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BARLOWORLD LIMITED - Results for the year ended 30 September 2019 Dividend and special dividend declaration

Release Date: 18/11/2019 07:15
Code(s): BAW BAWP     PDF:  
 
Wrap Text
Results for the year ended 30 September 2019
Dividend and special dividend declaration

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 07:15:00
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