To view the PDF file, sign up for a MySharenet subscription.

BARLOWORLD LIMITED - Trading update

Release Date: 06/11/2017 14:30
Code(s): BAW BAWP     PDF:  
Wrap Text
Trading update

Barloworld Limited
(Incorporated in the Republic of South Africa)
(Registration number 1918/000095/06)
(Income Tax Registration number 9000/051/71/5)
(JSE Share code: BAW)
(Ordinary share ISIN: ZAE000026639)
(Preference share code: BAWP)
(Preference share ISIN: ZAE000026647)
(Namibian Stock Exchange share code: BWL)
(“Barloworld” or “the Company”)

TRADING UPDATE

Group Overview
The group produced a resilient result for the year ended 30 September 2017 despite the tough
trading conditions, particularly in South Africa.

Investors are referred to the SENS announcement relating to the strategic review issued on
1 September 2017 where it was indicated that the group had entered into preliminary discussions
with an interested party for the potential sale of the Equipment Iberia business. The group will be
reporting the results of Equipment Iberia as a discontinued operation and assets and liabilities held
for sale in the financial statements for the year ended 30 September 2017.

Equipment
Equipment southern Africa’s operating performance has seen a significant improvement in the year
following a rebound in mining and infrastructure demand.

Our joint venture in the Katanga province of the Democratic Republic of Congo generated a strongly
improved result driven by improved commodity prices and following the resumption of mining
activity by one of our major mining customers.

In Equipment Russia revenue for the year improved significantly in US Dollar terms, driven by
improved mining and after sales activity. The mining project pipeline remains strong going into
2018.

Activity in the discontinued Equipment Iberia operations remained at low levels, with an operating
loss, mainly as a result of restructuring costs.

Automotive and Logistics
The Automotive division produced pleasing results despite challenging market conditions, with both
revenue and operating profit exceeding the 2016 levels.

Revenue in Motor Trading was negatively impacted by the sale and closure of two BMW dealerships
and the closure of three General Motors (GM) dealerships following GM’s announced exit from
South Africa. These closures further negatively impacted non-operating and capital costs due to
related impairments.

Trading levels in Logistics were up on last year due to the full year impact of acquisitions and new
contracts secured in 2016. However, the operating performance was well below last year. The
loss of a major customer in the KLL business negatively impacted operating profit and further
resulted in significant non-operating and capital losses related to the impairment of goodwill and
intangibles.
Headline earnings per share (HEPS)/Earnings per share (EPS) guidance

We expect that HEPS from continuing operations for the year ended 30 September 2017 will be
between 10%-20% higher than the adjusted reported HEPS from continuing operations for the
previous financial year ending 30 September 2016 of 840.9 cents. This translates to an expected
HEPS from continuing operations range of between 925.0 cents and 1 009.1 cents for the period.

We expect that HEPS, including both continuing and discontinued operations, for the year ended 30
September 2017 will be between 3%-7% higher than the reported HEPS for the previous financial
year ended 30 September 2016 of 838.1. This translates to an expected HEPS range of between
863.2 cents and 896.8 cents for the period.

We expect that EPS from continuing operations for the year ended 30 September 2017 will be
between 1%-5% higher than the adjusted reported EPS from continuing operations for the previous
financial year ending 30 September 2016 of 876.8 cents. This translates to an expected EPS from
continuing operations range of between 885.6 cents and 920.6 cents. Earnings in the current year
were negatively impacted by non-operating and capital item losses compared to gains in the prior
year.

We expect that EPS, including both continuing and discontinued operations, for the year ended 30
September 2017 will be between 10%-20% lower than the reported EPS for the previous financial
year ended 30 September 2016 of 890.5. This translates to an expected EPS range of between 712.4
and 801.5 cents for the period.

Cash flow and net debt

Despite a strong reduction in working capital in the current year, net cash inflows before financing
activities reduced compared to last year but are well up on previous estimates. Net debt levels have
decreased significantly for the second consecutive year freeing up capital for future growth
opportunities in line with the strategic objectives outlined at the half year.

Shareholders are advised that the financial information and this trading statement have not been
audited, reviewed or reported on by the group’s external auditors.

The group’s results for the year ended 30 September 2017 are scheduled to be announced on the
Stock Exchange News Service on or about 20 November 2017.


Sandton                                              Sponsor:
06 November 2017                                     J.P. Morgan Equities South Africa (Pty) Ltd.

About Barloworld

Barloworld is a distributor of leading international brands providing integrated rental, fleet
management, product support and logistics solutions. The core divisions of the group comprise
Equipment (earthmoving and surface preparation equipment, drills and power systems), Automotive
(car rental, motor retail, fleet services, used vehicles and disposal solutions) and Logistics (logistics
management and supply chain optimisation). We offer flexible, value adding, innovative business
solutions to our customers backed by leading global brands. The brands we represent on behalf of
our principals include Caterpillar, Hyster, Avis, Budget, Audi, BMW, Ford, Jaguar Land Rover, Mazda,
Mercedes-Benz, Toyota, Volkswagen, Challenger, Massey Ferguson and others.
Barloworld has a proven track record of long-term relationships with global principals and
customers. We have an ability to develop and grow businesses in multiple geographies including
challenging territories with high growth prospects. One of our core competencies is an ability to
leverage systems and best practices across our chosen business segments. As an organisation we are
committed to sustainable development and playing a leading role in empowerment and
transformation. The company was founded in 1902 and currently has operations in over 20
countries around the world with 78% of just over 20 000 employees in South Africa.

Corporate information
Registered office and business address
Barloworld Limited, 180 Katherine Street
PO Box 782248, Sandton, 2146, South Africa
Tel +27 11 445 1000
Email invest@barloworld.com
Instinctif: Hartwell Tshuma, Tel +27 11 447 3030
E-mail hartwell.tshuma@instinctif.com

Date: 06/11/2017 02:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

Share This Story