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Condensed unaudited consolidated results for the six months ended 31 Dec 2017 and Dividend Declaration
BOWLER METCALF LIMITED
(Registration number 1972/005921/06)
Share code: BCF ISIN number: ZAE000030797
(“Bowler Metcalf” or “the Company”)
CONDENSED UNAUDITED CONSOLIDATED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2017 AND DIVIDEND DECLARATION
HEPS + 54% Interim Dividends 20.48c per share
CONDENSED STATEMENT OF FINANCIAL POSITION
R mil % R mil
31/12/17 Change 30/06/17
Non-current Assets 156.8 (61) 401.2
Property. plant & equipment 145.8 147.7
Investment properties 5.5 5.7
Investment in associates - 162.3
Related party loan - 79.9
Deferred tax 0.7 0.8
Intangible assets 4.8 4.8
Current Assets 358.6 - 357.3
Inventories 74.7 82.4
Trade and other receivables 101.6 110.6
Prepayments 20.0 12.3
Cash and cash equivalents 159.2 152.0
Taxation 3.1 -
Assets held for sale 255.2 -
Investment in associate 175.4 -
Related party loan 79.8 -
Total Assets 770.6 2 758.5
Total Equity 692.4 5 661.2
Non-current liabilities 44.3 11 39.8
Deferred Tax 44.3 39.8
Current Liabilities 33.9 (41) 57.5
Trade and other payables 33.7 54.5
Taxation 0.2 3.0
Total Equity & Liabilities 770.6 2 758.5
CONDENSED STATEMENT OF CHANGES IN EQUITY (R mil)
Share Retained Treasury Total
Capital Earnings Shares Equity
30 Jun 16 21.5 707.6 (30.1) 699.0
Purchase of treasury shares - - (5.5) (5.5)
Comprehensive loss - (1.1) - (1.1)
Dividends - (31.2) - (31.2)
30 Jun 17 21.5 675.3 (35.6) 661.2
Comprehensive Income - 50.1 - 50.1
Dividends - (18.9) - (18.9)
Cancellation of issued share
Capital/treasury shares (5.5) - 5.5 -
31 Dec 17 16.0 706.5 (30.1) 692.4
CONDENSED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 31
DECEMBER 2017
31/12/17 % 31/12/16
R mil Change R mil
Continuing operations
Revenue 283.8 (3) 291.7
Other income 0.4 0.5
Operating costs (152.7) (166.6)
Depreciation (9.8) (12.6)
Rent & property finance (3.6) (1.3)
Staffing costs (72.8) (66.7)
Profit from operations 45.3 1 45.0
Net finance income 6.7 6.0
- income 6.7 6.0
Net profit before tax 52.0 2 51.0
Taxation (charge) / credit (15.5) (14.2)
Profit for the period from continuing operations 36.5 (1) 36.8
Discontinued operations
Share of profit/(loss) of associate 13.0 (20.1)
Impairment of investment in associate - (72.3)
Net finance income from associate 4.8 3.6
Net profit / (loss) before tax 17.8 120 (88.8)
Taxation (charge) / credit (4.3) 15.2
Profit / (loss) for the period from discontinued
operations 13.6 118 (73.6)
Attributable to equity holders of parent 50.1 236 (36.8)
Earnings / (Losses) & diluted earnings / (losses)
per share (c) CPS CPS
- Continuing operations 44.5 - 44.4
- Discontinued operations 16.5 (88.9)
61.0 237 (44.4)
NOTES TO THE CONDENSED STATEMENT OF COMPREHENSIVE INCOME
R mil R mil
Related party transactions
SoftBev (Pty) Ltd (associate)
- finance income 4.8 3.6
Quality Beverages 2000 (Pty) Ltd (other related
party)
- revenue 20.7 29.1
- rental income 2.6 2.3
CONDENSED STATEMENT OF CASH FLOWS
Operating Activities 17.9 4.3
Profit / (Loss) before tax 69.8 (37.8)
Non-cash items (3.3) 104.9
Working capital changes (8.6) (29.6)
Taxation paid (21.1) (18.0)
Dividends paid (18.9) (15.2)
Investing Activities (10.7) (50.9)
Property plant and equipment - additions (7.6) (27.6)
Property plant and equipment - disposals 0.1 -
Movement in advance payments (3.3) -
Repayment / (Advance) on related party loans 0.1 (23.3)
Net increase / (decrease) for the period 7.2 (46.6)
Opening balance 152.0 158.2
Closing balance 159.2 111.6
Comprising:
Cash & cash equivalents 159.2 111.6
Net cash flows from discontinued operations
included in above cash flow
Operating Activities 0.6 2.7
Investing Activities 0.1 (23.3)
0.7 (20.6)
HEADLINE EARNINGS
R mil % R mil
31/12/17 Change 31/12/16
Continuing operations
Profit for the period from continuing operations 36.5 36.8
Profit on disposal of plant & equipment (0.1) -
Profit (0.1) -
Tax - -
Headline earnings - continuing operations 36.4 (1) 36.8
Discontinued operations
Profit / (Loss) for the period from discontinued
operations 13.6 (73.6)
Impairment of investment in associate - 56.1
Loss - 72.3
Tax - (16.2)
Impairment within equity accounted profits - 13.4
Loss - 13.4
Tax - -
Headline earnings / (loss) - discontinued
operations 13.6 432 (4.1)
Headline earnings - attributable to holders of the
parent 50.0 53 32.7
BASIC & DILUTED HEADLINE EARNINGS PER SHARE (c)
CPS CPS
Continuing operations
Earnings per share (c) 44.5 44.4
Profit on disposal of plant & equipment (c) (0.1) -
Basic & diluted headline earnings per share-
continuing operations (c) 44.4 - 44.4
Discontinued operations
Earnings / (Loss) per share (c) 16.5 (88.9)
Impairment of investment in associate per share (c) - 83.9
Basic & diluted headline earnings (loss) per
share-discontinued operations (c) 16.5 (4.9)
Basic & diluted headline earnings per share -
attributable to holders of the parent (c) 60.9 54 39.5
ADDITIONAL INFORMATION
Dividend / share paid (c) 23.10 18.40
Ordinary dividend proposed (c) 20.48 19.32
Dividend cover (times) 2.97 2.04
Weighted shares in issue (mil) 82.00 82.80
Capital commitments (Rmil) 10.8 1.70
Closing share price (cents) 750 880
CONDENSED SEGMENTAL ANALYSIS
Plastic Discontinued Property Holding & Unallocated/
(Rmil) Packaging Beverages Investment Investment Eliminations Total
Revenue
Jul-Dec 16 289.4 - 2.4 - - 291.7
- total revenue 289.4 - 11.4 - - 300.7
- intersegment - - (9.0) - - (9.0)
Jul-Dec 17 281.2 - 2.6 - - 283.8
- total revenue 281.2 - 12.1 - - 293.3
- intersegment - - (9.5) - - (9.5)
Operating Profit
Jul-Dec 16 37.5 (92.4) 8.5 - (1.0) (47.4)
- continuing operations 37.5 - 8.5 - (1.0) 45.0
- discontinued operations - (92.4) - - - (92.4)
Jul-Dec 17 38.2 13.0 8.5 (0.4) (1.0) 58.3
- continuing operations 38.2 - 8.5 (0.4) (1.0) 45.3
- discontinued operations - 13.0 - - - 13.0
Attributable Profit
Jul-Dec 16 34.1 (76.3) 6.2 0.3 (1.0) (36.8)
- continuing operations 31.7 - 6.2 - (1.0) 36.8
- discontinued operations 2.4 (76.3) - 0.3 - (73.6)
Jul-Dec 17 29.1 10.1 6.1 5.8 (1.0) 50.1
- continuing operations 29.1 - 6.1 2.3 (1.0) 36.5
- discontinued operations - 10.1 - 3.5 - 13.6
Held for
Total Assets Sale
30 Jun 17 587.3 242.2 87.4 4.9 (162.6) 759.3
- total assets 479.3 162.3 32.8 - - 674.5
- intersegment 108.0 79.9 54.6 4.9 (162.6) 84.8
31 Dec 17 596.4 255.2 92.9 148.9 (322.8) 770.6
- total assets 330.6 175.4 35.9 144.0 - 685.9
- intersegment 265.8 79.8 57.0 4.9 (322.8) 84.6
Capital Expenditure
Jul-Dec 16 27.6 - - - - 27.6
Jul-Dec 17 7.3 - 0.3 - - 7.6
CEO'S COMMENTARY
Amidst the backdrop of deafening noise levels orchestrated by some of our political, auditing and
business elitarians in this reported period, the Bowler business was burdened with changeable
weather, PET (Polyethylene terephthalate) material Force Majeure shortages, material price
escalations and mixed consumer market performances in a strained consumer environment. In this
context, the return to profitability by SoftBev is extremely rewarding. Although the packaging
business battened down the hatches in an uncharacteristically fickle period towards the year end,
the group managed to post a 54% growth in HEPS to 61c on a profit after tax of R50mil. Treasury
shares bought towards the end of the previous financial year, were written back in this period
against issued share capital (refer below).
Plastic Packaging - Bowler Plastics
The long proven and well-diversified portfolio of products and customers of Bowler Plastics was not
able to buffer the down buying behaviours of consumers at year end. Certain niche products were
affected by significant volume losses in a generally lack lustre period. The business experienced a
3% revenue drop against the record performance of the prior year. The PET material shortage
negatively contributed to both costs and sales in peak time during which stocks reached prices at
74% premiums.
Within this context Bowler Plastics returned a profit after tax of R29 mil. In comparing these results
to the previous interim period, the transfer of cash investments into the holding company and their
related returns needs to be considered. Previously these returns were held in the Plastics Packaging
segment, but are now held in the Holding and Investments segment.
Beverages - SoftBev
The capricious weather in Gauteng and KZN over the festive season affected consumer purchases
strongly. The Western Cape region performed well. The business interventions of the prior period
assisted the national business to recover margins on reasonable volumes. Operating costs were
well managed even with the PET resin shortages and resulting additional costs. The business
delivered to Bowler a R13mil profit - a respectable turnaround from the losses of prior year.
Outlook
The plastics packaging business will continue trading in a likely subdued consumer environment.
The project activity is showing encouraging signs of revitalised activity on the back of positive
business sentiment.
During the reporting period Bowler Metcalf accepted an Expression of Interest (EOI) which was
subject to confidentiality, exclusivity and certain suspensive conditions for the disposal of its share in
the SoftBev business. This acceptance was in line with the long stated objective of exit from the
beverages business to pursue packaging business growth. Accordingly, the operations of SoftBev
have been classified as discontinued and the assets and liabilities classified as held for sale. The
detailed cautionary of 09 Feb 2018 informed shareholders of disposal negotiations currently
underway.
An interim dividend of 20.48c has been declared.
BASIS OF PREPARATION
The condensed unaudited consolidated results have been prepared in accordance with and
containing information required by IAS 34 Interim Financial Reporting, the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee and in the manner required by
the Companies Act and the Johannesburg Stock Exchange Listings Requirements. The condensed
report has been prepared using accounting policies and methods of computation that are in terms of
IFRS and which are consistent with those of the previous annual financial statements. The
condensed report has not been audited or reviewed by the auditors.
ACQUISITIONS AND DISPOSALS
There have been no additions or disposals during the period under review.
CHANGES TO THE BOARD
MA Olds retired from the Board at the AGM held 19 November 2017. No further changes have been
made to the Board during the reporting period.
ISSUE AND RE-PURCHASE OF TREASURY SHARES
Although there had been no issue or re-purchase of treasury shares, Bowler Plastics (Pty) Ltd,
subsidiary to the Company, issued a dividend in specie to the Company by means of 803 958
treasury shares, which have subsequently been cancelled.
CASH DIVIDEND DECLARATION
An interim gross cash dividend, as defined by the Income Tax Act, of 20.48 cents per share ("cps")
(2016: 19.32 cps) has been declared for the six months ended 31 December 2017 and is payable
to shareholders on Monday, 26 March 2018. The last day to trade will be Tuesday, 20 March 2018.
"Ex" dividend trading begins on Wednesday, 21 March 2018 and the record date will be Friday, 23
March 2018. Share certificates may not be dematerialised or re-materialised between Wednesday,
21 March 2018 and Friday, 23 March 2018, both days inclusive. Directors confirm that the solvency
and liquidity test is satisfied at the date of this report.
This dividend will be made from income reserves. The gross dividend is 20.48 cps. Dividend
Withholding Tax (DWT) is 20%. The net local cash dividend to shareholders liable for DWT will
therefore be 16.384 cps.
The number of shares in issue at the date of declaration is 81 995 105 shares.
Unless otherwise requested in writing, individual dividend cheques of less than R50 will not be paid
but retained in the company's unclaimed dividend account. Accumulated unpaid dividends in excess
of R200 may be claimed in writing from the Transfer Secretaries.
BJ FROST (Non-Exec Chairman) Company Tax No: 9775130710
PF SASS (Chief Executive Officer) Prepared by: CA Bothma (Professional Accountant (SA))
CAPE TOWN
28 February 2018
REGISTERED AUDITOR TRANSFER SECRETARIES
Mazars - Partner Yolandie Ferreira (Registered Auditor) Computershare Investor Services (Pty) Ltd
Mazars House. Rialto Road. PO Box 61051. Marshalltown. 2107
Grand Moorings Precinct. Century City. 7441
SPONSOR
Arbor Capital Sponsors Proprietary Limited
20 Stirrup Lane, Woodmead Office Park,
C/o Woodmead Drive and Van Reenens Avenue,
Woodmead
Date: 28/02/2018 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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