Wrap Text
Condensed abridged report of audited consolidated results for the year ended 30 June 2018 and dividend declaration
Bowler Metcalf Limited
REG NO : 1972/005 REG NO : 1972/005921/06
ALPHA CODE : BCF
ISIN CODE : ZAE000030797
CONDENSED ABRIDGED REPORT OF AUDITED CONSOLIDATED RESULTS
FOR THE YEAR ENDED 30 JUNE 2018 AND DIVIDEND DECLARATION
%
R mil 30 June 18 Change 30 June 17
CONDENSED STATEMENT OF FINANCIAL POSITION
Non-current Assets 169.7 400.4
Property, plant & equipment 158.0 147.7
Investment properties 5.6 5.7
Intangible assets 4.9 4.8
Investment in associate 162.3
Related party loans - 79.1
Deferred tax 1.2 0.8
Current Assets 416.4 358.1
Related party loan - 0.8
Inventories 86.6 82.4
Trade and other receivables 119.5 110.6
Prepayments 5.7 12.3
Cash and cash equivalents 202.9 152.0
Assets held for sale 298.2 -
Investment in associate 233.4 -
Related party loans 64.8 -
------------------ -------------------
Total Assets 884.3 * 17 758.5
========== ==========
Total Equity 766.1 * 16 661.2
Non-current liabilities 61.0 39.8
Deferred Tax 61.0 39.8
Current Liabilities 57.2 57.5
Trade and other payables 56.0 54.5
Taxation 1.2 3.0
------------------ -------------------
Total Equity & Liabilities 884.3 758.5
========== ==========
%
R mil 30 June 18 Change 30 June 17
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
Continuing operations
Revenue 577.3 -1 580.7
Other income 0.5 0.8
Operating costs (482.0) (473.5)
------------------ -------------------
Profit from operations 95.8 - 11 108.0
Net interest 13.2 11.7
------------------ -------------------
Net profit before tax 109.0 119.7
Taxation (30.7) (35.3)
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Total profit - continuing operations 78.3 -7 84.4
========== ==========
Discontinued operations
Share of profit/(loss) in discontinued operations 22.8 (51.9)
- share of post-tax profit/(loss) before impairments 13.3 (17.1)
- share of associate's impairment loss, net of tax - (42.5)
- net finance income from associate 9.4 7.7
Impairment of investment in associate - (57.7)
Reversal of impairment of investment in associate 57.7 -
------------------ -------------------
Net profit/(loss) before tax 80.5 (109.6)
Taxation (18.5) 24.1
------------------ -------------------
Total profit/(loss) - discontinued operations 62.0 (85.5)
========== ==========
TOTAL COMPREHENSIVE INCOME/(LOSS) ATTRIBUTABLE TO
OWNERS OF PARENT 140.3 +1315 (1.1)
========== ==========
Earnings/(Loss) & diluted earnings/(loss) per share (c)
Earnings/(Loss) & diluted earnings/(loss) per share (c) 171.08 +1326 (1.29)
- continuing operations 95.50 101.91
- discontinued operations 75.58 (103.20)
========== ==========
R mil
CONDENSED STATEMENT OF CHANGES IN EQUITY
Share Retained Treasury Total
Capital Earnings Shares Equity
30 June 16 21.5 707.8 (30.2) 699.1
Comprehensive Loss - (1.1) - (1.1)
Dividends - (31.3) - (31.3)
Purchase of treasury shares - - (5.5) (5.5)
----------------- ------------------ ----------------- -------------------
30 June 17 21.5 675.4 (35.7) 661.2
Cancellation of treasury shares (5.5) - 5.5 -
Comprehensive Profit - 140.3 - 140.3
Dividends - (35.4) - (35.4)
------------------- -------------------- ------------------- --------------------
30 June 18 16.0 780.3 (30.2) 766.1
=========== =========== =========== ============
%
30 June 18 Change 30 June 17
HEADLINE EARNINGS (R mil)
Earnings attributable to parent:
Continuing operations 78.3 84.4
Disposal of assets (0.1) -
- gross (0.1) -
- tax - -
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Headline earnings - continuing operations 78.2 -7 84.4
========== ==========
Earnings/(Loss) attributable to parent:
Discontinued operations 62.0 (85.4)
Disposal of assets (beverages) - (0.1)
- gross - (0.1)
- tax - 0.0
(44.8) 44.8
(Reversal of impairment)/Impairment of investment in associate
- (reversal)/impairment (57.7) 57.7
- tax 12.9 (12.9)
Impairment within equity accounted profits - 33.0
- loss - 42.5
- tax - (9.5)
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Headline earnings/(loss) - discontinued operations 17.2 (7.6)
========== ==========
Headline earnings (R'mil) 95.4 * 24 76.8
========== ==========
HEADLINE EARNINGS/(LOSS) PER SHARE (HEPS)
Earnings attributable to parent:
Continuing operations 95.50 101.91
Disposal of assets - net of outside interests (0.14) (0.03)
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HEPS - continuing operations (cents) 95.36 -6 101.88
========== ==========
Discontinued operations 75.58 (103.20)
Disposal of assets - net - (0.01)
(Reversal of impairment)/Impairment of investment in associate (54.60) 54.07
net of tax
Impairment within equity accounted profits - 39.85
------------------ -------------------
HEPS - discontinued operations 20.98 (9.29)
========== ==========
Basic & diluted headline earnings (c) 116.34 * 26 92.59
========== ==========
R mil
CONDENSED SEGMENTAL ANALYSIS
Plastic Discontinued ***
Packaging Beverages Property Holdings Eliminations Total
2018
Continuing Operations
Revenue 572.0 - 5.2 - - 577.2
Reversal of impairment on investment - 57.7 - - - 57.7
Intersegment revenue - - 19.0 - (19.0) -
Other income 3.0 - - - (2.4) 0.6
Expenses (493.9) - (6.7) (0.5) 19.0 (482.1)
Share of loss of associate - 13.3 - - - 13.3
------------------ ------------------ ------------------- -------------------- ------------------- --------------------
Operating income/(loss) 81.1 71.0 17.5 (0.5) (2.4) 166.7
Net finance income 3.6 9.4 - 9.7 - 22.7
Taxation (23.2) (18.6) (4.9) (2.6) - (49.3)
------------------ ------------------ ------------------- -------------------- ------------------- --------------------
Profit for the year - continuing operations 61.5 61.8 12.6 6.6 (2.4 140.1
------------------ ------------------ ------------------- -------------------- ------------------- --------------------
Attributable to parent 61.5 61.8 12.6 6.6 (2.4) 140.1
========== ========== =========== =========== =========== ============
Held for sale
Total assets 663.6 298.2 * 100.2 197.4 (375.0) 884.4
Total liabilities 150.2 38.5 1.5 315.4 (387.5) 118.1
========== ========== ============= ========== =========== ============
2017
Continuing Operations
Revenue 575.9 - 4.8 - - 580.7
Impairment on investment - (57.7) - - - (57.7)
Intersegment revenue - - 18.0 - (18.0) -
Other income 2.9 - - (2.1) 0.8
Expenses (486.1) - (5.5) 18.0 (473.6)
Share of loss of associate - (59.6) - - (59.6)
------------------ ------------------ ---------------------------------------- ------------------- -------------------
Operating income / (loss) 92.7 (117.3) 17.3 (2.1) (9.4)
Net finance income 11.7 7.7 ** - 19.4
Taxation (29.2) 22.1 ** (4.8) 0.8 0 (11.1)
------------------ ------------------ ---------------------- ------------------ ------------------- --------------------
Profit / (loss) for the year 75.2 (87.5) 12.5 0.8 (2.1) (1.1)
------------------ ------------------ ------------------- -------------------- ------------------- --------------------
Attributable to parent 75.2 (87.5) 12.5 0.8 (2.1) (1.1)
========== ========== =========== =========== =========== ============
Total assets 587.4 241.4 * 87.3 4.9 (162.6) 758.3
Total liabilities 236.1 23.5 1.3 - (163.7) 97.2
========== ========== ============= ========== =========== ============
* Investment in associate and loan
** Interest received from associate and related income tax in 2017 reallocated to discontinued beverages segment
*** This segment was previously reported as an unallocated segment. Due to the increased activity within this segment it was
deemed appropriate to apply the relevant title to this segment
R mil
CONDENSED STATEMENT OF CASH FLOWS 30 June 18 30 June 17
Operating Activities 61.4 50.4
Profit before tax 189.4 7.1
Non-cash items (55.7) 133.2
Working capital changes (5.0) (25.2)
Taxation paid (31.9) (33.5)
Dividends paid (35.4) (31.2)
Investing Activities (10.5) (51.1)
Property plant and equipment (24.0) (32.7)
Proceeds on disposal of assets 1.5 -
Loan receipts/(advances) 12.0 (30.0)
Advance payments - 11.6
Financing Activities - (5.5)
Treasury shares - acquisitions - (5.5)
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Net Cash Flow 50.9 (6.2)
Opening balance 152.0 158.2
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Closing balance 202.9 152.0
========== ==========
Comprising:
Cash & cash equivalents 202.9 152.0
========== ==========
RELATED PARTY TRANSACTIONS
Associate
SoftBev (Pty) Ltd
Finance income 9.4 4.9
Subsidiary of associate:
Quality Beverages 2000 (Pty) Ltd
Revenue 51.5 58.2
Rental income 4.8 4.8
Finance income - 2.8
========== ==========
%
30 June 18 Change 30 June 17
ADDITIONAL INFORMATION
Ordinary dividend/share paid (c) 43.18 37.72
Ordinary dividend/share proposed (c) 42.02 *0 42.02
Basic dividend cover (times) 2.27 2.43
Weighted shares in issue (mil) 81.995 82.795
Capital expenditure (Rmil) 23.97 - 27 32.66
Capital commitments (Rmil) 6.04 * 277 1.60
CEO'S COMMENTARY
“It ain’t over till it’s over” – a very fitting expression for the 16,5 years excursion in beverages leading to the final disposal of SoftBev
in August 2018 – at R1,7bil turnover, a formidable national beverages business . This all emanated from a millennium vision of
vertical integration with a start-up custom er and an entrepreneurial partner of note – Sharief Parker. At an impressive IRR of 21% on
top of good operating profits from many years of bottle and preform supply – this return of some R360mil to Bowler Metcalf from a
R61mil investment bears testimony to a focussed, dedicated and tenacious team effort playing to various strengths over many years.
My acknowledgement and gratitude extends to all beverage partners who have made this journey a memorable and educational
experience. Bowler Metcalf exits with a strong cash reserve, good balance sheet, resourcefulness and ambition providing the ideal
springboard for future growth and expansion.
It is however high time to return full focus to the golden goose, Bowler Plastics. After all, Plastics provided the solid pillar of
commercial, financial and technical support to the venture over all the years. Packaging remains the core business focus of Bowler
Metcalf and the starting point for the next venture.
During the past accounting period Bowler Plastics endured the full brunt of the South Africa VUCA (volatile, uncertain, complex and
ambiguous) business environment. The Personal Care niche market serviced with packaging by Bowler has been particularly hard
hit from a combination of events ranging from depressed business volumes (up to 30% drop in icon brands), low margin product mix,
material stock out “Force Majeure”, downstream customer business failures and manufacturing exit from South Africa. On an
unchanged revenue of R572mil to prior year with increased volumes of 1%, an operating profit of R 81mil ( -12%) is returned. Fixed
and overhead costs have been the main contributing drivers in a business structured for further growth. Admittedly the 2017 base
was particularly good. It has been a tumultuous period and the Plastics performance was not unexpected in the context of the South
African economy where disposable income is predominantly channelled towards life’s essentials.
Market focus on the reduction of single-use plastic packaging as well as processing of recyclable and recycled plastics is an important
development. Bowler Plastics does not supply single-use packaging. It has actively developed the use of recyclable and recycled
plastics to a 95% product compliance within its current supply portfolio. This focus will continue as new solutions emerge and a zero
waste circular economy is aspired to.
The now undivided resourcefulness of the executive team is directed towards long term key focus areas of partnership development
with a vibrant new emerging customer base, process and product innovation, business diversification and lean manufacture. I expect
this process to continue throughout the current accounting period, evidencing results in 2020 and beyond.
The Board has approved a final dividend of 21,54 cents and is intending to declare a further special dividend from the proceeds of
the disposal by Q4 2018 .
Our current Chairman of the Board, Mr B Frost will be retiring from the Board during the course of next year. The Nominations
Committee has commenced the task of developing the profile for the next Chairman. The intention is to have the new Chairman elect
in place prior to the end of the financial year.
Finally, I am grateful to the Bowler Metcalf Board for their advice, support, trust and many hours of engagement on this journey to
completion of the Beverages Project. Michael Brain, who initiated the vertical integration beverages venture, deserves special
mention for his invaluable contributions from cradle to grave.
BASIS OF PREPARATION AND AUDIT REPORT
The condensed consolidated results have been prepared in accordance with the Framework concepts, the measurement and
recognition requirements of International Financial Reporting Standards and the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee. They contain the information required by IAS 34 Interim Financial Reporting and have been
prepared in the manner required by the Companies Act and the Johannesburg Stock Exchange Listings Requirements.
The accounting policies and methods of computation applied in the preparation of the results are in terms of IFRS and are consistent
with those applied in the audited annual financial statements for the year ended 30 June 2017 except for the restatement of the
Statement of Cash Flows and the disclosure of Cost of Sales. With regards to the Statement of Cash Flows the cash movement in
related party loan has been restated to reflect repayments and advances separately resulting in the prior year being restated as
R30m advance in investment activities with R90m receipts and R27,9m payments made in financing activities opposed to prior
disclosure of R29,9m net receipts from related party loans under investing activities. The previous interpretation of the IFRS standards
allowed for an offset of these amounts at the prior year reporting date. This interpretation has been corrected in accordance with
IAS7, therefore the prior year has been restated for comparative purposes with a Rnil net effect to the Statement of Cash Flow. The
Cost of Sales figure has also been restated due to reallocation of intercompany rent offset in consolidation to operating expenses.
The effect of this correction has resulted in R12,1m decrease in Cost of Sales and similar increase in operating costs with a Rnil net
effect to the income statement in the full Integrated Annual Report. On this SENS announcement these lines are however combined
in Operating costs.
This condensed report has been prepared using the same accounting policies and methods of computation as used in the audited
annual financial statements from which the condensed report is extracted, and should be read in conjunction with the annual financial
statements.
This results announcement, itself not audited, is extracted from the audited Annual Financial Statements (AFS). The AFS, together
with the unqualified audit report of the company's auditors, Mazars, is available for inspection at the company's registered office. The
auditor’s report does not necessarily report on all of the information contained in this condensed report. Shareholders are therefore
advised that in order to obtain a full understanding of the nature of the auditor’s engagement they should obtain a copy of t he auditor’s
report together with the accompanying financial information from the company’s registered office. The directors take full responsibility
for this report correctly extracted from the underlying audited AFS.
CASH DIVIDEND DECLARATION
A final gross cash dividend, as defined by the Income Tax Act, of 21.54 cents per share ("cps") for the year ended 30 June 20 18
(2017: 22.7 cps) has been declared and is payable to shareholders on Monday, 29 October 2018. The last day to trade will be
Tuesday, 23 October 2018, the ex date is Wednesday, 24 October 2018 and the record date will be Friday, 26 October 2018. Share
certificates may not be dematerialised or re-materialised between Wednesday, 24 October 2018 and Friday, 26 October 2018, both
days inclusive.
This dividend will be made from income reserves. The gross dividend is 21.54cps. Dividend Withholding Tax (DWT) is 20%. The net
local cash dividend to shareholders liable for DWT will therefore be 17.232 cps.
Number of shares in issue at the date of declaration is 87 624 108 shares.
Unless otherwise requested in writing, individual dividend cheques of less than R50 will not be paid but retained in the company's
unclaimed dividend account. Accumulated unpaid dividends in excess of R200 may be claimed in writing from the Transfer
Secretaries.
SUBSEQUENT EVENTS
The sale agreement relating to the disposal of SoftBev was subject to the fulfilment of various suspensive conditions which w ere all
met on the 3rd August 2018. This investment in associate has been classified as “asset held for sale” on the Statement of Financial
Position and “discontinued operations” in the Statement of Comprehensive Income.
The final value that the Company will receive for this disposal, will be determined with reference to the actual EBITDA (including
certain pre-determined adjustments) achieved by SoftBev for the year ended 30 June 2018 and after adjusting for the final net debt
and working capital position of SoftBev as at 30 June 2018 and the final sellers’ transaction costs. The final value for the disposal
will be settled in two payments; a base consideration and a deferred consideration.
The base consideration in the amount of R349 436 073 and R64 841 610 for the shares and loan account respectively was received
on the 6th August 2018 (“Closing Date”).
The deferred consideration will be settled shortly after the completion of SoftBev’s audited financial statements for the yea r ended
June 2018. It is expected that this consideration will be between R40m and R55m, depending on the outcome of the final audit and
the quantum of the adjustments and costs as mentioned above.The deferred consideration will be settled in cash. The application of
such cash is addressed in the Chief Executive Officer's Report.
COMPANY TAX NUMBER
9775130710
ANNUAL REPORT
The Annual Report will be released on the same day as this announcement. The twenty-eighth annual general meeting of
shareholders (AGM) will be held at the company’s head office, Harris Drive, Ottery, Cape Town at 09:00 on Wednesday, 7 November
2018. The record date for purposes of determining which shareholders are entitled to participate and vote at the AGM is Friday, 2
November 2018. The last day to trade in order to be eligible to vote at the AGM will accordingly be Tuesday, 30 October 2018.
BJ Frost (Non-Exec Chairman)
PF Sass (Chief Executive Officer)
Cape Town
25 September 2018 Prepared by: CA Bothma PA (SA)
REGISTERED AUDITOR SPONSOR
Mazars - Partner Y Ferreira - Registered Auditor Arbor Capital Sponsors (Pty) Ltd
Mazars House, Rialto Road, 20 Stirrup Lane, Woodm ead Office Park
Grand Moorings Precinct, Century City, 7441 c/o W oodmead Drive & Van Reenen Avenue,
Woodmead, 2157
Date: 25/09/2018 05:50:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
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indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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