BELL EQUIPMENT LIMITED - Unaudited Interim Results for the period ended 30 June 2018 and Cash Dividend Declaration

Release Date: 30/08/2018 17:15
Code(s): BEL
 
Wrap Text
Unaudited Interim Results for the period ended 30 June 2018 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 2018
AND CASH DIVIDEND DECLARATION


Highlights

                                        Unaudited       Unaudited
                                     30 June 2018    30 June 2017             %
                                                         Restated        Change

Revenue                     R billion         3,7             3,5          up 6
NPAT                        R million       133,1           119,6         up 11
HEPS                            cents         131             119         up 10  
Interim dividend                cents          20              20             - 

Commentary

Ongoing economic growth and increased demand for
equipment in the major global markets of Europe, the
Americas and South East Asia have delivered stable
2018 half year results for Bell Equipment Limited.

This is despite the South African market
underperforming, mainly due to the country's political
landscape failing to boost business confidence and
drive infrastructure development. Investor appetite
for the mining industry has remained under pressure
because of uncertainty surrounding the Mining
Charter while general caution is likely to continue in
the run up to the 2019 national elections.

Volatility in exchange rates has also put margins
under pressure. No immediate respite is expected as
trade threats, Brexit and political instability in Europe
continue to influence emerging markets.

Positive management interventions have enabled the
group to contain losses in its African markets outside
South Africa during this period. During the next six
months the group expects to finalise a transaction
to sell assets of its Democratic Republic of Congo
operation as it migrates to a dealer model in order to
position itself to better serve this market.

The E-series range of trucks has been well accepted
in all global regions and the Bell product continues to
lead the market in terms of providing the lowest fuel
burn, lowest cost per tonne of material moved and in
providing leading innovative features for onsite safety
and vehicle protection.

In Europe new product introductions are settling in
well and will give Bell access to a wider customer
and industry base. These include a range of 4x4
quarry trucks, the new B20E LGP (Low Ground
Pressure) truck, a narrowed B20E truck as well as
the B33L Low Profile truck for underground mining
applications.

The Americas offer good promise for the next few
years as mining, aggregates and construction, the
main applications for Bell ADTs, all continue to show
good growth.

In Southern Africa the strategic partnership with
Japanese excavator specialist, Kobelco, continues to
grow from strength-to-strength with tremendous
interest and uptake from the market. To further
bolster the traditional size classes, three mini
excavator models were introduced in March to
develop new opportunities in the light construction,
demolition and light forestry applications, and
thereby tapping into an expanded customer segment.

Following an exclusive distribution agreement with
Russian heavy-duty tipper manufacturer, Kamaz, the
first trucks have been delivered to customers and
with promising feedback received, Bell is investigating
applications of the product as it explores this highly
competitive market.

South East Asia is another focus market going
forward. In Indonesia the market adoption of the Bell
product through an established dealer network has
been extremely positive, with mining conditions and
operations very similar to Africa where Bell trucks are
born, bred and tested.

We are progressing with investigations towards
introducing BBBEE ownership partners at our South
African manufacturing operations and to build on the
ownership profile at our sales distribution operation
to further improve our empowerment credentials.

OUTLOOK
We are enjoying strong global increase in demand for
all types of heavy equipment. This has however led
to pressure on upstream suppliers to meet increased
volume requirements. The group is mindful of the
challenge this may pose to our manufacturing and
sales operations in the coming months.

A restructuring exercise has commenced to better
utilise and direct resources in pursuit of continuous
improvement and the most effective alignment of
group structures to the evolving group strategy. Key
objectives are to better satisfy market requirements
while being optimised for efficient manufacturing,
to develop a dedicated and effective global sourcing
service to the manufacturing and aftermarket teams
to counter the continuous pressure on margins
and to implement a more coordinated approach
to product quality and on time delivery to enhance
overall business performance.

The group will continue its ongoing focus on its
aftermarket and product support offering in all
regions. The expansion of the Bell Eisenach-Kindel
facility in Germany is underway with completion
of Phase 2 scheduled for the second quarter of
2019. This will facilitate better flexibility and quicker
responsiveness to customers to support the group's
market growth in the Northern Hemisphere.

Our American Logistics Centre (ALC), located in North
Carolina, will start trading in quarter 4 of this year,
and is ideally positioned to service the expanding
dealer network and rapidly growing truck population
in the North American region.

Condensed consolidated statement of financial position
AS AT 30 JUNE 2018

                                                                  Unaudited    Unaudited       Audited
                                                                    30 June      30 June   31 December
                                                                       2018         2017          2017
                                                                      R'000        R'000         R'000
ASSETS
Non-current assets                                                 1 250 793   1 102 314     1 111 406
Property, plant and equipment                                        793 860     767 947       691 429
Intangible assets                                                    256 878     215 584       224 766
Investments                                                              624         584           574
Interest-bearing long-term receivables                               105 396      28 736        92 774
Deferred taxation                                                     94 035      89 463       101 863
Current assets                                                     4 768 400   3 969 145     4 246 208
Inventory                                                          3 311 032   2 458 719     3 047 119
Trade and other receivables                                        1 047 447   1 127 844       778 555
Current portion of interest-bearing long-term receivables            112 093      48 610        96 053
Prepayments                                                           32 748      62 514        51 912
Other financial assets                                                12 501       1 300        13 139
Current taxation assets                                               19 073       3 664         9 179
Cash and bank balances (note 13)                                     233 506     266 494       250 251
Assets classified as held for sale (note 12)                          55 562           -             -
Total assets                                                       6 074 755   5 071 459     5 357 614
EQUITY AND LIABILITIES
Capital and reserves                                               3 205 862   2 889 849     2 988 602
Stated capital (note 5)                                              232 499     232 244       232 244
Non-distributable reserves                                           638 003     565 176       530 281
Retained earnings                                                  2 316 495   2 086 332     2 214 236
Attributable to owners of Bell Equipment Limited                   3 186 997   2 883 752     2 976 761
Non-controlling interest                                              18 865       6 097        11 841
Non-current liabilities                                              404 088     389 372       351 819
Interest-bearing liabilities                                         174 695     151 107       113 183
Repurchase obligations and deferred leasing income                       519       1 394         1 243
Deferred income                                                      111 689     102 575       106 568 
Long-term provisions and lease escalation                             40 455      45 750        42 074
Deferred taxation                                                     76 730      88 546        88 751
Current liabilities                                                2 464 805   1 792 238     2 017 193
Trade and other payables                                           1 431 697   1 183 513     1 094 742
Current portion of interest-bearing liabilities                      312 083      84 150       215 414
Current portion of repurchase obligations
and deferred leasing income                                            1 246       3 011           746
Current portion of deferred income                                   114 021      98 253        94 171
Current portion of provisions and lease escalation                    70 363      79 298        60 825
Refund liabilities                                                    12 666           -             -
Other financial liabilities                                               24       1 143        20 272
Current taxation liabilities                                          11 515      42 057        25 675
Bank overdrafts and borrowings on call                               511 190     300 813       505 348

Total equity and liabilities                                       6 074 755   5 071 459     5 357 614

Condensed consolidated statement of profit or loss
FOR THE PERIOD ENDED 30 JUNE 2018

                                                                 Unaudited     Unaudited     Unaudited
                                                                six months    six months     12 months
                                                                     ended         ended         ended
                                                                   30 June       30 June   31 December
                                                                      2018          2017          2017
                                                                               Restated*     Restated*
                                                                     R'000         R'000         R'000
Revenue                                                          3 729 718     3 505 496     6 873 471
Cost of sales                                                  (3 090 006)   (2 861 329)   (5 526 784)
Gross profit                                                       639 712       644 167     1 346 687
Other operating income                                              75 792        65 587       137 477
Expenses                                                         (516 443)     (510 168)   (1 080 707)
Profit from operating activities (note 2)                          199 061       199 586       403 457 
Net interest expense (note 3)                                     (15 162)       (1 282)          (99)
Profit before taxation                                             183 899       198 304       403 358
Taxation                                                          (50 788)      (78 685)     (131 308)
Profit for the period/year                                         133 111       119 619       272 050
Profit for the period/year attributable to:
- Owners of Bell Equipment Limited                                 126 087       113 522       260 209
- Non-controlling interest                                           7 024         6 097        11 841
Earnings per share (basic) (note 4)                    (cents)         132           119           273
Earnings per share (diluted) (note 4)                  (cents)         132           119           273
* Refer to restatements of prior periods in note 11.

Condensed consolidated statement of comprehensive income
FOR THE PERIOD ENDED 30 JUNE 2018


                                                                       Unaudited  Unaudited    Audited
                                                                      six months six months  12 months
                                                                           ended      ended      ended
                                                                         30 June    30 June31 December
                                                                            2018       2017       2017
                                                                           R'000      R'000      R'000
    
Profit for the period/year                                               133 111    119 619    272 050
Other comprehensive income (loss)    
Items that may be reclassified subsequently to profit or loss:    
Exchange gains/(losses) arising during the period/year                   108 132      9 388   (22 311)
Exchange gains/(losses) on translating foreign operations                105 351      8 490   (23 744)
Exchange gains on foreign reserves                                         2 781        898      1 433
Items that may not be reclassified subsequently to profit or loss:             -          -    (3 124)
Surplus arising on revaluation of properties                                   -          -        258
Taxation relating to surplus arising on revaluation of properties              -          -    (3 382)
    
Other comprehensive income (loss) for the period/year,    
net of taxation                                                          108 132      9 388   (25 435)
Total comprehensive income for the period/year                           241 243    129 007    246 615
Total comprehensive income attributable to:    
- Owners of Bell Equipment Limited                                       234 219    122 910    234 774
- Non-controlling interest                                                 7 024      6 097     11 841

Condensed consolidated statement of cash flows
FOR THE PERIOD ENDED 30 JUNE 2018


                                                                  Unaudited     Unaudited         Audited
                                                                 six months    six months       12 months
                                                                      ended         ended           ended
                                                                    30 June       30 June     31 December
                                                                       2018          2017            2017
                                                                      R'000         R'000           R'000

Cash operating profit before working capital changes                374 146       346 369         665 069
Cash utilised in working capital                                  (238 971)     (101 615)       (533 369)
Cash generated from operations                                      135 175       244 754         131 700
Net interest paid                                                  (29 077)      (13 434)        (29 635)
Taxation paid                                                      (79 576)      (21 264)       (112 262)
Net cash generated from (utilised in) operating activities           26 522       210 056        (10 197)
Purchase of property, plant and equipment and intangible assets   (158 932)      (64 613)       (135 842) 
Proceeds on disposal of property, plant and equipment
and intangible assets                                                 1 721           769           7 975
Increase in interest-bearing long-term receivables                 (18 716)         (807)         (9 303)
Net cash utilised in investing activities                         (175 927)      (64 651)       (137 170)
Net interest-bearing liabilities raised                             150 391        82 264         173 320
Proceeds from share options exercised                                   255           105             105
Dividends paid                                                     (23 828)             -        (19 062)
Net cash generated from financing activities                        126 818        82 369         154 363
Net cash (outflow)/inflow                                          (22 587)       227 774           6 996
Net bank overdrafts and borrowings on call
at beginning of the period/year                                   (255 097)     (262 093)       (262 093)
Net bank overdrafts and borrowings on call
at end of the period/year                                         (277 684)      (34 319)       (255 097)
Comprising:
Cash and bank balances (note 13)                                    233 506       266 494         250 251
Bank overdrafts and borrowings on call                            (511 190)     (300 813)       (505 348)
Net bank overdrafts and borrowings on call at end
of the period/year                                                (277 684)      (34 319)       (255 097)

Condensed consolidated statement of changes in equity
FOR THE PERIOD ENDED 30 JUNE 2018

                              Attributable to owners of Bell Equipment Limited
                                                Non-                                     Non-         Total
                               Stated  distributable      Retained                controlling   capital and
                              capital       reserves      earnings        Total      interest      reserves
                                R'000          R'000         R'000        R'000         R'000         R'000
Balance at 31 December 2016
- audited                     232 139        553 298     1 972 810    2 758 247             -     2 758 247
Increase in equity-settled
employee benefits reserve           -            291             -          291             -           291
BBBEE share-based
payment charge                      -          2 199             -        2 199             -         2 199
Total comprehensive income
for the period                      -          9 388       113 522      122 910          6 097      129 007
Share options exercised           105              -             -          105              -          105
Balance at 30 June 2017
- unaudited                   232 244        565 176     2 086 332    2 883 752          6 097    2 889 849
Total comprehensive (loss)
income for the period               -       (34 823)       146 687      111 864          5 744      117 608
Transfer between reserves           -          (172)           172            -              -            -
Transfer to retained
earnings relating to
expired share options               -          (107)           107            -              -            -
Increase in equity-settled
employee benefits reserve           -            207             -          207              -          207
Dividends paid                      -              -      (19 062)     (19 062)              -     (19 062)
Balance at 31 December 2017
- audited                     232 244        530 281     2 214 236    2 976 761         11 841    2 988 602
Decrease in equity-settled
employee benefits reserve           -          (410)             -        (410)              -        (410)
Total comprehensive income
for the period                      -        108 132       126 087      234 219          7 024      241 243
Share options exercised           255              -             -          255              -          255
Dividends paid                      -              -      (23 828)     (23 828)              -     (23 828)
Balance at 30 June 2018
- unaudited                   232 499        638 003     2 316 495    3 186 997         18 865    3 205 862

Abbreviated notes to the unaudited interim results
FOR THE PERIOD ENDED 30 JUNE 2018

1.  BASIS OF PREPARATION
    The accounting policies and methods of computation applied in the preparation of these condensed consolidated
    financial statements are in terms of International Financial Reporting Standards and are consistent with those
    applied in the previous annual consolidated financial statements, except for the adoption of new accounting
    standards.

    The group has adopted all of the new accounting standards relevant to its operations and effective for annual
    reporting periods beginning 1 January 2018, including IFRS 9 Financial Instruments and IFRS 15 Revenue from
    Contracts with Customers. The adoption of these new accounting standards has not had any significant impact
    on the results in the condensed consolidated financial statements or the disclosures herein, but resulted merely
    in the reclassification of certain transactions in previously published results as disclosed in note 11.

    The condensed consolidated interim financial statements are 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 and containing the
    information required by IAS 34: Interim Financial Reporting, as well as the SAICA Financial Reporting Guides
    as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial
    Reporting Standards Council. The preparation of this interim report was supervised by the Group Finance
    Director, KJ van Haght CA (SA).

                                                                                                Unaudited    Unaudited        Audited
                                                                                               six months   six months      12 months
                                                                                                    ended        ended          ended
                                                                                                  30 June      30 June    31 December
                                                                                                     2018         2017           2017
                                                                                                    R'000        R'000          R'000

2. PROFIT FROM OPERATING ACTIVITIES
   Profit from operating activities is arrived at after taking into
   account:
   Income
   Currency exchange gains                                                                       196 656        90 298         156 361
   Decrease in provision for doubtful debts                                                            -         9 581          81 423
   Import duty rebates                                                                            48 155        37 031          84 612
   Net surplus on disposal of property,
   plant and equipment and intangible assets                                                       1 402           442           3 038
   Expenditure
   Amortisation of intangible assets                                                              12 453        18 053          33 240
   Amounts written off as uncollectible                                                              913        10 995          13 618
   Auditors' remuneration - audit and other services                                               5 209         3 169           9 739
   Consulting fees                                                                                 9 685        14 044          27 844
   Currency exchange losses                                                                      227 643        89 818         157 426
   Depreciation of property, plant and equipment                                                  66 179        76 632         152 902
   Increase in provision for doubtful debts                                                       14 836             -               -
   Operating lease charges                                                                        56 893        56 873         116 456
   Research expenses (excluding staff costs)                                                      20 889        20 968          46 298
   Staff costs (including directors' remuneration)                                               623 278       598 831       1 272 171

Abbreviated notes to the unaudited interim results
FOR THE PERIOD ENDED 30 JUNE 2018

                                                                                               Unaudited     Unaudited         Audited
                                                                                              six months    six months       12 months
                                                                                                   ended         ended           ended
                                                                                                 30 June       30 June     31 December
                                                                                                    2018          2017            2017
                                                                                                   R'000         R'000           R'000

3.NET INTEREST EXPENSE
  Interest expense                                                                                41 002        21 917          43 350
  Interest income (restated)* (unaudited)                                                       (25 840)      (20 635)        (43 251)
  Net interest expense                                                                            15 162         1 282              99
  * Refer to restatements of prior periods in note 11.


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)                   126 087       113 522         260 209
  Weighted average number of ordinary shares
  in issue during the period                                            ('000)                    95 316        95 307          95 307
  Earnings per share (basic)                                           (cents)                       132           119             273
  Diluted earnings per share is arrived at as follows:
  Profit for the period attributable to owners of
  Bell Equipment Limited                                               (R'000)                   126 087       113 522         260 209
  Fully converted weighted average number of shares*                    ('000)                    95 746        95 479          95 454
  Earnings per share (diluted)                                         (cents)                       132           119             273
    
  * The number of shares has been adjusted for the effect of the dilutive potential ordinary shares relating to the unexercised options in the
    group's share option scheme.

                                                                                               Unaudited     Unaudited         Audited
                                                                                              six months    six months       12 months
                                                                                                   ended         ended           ended
                                                                                                 30 June       30 June     31 December
                                                                                                    2018          2017            2017
                                                                                                   R'000         R'000           R'000

4.EARNINGS PER SHARE (CONTINUED)
  Headline earnings per share is arrived at as follows:
  Profit for the period attributable to owners of
  Bell Equipment Limited                                    (R'000)                              126 087       113 522         260 209
  Net surplus on disposal of property,
  plant and equipment and intangible assets                 (R'000)                              (1 402)         (442)         (3 038)
  Taxation effect of net surplus on disposal of property,
  plant and equipment and intangible assets                 (R'000)                                  393           124             237
  Impairment loss recognised on revaluation
  of buildings                                              (R'000)                                    -             -           2 597
  Taxation effect of impairment loss recognised on
  revaluation of buildings                                  (R'000)                                    -             -           (909)
  Reversal of impairment loss in respect of property,
  plant and equipment rental assets                         (R'000)                                    -             -         (1 942)
  Headline earnings                                         (R'000)                              125 078       113 204         257 154
  Weighted average number of ordinary shares
  in issue during the period                                 ('000)                               95 316        95 307          95 307
  Headline earnings per share (basic)                       (cents)                                  131           119             270
  Diluted headline earnings per share is arrived at as follows:
  Headline earnings calculated above                        (R'000)                              125 078       113 204         257 154
  Fully converted weighted average number of shares          ('000)                               95 746        95 479          95 454
  Headline earnings per share (diluted)                     (cents)                                  131           119             269
  Net asset value per share is arrived at as follows:
  Total capital and reserves                                (R'000)                            3 205 862     2 889 849       2 988 602
  Number of shares in issue                                  ('000)                               95 329        95 307          95 307
  Net asset value per share                                 (cents)                                3 363         3 032           3 136



                                                                                               Unaudited     Unaudited         Audited
                                                                                              six months    six months       12 months
                                                                                                   ended         ended           ended
                                                                                                 30 June       30 June     31 December
                                                                                                    2018          2017            2017
                                                                                                   R'000         R'000           R'000

5. STATED CAPITAL
   Authorised
   100 000 000 (June 2017: 100 000 000) ordinary shares
   of no par value
   Issued
   95 329 385 (June 2017: 95 306 885) ordinary shares
   of no par value                                                                               232 499       232 244         232 244
   The increase in share capital relates to 22 500
   (June 2017: 10 000) share options exercised at an average
   share price of R11,34 per share.

6. CAPITAL EXPENDITURE COMMITMENTS
   Contracted                                                                                    164 678            14          60 089
   Authorised, but not contracted                                                                 50 027        81 944         282 774
   Total capital expenditure commitments                                                         214 705        81 958         342 863
   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 2018
   South African sales operation                                           1 654 320           64 222        1 709 049       1 543 990
   South African manufacturing
   and logistics operation                                                 2 362 598           30 381        3 974 605       2 329 674
   European operation                                                      1 257 303           55 841        1 339 603         844 796
   Rest of Africa operation                                                  297 435           16 552          416 263         362 029
   North American operation                                                  555 656           17 893          167 061          92 642
   All other operations                                                            -          (2 460)        2 097 197          84 077
   Inter-segmental eliminations*                                         (2 397 594)           16 632      (3 629 023)     (2 388 315)
   Total - unaudited                                                       3 729 718          199 061        6 074 755       2 868 893
                                                                              
  June 2017
  South African sales operation (restated)**                               1 508 866           86 932        1 449 502       1 325 434
  South African manufacturing and logistics
  operation (restated)**                                                   2 037 734           54 053        3 501 927       1 856 690
  European operation (restated)**                                          1 235 312           56 333        1 161 118         741 213
  Rest of Africa operation (restated)**                                      379 271         (46 009)          501 085         455 195
  North American operation (restated)**                                      610 874           25 456          181 888         111 961
  All other operations                                                             -         (26 526)        1 277 479          69 214
  Inter-segmental eliminations* (restated)**                             (2 266 561)           49 347      (3 001 540)     (2 378 097)
  Total - unaudited (restated)**                                           3 505 496          199 586        5 071 459       2 181 610
  December 2017
  South African sales operation (restated)**                               2 956 949          157 356        1 516 718       1 369 180
  South African manufacturing and logistics
  operation (restated)**                                                   4 479 587          195 949        3 408 012       1 795 870
  European operation (restated)**                                          2 325 297           84 913        1 010 515         587 383
  Rest of Africa operation (restated)**                                      619 510         (70 000)          421 968         405 072
  North American operation (restated)**                                    1 151 175           49 980          233 896         170 066
  All other operations                                                             -         (83 267)        2 040 945         113 310
  Inter-segmental eliminations* (restated)**                             (4 659 047)           68 526      (3 274 440)     (2 071 869)
  Total - unaudited (restated)**                                           6 873 471          403 457        5 357 614       2 369 012

    *  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.

    ** The segment information has been adjusted for the restatements as disclosed in note 11.


                                                                          Unaudited         Unaudited         Audited
                                                                         six months        six months       12 months
                                                                              ended             ended           ended
                                                                            30 June           30 June     31 December
                                                                               2018              2017            2017
                                                                              R'000             R'000           R'000

8. CONTINGENT LIABILITIES
    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                                256 841           140 158          176 091

        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                   2 628             2 424            1 872

        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 towards
        the above liabilities                                               263 829           241 383          228 782
                                                                            (4 360)          (98 801)         (50 819)
        Less: provision for non-recovery                                    (2 032)           (2 635)          (1 549)
        Net contingent liability                                                  -                 -                -

        There is no interest rate saving to customers with regards to Bell-backed deals and therefore no fair value
        at initial recognition. Subsequent to initial recognition, where customers are in arrears with WesBank and
        there is a shortfall between the estimated realisation values of the equipment and the balances due by the
        customers to WesBank, an assessment of any additional security is done and a provision for any residual
        credit risk is made on a deal-by-deal basis. A provision for credit risk is also raised on a portfolio basis using
        historical rates of defaults and losses.

                                                                         Unaudited          Unaudited          Audited
                                                                        six months         six months        12 months
                                                                             ended              ended            ended
                                                                           30 June            30 June      31 December
                                                                              2018               2017             2017
                                                                             R'000              R'000            R'000

8. CONTINGENT LIABILITIES 
  8.1 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                                  1 191              3 843             6 123
                                                                             

      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 towards
      the above liabilities                                                  9 415              7 685             7 935
                                                                           (8 224)             (3 842 )         (1 812)
      Less: provision for non-recovery                                           -               (117 )               -
      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. A provision for credit risk is
      also raised on a portfolio basis using historical rates of
      defaults and losses.

  8.2 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                                                             46 113             22 941            41 952
      Net contingent liability                                              46 113             22 941            41 952

      The transactions described in note 8.2 above relate 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.



                                                                          Unaudited         Unaudited          Audited
                                                                         six months        six months        12 months
                                                                              ended             ended            ended
                                                                            30 June           30 June      31 December
                                                                               2018              2017             2017
                                                                              R'000             R'000            R'000

9. RELATED PARTY TRANSACTIONS
    Information regarding significant transactions with related
    parties is presented below. Transactions are carried out on
    an arm's-length basis.
    Shareholders
    John Deere Construction and Forestry Company
    - sales                                                                  10 680           10 103            22 101
    - purchases                                                             317 816          362 393           594 738
    - amounts owing to                                                      220 300          170 412           136 858
    - amounts owing by                                                        7 043            3 527             5 144
    Enterprises over which directors and shareholders are able
    to exercise significant influence and/or in which directors
    and shareholders have a beneficial interest
    Ario Properties Limited
    - property purchase commitment                                                -                -           51 537

10. FINANCIAL INSTRUMENTS
    Categories of financial instruments included in the condensed consolidated statement of financial position:
    -Loans and receivables at amortised cost comprising interest-bearing long-term receivables, trade and
     other receivables and cash and bank balances. The directors consider that the carrying amount of loans and
     receivables at amortised cost approximates their fair value.
    -Financial liabilities at amortised cost comprising interest-bearing liabilities, trade and other payables
     and bank overdrafts and borrowings on call. The directors consider that the carrying amount of financial
     liabilities at amortised cost approximates their fair value.
    -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. The fair value of these contracts
     is based on observable forward exchange rates at period end from an independent provider of financial
     market data.
    -Available for sale financial asset comprising an unlisted equity investment.

11. PRIOR PERIOD RESTATEMENTS
    The group adopted IFRS 15 Revenue from Contracts with Customers on 1 January 2018 for the first time.
    The group's previously published results have been restated and the adjustments are presented below.
    The adjustments only relate to reclassifications of the following transactions within the group's statement of
    profit or loss:

   i)income from extended warranty contracts sold has been reclassified from other operating income to
     revenue;
   ii)warranty expenses relating to standard warranties and extended warranties have been reclassified from
      other expenses to cost of sales;
  iii)income and expenses from transport services relating to the sale of goods, previously included in cost of
      sales and other expenses on a net basis, have been reclassified to revenue and cost of sales on a gross
      basis; and
  iv)the interest component on extended warranty contracts and service contracts sold, where the contract
    periods exceed twelve months, has been reclassified from revenue and other operating income to interest
    income included in net interest expense.
    The reclassifications have the following impacts on the Condensed Consolidated Statement of Profit or Loss:

                                                                        Unaudited        Unaudited        Unaudited
                                                                    As previously
                                                                         reported       Adjustment         Restated
                                                                            R'000            R'000            R'000
    June 2017
    Revenue                                                             3 446 757           58 739        3 505 496
    Cost of sales                                                     (2 744 277)        (117 052)      (2 861 329)
    Gross profit                                                          702 480         (58 313)          644 167
    Other operating income                                                105 234         (39 647)           65 587
    Expenses                                                            (595 030)           84 862        (510 168)
    Profit from operating activities                                      212 684         (13 098)          199 586
    Net interest expense                                                 (14 380)           13 098          (1 282)
    Profit before taxation                                                198 304                -          198 304

                                                                          Audited        Unaudited        Unaudited
                                                                    As previously
                                                                         reported      Adjustment          Restated
                                                                            R'000           R'000            R'000
    December 2017
    Revenue                                                             6 766 586          106 885        6 873 471
    Cost of sales                                                     (5 328 636)        (198 148)      (5 526 784)
    Gross profit                                                        1 437 950         (91 263)        1 346 687
    Other operating income                                                221 431         (83 954)          137 477
    Expenses                                                          (1 226 135)          145 428      (1 080 707)
    Profit from operating activities                                      433 246         (29 789)          403 457
    Net interest expense                                                 (29 888)           29 789             (99)
    Profit before taxation                                                403 358                -          403 358


                                                                             Unaudited     Unaudited      Unaudited
                                                                         As previously
                                                                              reported    Adjustment       Restated
                                                                                 R'000         R'000          R'000

11. PRIOR PERIOD RESTATEMENTS (CONTINUED)
    The reclassifications have the following impacts on the
    Abbreviated Segmental Analysis:
    Revenue
    June 2017
    South African sales operation                                            1 523 387      (14 521)      1 508 866
    South African manufacturing and logistics operation                      1 987 167        50 567      2 037 734
    European operation                                                       1 231 898         3 414      1 235 312
    Rest of Africa operation                                                   378 863           408        379 271
    North American operation                                                   610 884          (10)        610 874
    All other operations                                                             -             -              -
    Inter-segmental eliminations                                           (2 285 442)        18 881    (2 266 561)
    Total - unaudited                                                        3 446 757        58 739      3 505 496

                                                                               Audited     Unaudited      Unaudited
                                                                         As previously
                                                                              reported    Adjustment       Restated
                                                                                 R'000         R'000          R'000
    Revenue
    December 2017
    South African sales operation                                            2 991 387      (34 438)      2 956 949
    South African manufacturing and logistics operation                      4 376 792       102 795      4 479 587
    European operation                                                       2 324 683           614      2 325 297
    Rest of Africa operation                                                   618 845           665        619 510
    North American operation                                                 1 151 199          (24)      1 151 175
    All other operations                                                             -             -              -
    Inter-segmental eliminations                                           (4 696 320)        37 273    (4 659 047)
    Total - audited                                                          6 766 586       106 885      6 873 471

                                                                              Unaudited     Unaudited     Unaudited
                                                                          As previously
                                                                               reported    Adjustment      Restated
                                                                                  R'000         R'000         R'000

11.PRIOR PERIOD RESTATEMENTS (CONTINUED)
  Operating profit (loss)
  June 2017
  South African sales operation                                                  87 155         (223)        86 932 
  South African manufacturing and logistics operation                            66 928      (12 875)        54 053
  European operation                                                             56 333             -        56 333
  Rest of Africa operation                                                     (46 009)             -      (46 009)
  North American operation                                                       25 456             -        25 456
  All other operations                                                         (26 526)             -      (26 526)
  Inter-segmental eliminations                                                   49 347             -        49 347
  Total - unaudited                                                             212 684      (13 098)       199 586

                                                                                Audited     Unaudited    Unaudited
                                                                          As previously
                                                                               reported    Adjustment     Restated
                                                                                  R'000         R'000        R'000
  Operating profit (loss)
  December 2017
  South African sales operation                                                159 513        (2 157)      157 356
  South African manufacturing and logistics operation                          223 581       (27 632)      195 949
  European operation                                                            84 913              -       84 913
  Rest of Africa operation                                                    (70 000)              -     (70 000)
  North American operation                                                      49 980              -       49 980
  All other operations                                                        (83 267)              -     (83 267)
  Inter-segmental eliminations                                                  68 526              -       68 526
  Total - audited                                                              433 246       (29 789)      403 457



                                                                                     Unaudited      Unaudited      Audited
                                                                                    six months     six months    12 months
                                                                                         ended          ended        ended
                                                                                       30 June        30 June  31 December
                                                                                          2018           2017         2017
                                                                                         R'000          R'000        R'000

12.ASSETS HELD FOR SALE
   During the current period management resolved to sell
   certain assets in the group's operation in the Democratic
   Republic of the Congo. This disposal group of assets is
   actively being marketed and the sale is expected to be
   completed during the next 12 months. No impairment loss
   was recognised on reclassification of this disposal group of
   assets held for sale, as the estimated fair value less cost to
   sell is higher than the carrying amount.
   The assets that are intended to be sold includes the following (at carrying value):
   Inventory                                                                            40 519               -           -
   Trade and other receivables                                                          13 729               -           -
   Plant, equipment and vehicles                                                         1 314               -           - 
   Total assets                                                                         55 562               -           -
   These assets have been included in the segment results of
   the Rest of Africa operation as disclosed in note 7.

13.RESTRICTED ACCESS TO CASH
   AND BANK BALANCES
   In the group's cash and bank balances are cash and cash
   equivalents which form part of the operation in Zimbabwe
   that are not immediately available for use by the group due to
   foreign currency shortages in Zimbabwe and bank delays in
   releasing payments for imports.
   The cash and cash equivalents consist of the following cash
   balances in Zimbabwe:
   Cash and bank balance and cash on call                                      114 282               -           -


14. POST FINANCIAL POSITION EVENTS
    No fact or circumstance material to the appreciation of these condensed consolidated interim financial
    statements has occurred between 30 June 2018 and the date of this report.

15.CASH DIVIDEND DECLARATION
   Notice is hereby given that the directors have declared a gross interim cash dividend of 20 cents per ordinary
   share for the six-month period ended 30 June 2018 payable to ordinary shareholders in accordance with the
   timetable below.
   The interim net dividend is 16 cents per share for ordinary shareholders who are not exempt from dividends tax.
   The dividend withholding tax rate is 20%.
   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 95 329 385 ordinary shares.
   The salient dates for the dividend will be as follows:
                                                                                                           2018
   Last day of trade to receive a dividend                                                Tuesday, 18 September
   Shares commence trading "ex" dividend                                                Wednesday, 19 September
   Record date                                                                             Friday, 21 September
   Payment date                                                                           Tuesday, 25 September

   Share certificates may not be dematerialised or rematerialised between Wednesday, 19 September 2018 and
   Friday, 21 September 2018, both days inclusive.
   By order of the board
   29 August 2018

   Directors
   Non-executive
   GW Bell (Chairman), JR Barton* (Lead Independent), AJ Bell, DH Lawrance*, HR van der Merwe*,
   ME Ramathe*, R Naidu*
   *Independent
   Appointed: GW Bell was appointed as Chairman and JR Barton was appointed as Lead Independent Director
   on 1 June 2018.

   Executive
   L Goosen (Group Chief Executive), A Goordeen (Alternate), KJ van Haght (Group Finance Director)
   Retired: GW Bell retired as Group Chief Executive on 31 May 2018.
   Appointed: L Goosen was appointed as Group Chief Executive on 1 June 2018.

   Company Secretary
   D McIlrath

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

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

   Sponsor
   Investec Bank Limited
   100 Grayston Drive, Sandown, Sandton, 2196 

   Release date: 30 August 2018
   
   www.bellir.co.za


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