dividend: 8.0 cents per share). This is a
dividend as defined in the Income Tax Act, 1962, and is payable from income
reserves. The South African dividend withholding tax ("DWT") rate is 15%. The net
amount payable to shareholders who are not exempt from DWT is 15.725 cents per
share, while it is 18.5 cents per share to those who are exempt from DWT.
The number of ordinary shares in issue at the date of this declaration is
77 985 337 and will result in a total dividend amount payable of R14.4 million.
The Company's income tax number is 9381/483/84/2.
F2016 F2016 F2015
Final Interim Final
Distributable dividend (R'000) 14 427 7 409 6 239
Total number of shares in issue (‘000) 77 986 77 986 77 986
Dividend payable per share (cents) 18.5 9.5 8.0
Declaration date Friday, 27 May 2016
Last day to trade cum dividend Friday, 17 June 2016
Trading ex dividend commences Monday, 20 June 2016
Record date Friday, 24 June 2016
Payment date Monday, 27 June 2016
Share certificates may not be dematerialised or rematerialised between Monday,
20 June 2016 and Friday, 24 June 2016, both dates inclusive. The certificated
register will be closed for this period.
On behalf of the board
KA Vieira D Colley
Chief Executive Officer Chief Financial Officer
Johannesburg
27 May 2016
FINANCIAL INFORMATION
GROUP PROVISIONAL STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME
Group
Audited Audited
31 March 31 March
% 2016 2015
Movement R'000 R'000
Revenue 17 131 280 112 569
Cost of sales (54 488) (56 914)
Gross profit 38 76 792 55 655
Other income 19 -
Operating expenses (10) (29 841) (33 285)
Earnings before interest, taxation, depreciation
and amortisation ("EBITDA") 110 46 970 22 370
Depreciation and amortisation (3 653) (4 560)
Impairment (500) (49 982)
Profit/(loss) from operations 233 42 817 (32 172)
Finance income 2 401 1 863
Finance costs (4 301) (6 808)
Profit/(loss) before taxation 210 40 917 (37 117)
Taxation (11 643) (1 628)
Profit/(loss) from continuing operations 176 29 274 (38 745)
Loss from discontinued operations - (10 903)
(Loss) on disposal of subsidiary - (14 837)
Profit from discontinued operations - 3 935
Total comprehensive income/(loss) for the year 159 29 274 (49 648)
Total comprehensive income/(loss) attributable to:
Equity holders of Amecor at the end of the year 29 274 (51 606)
Non-controlling interest - 1 958
159 29 274 (49 648)
Earnings/(loss) per share (cents) 158 40.0 (69.5)
Continuing operations 40.0 (52.2)
Discontinued operations - (17.3)
GROUP PROVISIONAL STATEMENT OF FINANCIAL POSITION
Group
Audited Audited
31 March 31 March
2016 2015
R'000 R'000
Assets
Non-current assets 89 356 80 125
Property, plant and equipment 14 210 14 686
Intangible assets 17 702 14 000
Other financial assets 5 234 -
Goodwill 44 169 44 169
Deferred tax asset 8 041 7 270
Current assets 75 353 107 118
Inventories 12 285 12 354
Trade and other receivables 19 725 12 880
Other financial assets 6 000 36 637
Cash and cash equivalents 32 170 40 736
Taxation 5 173 4 511
Total assets 164 709 187 243
Equity and reserves 112 113 104 430
Equity attributable to Amecor shareholders 112 113 104 430
Non-current liabilities 2 158 2 286
Share-based payment 467 -
Deferred tax liability 1 691 2 286
Current liabilities 50 438 80 527
Trade and other payables 20 834 19 399
Taxation 2 104 1 128
Borrowings 27 500 60 000
Total equity and liabilities 164 709 187 243
GROUP PROVISIONAL STATEMENT OF CASH FLOWS
Audited Audited
31 March 31 March
2016 2015
R'000 R'000
Net inflow from operating activities 14 522 24 140
Cash generated from operations 42 097 47 549
Net finance cost (1 900) (4 629)
Taxation paid (12 696) (9 492)
Dividends paid (12 979) (9 288)
Net inflow/(outflow) from investing activities 18 024 (5 741)
Net outflow from financing activities (41 112) (451)
Movement in cash balances (8 566) 17 948
Cash and cash equivalents at the beginning of the year 40 736 39 888
Cash included in discontinued operations (17 100)
Cash and cash equivalents at the end of the year 32 170 40 736
STATEMENT OF CHANGES IN EQUITY
Total
attribu-
Accu- table Non-
Total mulated to equity control-
Share Share share profit/ holders of ling Total
capital premium capital loss the Group interest equity
R'000 R'000 R'000 R'000 R'000 R'000 R'000
Balance at
1 April 2014
as restated 743 69 890 70 633 94 918 165 551 20 553 186 104
(Loss)/profit
for the year - - - (51 606) (51 606) 1 958 (49 648)
Other
comprehensive
income - - - - - - -
Total
comprehensive
income for
the year - - - (51 606) (51 606) 1 958 (49 648)
Purchase of own/
treasury shares - (227) (227) - (227) (227)
Disposal of
subsidiary - - - - - (21 418) (21 418)
Dividends - - - (9 288) (9 288) (1 093) (10 381)
Total
contributions
by and
distributions
to owners of
the Company
recognised
directly in
equity - (227) (227) (9 288) (9 515) (22 511) (32 026)
Balance at
1 April 2015 743 69 663 70 406 34 024 104 430 - 104 430
Profit for
the year - - - 29 274 29 274 - 29 274
Other
comprehensive
income - - - - -
Total
comprehensive
income for
the year - - - 29 274 29 274 - 29 274
Purchase of
own/treasury
shares (33) (8 579) (8 612) - (8 612) (8 612)
Dividends - - - (12 979) (12 979) (12 979)
Total
contributions
by and
distributions
to owners of
the Company
recognised
directly in
equity (33) (8 579) (8 612) (12 979) (21 591) - (21 591)
Balance at
31 March 2016 710 61 084 61 794 50 319 112 113 - 112 113
EARNINGS PER SHARE
Audited Audited
31 March 31 March
2016 2015
R'000 R'000
Earnings per share ("EPS")
Earnings/(loss) per share
Continuing operations
Earnings/(loss):
Profit/(loss) attributable to Amecor shareholders 29 274 (38 745)
Shares in issue:
Weighted average number of shares in issue ('000) 73 280 74 210
Basic earnings/(loss) per share (cents) 40.0 (52.2)
Diluted earnings/(loss) per share (cents) 40.0 (52.2)
Discontinued operations
(Loss)
(Loss) attributable to Amecor shareholders - (12 861)
Shares in issue:
Weighted average number of shares in issue ('000) 73 280 74 210
Basic (loss) per share (cents) - (17.3)
Diluted (loss) per share (cents) - (17.3)
Total earnings/(loss) per share
Earnings/(loss):
Profit/(loss) attributable to Amecor shareholders 29 274 (51 606)
Shares in issue:
Weighted average number of shares in issue ('000) 73 280 74 210
Basic earnings/(loss) per share (cents) 40.0 (69.5)
Diluted earnings/(loss) per share (cents) 40.0 (69.5)
Headline earnings per share ("HEPS")
Headline earnings/(loss) per share - continuing operations 29 634 (17 045)
Basic earnings/(loss) 29 274 (38 745)
Loss on disposal of property, plant and equipment 48
Impairment - Building 17 431
Impairment - Intangible assets 500 12 659
Taxation on above (28%) (140) (8 438)
Shares in issue:
Weighted average number of shares in issue ('000) 73 280 74 210
Headline earnings/(loss) per share - continuing
operations (cents) 40.4 (23.0)
Diluted headline earnings/(loss) per share (cents) 40.4 (23.0)
Headline earnings per share - discontinued operation - 2 710
Basic (loss)/earnings - (12 861)
Loss on disposal of subsidiary - 14 837
Impairment - Intangible assets - 1 102
(Profit) on disposal of property, plant and equipment - (82)
Taxation on above (28%) - (286)
Shares in issue:
Weighted average number of shares in issue ('000) 73 280 74 210
Headline earnings per share (cents) - 3.7
Diluted headline earnings per share (cents) - 3.7
Total headline earnings/(loss) per share 29 634 (14 337)
Basic earnings/(loss) 29 274 (51 606)
Loss on disposal of subsidiary - 14 837
(Profit) on disposal of property, plant and equipment - (34)
Impairment - Building - 17 431
Impairment - Intangible assets 500 13 759
Taxation on above (28%) (140) (8 724)
Shares in issue:
Weighted average number of shares in issue ('000) 73 280 74 210
Headline earnings/loss per share (cents) 40.4 (19.3)
Diluted headline earnings/(loss) per share (cents) 40.4 (19.3)
NET ASSET VALUE ("NAV") PER SHARE
Audited Audited
31 March 31 March
2016 2015
R'000 R'000
Ordinary share capital and reserves (R'000) 112 113 104 430
Total number of shares in issue net of
treasury shares ('000) 70 872 74 210
NAV per share (cents) 158.2 140.7
Tangible net asset value ("TNAV") per share
Ordinary share capital and reserves (R'000) 112 113 104 430
Less: Intangible assets and goodwill (R'000) (61 871) (58 169)
50 243 46 261
Total number of shares in issue net of
treasury shares ('000) 70 872 74 210
TNAV per share (cents) 70.9 62.3
SEGMENTAL ANALYSIS
Profit/loss
attributable
to Amecor Total
share- Total lia-
Revenue EBITA holders assets bilities
12 months to 31 March 2016 R'000 R'000 R'000 R'000 R'000
Security 138 091 50 050 35 027 162 291 (15 769)
Head office and management
subsidiary companies 14 836 15 932 12 050 139 414 (160 538)
Intercompany elimination and
consolidation (21 648) (19 013) (17 803) (136 997) 123 711
Continuing operations 131 280 46 970 29 274 164 709 (52 596)
Profit/loss
attributable
to Amecor Total
share- Total lia-
Revenue EBITA holders assets bilities
12 months to 31 March 2016 R'000 R'000 R'000 R'000 R'000
Security 115 963 35 181 14 687 134 610 (9 458)
Head Office and management
subsidiary companies 15 424 (5 565) (56 996) 147 679 (170 073)
Intercompany elimination and
consolidation (18 817) (7 246) (9 297) (95 046) 96 715
Continuing operations 112 569 22 370 (51 606) 187 243 (82 816)
CORPORATE INFORMATION
Registered Office
Amecor House, 14 Richard Road, Industria North, 1709
(PO Box 720, Florida Hills, 1716)
Directors
KA Vieira, D Colley, CH Boulle (Chairman)*#, JF Evans*#, W Kirsh*, SD Shane*,
C Angel* (alternate), PFC Ying*#, J Winer*, D Strydom*#
(* Non-executive # Independent)
Company Secretary
Acorim Proprietary Limited
2nd Floor, North Block, Hyde Park Office Towers, Corner 6th Road and Jan Smuts
Avenue, Hyde Park, Johannesburg, 2196 (PO Box 41480, Craighall, 2024)
Auditors
Grant Thornton
52 Corlett Drive, Wanderers Office Park, Illovo, 2196
(Private Bag X5, Northlands, 2116)
Transfer Secretaries
Link Market Services Proprietary Limited
13th Floor, Rennie House, 19 Ameshoff Street, Braamfontein, 2001
(PO Box 4844, Johannesburg, 2000)
Sponsor
Merchantec Capital
2nd Floor, North Block, Hyde Park Office Towers, Corner 6th Road and Jan Smuts
Avenue, Hyde Park, Johannesburg, 2196 (PO Box 41480, Craighall, 2024)
www.amecor.com
Date: 27/05/2016 05:28:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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