audited results n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
Audited Results PowerPoint Presentation
Download Presentation
Audited Results

Loading in 2 Seconds...

play fullscreen
1 / 52

Audited Results - PowerPoint PPT Presentation


  • 186 Views
  • Uploaded on

Audited Results. For the twelve months ended June 30 2005. Agenda. Introduction Financial Results Divisional Results Group Matters Outlook. Introduction. Results Summary. Revenue +22,5% to R62,8bn Trading income +24,4% to R 3,2bn Headline earnings +27,1% to R 2,1bn

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

Audited Results


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
    Presentation Transcript
    1. Audited Results For the twelve months ended June 30 2005

    2. Agenda • Introduction • Financial Results • Divisional Results • Group Matters • Outlook

    3. Introduction

    4. Results Summary • Revenue +22,5% to R62,8bn • Trading income +24,4% to R 3,2bn • Headline earnings +27,1% to R 2,1bn • HEPS +26,2% to 686,6cps (+29% in H1*; + 23% in H2*) • DPS +22,3% to 306,0cps • ROFE 51% in 2004 vs 55% in 2005 Note: F2005 accounts not prepared i.t.o. IFRS * H1 includes first time contributions from McCarthy and acquired minorities, whereas H2 2005 is materially comparable to H2 2004

    5. Financial Results

    6. Consolidated Income Statement Year ended June 30 2005

    7. Segmental Performance * Lithotech France: R15,0m loss in H1 vs R4,5m profit in H2

    8. Foreign businesses • 35% (R22,1bn) vs 41% (R21,1bn) in 2004 (impact of McCarthy) Local businesses • Like-for-like revenue growth of 8,6% excluding McCarthy Consolidated Income Statement Year ended June 30 2005 2005 in constant currency: Avg R/£ 11.94 Actual: Avg R/£ 11.53 Actual: Avg R/£ 11.94

    9. Excluding McCarthy, 10% increase in H1 trading income and 15% for full year Trading margins 2005 2004 Local 5,8% 6,1% Excluding McCarthy, group margin improves from 5,1% to 5,4% Offshore 3,3%* 2,9% Return to profitability at Bidcorp; Strong performance from offshore Foodservice Group 5,0% 5,0% NOTES: 1)Offshore margins include a R10,5m (R16,9m) loss from Lithotech France 2) Foreign businesses = 23% (R726,1m) contribution to Trading Income vs 24% (R611,4m) in 2004 Consolidated Income Statement Year ended June 30 2005 2005 in constant currency: Avg R/£ 11.94 Actual: Avg R/£ 11.53 Actual: Avg R/£ 11.94

    10. Consolidated Income Statement Year ended June 30 2005 2005 in constant currency: Avg R/£ 11.94 Actual: Avg R/£ 11.53 Actual: Avg R/£ 11.94 Trading Margins Offshore 2.7% Bidvest plc margins 3.1% in 2004 vs 2.9% in 2003 * Offshore margins include a R21.8m loss from Bidcorp plc and a R17.0m loss from Lithotech France

    11. Consolidated Income Statement Year ended June 30 2005 2005 in constant currency: Avg R/£ 11.94 Actual: Avg R/£ 11.53 Actual: Avg R/£ 11.94 Net interest: • R0,29bn net debt offshore; R0,75bn net debt in SA • R2,6bn debt for McCarthy & offshore minority acquisitions added +/-R200m to interest bill, but more than offset at earnings line • Interest cover = 11x (15x in F2004)

    12. Consolidated Income Statement Year ended June 30 2005 2005 in constant currency: Avg R/£ 11.94 Actual: Avg R/£ 11.53 Actual: Avg R/£ 11.94

    13. Effective Tax Rates* 2005 2004 Local 28,2% 28,1% Deferred tax asset write-back offsets 1% decrease in corporate tax rates Offshore 28,9% 31,5% Decline due to tax relief as a consequence of minority acquisitions of Bidvest plc and Bidcorp plc as well as reduced losses Group 28,4% 28,9% *Excl. STC Consolidated Income Statement Year ended June 30 2005 2005 in constant currency: Avg R/£ 11.94 Actual: Avg R/£ 11.53 Actual: Avg R/£ 11.94

    14. Consolidated Income Statement Year ended June 30 2005 2005 in constant currency: Avg R/£ 11.94 Actual: Avg R/£ 11.53 Actual: Avg R/£ 11.94

    15. Consolidated Income Statement Year ended June 30 2005 2005 in constant currency: Avg R/£ 11.94 Actual: Avg R/£ 11.53 Actual: Avg R/£ 11.94 Earnings • Total foreign headline earnings = 22,7% of Group (21,3% in F2004) • Dividend • 16% enhancementin DPS due to Dinatla transaction • Dividend policy = +/- 2x

    16. 4 8 No. of Days Note: Seasonality always affects H1 Consolidated Balance Sheet Year ended June 30

    17. Consolidated Balance Sheet Year ended June 30 • Net debt up to R2,1bnon payment for Deli XL • bringing net debt : funds employed from October 2005 to 35%, • Delix XL pre-funded by issue of 18m (R1bn) Dinatla options • Deli XL debt is at competitive pre-tax funding rate of 2,5% • McCarthy floor plan lease creditors R616m - short term debt of R382m & interest free accounts payable of R234m

    18. Positive working capital swing in H2: • R200m in cash retained from working capital for the year • R1,1bn applied to share buybacks over 3 years (avg. price 4959cps) • R525m spent on acquisition of Tiger Wheels & Bidcorp plc minorities • R1,2 bn Capex (R588m expansion & R612m replacement) Consolidated Cash Flow Statement

    19. Divisional Results

    20. …% Trading margin Services – Bidfreight Lasting leases • Renegotiation & signing of port leases secures tenure for extended periods • Higher imports benefit Safcor Panalpina • Terminals: • 23% drop in BMA volumes as rand and high Spoornet charges deter coal exports • Wheat & soya imports boost SABT • IVS, largest contributor, held profits steady • Good growth at RDS from specialised services • Trade volumes good for SACD • BPO down on lower exports; Naval poor • Strong recovery at Ships Agency • Small profits at Manica despite regional instability Rm Trading Income Rm Revenue +16% 3.6% 3.4%

    21. Services - Bidfreight Strategic imperatives & prospects • NPA leases renegotiated – rental increases set against security of tenure over an extensive period • NPA negotiations to handle wider range of product (BMA) • PPP opportunities with NPA & Transnet slow to materialise • Confidence to proceed with capex – R1bn budgeted for Terminals over three years • Safcor Panalpina air import dominance to be complemented by planned focus on sea freight • Marine emphasis on new principals in Liner and strategic alliances in Non-Liner 15% Current contr. to Group Trading Income

    22. Services – Bidcorp Ships ahoy! Rm Trading Income Rm Revenue • Shipping achieved small profit • Dunkirk route closed, business right-sized, 2 ships sold (capital items) • Automotive in a cut-throat arena • Rescue & Recovery and Specialised Transport profitable • £1.5m loss from Volume Distribution (UK & France); divesting of unprofitable contracts; potential bankruptcy of competitors 1.7% 0.8% …% Trading margin

    23. Services – Bidcorp Strategic imperatives & prospects • Intrinsic net asset value well exceeds book value (ships & property) • Shipping strategy and prospects: • Zeebrugge/Dartford route performing well • Fuel prices a negative • New materials handling equipment enhances efficiencies • Automotive strategy and prospect: • Management committed to restoring profitability in Volume in F2006 • Strategic rationale of staying in industry under review • Property & Outsource strategy and prospects: • Dartford property plans linked to shipping relocation • Car parking business reliant on Westminster City Council contract March 2006 – one of two bidders 0.5% Current contr. to Group Trading Income

    24. …% Trading margin Services – Bidserv Acquisitive achievements Rm Trading Income Rm Revenue • 41% growth in trading income (23% organic, 18% acquisitive) • Strong results from profit mainstays Cleaning and Hygiene • Laundry leadership position & profitability enhanced by timely capex • Security more than doubles profits: • management actions in Guarding • outperformance of IPS in its first full year • doubling of profits in Electronics • BidAviation flies thanks to EAS • Sharp profit increase at Industrial & Janitorial as G Fox acquisition kicks in +41% 10.0% 9.5%

    25. Services - Bidserv Strategic imperatives & prospects • New Top Turf golf course construction unit – promising potential • Laundry world-class plant capability to underpin organic growth • Security, third largest profit contributor • Guarding on a firmer management and technology footing • IPS positioned to deepen presence in banking market • Intended Fedex merger with Supaswift (36% BVT stake) creates combined entity with branded domestic courier capability • Annuity income reinforced by F2005 initiatives • Bolt-on and complementary opportunities continually sought 9% Current contr. to Group Trading Income

    26. …% Trading margin Services – Renfin Zero is the new hero Rm Trading Income Rm Revenue • Travel trading income (-27%) • Zero commission 1 May 2005 for SAA, other carriers phasing in • Dust yet to settle - yields have improved but knee jerk price cutting and direct bookings are initial consequences • Milestone – travel now profitable pre-overrides, which fell 34% • Banking trading income (+22%) • Low exchange rate volatility kept dealing margins on par with F2004 • Crime hammers insurance costs -15% 19.4% 15.7%

    27. Services - Renfin Strategic imperatives & prospects • Rennies a strong advocate of zero commission - positioning to take advantage of “fee for service” model • Industry turmoil will create opportunities for consolidation • Focus on collections, risk management, elimination of duplication • Budgeting for recovery through F2006 in Travel • Bank to retain focus on growing value add products such as cards, corporate FX and trade services 3% Current contr. to Group Trading Income

    28. Foodservice Products – International (UK) Britannia way cool • Profits up 14% to £45.7m; record 3.6% margin despite moderating GDP growth and tougher trading • Multi-temp: scale economies, cost control • FFC: gross margins up sharply • Swithenbank losses almost eliminated; benefits of MOD contract • CD: strong result, with benefits from KFC effective March; cost pressures from fuel and driver wages • MOD: ahead of budget but down on F2004 due to downscaling of activity in Kuwait • Barton Meat loss increases to £2,1m • Ongoing depot infrastructure programme Rm Trading Income Rm Revenue +16% 3.6% 3.2% …% Trading margin

    29. …% Trading margin Foodservice Products – International (Australasia) a sweet song from down under AUSTRALIA: Trading income up 16% to A$26.5m; up 21% after disposal of Alice Springs Organic foodservice revenue growth 9.5% Melbourne delivering but losses in Sydney Hospitality Supply rollout on track QSR (started October ’03) into profit New Zealand Trading income up 75% to NZ$ 10.3m Organic revenue growth 24%, acquisitions 5% Small acquisitions in fresh and seafoods Crean housebrand; e-commerce 10% of sales and growing Rm Trading Income Rm Revenue +20% 2.9% 2.7%

    30. Foodservice Products - International Strategic imperatives & prospects • 3663 • Terrorist threat to UK • Improved volumes ameliorate cost pressures • KFC £150m p.a; contract extension with Compass to 2011 • Substantial improvement in Barton Meat budgeted • Australia • Opportunities to expand into WA (Perth) • Improved performance in Sydney, fresh management • Independent research – foodservice development lags USA by 20 years – Bidvest +/- 15% market share, huge growth feasible • Crean (New Zealand) • Range extensions and geographic spread 22% Current contr. to Group Trading Income Proforma contr. to Group Trading Income including Deli XL = 24%)

    31. …% Trading margin Foodservice Products – Caterplus (SA): Slender Rm Trading Income Rm Revenue 11% revenue growth Strong consumer spending not translating into margin Catering Supplies: Improved H2 Frozen 14% down: Contract logistics shed; successes in street trade 3663 multi-temp business: internal focus on integration slows progress Acquisition of Lufil Packaging Vulcan-Caars up 33%; slower exports H2 +11% 8.7% 8.7%

    32. Foodservice Products – Caterplus (SA) Strategic imperatives & prospects • Adaptation to deflation largely achieved • Emergent middle class – increasing leisure spend • Continued adaptation of focus: • Frozen move to more independent business • Leverage benefits of multi temperature concept (3663) • New management with new focus • Benefits of new contracts (i.e. Compass), expanded product range (Lufil) and customer branded food expansions (Vulcan) to be felt in 2006 6% Current contr. to Group Trading Income

    33. …% Trading margin Foodservice Products – Combined Foods (SA) Kneading some dough Rm Trading Income Rm Revenue Pricing pressure due to strong Rand, i.e. yeast imports Crown trading income up 25%, despite deflation and export sales 26% down Spice ingredient volumes 23% up Continental Spice / Tari product ranges positively impact results IBI-Trimark & Conti Spice strengthen bakery & spice offering Bidbake H2 results disappoint Crown/Bidbake synergies yet to materialise +8% 12.6% 12.3%

    34. Foodservice Products – Combined Foods (SA) Strategic imperatives & prospects • Bidbake: • New facility to open up efficiency opportunities • Yeast strategy to be finalised • Internal focus on extracting synergies and efficiencies • Leverage customers over scope of product range • Crown well positioned to continue growth 4% Current contr. to Group Trading Income

    35. …% Trading margin Bidoffice - Office Products Mighty Minolco Rm Trading Income Rm Revenue • 38% profit increase at Automation • Minolco: securing annuity income streams & new contracts • Pressure from deflation in Stationery; undercutting by competitors • Stationery: • Waltons sales up 5% and profits flat; Southern Gauteng underperformance being closely monitored, Northern Gauteng trading well • Kolok maintains market share, unit volumes up 23% profits down 21% • Office furniture: flat overall +5% 9.1% 8.0%

    36. Bidoffice - Office Products Strategic imperatives & prospects Stationery and related improving mix & margin though complementary promotional gifts and computer peripherals Improvement in Waltons Southern Gauteng New site for Kolok to capitalise on anticipated growth Minolta large contract wins in a strong trading environment 9% Current contr. to Group Trading Income

    37. …% Trading margin Bidoffice - Printing & Paper Conversion Sacré bleu Rm Trading Income Rm Revenue • Lithotech France returns to profitability: • F2004: -R16,9m • H1 2005: -R15,0m • H2 2005: + R4,5m • Capacity mismatch successfully addressed, but requires intense focus • Lithotech SA moving up the value chain to offset ex-growth products (R40m capex in F2004 supports growth) • Statmark satisfactory • Silveray down 35% - margins sacrificed to maintain market share; reorganisation -4% 8.9% 7.6%

    38. Bidoffice - Printing & Paper Conversion Strategic imperatives & prospects • Lithotech SA • Dynamic business model adapts to changing technologies and customer preferences • Investment in labels to grow market share • Laser, mailing and electronic bill presentment enjoy significant success • Refocused Silveray to deliver better F2006 results • Lithotech France • Capacity cut-backs through plants closures in France & UK underscore the expected turnaround 5% Current contr. to Group Trading Income

    39. …% Trading margin Bid Industrial Products Luminary Rm Trading Income Rm Revenue • Voltex • 24% increase in trading income on a 15% rise in sales; margin 6,7% (6,3%) • Stock building for strategic reasons • Energy efficient luminaries for Eskom a positive impact • Afcom • Trading income up 10%; 3% rise in sales • Deflation, import penetration • Maintaining flexibility by selectively importing whilst maintaining manufacturing capability • Buffalo Executape • Trading income up 14%; 13% rise in sales +18% 8.0% 7.7%

    40. Bid Industrial Products Strategic imperatives & prospects • Significant new contracts for electrical wholesale • Operational objectives on track • “Building automation” gathers momentum • Eskom Demand Side Management in tandem with national energy saving programme a plus • Infrastructure pipeline substantial • Packaging Closures businesses optimistic • Focus on the commercial market 8% Current contr. to Group Trading Income

    41. …% Trading margin Automotive - McCarthy Awesome automotive • 14% rise in revenue to R13.6bn, profits up 22% to R500m on like for like basis • Slight easing in dealership profits countered by stellar Yamaha and Financial Services result • Automotive dealerships: • 19% growth in new units to 41 556 • Flat used market of 31 047 units • New vehicle price standstill (added value without cost) & deflation in used • Margin pressure in new and used • Strong consumer economy benefits Yamaha – full range • McCarthy/WesBank JV book R3.7bn • GAZ taxi partnership with SANTACO Rm Trading Income Rm Revenue 3.9% 3.7% 3.4% 3.3%

    42. Automotive - McCarthy Strategic imperatives & prospects • Socio-economic factors favour strongest automotive market in 25 years • Possibility of market doubling over 5 years • Mood of confidence; nominal interest rates at a quarter century low; increased affordability • Previously disadvantaged individuals now commanding a 25% (and growing) share of new vehicle sales, often bypassing used market • Vehicle ownership ratios in SA low – in line with world average • Group Initiatives: • Mega dealerships for new cars & Renault marque added • “McCarthy Pre-owned” – 12 outlets, extra 8 planned; strategic priority • Budget strongly positioned – new van rental • Yamaha – full range offering • GAZ taxi market potential promising • Re-launched McCarthy Fleet Services • Bidvest group synergies already unfolding 16% Current contr. to Group Trading Income

    43. Corporate Services BNS a loss of R6m – conditional sale Leases with fixed determinable escalation clauses now expensed on a straight line basis thru Investment & Other Income line mymarket.com annual transaction R6bn; breakeven on a cash basis Property rental income up 10% Quality catches but Namsov profits sharply down on strong currency and fuel prices Rm Trading Income -3% 2% Current contr. to Group Trading Income

    44. Group Matters

    45. Group Matters • BEE update • Bidvest share price increase assists funding prospects • Relationship with Dinatla continues to develop and evolve • Negation of dilution from 18m options issued at the time of the Dinatla deal through share repurchases • Group capital will increase by R1bn in December 2006 due to issue of 18m shares, i.e. Deli XL acquisition pre-funded through share repurchases • Ongoing process of refocusing: • Board restructuring • Succession planning at Bidoffice • IFRS impacts – unlikely to be material (see appendix 1) • Acquisitions: • Tiger Wheels • Deli XL

    46. Acquisition of Deli XL • Deli XL fits Bidvest’s stated model of: • Market-leadership within a new geographic distribution channel • Extracting synergies between businesses • Purchase price: • Є140m(R1,1bn) in debt, including Є57m (R450m) in goodwill • Tangible NAV reduced by +/- R450m, but total NAV rises by an annualised +/- R25m retained income • Extremely cost effective funding at 0,50% over Eurobor (1,75% post-tax) • Historic PE of 17x (EBITDA of 7,2x) paid for for an underperforming business can reduce sharply to around a 6-7 PE in the medium term due to: • Bidvest assuming only current employees social obligations • Procurement improvements quickly reflected in margins • Likely to impact for 9 months of F2006 • Earnings accretive in F2006 after funding costs

    47. Acquisition of Deli XL Rationale for the acquisition: • Objective: to internationalise Bidvest’s foodservice interests • Deli XL delivers: • Geographic diversification into Continental Europe • Market shares : • 13% of overall Dutch market segment but 46% of Institutional segment • 4% of overall Belgium market but 10% of Institutional & Catering segment • Good basis for organic and acquisitive European expansion • Access to volume (extra 34 000 customers) • Deli XL background: • Є819m turnover, but trading margins currently less than 1% • Sub-optimal business structure • Benefits of recent restructuring available to Bidvest

    48. Acquisition of Deli XL • Deli XL turnaround strategy (improve margins from 1% to 2-3% in 3 years): • Optimisation of existing state-of-the-art infrastructure • Renegotiation of unprofitable contracts; optimisation of client mix • Rationalisation & optimisation of product range • Implementation of Bidvest philosophy – support, expectations & accountability • Benefits of focused purchasing to both Deli XL and 3663

    49. Outlook

    50. Key growth drivers Internationally: • Increased efficiencies, market share gains, product expansion and profit-enhancing new territories in International Foodservice South Africa: • Freight services aligned with trade growth ahead of GDP • Continuation of trend to outsourcing • Cost base adapting to prevailing low inflation environment • SA Foodservice market far from exhausted – e.g. 3663 initiative • Upswing in infrastructure spend + sporting & tourism events • New vehicle market could double in 5 years • Exposure to emergent consumers