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Results for the year ended 30 September 2019
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)
(JSE ISIN: ZAE000026639) (Share code: BAWP)
(JSE ISIN: ZAE000026647)
(Namibian Stock Exchange share code: BWL)
(Barloworld or the Company or the group)
Short form announcement
Results for the year ended 30 September 2019
Salient features
* Pleasing performance from Equipment southern Africa (snA),
Equipment Russia and our Bartrac JV in challenging trading
conditions
* Strong performance from Automotive amidst a tough
macroeconomic environment
* Logistics impacted by non-core businesses held for sale and
KLL closure costs
* Strong free cash generation of R3.1 billion (2018: R3.6 billion
- included R2.5 billion from the Iberian operation sale;
2017: R3.4 billion)
* Group return on invested capital of 11.9% (2018: 12.3%,
2017: 11.2%)
* Normalised headline earnings per share from continuing operations
including Avis Fleet at 1 167 cents up 1.4% (2018: up 18%,
2017: up 16%)
* Headline earnings per share of 1 100.0 cents (2018: 1 192.1 cents
per share)
* Earnings per share of 1 150.2 cents (2018: 1 823.8 cents per share)
* Total dividend per share of 462 cents (2018: 462 cents,
2017: 390 cents) together with a special dividend of 228 cents
per share (2018: nil)(subject to Exchange Control approval)
* Avis Fleet held for sale at 30 September 2019
* Khula Sizwe B-BBEE transaction oversubscribed and funding target met
Dominic Sewela, CE of Barloworld, said:
The group delivered a resilient set of results despite the challenges
in certain sectors, with our Fix, Optimise, Grow strategy and managing
for value approach firmly in place across the group. Normalised
headline earnings per share (HEPS)* was up 1.4% from the previous
year, driven by pleasing performance from Equipment SnA and Equipment
Russia as well as strong performance from Automotive, delivered in the
context of tough trading conditions. While Logistics' revenue and
operating profit were down, the turnaround project is still on track
and the merger of Automotive and Logistics creates a platform for
innovation and the ability to extract further value from combined
strategic sourcing opportunities. The due diligence for the acquisition
of Wagner Asia in Mongolia is complete.
Overview
The group produced a resilient result given the challenging economic
and trading conditions as well as the impact of numerous once-off
events in the year. Revenue of R56.8 billion (2018: R60.1 billion)
was down 5.4% from the prior year. Operating profit for the group
was down 13.0% to R3 272 million (2018: R3 762 million), with the
operating margin declining from 6.3% to 5.8%.
Normalised HEPS* of 1 167 cents, excluding the impact of the B-BBEE
transaction charges and the GMP equalisation charge, were 1.4% up on
the prior year (2018: 1 151 cents). Including these charges HEPS from
continuing operations including Avis Fleet was down 4.4%.
The group generated a return on invested capital (ROIC) of 11.9%, down
on the 12.3% achieved in 2018.
A total dividend of 462 cents per share was declared (2018: 462 cents
per share) together with a special dividend of 228 cents per share
(subject to Exchange Control approval).
Outlook
We are positive that despite the challenging macroeconomic environment
as well as volatile geopolitical dynamics, Barloworld will continue to
generate pleasing results. The implementation of our strategy in line
with our active shareholder operating model as well as the roll out
of our business transformation initiatives put the group in the best
position to deliver value in the short to medium term.
We are already seeing the benefits of the Barloworld Business System
(BBS) being realised in Equipment southern Africa, through increased
cash flows and reductions in invested capital. This trend is expected
to continue. The resourcing of the active corporate centre is nearing
completion and we anticipate a period of adjustment in 2020 as
duplicated functions are re-deployed from our divisions to higher
value activities across the group.
In terms of Equipment southern Africa, significant improvement in the
markets we serve will be slow in the short term. Nonetheless, we have
an opportunity to grow machine market share significantly with the
introduction of a new competitive product range. We are also well
positioned to grow our parts market share in the large construction
segment. We will continue our focus on managing levers under our
control which include prudent cost containment and invested capital
reduction in the short to medium term and until the operating
environment improves. Income from our Bartrac JV is expected to reduce
in the short term due to ongoing plant reconfiguration work at a key
customer operation.
The South African consumer is still under pressure with the industry
outlook impacted by the cautious outlook for growth. It is anticipated
that new vehicle sales will remain challenging in FY2020. However,
the business continues to focus on improving the returns of dealerships
to ensure resilience in the short to medium term. While industry rental
days are expected to remain subdued in Car Rental, the business expects
to drive top line revenue growth through yield management.
Several significant opportunities in the public sector were pursued
during the year, these together with the outcome of the City of
Johannesburg (COJ) and the National Department of Transport (NDot)
contracts will impact the performance of the Avis Fleet business in
the medium-term. Subsequent to the sale of our 50% shareholding,
the Avis Fleet business will be deconsolidated and become a major
contributor to income from joint ventures.
Logistics is expecting a much improved performance going forward
following the closure of KLL and the disposal of the Middle East
and SmartMatta businesses. The business turnaround project continues
to be a priority for management and remains a key factor in ensuring
ongoing improved profitability. High contract renewal rates together
with new business secured in 2019 is a strong foundation for the future.
The business team has been further strengthened to drive growth and
capitalise on opportunities in the market and internal fulfilment.
Notwithstanding the disappointing result of our Logistics business in
the current year, we expect to begin realising cost efficiencies and
operational synergies from the integration of our Automotive and
Logistics businesses in the short to medium term.
Operating segments results for the year ended 30 September 2019
Continuing and discontinued operations - Audited
Operating profit Invested
Revenue /(loss) Capital
Full Year Full Year Full Year
ended ended ended
30 Sep 30 Sep 30 Sep 30 Sep 30 Sep 30 Sep
R million 2019 2018 2019 2018 2019 2018
Equipment and
Handling 26 647 31 023 2 559 2 710 14 966 15 126
Automotive and
Logistics 33 558 35 733 1 747 1 963 10 665 11 656
Corporate 1 1 (409) (133) (674) (772)
Total group 60 206 66 757 3 897 4 540 24 957 26 010
Dividend and special dividend declaration
Notice is hereby given that total dividend number 182 of 297 cents
(gross) per ordinary share in respect of the 12 months ended 30 September
2019 has been declared subject to the applicable dividends tax levied in
terms of the Income Tax Act (Act No. 58 of 1962)(as amended) (the Income
Tax Act). In addition, the group has declared a special dividend of
228 cents per share for the 12 months ended 30 September 2019 subject
to Exchange Control approval. A further announcement will be released
once the Exchange Control approval has been obtained.
In accordance with paragraphs 11.17(a)(i) to (ix) and 11.17(c) of the
JSE Listings Requirements the following additional information is
disclosed:
* The dividend and special dividend has been declared out of income
reserves;
* Local dividends tax rate is 20% (twenty per centum);
* Barloworld has 212 692 583 ordinary shares in issue;
* The gross local dividend amount are 297 cents per ordinary
share for the dividend and 228 cents per ordinary share for
the special dividend;
* The net dividend amount are 237.60000 cents per share for the
dividend and 182.40000 cents per ordinary share for the special
dividend.
In compliance with the requirements of Strate and the JSE Limited, the
following dates are applicable:
Dividend declared Friday, 15 November 2019
Last day to trade cum dividend Tuesday, 7 January 2020
Shares trade ex-dividend Wednesday, 8 January 2020
Record date Friday, 10 January 2020
Payment date Monday, 13 January 2020
Share certificates may not be dematerialised or re-materialised between
Wednesday, 8 January 2020 and Friday, 10 January 2020, both days
inclusive.
18 November 2019
Short form announcement
This short form announcement is the responsibility of the board of
directors of Barloworld Limited and is a summarised version of the
full announcement in respect of the full year financial results for
the period ended 30 September 2019 of Barloworld and its subsidiaries
(collectively the group) and as such it does not contain full or
complete details pertaining to the group's results. Any investment
decisions should be made based on the full announcement. The full
announcement is available at the JSE's website at:
https://senspdf.jse.co.za/documents/2019/JSE/ISSE/BAWE/ye19.pdf
The full announcement can also be found on the group's website
(https://www.barloworld.com/investors/yearend-results-presentations/).
The full announcement is available for inspection, at no charge, at
the registered office of Barloworld (61 Katherine Street, Sandton,
Johannesburg, 2146) from 09:00 to 16:00 on business days. Copies of
the full announcement can be requested from the registered office by
contacting the company secretary on +27 11 445 1000.
* Certain information presented in this announcement is regarded as
proforma information. This information has been prepared for
illustrative purposes only, is the responsibility of the board of
directors of Barloworld has not been reviewed or reported on by
the Company's external auditors and, because of its nature, may
not fairly present the Company's financial position.
Registered office and business address
Barloworld Limited, 61 Katherine Street
PO Box 782248, Sandton, 2146, South Africa
Tel +27 11 445 1000
Email invest@barloworld.com
Directors
Non-executive: DB Ntsebeza (Chairman), NP Dongwana, FNO Edozien**,
HH Hickey, MD Lynch-Bell*, NP Mnxasana, NV Mokhesi, H Molotsi,
SS Ntsaluba, P Schmid,
Executive: DM Sewela (Group Chief executive), N Lila (Group Finance
Director)
**Nigeria *UK
Group company secretary: Andiswa Ndoni
Enquiries: Barloworld Limited
Tel: +27 11 445 1000
E-mail: invest@barloworld.com
Sponsor: Nedbank Corporate and Investment Banking, a division of
Nedbank Limited
Date: 18/11/2019 09:00:00
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