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BELL EQUIPMENT LIMITED - Unaudited interim results for the period ended 30 June 2016 and cash dividend declaration

Release Date: 22/09/2016 10:44
Code(s): BEL     PDF:  
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Unaudited interim results for the period ended 30 June 2016 and cash dividend declaration

BELL EQUIPMENT LIMITED
('Bell' or 'the group' or 'the company')
(Incorporated in the Republic of South Africa)
Share code: BEL
ISIN: ZAE000028304
Registration number: 1968/013656/06

UNAUDITED INTERIM RESULTS FOR THE PERIOD ENDED 30 JUNE 2016 AND CASH DIVIDEND DECLARATION

MARKET OVERVIEW
Bell Equipment Limited has successfully redirected resources across its
global markets to focus activity on the more buoyant construction equipment
sectors. Mining activity has continued to deteriorate across most markets,
particularly across Africa, much in line with lower commodity demand and
pricing.

Miners have delayed capital projects and have sweated their equipment
assets to a point that data indicates that mobile equipment fleets are now the
oldest they have been in more than a dozen years. Clearly any small
movement in commodity prices will trigger strong demand as safety,
productivity and lowest operating costs will drive mining demands.

As from the second half of 2016 both Bell manufacturing plants in South
Africa and Germany will have converted and will only be producing the new
and upgraded range of E-Series Dump Trucks which will match these
market needs.

During the second half of 2016, Bell Equipment Sales SA plans to conclude
a BBBEE transaction to promote gender inclusive economic transformation.

FINANCIAL RESULTS
The first half of 2016 would have shown an improvement in profitability
compared with the first six months of 2015 had it not been for the fraud and
mismanagement uncovered in the group's operation in the Democratic
Republic of the Congo (DRC) in the first quarter of 2016. The group right-
sizing and restructuring initiatives undertaken in early 2015, higher factory
throughput, favourable exchange rates and lower interest costs on well
managed borrowings all contributed to the rest of the business performing
better this year than in the first half of 2015. After the impact of the findings
in the DRC, the group reported a profit after tax of R64 million and earnings
per share of 67 cents for the first half, a decrease of 28% on the restated
results for the first half of 2015 (refer to note 11 of this announcement).
Revenue for the period was R3,1 billion, up 7% from R2,9 billion in the
same period last year.

A forensic investigation in the DRC resulted in the dismissal of the entire
local management team and a number of other employees. Further
investigations were carried out with the assistance of independent legal and
tax professionals to regularise the activities of this operation. Management is
being replaced and order has been restored. Of key focus during this period
has been the continuation of service to our customers in this difficult market.

Global markets have remained depressed throughout the first half of 2016
and the volume outlook remains unchanged. As a result of this production
volumes, working capital levels and group borrowings have remained stable
throughout the period. There was a positive cash flow for the period. The
Board has therefore thought it appropriate to resume the payment of
dividends and has declared an interim dividend of 15 cents per share.

OPERATIONS REVIEW
Having weathered the challenges encountered in the DRC in the first half of
2016, we look forward to renewed focus on the strategic imperatives of
reducing production costs, adding products and services to our distribution
networks in order to equip the business to deliver financially sustainable
results through the business cycle.

We continue to invest in upgrading our distribution infrastructure and will
complete the construction of a new parts distribution facility in Germany in
quarter 1 of 2017. Aftermarket sales are a critical element of the business,
particularly during tough market conditions when customers are delaying the
replacement of machines.

Political and economic instability and the increasing cost of doing business
in South Africa remains a key concern and the group continues to evaluate
the merits of increasing activities at its German facility, in closer proximity
to the higher volume northern hemisphere markets.

We expect the extremely tough trading conditions to continue. We will
continue to take all reasonable steps to best position the company to
withstand these challenges and to continue delivering on our customer
needs.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION      Unaudited   Unaudited     Unaudited   Unaudited   
as at 30 June 2016                                            30 June     30 June   31 December   1 January   
R'000                                                            2016        2015          2015        2015   
                                                                        Restated*     Restated*   Restated*   
ASSETS                                                                                                        
Non-current assets                                            910 954   1 063 351     1 032 725   1 011 357   
Property, plant and equipment                                 584 830     706 028       686 608     672 106   
Intangible assets                                             210 149     217 689       213 305     203 078   
Investments                                                       636         530           665         548   
Interest-bearing long-term receivables                         24 468      51 063        35 573      45 357   
Deferred taxation                                              90 871      88 041        96 574      90 268   
Current assets                                              3 763 865   3 814 085     3 855 778   3 483 147   
Inventory                                                   2 745 254   2 662 181     2 862 652   2 403 437   
Trade and other receivables and prepayments                   870 833     991 728       772 316     753 984   
Current portion of interest-bearing long-term receivables      63 571      60 906        77 331      42 519   
Other financial assets                                          2 787       3 207        12 783       2 071   
Non-current assets held for sale                                    -      11 550             -      11 850   
Taxation                                                       19 342      18 363        26 475      10 331   
Cash resources                                                 62 078      66 150       104 221     258 955   
TOTAL ASSETS                                                4 674 819   4 877 436     4 888 503   4 494 504   
EQUITY AND LIABILITIES                                                                                        
Capital and reserves                                        2 919 652   2 595 560     2 947 416   2 518 457   
Stated capital (Note 5)                                       230 567     230 567       230 567     230 567   
Non-distributable reserves                                    669 946     452 796       752 269     465 551   
Retained earnings                                           2 011 150   1 904 095     1 957 219   1 814 703   
Attributable to owners of Bell Equipment Limited            2 911 663   2 587 458     2 940 055   2 510 821   
Non-controlling interest                                        7 989       8 102         7 361       7 636   
Non-current liabilities                                       278 078     298 988       293 056     214 273   
Interest-bearing liabilities                                   83 314     155 484       117 695      87 161   
Repurchase obligations and deferred leasing income              2 587           -         3 820           -   
Deferred income                                                72 689      68 185        66 543      65 616   
Long-term provisions and lease escalation                      48 091      43 137        51 376      44 813   
Deferred taxation                                              71 397      32 182        53 622      16 683   
Current liabilities                                         1 477 089   1 982 888     1 648 031   1 761 774   
Trade and other payables                                      981 929   1 201 188     1 068 804   1 386 621   
Current portion of interest-bearing liabilities                77 185      96 204        90 344      40 304   
Current portion of repurchase obligations and                                                                 
deferred leasing income                                         1 114      20 583         1 042      34 980   
Current portion of deferred income                             79 080      61 362        71 774      59 079   
Current portion of provisions and lease escalation             58 207      50 506        53 783      65 941   
Other financial liabilities                                     6 846       3 952        20 593       4 404   
Taxation                                                       22 373      45 463        37 898      36 666   
Short-term interest-bearing debt                              250 355     503 630       303 793     133 779   
TOTAL EQUITY AND LIABILITIES                                4 674 819   4 877 436     4 888 503   4 494 504   
Number of shares in issue ('000)                               95 147      95 147        95 147      95 147   
Net asset value per share (cents)                               3 069       2 728         3 098       2 647   


* Refer to restatements of prior periods in note 11.

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS                          Unaudited     Unaudited       Unaudited   
for the period ended 30 June 2016                                          six months    six months   twelve months   
                                                                                ended         ended           ended   
                                                                              30 June       30 June     31 December   
R'000                                                                            2016          2015            2015   
                                                                                          Restated*       Restated*   
Revenue                                                                     3 097 762     2 898 009       5 901 431   
Cost of sales                                                             (2 367 911)   (2 199 741)     (4 556 343)   
Gross profit                                                                  729 851       698 268       1 345 088   
Other operating income                                                         75 027        90 610         184 523   
Expenses                                                                    (660 057)     (630 874)     (1 261 195)   
Profit from operating activities (Note 2)                                     144 821       158 004         268 416   
Net interest expense (Note 3)                                                (18 763)      (27 472)        (61 364)   
Profit before taxation                                                        126 058       130 532         207 052   
Taxation                                                                     (61 770)      (41 135)        (65 308)   
Profit for the period / year                                                   64 288        89 397         141 744   
Profit for the period / year attributable to:                                                                         
- Owners of Bell Equipment Limited                                             63 660        88 931         141 169   
- Non-controlling interest                                                        628           466             575   
Earnings per share (basic)(cents) (Note 4)                                         67            93             148   
Earnings per share (diluted)(cents) (Note 4)                                       67            93             148   
    
* Refer to restatements of prior periods in note 11.

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND                                                               
OTHER COMPREHENSIVE INCOME                                                  Unaudited     Unaudited       Unaudited   
for the period ended 30 June 2016                                          six months    six months   twelve months   
                                                                                ended         ended           ended   
                                                                              30 June       30 June     31 December   
R'000                                                                            2016          2015            2015   
                                                                                          Restated*       Restated*   
Profit for the period / year                                                   64 288        89 397         141 744   
Other comprehensive (loss) income                                                                                     
Items that may be reclassified subsequently to profit or loss:                                                        
Exchange differences arising during the period / year                        (89 781)      (13 222)         285 630   
Exchange differences on translating foreign operations                       (87 049)      (12 494)         272 161   
Exchange differences on foreign reserves                                      (2 732)         (728)          13 469   
Items that may not be reclassified subsequently to profit or loss:                432             -               -   
Surplus arising on revaluation of properties                                      600             -               -   
Taxation relating to surplus arising on revaluation of properties               (168)             -               -   
Other comprehensive (loss) income for the period / year, net of taxation     (89 349)      (13 222)         285 630   
Total comprehensive (loss) income for the period / year                      (25 061)        76 175         427 374   
Total comprehensive (loss) income attributable to:                                                                    
- Owners of Bell Equipment Limited                                           (25 689)        75 709         426 799   
- Non-controlling interest                                                        628           466             575   


* Refer to restatements of prior periods in note 11.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS                                   Unaudited    Unaudited       Unaudited   
for the period ended 30 June 2016                                               six months   six months   twelve months   
                                                                                     ended        ended           ended   
                                                                                   30 June      30 June     31 December   
R'000                                                                                 2016         2015            2015   
                                                                                              Restated*       Restated*   
Cash operating profit before working capital changes                               254 463      204 316         361 045   
Cash utilised in working capital                                                 (103 502)    (805 405)       (602 925)   
Cash generated from (utilised in) operations                                       150 961    (601 089)       (241 880)   
Net interest paid                                                                 (14 262)     (26 971)        (54 369)   
Taxation paid                                                                     (45 322)     (24 921)        (54 141)   
Net cash generated from (utilised in) operating activities                          91 377    (652 981)       (350 390)   
Net cash utilised in investing activities                                         (39 435)     (34 013)        (54 194)   
Net cash (utilised in) generated from financing activities                        (40 647)      124 338          79 836   
Net cash inflow (outflow)                                                           11 295    (562 656)       (324 748)   
Net (short-term interest-bearing debt) cash at beginning of the period / year    (199 572)      125 176         125 176   
Net short-term interest-bearing debt at end of the period / year                 (188 277)    (437 480)       (199 572)   
Comprising:                                                                                                               
Cash resources                                                                      62 078       66 150         104 221   
Short-term interest-bearing debt                                                 (250 355)    (503 630)       (303 793)   
Net short-term interest-bearing debt at end of the period / year                 (188 277)    (437 480)       (199 572)   


* Refer to restatements of prior periods in note 11.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the period ended 30 June 2016                            Attributable to owners of Bell Equipment Limited

                                                                                 Non-                                  Non-         Total   
                                                               Stated   distributable    Retained               controlling   capital and   
R'000                                                         capital        reserves    earnings       Total      interest      reserves   
Balance at 31 December 2014 - unaudited (restated)*           230 567         465 551   1 814 703   2 510 821         7 636     2 518 457   
Recognition of share-based payments                                 -             928           -         928             -           928   
Total comprehensive (loss) income for the period (restated)*        -        (13 222)      88 931      75 709           466        76 175   
Decrease in statutory reserves of foreign subsidiaries              -           (461)         461           -             -             -   
Balance at 30 June 2015 - unaudited (restated)*               230 567         452 796   1 904 095   2 587 458         8 102     2 595 560   
Recognition of share-based payments                                 -             657           -         657             -           657   
Total comprehensive income for the period (restated)*               -         298 852      52 238     351 090           109       351 199   
Transactions with non-controlling interest                          -               -         850         850         (850)             -   
Decrease in statutory reserves of foreign subsidiaries              -            (36)          36           -             -             -   
Balance at 31 December 2015 - unaudited (restated)*           230 567         752 269   1 957 219   2 940 055         7 361     2 947 416   
Recognition of share-based payments                                 -         (2 703)           -     (2 703)             -       (2 703)   
Total comprehensive (loss) income for the period                    -        (89 349)      63 660    (25 689)           628      (25 061)   
Increase in statutory reserves of foreign subsidiaries              -           9 729     (9 729)           -             -             -   
Balance at 30 June 2016 - unaudited                           230 567         669 946   2 011 150   2 911 663         7 989     2 919 652   


* Refer to restatements of prior periods in note 11.

ABBREVIATED NOTES TO THE UNAUDITED INTERIM RESULTS                                                                                     
for the period ended 30 June 2016                                                             Unaudited    Unaudited       Unaudited   
                                                                                             six months   six months   twelve months   
                                                                                                  ended        ended           ended   
                                                                                                30 June      30 June     31 December   
R'000                                                                                              2016         2015            2015   
                                                                                                            Restated        Restated   
1 BASIS OF PREPARATION                                                                                                                 
  The accounting policies applied in the preparation of this interim report are in terms of                                              
  International Financial Reporting Standards and are consistent with those applied in the                                               
  previous annual financial statements, except for the adoption of new and amended                                                       
  standards and the prior period adjustments as described below.      

  In the current period the group has adopted all of the new and amended standards relevant                                              
  to its operations and effective for annual reporting periods beginning 1 January 2016. The                                             
  adoption of these new and amended standards has not had any significant impact on the                                                  
  amounts reported in the interim report or the disclosures herein. 

  In the current period the group reclassified certain revenue transactions and related                                                  
  receivables balances from the South African manufacturing and logistics operation to the                                               
  Rest of Africa operation. The operating segment information for the previous periods has                                               
  been restated accordingly. Refer to note 7.  

  Due to fraud and mismanagement in the group's operation in the Democratic Republic of                                                  
  the Congo, Bell Equipment (DRC) SPRL, the group's results in prior periods have been                                                   
  restated. Comparative information has been restated and details of these adjustments are                                               
  disclosed in note 11. 

  The condensed consolidated interim report is prepared in accordance with the                                                           
  requirements of the JSE Limited's Listings Requirements for interim reports and the                                                    
  requirements of the Companies Act in South Africa. The Listings Requirements require                                                   
  interim reports to be prepared in accordance with the SAICA Financial Reporting Guides as                                              
  issued by the Accounting Practices Committee, the Financial Reporting Pronouncements                                                   
  as issued by the Financial Reporting Standards Council and IAS 34 - Interim Financial                                                  
  Reporting . The preparation of this interim report was supervised by the Group Finance                                                 
  Director, KJ van Haght CA (SA).   

2 PROFIT FROM OPERATING ACTIVITIES                                                                                                     
  Profit from operating activities is arrived at after taking into account:                                                              
  Income                                                                                                                                 
  Currency exchange gains                                                                         268 416      117 158         239 526   
  Decrease in warranty provision                                                                        -       17 964          21 330   
  Deferred warranty income                                                                         24 730       25 350          51 627   
  Import duty rebates                                                                              22 223       30 190          57 153   
  Royalties                                                                                         1 385        2 139           4 447   
  Net surplus on disposal of non-current assets held for sale                                           -            -           7 073   
  Net surplus on disposal of property, plant and equipment and intangible assets                        -        5 766           6 041   
  Expenditure                                                                                                                            
  Amortisation of intangible assets                                                                17 026        8 833          25 374   
  Amounts written off as uncollectible                                                             10 778          420          11 924   
  Auditors' remuneration - audit and other services                                                 5 499        5 324           9 683   
  Currency exchange losses                                                                        294 668       92 173         234 940   
  Depreciation of property, plant and equipment                                                    50 626       69 770         143 304   
  Increase in provision for doubtful debts                                                          6 437       15 488           6 412   
  Increase in warranty provision                                                                    2 321            -               -   
  Operating lease charges                                                                                                                
  - equipment and motor vehicles                                                                   18 829       19 669          40 609   
  - land and buildings                                                                             45 994       44 881          94 859   
  Research expenses (excluding staff costs)                                                        16 877       13 428          29 978   
  Staff costs (including directors' remuneration)                                                 608 306      634 433       1 251 422   

3 NET INTEREST EXPENSE                                                                                                                 
  Interest expense                                                                                 27 100       34 422          77 384   
  Interest income                                                                                 (8 337)      (6 950)        (16 020)   
  Net interest expense                                                                             18 763       27 472          61 364   


4 EARNINGS PER SHARE                                                                                                    
  Basic earnings per share is arrived at as follows:                                                                      
  Profit for the period attributable to owners of Bell Equipment Limited (R'000)                   63 660       88 931         141 169   
  Weighted average number of ordinary shares in issue during the period ('000)                     95 147       95 147          95 147   
  Earnings per share (basic) (cents)                                                                   67           93             148   
  Diluted earnings per share is arrived at as follows:                                                                                   
  Profit for the period attributable to owners of Bell Equipment Limited (R'000)                   63 660       88 931         141 169   
  Fully converted weighted average number of shares ('000) *                                       95 147       95 147          95 147   
  Earnings per share (diluted) (cents)                                                                 67           93             148   
  * There has been no dilutive effect in the current period as employee                                                                  
  share option exercise prices exceeded the average market price.    

  Headline earnings per share is arrived at as follows:                                                                                  
  Profit for the period attributable to owners of Bell Equipment Limited (R'000)                   63 660       88 931         141 169   
  Net surplus on disposal of property, plant and equipment, intangible assets and                                                        
  non-current assets held for sale (R'000)                                                              -      (5 766)        (13 114)   
  Taxation effect of net surplus on disposal of property, plant and equipment, intangible                                                
  assets and non-current assets held for sale (R'000)                                                   -        1 614           3 672   
  Headline earnings (R'000)                                                                        63 660       84 779         131 727   
  Weighted average number of ordinary shares in issue during the period ('000)                     95 147       95 147          95 147   
  Headline earnings per share (basic) (cents)                                                          67           89             138   
  Diluted headline earnings per share is arrived at as follows:                                                                          
  Headline earnings calculated above (R'000)                                                       63 660       84 779         131 727   
  Fully converted weighted average number of shares ('000)                                         95 147       95 147          95 147   
  Headline earnings per share (diluted) (cents)                                                        67           89             138   


5 STATED CAPITAL                                                                                                            
  Authorised                                                                                                                  
  100 000 000 (June 2015: 100 000 000) ordinary shares of no par value                                                        
  Issued                                                                                                                      
  95 146 885 (June 2015: 95 146 885) ordinary shares of no par value                              230 567      230 567         230 567   

6 CAPITAL EXPENDITURE COMMITMENTS                                                                                                      
  Contracted                                                                                        2 822        3 232           3 827   
  Authorised, but not contracted                                                                   91 759       36 419          46 260   
  Total capital expenditure commitments                                                            94 581       39 651          50 087   
  This capital expenditure is to be financed from internal resources and                                                      
  long-term facilities.   

7 ABBREVIATED SEGMENTAL ANALYSIS                                                                                            
  Information regarding the group's reportable segments is presented below.                                                   
  Information reported to the group's chief operating decision maker for purposes of resource                                 
  allocation and assessment of segment performance is focused on geographical areas.                                          
  Each reportable segment derives its revenues from the sale of goods (machines and parts)                                    
  and related services and rental income. The accounting policies of the reportable                                           
  segments are the same as the group's accounting policies.                                                                   


                                                                                                             Operating                               
                                                                                               Revenue   profit (loss)        Assets   Liabilities   
                                                                                                 R'000           R'000         R'000         R'000   
  June 2016                                                                                                                                          
  South African sales operation                                                              1 318 376          58 459     1 126 871       765 891   
  South African manufacturing and logistics operation                                        1 599 064         127 490     2 612 221     1 053 258   
  European operation                                                                         1 238 232          44 617       964 033       539 861   
  Rest of Africa operation                                                                     452 760       (123 175)       699 970       504 061   
  North American operation                                                                     363 047          24 206       302 405       237 543   
  All other operations                                                                               -        (60 204)     1 215 927       124 686   
  Inter-segmental eliminations *                                                           (1 873 717)          73 428   (2 246 608)   (1 470 133)   
  Total - unaudited                                                                          3 097 762         144 821     4 674 819     1 755 167   
  June 2015                                                                                                                                          
  South African sales operation                                                              1 247 877          44 591     1 181 268       854 281   
  South African manufacturing and logistics operation (restated) **                          1 753 242          43 507     2 418 131     1 048 779   
  European operation                                                                           919 819          40 800     1 016 512       669 574   
  Rest of Africa operation (restated) **                                                       602 147          26 359       862 123       694 992   
  North American operation                                                                     244 989           5 257       155 273       103 007   
  All other operations                                                                               -         (6 319)     1 074 794       135 393   
  Inter-segmental eliminations *                                                           (1 870 065)           3 809   (1 830 665)   (1 224 150)   
  Total - unaudited                                                                          2 898 009         158 004     4 877 436     2 281 876   
  December 2015                                                                                                                                      
  South African sales operation                                                              2 435 925          70 112     1 155 685       822 850   
  South African manufacturing and logistics operation (restated) **                          3 571 649         148 671     2 556 304     1 109 465   
  European operation                                                                         1 806 920          65 273     1 130 113       692 910   
  Rest of Africa operation (restated) **                                                     1 127 479         (1 714)       909 980       785 352   
  North American operation                                                                     560 413             301        95 996        29 152   
  All other operations                                                                               -        (40 360)     1 342 185       153 523   
  Inter-segmental eliminations *                                                           (3 600 955)          26 133   (2 301 760)   (1 652 165)   
  Total - unaudited                                                                          5 901 431         268 416     4 888 503     1 941 087   
  
  * Inter-segmental eliminations above relate to the following:                                                                                      
  i) Revenue - the elimination of intra-group sales transactions, mainly sales                                                                       
  from the South African manufacturing and logistics operation, to the distribution                                                                  
  operations.                                                                                                                                        
  ii) Operating profit (loss) - the elimination of profit (loss) on intra-group                                                                      
  transactions, mainly sales transactions from the South African manufacturing                                                                       
  and logistics operation to the distribution operations, where the inventory has                                                                    
  not yet been on-sold by the distribution operations to a third party at period end.                                                                
  iii) Assets and liabilities - the intra-group transactions result in intra-group                                                                   
  receivables and payables balances and furthermore intra-group loans are in                                                                         
  place between certain group operations. These are eliminated on consolidation.                                                                     
 
  ** In the current period the group reclassified certain revenue transactions and                                                                   
  related receivables balances from the South African manufacturing and logistics                                                                    
  operation to the Rest of Africa operation. Previously revenue from certain customers                                                               
  in Africa was reported to the group's chief operating decision maker under the South                                                               
  African manufacturing and logistics operation. This is now reported under the Rest                                                                 
  of Africa operation. The operating segment information for the previous periods has                                                                
  been restated accordingly. The effect of these reclassifications is presented below.                                                               
  Refer adjustment (a). This reclassification had no impact on the operating profit                                                                  
  (loss) of the segments.                                                                                                                            
  The segment information for the Rest of Africa operation has been further adjusted                                                                 
  for the prior period restatements as disclosed in note 11. Refer adjustment (b) below.                                                             
                                                                                                             Operating                               
                                                                                               Revenue   profit (loss)        Assets   Liabilities   
                                                                                                 R'000           R'000         R'000         R'000   
  June 2015                                                                                                                                          
  South African manufacturing and logistics operation                                                                                                
  As previously reported                                                                     1 889 229          43 507     2 448 233     1 048 779   
  Adjustment (a)                                                                             (135 987)               -      (30 102)             -   
  Restated - unaudited                                                                       1 753 242          43 507     2 418 131     1 048 779   
  Rest of Africa operation                                                                                                                           
  As previously reported                                                                       466 160          35 706       790 491       622 912   
  Adjustment (a)                                                                               135 987               -        30 102             -   
  Adjustment (b)                                                                                     -         (9 347)        41 530        72 080   
  Restated - unaudited                                                                         602 147          26 359       862 123       694 992   
  
  December 2015                                                                                        
  South African manufacturing and logistics operation                                                  
  As previously reported                                                                     3 782 318         148 671     2 558 768     1 109 465   
  Adjustment (a)                                                                             (210 669)               -       (2 464)             -   
  Restated - unaudited                                                                       3 571 649         148 671     2 556 304     1 109 465   
  Rest of Africa operation                                                                                                                           
  As previously reported                                                                       916 810          21 634       872 073       693 034   
  Adjustment (a)                                                                               210 669               -         2 464             -   
  Adjustment (b)                                                                                     -        (23 348)        35 443        92 318   
  Restated - unaudited                                                                       1 127 479         (1 714)       909 980       785 352   


                                                                                                    Unaudited    Unaudited       Unaudited   
                                                                                                   six months   six months   twelve months   
                                                                                                        ended        ended           ended   
                                                                                                      30 June      30 June     31 December   
8 CONTINGENT LIABILITIES                                                                                 2016         2015            2015   
  8.1 The group has assisted customers with the financing of equipment purchased                                                             
  through a financing venture with WesBank, a division of FirstRand Bank Limited.                                                            
  In respect of the different categories of financing provided by WesBank, the group                                                         
  carries certain credit risks. These are considered to be financial guarantee contracts.                                                    
  The group is liable for all credit risk and therefore the full balance due to WesBank                                                      
  by default customers with regard to Bell-backed deals and a portion of the credit risk                                                     
  and a portion of the balance due to WesBank by default customers with regard to                                                              
  Bell-shared risk deals. In terms of the Bell-shared risk deals the group's exposure is                                                     
  calculated as a percentage of the net selling price of the equipment.                                                                      
  At period end the group's credit risk exposure to WesBank under Bell-backed deals                                                          
  for which the group carries all the credit risk totalled                                            196 930      169 823         211 581   
  At period end the group's credit risk exposure to WesBank under Bell-shared risk deals                                                     
  for which the group carries a portion of the credit risk totalled                                     1 154        2 590           1 997   
  In the event of default, the equipment financed would be recovered and it is estimated                                                     
  that on re-sale the equipment would presently realise the following                                 337 331      206 317         319 208   
  Net contingent liability   
                                                                                                            -            -               -   
  The group has entered into similar shared risk arrangements with various other                                                             
  institutions. These arrangements are first-loss undertakings and the group's exposure                                                      
  remains fixed until the capital is repaid. These are considered to be financial                                                            
  guarantee contracts.                                                                                                                       
  At period end the group's credit risk exposure to these financial institutions                                                             
  totalled                                                                                              4 285       20 165          14 566   
  In the event of default, the equipment financed would be recovered and it is estimated                                                     
  that on re-sale the equipment would presently realise the following                                   6 650       31 029          27 839   
                                                                                                      (2 365)     (10 864)        (13 273)   
  Less: provision for non-recovery                                                                    (2 523)      (1 188)           (262)   
  Net contingent liability                                                                                  -            -               -   
  
  Where customers are in arrears with these financial institutions and there is a shortfall                                                  
  between the estimated realisation values of the equipment and the balances due by                                                          
  the customers to these financial institutions, an assessment of any additional security                                                    
  is done and a provision for any residual credit risk is made on a deal-by-deal basis.  
  
  8.2 The repurchase of equipment sold to customers and financial institutions has been                                                      
  guaranteed by the group for an amount of                                                                418          853             945   
  In the event of repurchase, it is estimated that the equipment would presently                                                             
  realise                                                                                               1 845        3 192           3 404   
  Net contingent liability                                                                                  -            -               -   
  
  This relates to sales transactions with buy-back obligations where the probability of                                                      
  return of the equipment by the customer at the end of the buy-back period has                                                              
  been assessed as remote and revenue has been recognised upfront. A provision                                                               
  for residual value risk is recognised subsequent to initial recognition of the sale                                                        
  on a deal-by-deal basis, to the extent that the assessed market value of the equipment                                                     
  is less than the cost of meeting the buy-back obligation.   
  
  8.3 The residual values of certain equipment sold to financial institutions have been                                                      
  guaranteed by the group. The group's exposure is limited to the difference between                                                         
  the group's guaranteed amount and the financial institution's predetermined estimate.                                                      
  In the event of a residual value shortfall on this equipment, the group would be exposed to                                                
  a maximum amount of                                                                                   9 981        8 611          28 335   
  Less: provision for residual value risk                                                                   -        (525)               -     
  Net contingent liability                                                                              9 981        8 086          28 335   
  
  In certain other transactions the group has paid cash collateral as security for the residual                                              
  value risk. This cash collateral is recognised as retention deposits under interest-bearing                                                
  long-term receivables. In the event of a residual value shortfall on this equipment, the group                                             
  would be exposed to a maximum amount equal to the cash collateral of                                      -        2 903           2 072   
  Less: impairment of retention deposits                                                                    -      (2 008)         (2 072)   
  Net retention deposits and net contingent liability                                                       -          895               -
     
  This relates to sales transactions to financial institutions which lease the equipment to                                                  
  customers for an agreed lease term. In certain cases, the group has a remarketing                                                          
  agreement with the institution for the disposal of the equipment returned after the lease                                                  
  term, but in all instances the group's risk is limited to the residual value risk described                                                
  above.  
                                                                                                                                     
  The provision for residual value risk and the impairment of retention deposits are based                                                   
  on an assessment of the market value of the equipment.                                                                                     
  
  
9 RELATED PARTY TRANSACTIONS                                                                                            
  Information regarding transactions with significant related parties is presented below.                                 
  Transactions are carried out on an arms length basis.                                                                   
  Shareholders                                                                                                            
  John Deere Construction and Forestry Company                                                                            
  - sales                                                                                               9 208       56 987         106 458   
  - purchases                                                                                         210 923      377 131         565 492   
  - amounts owing to                                                                                  129 247      128 351          51 961   
  - amounts owing by                                                                                    1 265       25 375          25 216   


10 FINANCIAL INSTRUMENTS
   Categories of financial instruments included in the statement of financial position:

   - Loans and receivables at amortised cost comprising interest-bearing long-term
   receivables, trade and other receivables and cash resources.
   The directors consider that the carrying amount of loans and receivables at amortised
   cost approximates their fair value. (Level 3 fair value measurement)

   - Financial liabilities at amortised cost comprising interest-bearing liabilities, trade
   and other payables and short-term interest-bearing debt.
   The directors consider that the carrying amount of financial liabilities at amortised
   cost approximates their fair value. (Level 3 fair value measurement)

   - Financial assets and liabilities carried at fair value through profit or loss include
   forward foreign exchange contracts and fair value is determined based on a Level 2
   fair value measurement. Level 2 fair value measurements are those derived from
   inputs other than quoted prices and is based on observable forward exchange rates
   at period end.

   - Available for sale financial asset comprising an unlisted equity investment at cost
   for which a reliable fair value could not be determined.

11 PRIOR PERIOD RESTATEMENTS
   As a result of fraud and mismanagement of the group's operation in
   the Democratic Republic of the Congo which was uncovered in the
   current period, the group's results in prior periods have been restated.
   This is due to the fact that:
   1) A finance lease receivable had been discounted with a financial
   institution with recourse to the group and had been derecognised.
   The outstanding receivable has been re-instated and the corresponding
   liability to the financial institution recognised (adjustment (a)).

   2) Employees taxation, corporate income taxation and related penalties
   and interest, as well as certain other less significant expenses, had
   been understated in prior periods. Accordingly, the group's comparative
   information has been restated for these items (adjustment (b)).

                                                                   As previously                                                   
                                                                        reported   Adjustment (a)   Adjustment (b)      Restated   
   June 2015                                                               R'000            R'000            R'000         R'000   
   Statement of financial position                                                                                                 
   - Interest-bearing long-term receivables                               33 495           17 568                -        51 063   
   - Current portion of interest-bearing long-term receivables            36 944           23 962                -        60 906     
   Net increase in assets - unaudited                                                      41 530                -                 
  
   - Non-distributable reserves                                          455 011                -          (2 215)       452 796   
   - Retained earnings                                                 1 932 430                -         (28 335)     1 904 095   
   - Interest-bearing liabilities                                        137 916           17 568                -       155 484   
   - Trade and other payables                                          1 181 151                -           20 037     1 201 188   
   - Current portion of interest-bearing liabilities                      72 242           23 962                -        96 204   
   - Taxation liability                                                   34 950                -           10 513        45 463      
   Net increase in equity and liabilities - unaudited                                      41 530                -                 
   
   Statement of profit or loss                                                                                                     
   - Expenses                                                          (621 527)                -          (9 347)     (630 874)   
   - Interest paid                                                      (30 909)          (1 740)          (1 773)      (34 422)   
   - Interest received                                                     5 210            1 740                -         6 950   
   - Taxation                                                           (40 676)                -            (459)      (41 135)   
   Net decrease in profit - unaudited                                                           -         (11 579)                 
   
   Statement of profit or loss and other comprehensive income                                                                      
   - Exchange differences arising during the period / year              (12 125)                -          (1 097)      (13 222)   
   
   Statement of cash flows                                                                                                         
   - Net cash utilised in operating activities                         (611 451)         (41 530)                -     (652 981)   
   - Net cash generated from financing activities                         82 808           41 530                -       124 338   
   
   Earnings per share (basic)                                                106                -             (13)            93   
   Earnings per share (diluted)                                              106                -             (13)            93   
   
   December 2015                                                                                                                   
   Statement of financial position                                                                                                 
   - Interest-bearing long-term receivables                               29 763            5 810                -        35 573   
   - Trade and other receivables and prepayments                         777 903          (2 947)          (2 640)       772 316   
   - Current portion of interest-bearing long-term receivables            41 759           35 572                -        77 331   
   - Taxation asset                                                       26 827                -            (352)        26 475     
   Net increase (decrease) in assets - unaudited                                           38 435          (2 992)                 
  
   - Non-distributable reserves                                          765 277                -         (13 008)       752 269   
   - Retained earnings                                                 2 001 086                -         (43 867)     1 957 219   
   - Interest-bearing liabilities                                        111 885            5 810                -       117 695   
   - Trade and other payables                                          1 014 921                -           53 883     1 068 804   
   - Current portion of interest-bearing liabilities                      57 719           32 625                -        90 344   
   Net increase (decrease) in equity and liabilities - unaudited                           38 435          (2 992)                 
   
   Statement of profit or loss                                                                                                     
   - Cost of sales                                                   (4 554 157)                -          (2 186)   (4 556 343)   
   - Expenses                                                        (1 240 033)                -         (21 162)   (1 261 195)   
   - Interest paid                                                      (70 787)          (4 134)          (2 463)      (77 384)   
   - Interest received                                                    11 886            4 134                -        16 020   
   - Taxation                                                           (64 008)                -          (1 300)      (65 308)   
   Net decrease in profit - unaudited                                                           -         (27 111)    
   
   Statement of profit or loss and other comprehensive income                                                                    
   - Exchange differences arising during the period / year               297 520                -         (11 890)       285 630   
  
   Statement of cash flows                                                                                                         
   - Net cash utilised in operating activities                         (311 955)         (38 435)                -     (350 390)   
   - Net cash generated from financing activities                         41 401           38 435                -        79 836   
  
   Earnings per share (basic)                                                177                -             (29)           148   
   Earnings per share (diluted)                                              177                -             (29)           148   
  
   January 2015                                                                                                                    
   Statement of financial position                                                                                                 
   - Non-distributable reserves                                          466 669                -          (1 118)       465 551   
   - Retained earnings                                                 1 831 459                -         (16 756)     1 814 703   
   - Trade and other payables                                          1 376 773                -            9 848     1 386 621   
   - Taxation liability                                                   28 640                -            8 026        36 666   
   Net increase in equity and liabilities - unaudited                                           -                -                 

12 POST FINANCIAL POSITION EVENTS
   No fact or circumstance material to the appreciation of this
   interim report has occurred between 30 June 2016 and the
   date of this report.

13 CASH DIVIDEND DECLARATION
   Notice is hereby given that the directors have declared a gross interim
   cash dividend of 15 cents per ordinary share for the six-month period
   ended 30 June 2016, payable to ordinary shareholders in accordance
   with the timetable below. 

   The interim net dividend is 12.75 cents per share for ordinary
   shareholders who are not exempt from dividends tax. The dividend
   withholding tax rate is 15 per cent. 

   The dividend has been declared from income reserves.

   The company's income tax reference number is 9022169206.

   The issued share capital at the declaration date is 95 146 885
   ordinary shares.

   The salient dates for the dividend will be as follows:
                                                                                     2016
   Last day of trade to receive a dividend                            Tuesday, 18 October
   Shares commence trading "ex" dividend                            Wednesday, 19 October
   Record date                                                         Friday, 21 October
   Payment date                                                        Monday, 24 October

   Share certificates may not be dematerialised or rematerialised
   between Wednesday, 19 October 2016 and Friday,
   21 October 2016, both days inclusive.

   By order of the Board
   20 September 2016

Directors
Non-executive
JR Barton* (Chairman), AJ Bell, DB Crandon, B Harie*, DH Lawrance*,
TO Tsukudu*, HR van der Merwe*
*Independent
Appointed: DB Crandon was appointed as director
on 1 June 2016.
Retired: DJJ Vlok retired on 5 May 2016
Executive
GW Bell (Group Chief Executive), KJ van Haght (Group Finance
Director), L Goosen (Chief Operating Officer)

Company Secretary
D McIlrath

Registered Office
13 - 19 Carbonode Cell Road, Alton, Richards Bay,
3900

Transfer Secretaries
Link Market Services South Africa Proprietary Ltd,
19 Ameshoff Street, Johannesburg, 2001

Sponsor
Rand Merchant Bank
(a division of FirstRand Bank Limited)
1 Merchant Place, Cnr Fredman Drive and
Rivonia Road, Sandton, 2196

Release date: 22 September 2016

www.bellequipment.com



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