The following are profit results for NZX listed companies as reported to the NZX for the first half reporting season (July - Nov ) for NZX listed companies in 2013.
This reporting season kicks off early January and Share Investor Forum will be posting full profit announcements here, with additional attachments where appropriate.
They will be added to Share Investor Forum as and when they come in.
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NZ Stock Exchange Profit Announcements: Jan - June 2013
NZ Stock Exchange Profit Announcements: Jan - June 2013
by Share Investor » 11 Jan 2013 09:20
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AFI - Aust Foundation 2012
by Share Investor » 21 Jan 2013 14:45
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NEW - Half Year Performance and Full Year Outlook
by Share Investor » 01 Feb 2013 22:51
5:13pm, 1 Feb 2013 | FORECAST
Half Year Performance and Full Year Outlook
New Image announces unaudited results for the half year of the financial year to 30th June 2013 and provides some general guidance as to the expectations for the full year.
The total group revenue for the half year was $67.3m, up 90.5% on the previous year’s first six months of $35.3m. This was helped by a strong performance in our key Malaysian market peaking at the start of the second quarter but has reduced in subsequent months. Our indication for the full year is total annual revenue of $110-120m compared with last year $74.7m.
NPBT for the half year was $7.8m compared with a loss of $0.3m for the same period last year. This is after allowing for a $3m provision for existing investment and stock write offs.
Our current expectations are for the NPBT for the full year to be in the range $12-14m compared with last year’s NPBT loss of $4.8m.<br /> Whilst the year has started strongly the second half will present more difficult trading conditions.
The earlier part of the calendar year is normally soft with holiday periods and Chinese New Year.<br /> Recent publicity of New Zealand’s DCD problems is causing problems within MLM countries and with retail customers. Whilst new retail business is being developed in the China market, it takes time to build and is requiring an increased investment in production capacity.
Graeme Clegg<br /> Chairman
Half Year Performance and Full Year Outlook
New Image announces unaudited results for the half year of the financial year to 30th June 2013 and provides some general guidance as to the expectations for the full year.
The total group revenue for the half year was $67.3m, up 90.5% on the previous year’s first six months of $35.3m. This was helped by a strong performance in our key Malaysian market peaking at the start of the second quarter but has reduced in subsequent months. Our indication for the full year is total annual revenue of $110-120m compared with last year $74.7m.
NPBT for the half year was $7.8m compared with a loss of $0.3m for the same period last year. This is after allowing for a $3m provision for existing investment and stock write offs.
Our current expectations are for the NPBT for the full year to be in the range $12-14m compared with last year’s NPBT loss of $4.8m.<br /> Whilst the year has started strongly the second half will present more difficult trading conditions.
The earlier part of the calendar year is normally soft with holiday periods and Chinese New Year.<br /> Recent publicity of New Zealand’s DCD problems is causing problems within MLM countries and with retail customers. Whilst new retail business is being developed in the China market, it takes time to build and is requiring an increased investment in production capacity.
Graeme Clegg<br /> Chairman
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TLS - Telstra Corporation Financial Results for the Half Yea
by Share Investor » 07 Feb 2013 16:14
10:32am, 7 Feb 2013 | HALFYR
Telstra Corporation Limited Financial Results for the Half Year ended 31 December 2012.
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Telstra Corporation Limited Financial Results for the Half Year ended 31 December 2012.
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SPN - South Port Interim Result
by Share Investor » 07 Feb 2013 16:44
4:25pm, 7 Feb 2013 | HALFYR
NZX MEDIA STATEMENT
7 February 2013
Storage Revenue Lifts South Port Half
The diversified trading activities of South Port New Zealand Ltd have contributed to higher first-half earnings by the operator of the Port of Bluff.
Despite processing a lower cargo tonnage for the six month period ended 31 December 2012, the Company has recorded an increased interim net profit after tax of $2.90 million, said the Chairman, Mr Rex Chapman.
The result compares with the 2012 interim of $2.54 million, and matched the previous record interim profit set in December 2010.
Mr Chapman said The half-year was boosted by the addition of the former Southland Cool Stores cold storage operation (with effect from 1 September 2012) and increased fish cargo being stored at South Ports Island Harbour cold storage facility.
The Chief Executive, Mr Mark OConnor said, Cargo activity for the six months was 1,268,000 tonnes, a decrease of 9% in volume terms on the prior interim period which produced first-half cargo volume record of 1,390,000 tonnes.
The decline in cargo was due primarily to weaker export activity while overall import movements largely maintained their momentum, he added. Reduced volumes for petroleum products, NZAS import / export cargo, woodchips and logs were partially offset by volume gains for fertiliser, stock food and fish.
The performance of the port operator reflects that of the economy of the southern region. The forestry sector continued to encounter trying conditions with the Japanese market for softwood chips being extremely weak while demand for Southern logs was spasmodic. Fertiliser tonnages were notably buoyant although South Ports customers in this sector expect reduced throughput during the second half of the financial year.
The past six months provided a lift in deep-water fish catch being discharged into South Ports cold store in Bluff. During the quieter part of the season, a number of vessels were either based at the Port or transferred their catch at the closest discharge location. In addition to generating extra cargo, this activity also provided incremental storage volume for South Ports Island Harbour cold store division.
As the half-yearly result shows, the cold storage activities of South Port are an important part of the business, said Mr OConnor. Accordingly, since the acquisition of the Bluff based Southland Cool Stores business, in September 2012, South Port has taken steps to integrate this business with its existing Island Harbour cold storage operation. This has been successfully achieved with both locations now forming an enlarged single cold storage division within the Company.
An additional 5,900 m2 dry warehouse is under construction at the west end of the Bluff Island Harbour. This new structure to accommodate bulk cargoes (such as stock feed and fertiliser) will be a useful addition to South Ports warehousing resources.
Prior to Christmas, South Port acquired 0.63 ha of bare land adjacent to the Invercargill rail-head area where containerised cargo is transferred and is exploring warehousing options for this site. The Company also aims to establish a packing/devanning operation there.
The renegotiation of the long-term electricity supply contract with Meridian Energy by New Zealand Aluminium Smelters remains unresolved. Of all the rationalisation strategies being applied by NZAS, the outcome of the electricity contract renegotiation is likely to have the most significant impact on the long term future of NZAS.
(NZAS operates the aluminium production facility located on Tiwai Peninsula alongside Bluff Harbour and leases the Tiwai Wharf infrastructure from South Port).
Mr OConnor says that in the fourth quarter of 2012, South Port marine pilots conducted a simulation exercise at the modern Smartship simulator facility in Brisbane, to assess whether the Port of Bluff could safely accommodate larger 260 metre length container vessels.
MSC Shipping Line is considering introducing such larger vessels into the current Capricorn Service rotation. The testing carried out during the simulation exercise confirmed that, subject to certain operating conditions, the larger container vessels could safely transit the port, said Mr OConnor.
South Port and regional stakeholders continue to interact with oil and gas exploration companies and remain optimistic about the energy potential available in the Great South Basin (GSB).
The most significant exploration licence in the GSB is held by a consortium comprising Shell NZ (50%), OMV NZ (18%), PTTEP NZ (18%) and Mitsui E&P Australia (14%). Once 3D seismic data acquired in early 2012 is analysed - by mid-2013 - a decision on a potential exploration drilling project will be made by the consortium.
Should an exploration well be committed to, the timing of this project is expected to be in the summer months of 2014-2015.
Three of the above consortium members have been awarded an additional exploration permit (PEP54863) in the Great South Basin.
South Port has been working with Solid Energy and its consultants to provide meaningful data in relation to a full feasibility study to assess the viability of a potential lignite-to-urea conversion process in the region. Solid Energy has access to approximately 1.4 billion tonnes of lignite in Eastern Southland. Renewed emphasis has been placed on completing this study.
OUTLOOK
Looking to the remainder of the current financial period, South Ports Chairman has again noted the unique global environment that persists. While encouraged by the strong start to the 2013 year, there are currently a number of testing factors affecting a range of cargo generating businesses in Southern New Zealand, said Mr Chapman.
These factors include subdued off-shore demand, a high exchange rate, the need to maintain international competitiveness and lower commodity prices. The reduced cargo volume in the first half was directly attributable to these factors. As a consequence the second half of the current financial year is likely to be a more challenging period for the Company and its customer base.
Based on all known factors at the date of releasing its 2013 interim result South Port estimates that its full year earnings should fall in the range of $6.0 million to $6.4 million.
DIVIDEND
After assessing the anticipated year end result, the Directors have declared an improved fully imputed interim dividend of 6.5 cents per share (2012 5.50 cents) payable on 4 March 2013. The Companys aim is to maintain the same full year dividend pay-out level that it has achieved over the past two financial years (20.0 cents per share).
FOR FURTHER INFORMATION PLEASE CONTACT:
Mr Mark OConnor
Chief Executive
South Port New Zealand Ltd
Tel 03 212 8159
Mobile 0272 560 401
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NZX MEDIA STATEMENT
7 February 2013
Storage Revenue Lifts South Port Half
The diversified trading activities of South Port New Zealand Ltd have contributed to higher first-half earnings by the operator of the Port of Bluff.
Despite processing a lower cargo tonnage for the six month period ended 31 December 2012, the Company has recorded an increased interim net profit after tax of $2.90 million, said the Chairman, Mr Rex Chapman.
The result compares with the 2012 interim of $2.54 million, and matched the previous record interim profit set in December 2010.
Mr Chapman said The half-year was boosted by the addition of the former Southland Cool Stores cold storage operation (with effect from 1 September 2012) and increased fish cargo being stored at South Ports Island Harbour cold storage facility.
The Chief Executive, Mr Mark OConnor said, Cargo activity for the six months was 1,268,000 tonnes, a decrease of 9% in volume terms on the prior interim period which produced first-half cargo volume record of 1,390,000 tonnes.
The decline in cargo was due primarily to weaker export activity while overall import movements largely maintained their momentum, he added. Reduced volumes for petroleum products, NZAS import / export cargo, woodchips and logs were partially offset by volume gains for fertiliser, stock food and fish.
The performance of the port operator reflects that of the economy of the southern region. The forestry sector continued to encounter trying conditions with the Japanese market for softwood chips being extremely weak while demand for Southern logs was spasmodic. Fertiliser tonnages were notably buoyant although South Ports customers in this sector expect reduced throughput during the second half of the financial year.
The past six months provided a lift in deep-water fish catch being discharged into South Ports cold store in Bluff. During the quieter part of the season, a number of vessels were either based at the Port or transferred their catch at the closest discharge location. In addition to generating extra cargo, this activity also provided incremental storage volume for South Ports Island Harbour cold store division.
As the half-yearly result shows, the cold storage activities of South Port are an important part of the business, said Mr OConnor. Accordingly, since the acquisition of the Bluff based Southland Cool Stores business, in September 2012, South Port has taken steps to integrate this business with its existing Island Harbour cold storage operation. This has been successfully achieved with both locations now forming an enlarged single cold storage division within the Company.
An additional 5,900 m2 dry warehouse is under construction at the west end of the Bluff Island Harbour. This new structure to accommodate bulk cargoes (such as stock feed and fertiliser) will be a useful addition to South Ports warehousing resources.
Prior to Christmas, South Port acquired 0.63 ha of bare land adjacent to the Invercargill rail-head area where containerised cargo is transferred and is exploring warehousing options for this site. The Company also aims to establish a packing/devanning operation there.
The renegotiation of the long-term electricity supply contract with Meridian Energy by New Zealand Aluminium Smelters remains unresolved. Of all the rationalisation strategies being applied by NZAS, the outcome of the electricity contract renegotiation is likely to have the most significant impact on the long term future of NZAS.
(NZAS operates the aluminium production facility located on Tiwai Peninsula alongside Bluff Harbour and leases the Tiwai Wharf infrastructure from South Port).
Mr OConnor says that in the fourth quarter of 2012, South Port marine pilots conducted a simulation exercise at the modern Smartship simulator facility in Brisbane, to assess whether the Port of Bluff could safely accommodate larger 260 metre length container vessels.
MSC Shipping Line is considering introducing such larger vessels into the current Capricorn Service rotation. The testing carried out during the simulation exercise confirmed that, subject to certain operating conditions, the larger container vessels could safely transit the port, said Mr OConnor.
South Port and regional stakeholders continue to interact with oil and gas exploration companies and remain optimistic about the energy potential available in the Great South Basin (GSB).
The most significant exploration licence in the GSB is held by a consortium comprising Shell NZ (50%), OMV NZ (18%), PTTEP NZ (18%) and Mitsui E&P Australia (14%). Once 3D seismic data acquired in early 2012 is analysed - by mid-2013 - a decision on a potential exploration drilling project will be made by the consortium.
Should an exploration well be committed to, the timing of this project is expected to be in the summer months of 2014-2015.
Three of the above consortium members have been awarded an additional exploration permit (PEP54863) in the Great South Basin.
South Port has been working with Solid Energy and its consultants to provide meaningful data in relation to a full feasibility study to assess the viability of a potential lignite-to-urea conversion process in the region. Solid Energy has access to approximately 1.4 billion tonnes of lignite in Eastern Southland. Renewed emphasis has been placed on completing this study.
OUTLOOK
Looking to the remainder of the current financial period, South Ports Chairman has again noted the unique global environment that persists. While encouraged by the strong start to the 2013 year, there are currently a number of testing factors affecting a range of cargo generating businesses in Southern New Zealand, said Mr Chapman.
These factors include subdued off-shore demand, a high exchange rate, the need to maintain international competitiveness and lower commodity prices. The reduced cargo volume in the first half was directly attributable to these factors. As a consequence the second half of the current financial year is likely to be a more challenging period for the Company and its customer base.
Based on all known factors at the date of releasing its 2013 interim result South Port estimates that its full year earnings should fall in the range of $6.0 million to $6.4 million.
DIVIDEND
After assessing the anticipated year end result, the Directors have declared an improved fully imputed interim dividend of 6.5 cents per share (2012 5.50 cents) payable on 4 March 2013. The Companys aim is to maintain the same full year dividend pay-out level that it has achieved over the past two financial years (20.0 cents per share).
FOR FURTHER INFORMATION PLEASE CONTACT:
Mr Mark OConnor
Chief Executive
South Port New Zealand Ltd
Tel 03 212 8159
Mobile 0272 560 401
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TUR - FY to 31/12/12 $4.2M up 14%, FY Total dividend 15cps
by Share Investor » 12 Feb 2013 10:04
9:55am, 12 Feb 2013 | FLLYR
Turners Auctions Result for the year ended 31st December 2012
Turners Auctions today announced 2012 net profit after tax of $4.2 million, up 14% on 2011. Revenue for the year was $78 million, an increase of 4%.
Revenue growth was achieved in the Cars business, partly due to the continued success of our CashNow product. New customers have been attracted by the convenience of CashNow, which provides immediate cash for their cars. Our Damaged Vehicle Division grew on the back of new business, with a steady performance in the Commercial and Trucks Division.
Turners Fleet performed well overall as we implemented our strategy to buy more cars domestically. As expected, the Japan import market was challenging following the implementation of new emissions regulations which started from 1st January 2012.
The Turners Finance ledger grew by 10%, which will lead to further growth in interest revenue in 2013.
The Directors have declared a final fully imputed dividend of 8 cents per share (2011: 6 cents) given the strong balance sheet and cash position of the business at the end of 2012. This makes a total dividend for the year of 15 cents (2011: ordinary dividend 11 cents plus a special dividend of 6 cents).
The Directors have elected not to declare a special dividend this year because the Group is currently considering a number of growth opportunities which may require investment.
Results Summary
Revenue $78 million up 4%
Net profit after tax of $4.2m up 14%
Final dividend payment 8 cents (2011: 6 cents)
Total ordinary dividend payment for year 15 cents (2011: 11 cents)
Further information is included in the Turners Auctions full year investor presentation, available from the company or on the NZX website [www.nzx. com].
Contact:
Graham Roberts Turners Auctions, Chief Executive
+64 9 580 9353
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Turners Auctions Result for the year ended 31st December 2012
Turners Auctions today announced 2012 net profit after tax of $4.2 million, up 14% on 2011. Revenue for the year was $78 million, an increase of 4%.
Revenue growth was achieved in the Cars business, partly due to the continued success of our CashNow product. New customers have been attracted by the convenience of CashNow, which provides immediate cash for their cars. Our Damaged Vehicle Division grew on the back of new business, with a steady performance in the Commercial and Trucks Division.
Turners Fleet performed well overall as we implemented our strategy to buy more cars domestically. As expected, the Japan import market was challenging following the implementation of new emissions regulations which started from 1st January 2012.
The Turners Finance ledger grew by 10%, which will lead to further growth in interest revenue in 2013.
The Directors have declared a final fully imputed dividend of 8 cents per share (2011: 6 cents) given the strong balance sheet and cash position of the business at the end of 2012. This makes a total dividend for the year of 15 cents (2011: ordinary dividend 11 cents plus a special dividend of 6 cents).
The Directors have elected not to declare a special dividend this year because the Group is currently considering a number of growth opportunities which may require investment.
Results Summary
Revenue $78 million up 4%
Net profit after tax of $4.2m up 14%
Final dividend payment 8 cents (2011: 6 cents)
Total ordinary dividend payment for year 15 cents (2011: 11 cents)
Further information is included in the Turners Auctions full year investor presentation, available from the company or on the NZX website [www.nzx. com].
Contact:
Graham Roberts Turners Auctions, Chief Executive
+64 9 580 9353
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SKC - Interim Result (For the six months to 31 December 2012
by Share Investor » 13 Feb 2013 09:36
8:52am, 13 Feb 2013 | HALFYR
SKYCITY Entertainment Group Limited 2013 Interim Result
Summary of six months to 31/12/12
Reported: Net Profit After Tax: $66.3m (-$12.5m) -15.9%, 11.5cps
Normalised: Net Profit After Tax: $74.4 (-$2.6m) -3.5%, 12.9cps
Name of Listed Issuer: SKYCITY Entertainment Group Limited
CONSOLIDATED OPERATING STATEMENT
Current Interim Period NZ$; Up/Down %; Previous Corresponding Period NZ$
TOTAL REVENUE (excl GST) (REPORTED)
$444.5m; down 1.5%; $451.3m
NET PROFIT AFTER TAX (REPORTED)
$66.3m; down 15.9%; $78.8m
EARNINGS PER SHARE (REPORTED)
11.5cps; down from 13.7cps
TOTAL REVENUE (excl GST) (NORMALISED)
$451.8m; up 1.1%; $446.9m
NET PROFIT AFTER TAX (NORMALISED)
$74.4m; down 3.5%; $77.0m
EARNINGS PER SHARE (NORMALISED)
12.9cps; down from 13.4cps
FINAL DISTRIBUTION
10.0cps
Record date: 27 March 2013, Payment date: 5 April 2013
Dividend Reinvestment Plan will not apply
FY13 INTERIM RESULT ANNOUNCEMENT
Refer company presentation - attached
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SKYCITY Entertainment Group Limited 2013 Interim Result
Summary of six months to 31/12/12
Reported: Net Profit After Tax: $66.3m (-$12.5m) -15.9%, 11.5cps
Normalised: Net Profit After Tax: $74.4 (-$2.6m) -3.5%, 12.9cps
Name of Listed Issuer: SKYCITY Entertainment Group Limited
CONSOLIDATED OPERATING STATEMENT
Current Interim Period NZ$; Up/Down %; Previous Corresponding Period NZ$
TOTAL REVENUE (excl GST) (REPORTED)
$444.5m; down 1.5%; $451.3m
NET PROFIT AFTER TAX (REPORTED)
$66.3m; down 15.9%; $78.8m
EARNINGS PER SHARE (REPORTED)
11.5cps; down from 13.7cps
TOTAL REVENUE (excl GST) (NORMALISED)
$451.8m; up 1.1%; $446.9m
NET PROFIT AFTER TAX (NORMALISED)
$74.4m; down 3.5%; $77.0m
EARNINGS PER SHARE (NORMALISED)
12.9cps; down from 13.4cps
FINAL DISTRIBUTION
10.0cps
Record date: 27 March 2013, Payment date: 5 April 2013
Dividend Reinvestment Plan will not apply
FY13 INTERIM RESULT ANNOUNCEMENT
Refer company presentation - attached
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GFF - Goodman Fielder profit to 31 Dec 2012
by Share Investor » 13 Feb 2013 12:03
11:11am, 13 Feb 2013 | HALFYR
I attach the following documents in relation to the half year ended 31 December 2012:
Appendix 4D Half Year Report;
Commentary on results for the period (ASX/NZX Announcement); and
Half Year Financial Report, including the Directors Report, Financial Report and Independent Auditors Review Report.
The attached documents comprise the half year results information required by ASX Listing Rule 4.2A and NZSX Listing Rule 10.4.2. The information should be read in conjunction with the Goodman Fielder Limited 2012 Annual Report.
The analyst briefing in connection with the half year results will follow shortly.
The attached information will be posted to Goodman Fielders website once released to the market.
Jonathon West
Company Secretary
Attachments
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I attach the following documents in relation to the half year ended 31 December 2012:
Appendix 4D Half Year Report;
Commentary on results for the period (ASX/NZX Announcement); and
Half Year Financial Report, including the Directors Report, Financial Report and Independent Auditors Review Report.
The attached documents comprise the half year results information required by ASX Listing Rule 4.2A and NZSX Listing Rule 10.4.2. The information should be read in conjunction with the Goodman Fielder Limited 2012 Annual Report.
The analyst briefing in connection with the half year results will follow shortly.
The attached information will be posted to Goodman Fielders website once released to the market.
Jonathon West
Company Secretary
Attachments
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MHI - Results for six months ended 31 December 2012
by Share Investor » 15 Feb 2013 08:39
8:30am, 15 Feb 2013 | HALFYR
Michael Hill International Limited
Results for announcement to the market
Reporting Period 6 months to 31 December 2012
Previous Reporting Period 6 months to 31 December 2011
Percentage
Amount Change
$NZ'000 %
Revenue from ordinary activities 312,866 8.3%
Profit from ordinary activities after tax attributable to members 27,839 5.9%
Net profit for the period attributable to members 27,839 5.9%
Imputed
Amount amount
per security per security
Interim dividend for half-year ended 31 December 2012 2.5 cents nil
Record date 25 March 2013
Dividend payment date 3 April 2013
Michael Hill International Limited's accounts attached to this report have been reviewed and are not subject
to any qualification.
CHAIRMAN'S STATEMENT
Profit Announcement
Michael Hill International Limited today announced an after tax profit of $27.839m for the six months ended 31 December 2012, up 5.9% on the corresponding period last year.
Summary of Key Points (all values stated in NZD unless stated otherwise)
Operating revenue of $312.866m up 8.3% on same period last year
Same store sales were 2.3% up on same period last year
EBIT of $35.970m up 3.4% on same period last year
Net profit before tax of $34.210m up 5.8% on same period last year
Net profit after tax of $27.839m up 5.9% on same period last year
Revenue collected from professional care plans of $18.063m for the period
Net debt of $20.688m at 31 December 2012
Operating cash flow of $28.114m
12 new stores opened and 1 closed during the period
Total of 263 stores open at 31 December 2012
Interim dividend of 2.5 cents per share up 25.0%
New Zealand Retail Operations
The New Zealand retail segment revenue increased by 3.6% to $63.117m for the six months, with an operating surplus of $12.945m, an increase of 6.2% on the corresponding period last year.
Same store sales during the twelve months increased by 3.0% (9.2% last year).
The operating surplus as a percentage of revenue increased to 20.5% (20.0% last year).
One store closed in New Zealand during the period at Fashion Island (Papamoa), giving a total of 52 stores operating in New Zealand as at 31 December 2012.
Australian Retail Operations
The Australian retail segment increased its revenue by 10.6% to AU$162.712m for the six months with an operating surplus of AU$27.986m, compared to AU$24.363m for the previous corresponding period, an increase of 14.9%. Same store sales in local currency increased 3.8% for the six months (1.5% decrease last year).
The operating surplus as a percentage of revenue was 17.2% (16.6% last year).
Seven new stores were opened in Australia during the period, as follows:
Goulburn, New South Wales
Melbourne CBD, Victoria
Mt Gambier, South Australia
Parramatta, New South Wales
Queens Plaza Brisbane CBD, Queensland
Shepparton, Victoria
Singleton, New South Wales
No stores were closed during the period, giving a total of 160 stores operating in Australia as at 31 December 2012.
Canadian Retail Operations
The Canadian retail segment increased its revenue by 21.5% for the six months to CA$29.463m and there was an operating surplus of CA$1.555m, up 31.7% on CA$1.181m for the previous corresponding period. Same stores sales in local currency increased 3.8% for the six months (5.2% last year).
Five new stores were opened during the period, as follows:
Cambridge, Ontario
Georgian Mall, Ontario
Lambton Mall, Ontario
Markville, Ontario
St Laurent, Ontario
No stores were closed during the period, giving a total of 42 stores operating in Canada as at 31 December 2012.
US Retail Operations
The US retail segment increased its revenue by 4.2% for the six months to US$5.493m for the six months and there was an operating loss of US$1.266m for the same period (US$1.431m loss last year). Same stores sales in local currency increased 4.2% for the six months.
The board is satisfied with the progress of the US operation over the past six months but acknowledges there is still a long way to go before the business is proven up in the US market. Focus remains on improving both the top line sales and the margins in order to grow the bottom line of the nine stores over the coming twelve months.
There were nine stores open as at 31 December 2012.
Professional Care Plan (PCP)
PCP sales for the half year were $18.063m. An amount of $5.060m has been included as revenue in the segment figures stated above from the current and prior periods.
PCP sales are carried on the balance sheet as deferred revenue and then brought to revenue in the P&L over the life of the plans (3 year and lifetime) in proportion to the expected cost of meeting commitments under the PCPs. It is assumed that the liability for accounting purposes of the life time plans will expire within 10 years from date of sale. The estimate of expected commitments under the relevant PCP is based on a combination of our own experience and overseas research. These estimates will be updated as the company gathers actual data over the coming years. The costs of meeting the liability under the PCP programs are brought to account in the period incurred.
The following table summarises the revenue treatment of the PCP business.
The following figures are in NZ Dollars Last Year This Year
PCP sales collected for the half year $14,411,408 $18,063,228
PCP revenue brought to income for the half year $1,466,312 $5,059,516
Deferred revenue held on balance sheet $24,337,672 $44,468,278
Outstanding Tax Issues from Group Restructuring in 2008
It will be recalled that the Group currently has two unresolved tax matters relating to the way the Group valued and financed the sale of intellectual property from one of our New Zealand companies to one of our Australian companies.
In New Zealand, the Inland Revenue (IR) has questioned the manner in which the transaction was financed. In Australia, the Australian Taxation Office (ATO) has queried the value at which the intellectual property was transferred. The Group does not agree with the positions advanced by either the IR or ATO and believes the tax treatment and values it has adopted are correct. Discussions continue with both the IR and ATO within their dispute process frameworks, but it remains unclear when final resolution will be achieved in respect of either matter.
In New Zealand, the amount in dispute is $24,636,000, being the tax effect of deductions claimed by the New Zealand Group from the date of the sale through to 30 June 2012. The tax effect of deductions for the December 2012 half year is $3,469,000. In the event any tax liability was payable, the Group would also incur an interest expense.
In respect of Australia, the value at which the intellectual property was transferred was originally determined by reference to an independent valuation carried out by an internationally recognised firm and a deferred tax asset was raised in 2009 based on that valuation. The deferred tax asset balance at 31 December 2012 was $41,591,000 as a result of depreciation of components of the intellectual property and a previously announced adjustment in value. The ATO has signalled that it has issues with aspects of that valuation which, if correct, would reduce the amount of depreciation able to be deducted by the Group. As noted, the Group does not accept the ATO's position and believes the ATOs views are based on a number of factual, legal and technical valuation errors.
Both matters are capable of being resolved by agreement, but if the Group is unable to find common ground with either the IR or ATO then further formal legal processes may be needed to achieve resolution. As is the case with almost all legal processes there is inherent uncertainty as to the outcome and the Group does not believe that the outcome of either process can be predicted or the range of possible implications quantified. The board does not consider that either of the above ongoing tax matters require a provision in the Group's financial statements for the six months ended 31 December 2012.
Dividend
The Directors are pleased to announce a final dividend of 2.5 per share (2011 2.0), with no imputation credits attached for New Zealand shareholders and full franking credits for Australian shareholders. The dividend will be paid on Wednesday, 3 April 2013 with the record date being Monday, 25 March 2013.
Due to the internal restructuring of the Group in December 2008, the company is unlikely to be in a position to impute dividends for New Zealand shareholders for some years, however this will depend on the performance of the segment in the coming years and also on the level of dividend to be paid in future periods.
Whilst the 2012-13 interim dividend is fully franked to Australian resident shareholders, it is possible that future dividends will only be partially franked due to the likelihood of future dividend payout exceeding the level of tax liability in Australia. However, this position can change over time depending on a number of variables and the company will keep the market informed each time a dividend is declared.
Cash Flows / Balance Sheets
The Group has reported net operating cash flows of $28.114m for the six months, compared to $46.800m for the previous year.
The surplus from operations is a result of:
Profit excluding non-cash items $34.935m
Increase in trade and other receivables ($10.324)m
Increase in inventory levels ($28.035)m
Increase in trade and other payables $20.107m
Increase in deferred revenues from professional care plan $12.902m
Other miscellaneous items ($1.471)m
Net cash inflow from operations surplus for the half year $28.114m
The Groups balance sheet continues to be sound with an equity ratio of 55.9% as at 31 December 2012 (56.2% in 2011) and a working capital ratio of 2.6:1 (2.8:1 in 2011).
Summary
Trading for the six months was a story of two quarters with a strong first quarter being followed by a slowdown in the second quarter. All countries struggled to make gains on the previous years sales numbers during the key December quarter however same store growth was achieved in all markets during the six months which is pleasing. As mentioned in our August 2012 Chairmans Statement, additional resources were placed into our key Australian market in mid-2012 and this has started to have a positive impact on sales in this key market. The directors remain satisfied with the overall performance of the Group and they remain confident in the continued growth and profitability of the Group.
Sir Michael Hill 15/02/2013
Chairman
Internet Home Page - http://www.michaelhill.com
All inquiries should be made to Mike Parsell CEO phone +61 403 246655
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Michael Hill International Limited
Results for announcement to the market
Reporting Period 6 months to 31 December 2012
Previous Reporting Period 6 months to 31 December 2011
Percentage
Amount Change
$NZ'000 %
Revenue from ordinary activities 312,866 8.3%
Profit from ordinary activities after tax attributable to members 27,839 5.9%
Net profit for the period attributable to members 27,839 5.9%
Imputed
Amount amount
per security per security
Interim dividend for half-year ended 31 December 2012 2.5 cents nil
Record date 25 March 2013
Dividend payment date 3 April 2013
Michael Hill International Limited's accounts attached to this report have been reviewed and are not subject
to any qualification.
CHAIRMAN'S STATEMENT
Profit Announcement
Michael Hill International Limited today announced an after tax profit of $27.839m for the six months ended 31 December 2012, up 5.9% on the corresponding period last year.
Summary of Key Points (all values stated in NZD unless stated otherwise)
Operating revenue of $312.866m up 8.3% on same period last year
Same store sales were 2.3% up on same period last year
EBIT of $35.970m up 3.4% on same period last year
Net profit before tax of $34.210m up 5.8% on same period last year
Net profit after tax of $27.839m up 5.9% on same period last year
Revenue collected from professional care plans of $18.063m for the period
Net debt of $20.688m at 31 December 2012
Operating cash flow of $28.114m
12 new stores opened and 1 closed during the period
Total of 263 stores open at 31 December 2012
Interim dividend of 2.5 cents per share up 25.0%
New Zealand Retail Operations
The New Zealand retail segment revenue increased by 3.6% to $63.117m for the six months, with an operating surplus of $12.945m, an increase of 6.2% on the corresponding period last year.
Same store sales during the twelve months increased by 3.0% (9.2% last year).
The operating surplus as a percentage of revenue increased to 20.5% (20.0% last year).
One store closed in New Zealand during the period at Fashion Island (Papamoa), giving a total of 52 stores operating in New Zealand as at 31 December 2012.
Australian Retail Operations
The Australian retail segment increased its revenue by 10.6% to AU$162.712m for the six months with an operating surplus of AU$27.986m, compared to AU$24.363m for the previous corresponding period, an increase of 14.9%. Same store sales in local currency increased 3.8% for the six months (1.5% decrease last year).
The operating surplus as a percentage of revenue was 17.2% (16.6% last year).
Seven new stores were opened in Australia during the period, as follows:
Goulburn, New South Wales
Melbourne CBD, Victoria
Mt Gambier, South Australia
Parramatta, New South Wales
Queens Plaza Brisbane CBD, Queensland
Shepparton, Victoria
Singleton, New South Wales
No stores were closed during the period, giving a total of 160 stores operating in Australia as at 31 December 2012.
Canadian Retail Operations
The Canadian retail segment increased its revenue by 21.5% for the six months to CA$29.463m and there was an operating surplus of CA$1.555m, up 31.7% on CA$1.181m for the previous corresponding period. Same stores sales in local currency increased 3.8% for the six months (5.2% last year).
Five new stores were opened during the period, as follows:
Cambridge, Ontario
Georgian Mall, Ontario
Lambton Mall, Ontario
Markville, Ontario
St Laurent, Ontario
No stores were closed during the period, giving a total of 42 stores operating in Canada as at 31 December 2012.
US Retail Operations
The US retail segment increased its revenue by 4.2% for the six months to US$5.493m for the six months and there was an operating loss of US$1.266m for the same period (US$1.431m loss last year). Same stores sales in local currency increased 4.2% for the six months.
The board is satisfied with the progress of the US operation over the past six months but acknowledges there is still a long way to go before the business is proven up in the US market. Focus remains on improving both the top line sales and the margins in order to grow the bottom line of the nine stores over the coming twelve months.
There were nine stores open as at 31 December 2012.
Professional Care Plan (PCP)
PCP sales for the half year were $18.063m. An amount of $5.060m has been included as revenue in the segment figures stated above from the current and prior periods.
PCP sales are carried on the balance sheet as deferred revenue and then brought to revenue in the P&L over the life of the plans (3 year and lifetime) in proportion to the expected cost of meeting commitments under the PCPs. It is assumed that the liability for accounting purposes of the life time plans will expire within 10 years from date of sale. The estimate of expected commitments under the relevant PCP is based on a combination of our own experience and overseas research. These estimates will be updated as the company gathers actual data over the coming years. The costs of meeting the liability under the PCP programs are brought to account in the period incurred.
The following table summarises the revenue treatment of the PCP business.
The following figures are in NZ Dollars Last Year This Year
PCP sales collected for the half year $14,411,408 $18,063,228
PCP revenue brought to income for the half year $1,466,312 $5,059,516
Deferred revenue held on balance sheet $24,337,672 $44,468,278
Outstanding Tax Issues from Group Restructuring in 2008
It will be recalled that the Group currently has two unresolved tax matters relating to the way the Group valued and financed the sale of intellectual property from one of our New Zealand companies to one of our Australian companies.
In New Zealand, the Inland Revenue (IR) has questioned the manner in which the transaction was financed. In Australia, the Australian Taxation Office (ATO) has queried the value at which the intellectual property was transferred. The Group does not agree with the positions advanced by either the IR or ATO and believes the tax treatment and values it has adopted are correct. Discussions continue with both the IR and ATO within their dispute process frameworks, but it remains unclear when final resolution will be achieved in respect of either matter.
In New Zealand, the amount in dispute is $24,636,000, being the tax effect of deductions claimed by the New Zealand Group from the date of the sale through to 30 June 2012. The tax effect of deductions for the December 2012 half year is $3,469,000. In the event any tax liability was payable, the Group would also incur an interest expense.
In respect of Australia, the value at which the intellectual property was transferred was originally determined by reference to an independent valuation carried out by an internationally recognised firm and a deferred tax asset was raised in 2009 based on that valuation. The deferred tax asset balance at 31 December 2012 was $41,591,000 as a result of depreciation of components of the intellectual property and a previously announced adjustment in value. The ATO has signalled that it has issues with aspects of that valuation which, if correct, would reduce the amount of depreciation able to be deducted by the Group. As noted, the Group does not accept the ATO's position and believes the ATOs views are based on a number of factual, legal and technical valuation errors.
Both matters are capable of being resolved by agreement, but if the Group is unable to find common ground with either the IR or ATO then further formal legal processes may be needed to achieve resolution. As is the case with almost all legal processes there is inherent uncertainty as to the outcome and the Group does not believe that the outcome of either process can be predicted or the range of possible implications quantified. The board does not consider that either of the above ongoing tax matters require a provision in the Group's financial statements for the six months ended 31 December 2012.
Dividend
The Directors are pleased to announce a final dividend of 2.5 per share (2011 2.0), with no imputation credits attached for New Zealand shareholders and full franking credits for Australian shareholders. The dividend will be paid on Wednesday, 3 April 2013 with the record date being Monday, 25 March 2013.
Due to the internal restructuring of the Group in December 2008, the company is unlikely to be in a position to impute dividends for New Zealand shareholders for some years, however this will depend on the performance of the segment in the coming years and also on the level of dividend to be paid in future periods.
Whilst the 2012-13 interim dividend is fully franked to Australian resident shareholders, it is possible that future dividends will only be partially franked due to the likelihood of future dividend payout exceeding the level of tax liability in Australia. However, this position can change over time depending on a number of variables and the company will keep the market informed each time a dividend is declared.
Cash Flows / Balance Sheets
The Group has reported net operating cash flows of $28.114m for the six months, compared to $46.800m for the previous year.
The surplus from operations is a result of:
Profit excluding non-cash items $34.935m
Increase in trade and other receivables ($10.324)m
Increase in inventory levels ($28.035)m
Increase in trade and other payables $20.107m
Increase in deferred revenues from professional care plan $12.902m
Other miscellaneous items ($1.471)m
Net cash inflow from operations surplus for the half year $28.114m
The Groups balance sheet continues to be sound with an equity ratio of 55.9% as at 31 December 2012 (56.2% in 2011) and a working capital ratio of 2.6:1 (2.8:1 in 2011).
Summary
Trading for the six months was a story of two quarters with a strong first quarter being followed by a slowdown in the second quarter. All countries struggled to make gains on the previous years sales numbers during the key December quarter however same store growth was achieved in all markets during the six months which is pleasing. As mentioned in our August 2012 Chairmans Statement, additional resources were placed into our key Australian market in mid-2012 and this has started to have a positive impact on sales in this key market. The directors remain satisfied with the overall performance of the Group and they remain confident in the continued growth and profitability of the Group.
Sir Michael Hill 15/02/2013
Chairman
Internet Home Page - http://www.michaelhill.com
All inquiries should be made to Mike Parsell CEO phone +61 403 246655
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STU - 2013 Half Year Results
by Share Investor » 15 Feb 2013 15:32
8:30am, 15 Feb 2013 | HALFYR
Issuer: Steel & Tube Holdings Limited
Reporting period: 6 months to 31 December 2012
Previous reporting period: 6 months to 31 December 2011
Amount ($000) Percentage change
Revenue from ordinary activities: 199,572; (1.64%)
Profit before tax 10,245; 15%
Tax expense operating income (2,955); 17%
Profit after tax attributable to security
holders: 7,290; 14%
Current Year Prior Year
Net tangible assets per share: $1.53; $1.47
Amount per security Imputed amount per
security
Interim Dividend: 6.5 cents 2.53 cents
Supplementary dividend: 1.15 cents
Record date: 15 March 2013
Payment date 28 March 2013
Review The financial statements attached to this report have been reviewed.
Comments Refer to separate attachment.
The unaudited condensed consolidated interim financial statements have been prepared in accordance, and comply, with, New Zealand Generally Accepted Accounting Practice (NZGAAP), New Zealand Equivalents to International Financial Reporting Standard NZ IAS 34: Interim Financial Reporting and International Accounting Standard IAS 34: Interim Financial Reporting.
Directors' Report
It has been a successful six months to 31 December 2012 for Steel & Tube. The on-going One Company and supply-chain initiatives have contributed to an improvement in the Companys performance compared with the same period last year.
Results
The trading result for the six months to 31 December 2012 is a profit after tax of $7.3 million. This is an increase of $0.9 million or 14 per cent compared with the same period last year and slightly higher than previous guidance.
Sales decreased marginally by $3.3 million or 1.6 per cent to $199.6 million. However, margins improved due to close management of market pricing.
The net tangible assets per share at 31 December 2012 were $1.53 compared with $1.47 at 31 December 2011.
Dividend
The Directors have declared a fully-imputed interim dividend of 6.5 cents per share to be paid on 28 March 2013 to holders of fully-paid ordinary shares registered at 15 March 2013. The amount payable is $5.75 million and a supplementary dividend of 1.15 cents will be paid to non-resident shareholders.
Arriums majority shareholding divestiture
A significant development for Steel & Tube during the half year was the divestiture on 9 October 2012 by Arrium (formerly known as OneSteel) of their 50.3 per cent majority shareholding in the Company. The shares were acquired by New Zealand institutional and retail investors.
A positive development for Steel & Tube was the return to the NZX 50 on 14 November 2012. This has generated a much greater interest in the Company from our new shareholders and the wider investment community.
As a consequence of the shareholding change existing Director Sir John Anderson replaced Dean Pritchard as the Chairman, effective 10 October. Dean Pritchard and Rosemary Warnock, both formerly Arrium-appointed Directors, remain as independent Directors. Steve Hamer Chief Executive of OneSteel Distribution resigned 9 October and a search for his replacement is underway. Independent Director Janine Smith and Chief Executive Officer Dave Taylor remain as Directors.
Performance
Global uncertainty continues to shape those domestic markets important to Steel & Tube, notably manufacturing, construction and rural, as well as the steel sector generally with on-going pricing volatility and sluggish, worldwide demand.
The start of the new financial year coincided with price increases improving margins, although underlying demand remained restrained with subdued activity in the manufacturing and rural sectors. However, this was offset by increased construction activity led by Christchurch.
With rising concerns about a slowing Chinese economy and increasingly soft global demands, pricing for steel raw materials and finished products eased. This coupled with ongoing intense domestic competition led to pricing pressures, which reduced some of the earlier margin gains as the half year progressed.
Christchurch construction activity continued to slowly improve and our business there remains well positioned. Auckland activity levels and, in particular, commercial construction have remained subdued with only the residential construction sector offering any real sign of improvement. Manufacturing remained suppressed with metal manufacturing activity by volume down 6.9 per cent for the quarter ending September on seasonally adjusted figures. Transport and machinery equipment saw a slight improvement at 0.8 per cent.
Progress continues with the Companys various reinvigoration initiatives under the banner of One Company'. Two further areas, Nelson and Hamilton, have consolidated all of their respective businesses into single-site operations. The Companys Lower Hutt-based national support centre has been relocated to a new office facility in the Hutt Valley.
A new plate-processing facility was commissioned in Auckland and resources have been bolstered in Christchurch. Extensive staff development and capability programmes have continued, which are all underpinned by the Companys brand and values.
The half year saw the introduction of the new supply-chain model with the culmination of several supply-chain initiatives. Although the transition remains in its early days it is pleasing to see some benefits already flowing through.
As always, health and safety are a priority for Steel & Tube with considerable effort and focus placed on educating and engaging staff and particularly on those activities with high risk. Pleasingly, the number of incidents resulting in injury was reduced compared with the previous year and all of those incidents were of minor nature.
Outlook
Underlying demand remains the fundamental issue for the steel industry both domestically and globally. Internationally, business sentiment appears to be more optimistic with the Chinese and the US economies appearing more bullish and Europe a little more stable. This is reflected in slow expansions to manufacturing in the US and emerging markets, although Europe continues to contract.
Similarly, and despite mixed data, domestic sentiment appears to be strengthening aided by a reasonable December quarter, increasing construction activity centred predominately around Christchurch and improving house prices.
Volatility in manufacturing continues with a weak September quarter countered by a marginally stronger December quarter. With the slow improvement in the economy and other trading partners it is hoped this sector will continue to deliver growth, albeit likely to be muted by the ongoing strength of the New Zealand dollar.
With robust overseas demand, the rural sector appears to be more positive than the previous year. However, generally on-farm spending is slow but consistent with our expectations. New investment in processing capacity in dairy shows a continuing long-term confidence in the sector.
From a company perspective, construction is improving, clearly being led by the Christchurch rebuild activities. Other regions are showing an increase in quote activity across the sector suggesting the non-residential inertia has bottomed. The recent appointment of receivers to Mainzeal Property and Construction Ltd has no material impact on the Company. Manufacturing is holding but under pressure, and the rural sector is constant.
With the pick-up in global activity and compounded by a tightening in supply, iron ore has rebounded from the lows of September 2012 and is currently above $150 per tonne. Some mills have already started to increase finished steel product prices and this is likely to impact the domestic market in the near term.
At Steel & Tube we remain focused on delivering the various reinvigoration initiatives that put the customer at the centre of what we do. We believe our strengthened approach will increasingly generate benefits above those of the general trading environment.
Overall, we expect the results for the second half of the year to be ahead of the first six months.
For further information, please contact Dave Taylor, Chief Executive Officer, Steel & Tube Holdings Limited on (04) 570-5001.
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Issuer: Steel & Tube Holdings Limited
Reporting period: 6 months to 31 December 2012
Previous reporting period: 6 months to 31 December 2011
Amount ($000) Percentage change
Revenue from ordinary activities: 199,572; (1.64%)
Profit before tax 10,245; 15%
Tax expense operating income (2,955); 17%
Profit after tax attributable to security
holders: 7,290; 14%
Current Year Prior Year
Net tangible assets per share: $1.53; $1.47
Amount per security Imputed amount per
security
Interim Dividend: 6.5 cents 2.53 cents
Supplementary dividend: 1.15 cents
Record date: 15 March 2013
Payment date 28 March 2013
Review The financial statements attached to this report have been reviewed.
Comments Refer to separate attachment.
The unaudited condensed consolidated interim financial statements have been prepared in accordance, and comply, with, New Zealand Generally Accepted Accounting Practice (NZGAAP), New Zealand Equivalents to International Financial Reporting Standard NZ IAS 34: Interim Financial Reporting and International Accounting Standard IAS 34: Interim Financial Reporting.
Directors' Report
It has been a successful six months to 31 December 2012 for Steel & Tube. The on-going One Company and supply-chain initiatives have contributed to an improvement in the Companys performance compared with the same period last year.
Results
The trading result for the six months to 31 December 2012 is a profit after tax of $7.3 million. This is an increase of $0.9 million or 14 per cent compared with the same period last year and slightly higher than previous guidance.
Sales decreased marginally by $3.3 million or 1.6 per cent to $199.6 million. However, margins improved due to close management of market pricing.
The net tangible assets per share at 31 December 2012 were $1.53 compared with $1.47 at 31 December 2011.
Dividend
The Directors have declared a fully-imputed interim dividend of 6.5 cents per share to be paid on 28 March 2013 to holders of fully-paid ordinary shares registered at 15 March 2013. The amount payable is $5.75 million and a supplementary dividend of 1.15 cents will be paid to non-resident shareholders.
Arriums majority shareholding divestiture
A significant development for Steel & Tube during the half year was the divestiture on 9 October 2012 by Arrium (formerly known as OneSteel) of their 50.3 per cent majority shareholding in the Company. The shares were acquired by New Zealand institutional and retail investors.
A positive development for Steel & Tube was the return to the NZX 50 on 14 November 2012. This has generated a much greater interest in the Company from our new shareholders and the wider investment community.
As a consequence of the shareholding change existing Director Sir John Anderson replaced Dean Pritchard as the Chairman, effective 10 October. Dean Pritchard and Rosemary Warnock, both formerly Arrium-appointed Directors, remain as independent Directors. Steve Hamer Chief Executive of OneSteel Distribution resigned 9 October and a search for his replacement is underway. Independent Director Janine Smith and Chief Executive Officer Dave Taylor remain as Directors.
Performance
Global uncertainty continues to shape those domestic markets important to Steel & Tube, notably manufacturing, construction and rural, as well as the steel sector generally with on-going pricing volatility and sluggish, worldwide demand.
The start of the new financial year coincided with price increases improving margins, although underlying demand remained restrained with subdued activity in the manufacturing and rural sectors. However, this was offset by increased construction activity led by Christchurch.
With rising concerns about a slowing Chinese economy and increasingly soft global demands, pricing for steel raw materials and finished products eased. This coupled with ongoing intense domestic competition led to pricing pressures, which reduced some of the earlier margin gains as the half year progressed.
Christchurch construction activity continued to slowly improve and our business there remains well positioned. Auckland activity levels and, in particular, commercial construction have remained subdued with only the residential construction sector offering any real sign of improvement. Manufacturing remained suppressed with metal manufacturing activity by volume down 6.9 per cent for the quarter ending September on seasonally adjusted figures. Transport and machinery equipment saw a slight improvement at 0.8 per cent.
Progress continues with the Companys various reinvigoration initiatives under the banner of One Company'. Two further areas, Nelson and Hamilton, have consolidated all of their respective businesses into single-site operations. The Companys Lower Hutt-based national support centre has been relocated to a new office facility in the Hutt Valley.
A new plate-processing facility was commissioned in Auckland and resources have been bolstered in Christchurch. Extensive staff development and capability programmes have continued, which are all underpinned by the Companys brand and values.
The half year saw the introduction of the new supply-chain model with the culmination of several supply-chain initiatives. Although the transition remains in its early days it is pleasing to see some benefits already flowing through.
As always, health and safety are a priority for Steel & Tube with considerable effort and focus placed on educating and engaging staff and particularly on those activities with high risk. Pleasingly, the number of incidents resulting in injury was reduced compared with the previous year and all of those incidents were of minor nature.
Outlook
Underlying demand remains the fundamental issue for the steel industry both domestically and globally. Internationally, business sentiment appears to be more optimistic with the Chinese and the US economies appearing more bullish and Europe a little more stable. This is reflected in slow expansions to manufacturing in the US and emerging markets, although Europe continues to contract.
Similarly, and despite mixed data, domestic sentiment appears to be strengthening aided by a reasonable December quarter, increasing construction activity centred predominately around Christchurch and improving house prices.
Volatility in manufacturing continues with a weak September quarter countered by a marginally stronger December quarter. With the slow improvement in the economy and other trading partners it is hoped this sector will continue to deliver growth, albeit likely to be muted by the ongoing strength of the New Zealand dollar.
With robust overseas demand, the rural sector appears to be more positive than the previous year. However, generally on-farm spending is slow but consistent with our expectations. New investment in processing capacity in dairy shows a continuing long-term confidence in the sector.
From a company perspective, construction is improving, clearly being led by the Christchurch rebuild activities. Other regions are showing an increase in quote activity across the sector suggesting the non-residential inertia has bottomed. The recent appointment of receivers to Mainzeal Property and Construction Ltd has no material impact on the Company. Manufacturing is holding but under pressure, and the rural sector is constant.
With the pick-up in global activity and compounded by a tightening in supply, iron ore has rebounded from the lows of September 2012 and is currently above $150 per tonne. Some mills have already started to increase finished steel product prices and this is likely to impact the domestic market in the near term.
At Steel & Tube we remain focused on delivering the various reinvigoration initiatives that put the customer at the centre of what we do. We believe our strengthened approach will increasingly generate benefits above those of the general trading environment.
Overall, we expect the results for the second half of the year to be ahead of the first six months.
For further information, please contact Dave Taylor, Chief Executive Officer, Steel & Tube Holdings Limited on (04) 570-5001.
Attachments
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CAV-Preliminary announcement of December 2012 half year resu
by Share Investor » 15 Feb 2013 16:51
3:30pm, 15 Feb 2013 | HALFYR
Directors Review
For the six months ended 31 December 2012
Your directors present their report, including financial statements, for Cavalier Corporation for the financial period ended six months to 31 December 2012.
FINANCIAL PERFORMANCE
Consolidated Income Statement
Unaudited
(figures in $000's for six months ended 31 Dec 2012 & previous six mths ended Dec 2011, % change)
Operating revenue $100,973; $107,992; -6%
EBIT (before restructuring costs) 496: 6,341; -92%
Net interest expense -1,940; -1,956; -1%
Share of profit of associate (net of tax) 2,116; 1,178; 80%
Profit before tax (normalised) 672; 5,563; -88%
Tax 340; -1,284
Profit after tax (normalised) 1,012; 4,279; -76%
Restructuring costs (after tax) 427; -732
Profit after tax (reported) 1,439; 3,547; -59%
Earnings per share (cents) (normalised) 1.5; 6.3; -76%
Unaudited profit after tax of $1.4 million for the period is a decrease of 59% on the $3.5 million reported in 2011.
The result includes, net of tax, $149,000 of redundancy costs and a $576,000 write back of over accrued restructuring costs from the 2012 financial year.
The first six months of 2012/13 was challenging, with the run out of high cost stocks due to unusually high wool prices from the preceding year and soft trading conditions in both New Zealand and Australia.
Group revenue for the six months was $101 million, a decrease of 6% on the $108 million in the previous year, with sluggish New Zealand and Australian based revenue.
Return on average shareholders equity for the six months was 2.2% and earnings per share was 3.0 cents (both normalised and annualised) - compared with 8.8% and 12.5 cents respectively the previous year. It was a disappointing but not unexpected trading result for the first half of the year.
FINANCIAL POSITION
Shareholders equity at 31 December 2012 of $92.1 million was down 4.3% on the $96.2 million reported a year ago.
In December 2011, the companys net interest-bearing debt was in excess of $78 million and the immediate trading outlook was not encouraging. At the time, the company decided it needed to strengthen its balance sheet by reducing debt. Since then, management have embarked on a programme to reduce the levels of inventory held, restrict capital spend to essential items only and cut overhead costs and discretionary spending where possible. Also included in the debt reduction plans was the suspension of the shareholder dividend. As a result, the companys net interest-bearing debt has dropped by $21.3 million or 27% since December 2011.
Net interest-bearing debt at balance date stood at $56.8 million and net interest-bearing debt to equity ratio was 38:62. The previous years figures were $78.1 million and 45:55 respectively.
Total assets employed stood at $188.4 million, down $28.6 million on the $217.0 million reported in 2011. Inventories reduced by $25.6 million and debtors by $2.8 million, reflecting the efforts made by management to reduce stock levels and debtor days outstanding.
As a result, shareholders equity accounted for 49% of total assets employed at balance date, compared with 44% a year ago and 45% in 30 June 2012.
CASH FLOWS
Net cash flows from operating activities were $8.9 million, an improvement of $13.0 million on the same period last year. This reflects the cash generated from the reduction in inventories and reduced debtor balances.
Since June 2012, net cash inflows from investing activities were $0.8 million with a modest amount of capital spend of $0.7 million offset by a $2.0 million dividend received from our 50% associate, Cavalier Wool Holdings.
In the six months since year-end, there has been a cash outflow of $9.3 million from financing activities which is the result of the debt repayment programme.
SEGMENT REVIEWS
Carpet Business
Our carpet business comprises broadloom carpets and carpet tiles which predominantly services the New Zealand and Australian markets, but with an increasing focus on the rest of the world.
In the six months to 31 December 2012, our carpet business produced a segment result before restructuring costs of $1.0 million on revenue of $88.0 million, compared with $6.7 million on revenue of $92.0 million the previous year - a decrease of 85% and 4% respectively.
It has been a difficult first six months for the carpet business. As a result of soft demand, we were unable to pass on the high carrying value of brought forward finished goods stocks and had to therefore absorb this through lower margins. The retailing landscape also continues to change, with increased consolidation and direct importing helped by the ever increasing strength of the New Zealand Dollar.
There are signs that the economy is picking up in New Zealand with increased building consents being issued and the Christchurch rebuild underway. However, the sentiment in Australia is more worrying and the economy across the Tasman appears to be slowing down.
We expect to launch Cavaliers new high-end synthetic products before year-end, and with the high valued finished goods stock now fully run out of the system, margins going forward should be closer to long term averages.
In the last six months, there has been a major reorganisation of the manufacturing business, with consolidation of the spinning and warehousing activities that we commenced in June. The cost benefits of this restructuring will flow through into future years.
Wool Business
The wool business comprises our wool buying business Elco Direct and the 50% interest in the commission wool scourer, Cavalier Wool Holdings Limited (CWH).
Elco Directs revenue of $13.9 million was down 22% due to reduced wool prices in the second half of 2011/12. However, EBIT at $353,000 was on par with the $359,000 achieved in December 2011 and the business is currently tracking above expectations.
Cavaliers share of the tax-paid earnings of CWH for the six months to 31 December 2012 is $2.1 million compared with $1.2 million the previous year. CWH has had an excellent start to the year and the outlook remains positive for the remaining six months.
There were plans to rationalise the scouring industry by consolidating the New Zealand Wool Services International (NZWSI) scouring business with CWH. An extensive process was undertaken in an attempt to make this happen. However, the rationalisation did not occur. NZWSI is currently being taken over by Lempriere Holdings, an Australian wool trader, and we will watch this development with interest.
The directors will continue to inform shareholders of any significant developments as they unfold.
Yarn Business
The Radford Yarn Technologies operation is a supplier of premium felted woolen yarns to the Cavalier Bremworth broadloom carpet operation and to up-market broadloom carpet and rug manufacturers in North America and Europe. Sales were down on last year and as a result, it made a small loss for the first six months.
In December, Cavalier purchased the remaining 25% of the business.
BUSINESS IMPROVEMENT PLANS
Last year, we embarked on a business improvement plan aimed at optimising capacity utilisation.
It involved:
- The closure of one of our three carpet yarn spinning plants; and
- The consolidation of our New Zealand based warehousing and distribution operations
The cost of this program was recognised in the 2011/12 financial results with an $8.2 million (pre-tax) or $5.9 million (post-tax) cost incurred or provided.
We indicated at the November Annual Meeting of shareholders that we had further business improvement initiatives scheduled for implementation during the 2012/13 year in order to continue to improve the level of efficiencies in our businesses. We are continuing to work on these and will update shareholders as they unfold.
EARNINGS OUTLOOK
The results for the first six months were disappointing and reflected soft demand in both New Zealand and Australia and the high cost of stocks being sold with associated reduced margins.
The directors expect an improvement in the next six months and the latest normalised after tax earnings outlook remains in the $6 to $10 million range as indicated at the Annual Meeting of shareholders in November.
In arriving at this earnings outlook, we anticipate the demand for carpet to lift in New Zealand alongside increased building activity helped by the Christchurch rebuild and a general uplift in real estate turnover, while we expect Australia to remain relatively flat. Now that the high stock value has run its course, we will benefit from increased margins over the next six months. The feedback on our new synthetic carpet range is encouraging and we expect sales of the product before year-end.
There has been significant reduction in headcount in the previous 12 months and the business has been reorganised to operate more efficiently. The reduced costs as a consequence of these will flow through into future earnings.
DIVIDENDS
The first half trading results do not support the payment of a dividend at this stage, and the directors are therefore not recommending an interim dividend payment.
Whilst the company is in a much better financial position with considerably less interest-bearing debt, there needs to be a lift in earnings to justify a payment of a dividend.
If earnings improve as forecast and the outlook remains positive, directors expect to be able to declare a dividend with the announcement of the full year results in August, subject to capital requirements and the cost of any further restructuring.
A M James
Chairman
C A McKenzie
Managing Director
15 February 2013
For more information regarding this announcement, please contact Colin McKenzie on 09 277 1138 or 027 292 4080.
Directors Review
For the six months ended 31 December 2012
Your directors present their report, including financial statements, for Cavalier Corporation for the financial period ended six months to 31 December 2012.
FINANCIAL PERFORMANCE
Consolidated Income Statement
Unaudited
(figures in $000's for six months ended 31 Dec 2012 & previous six mths ended Dec 2011, % change)
Operating revenue $100,973; $107,992; -6%
EBIT (before restructuring costs) 496: 6,341; -92%
Net interest expense -1,940; -1,956; -1%
Share of profit of associate (net of tax) 2,116; 1,178; 80%
Profit before tax (normalised) 672; 5,563; -88%
Tax 340; -1,284
Profit after tax (normalised) 1,012; 4,279; -76%
Restructuring costs (after tax) 427; -732
Profit after tax (reported) 1,439; 3,547; -59%
Earnings per share (cents) (normalised) 1.5; 6.3; -76%
Unaudited profit after tax of $1.4 million for the period is a decrease of 59% on the $3.5 million reported in 2011.
The result includes, net of tax, $149,000 of redundancy costs and a $576,000 write back of over accrued restructuring costs from the 2012 financial year.
The first six months of 2012/13 was challenging, with the run out of high cost stocks due to unusually high wool prices from the preceding year and soft trading conditions in both New Zealand and Australia.
Group revenue for the six months was $101 million, a decrease of 6% on the $108 million in the previous year, with sluggish New Zealand and Australian based revenue.
Return on average shareholders equity for the six months was 2.2% and earnings per share was 3.0 cents (both normalised and annualised) - compared with 8.8% and 12.5 cents respectively the previous year. It was a disappointing but not unexpected trading result for the first half of the year.
FINANCIAL POSITION
Shareholders equity at 31 December 2012 of $92.1 million was down 4.3% on the $96.2 million reported a year ago.
In December 2011, the companys net interest-bearing debt was in excess of $78 million and the immediate trading outlook was not encouraging. At the time, the company decided it needed to strengthen its balance sheet by reducing debt. Since then, management have embarked on a programme to reduce the levels of inventory held, restrict capital spend to essential items only and cut overhead costs and discretionary spending where possible. Also included in the debt reduction plans was the suspension of the shareholder dividend. As a result, the companys net interest-bearing debt has dropped by $21.3 million or 27% since December 2011.
Net interest-bearing debt at balance date stood at $56.8 million and net interest-bearing debt to equity ratio was 38:62. The previous years figures were $78.1 million and 45:55 respectively.
Total assets employed stood at $188.4 million, down $28.6 million on the $217.0 million reported in 2011. Inventories reduced by $25.6 million and debtors by $2.8 million, reflecting the efforts made by management to reduce stock levels and debtor days outstanding.
As a result, shareholders equity accounted for 49% of total assets employed at balance date, compared with 44% a year ago and 45% in 30 June 2012.
CASH FLOWS
Net cash flows from operating activities were $8.9 million, an improvement of $13.0 million on the same period last year. This reflects the cash generated from the reduction in inventories and reduced debtor balances.
Since June 2012, net cash inflows from investing activities were $0.8 million with a modest amount of capital spend of $0.7 million offset by a $2.0 million dividend received from our 50% associate, Cavalier Wool Holdings.
In the six months since year-end, there has been a cash outflow of $9.3 million from financing activities which is the result of the debt repayment programme.
SEGMENT REVIEWS
Carpet Business
Our carpet business comprises broadloom carpets and carpet tiles which predominantly services the New Zealand and Australian markets, but with an increasing focus on the rest of the world.
In the six months to 31 December 2012, our carpet business produced a segment result before restructuring costs of $1.0 million on revenue of $88.0 million, compared with $6.7 million on revenue of $92.0 million the previous year - a decrease of 85% and 4% respectively.
It has been a difficult first six months for the carpet business. As a result of soft demand, we were unable to pass on the high carrying value of brought forward finished goods stocks and had to therefore absorb this through lower margins. The retailing landscape also continues to change, with increased consolidation and direct importing helped by the ever increasing strength of the New Zealand Dollar.
There are signs that the economy is picking up in New Zealand with increased building consents being issued and the Christchurch rebuild underway. However, the sentiment in Australia is more worrying and the economy across the Tasman appears to be slowing down.
We expect to launch Cavaliers new high-end synthetic products before year-end, and with the high valued finished goods stock now fully run out of the system, margins going forward should be closer to long term averages.
In the last six months, there has been a major reorganisation of the manufacturing business, with consolidation of the spinning and warehousing activities that we commenced in June. The cost benefits of this restructuring will flow through into future years.
Wool Business
The wool business comprises our wool buying business Elco Direct and the 50% interest in the commission wool scourer, Cavalier Wool Holdings Limited (CWH).
Elco Directs revenue of $13.9 million was down 22% due to reduced wool prices in the second half of 2011/12. However, EBIT at $353,000 was on par with the $359,000 achieved in December 2011 and the business is currently tracking above expectations.
Cavaliers share of the tax-paid earnings of CWH for the six months to 31 December 2012 is $2.1 million compared with $1.2 million the previous year. CWH has had an excellent start to the year and the outlook remains positive for the remaining six months.
There were plans to rationalise the scouring industry by consolidating the New Zealand Wool Services International (NZWSI) scouring business with CWH. An extensive process was undertaken in an attempt to make this happen. However, the rationalisation did not occur. NZWSI is currently being taken over by Lempriere Holdings, an Australian wool trader, and we will watch this development with interest.
The directors will continue to inform shareholders of any significant developments as they unfold.
Yarn Business
The Radford Yarn Technologies operation is a supplier of premium felted woolen yarns to the Cavalier Bremworth broadloom carpet operation and to up-market broadloom carpet and rug manufacturers in North America and Europe. Sales were down on last year and as a result, it made a small loss for the first six months.
In December, Cavalier purchased the remaining 25% of the business.
BUSINESS IMPROVEMENT PLANS
Last year, we embarked on a business improvement plan aimed at optimising capacity utilisation.
It involved:
- The closure of one of our three carpet yarn spinning plants; and
- The consolidation of our New Zealand based warehousing and distribution operations
The cost of this program was recognised in the 2011/12 financial results with an $8.2 million (pre-tax) or $5.9 million (post-tax) cost incurred or provided.
We indicated at the November Annual Meeting of shareholders that we had further business improvement initiatives scheduled for implementation during the 2012/13 year in order to continue to improve the level of efficiencies in our businesses. We are continuing to work on these and will update shareholders as they unfold.
EARNINGS OUTLOOK
The results for the first six months were disappointing and reflected soft demand in both New Zealand and Australia and the high cost of stocks being sold with associated reduced margins.
The directors expect an improvement in the next six months and the latest normalised after tax earnings outlook remains in the $6 to $10 million range as indicated at the Annual Meeting of shareholders in November.
In arriving at this earnings outlook, we anticipate the demand for carpet to lift in New Zealand alongside increased building activity helped by the Christchurch rebuild and a general uplift in real estate turnover, while we expect Australia to remain relatively flat. Now that the high stock value has run its course, we will benefit from increased margins over the next six months. The feedback on our new synthetic carpet range is encouraging and we expect sales of the product before year-end.
There has been significant reduction in headcount in the previous 12 months and the business has been reorganised to operate more efficiently. The reduced costs as a consequence of these will flow through into future earnings.
DIVIDENDS
The first half trading results do not support the payment of a dividend at this stage, and the directors are therefore not recommending an interim dividend payment.
Whilst the company is in a much better financial position with considerably less interest-bearing debt, there needs to be a lift in earnings to justify a payment of a dividend.
If earnings improve as forecast and the outlook remains positive, directors expect to be able to declare a dividend with the announcement of the full year results in August, subject to capital requirements and the cost of any further restructuring.
A M James
Chairman
C A McKenzie
Managing Director
15 February 2013
For more information regarding this announcement, please contact Colin McKenzie on 09 277 1138 or 027 292 4080.
-
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- Joined: 11 May 2008 21:32
- Location: Auckland New Zealand
FRE - Half Year Results to 31 Dec 2012 and Interim Dividend
by Share Investor » 18 Feb 2013 10:02
9:56am, 18 Feb 2013 | HALFYR
SUMMARY OF PRELIMINARY HALF YEAR ANNOUNCEMENT
Name of Listed Issuer: Freightways Limited
Reporting Period: 6 months to 31 December 2012.
This report has been prepared in a manner which complies with generally accepted accounting practice and fairly presents the matters to which the report relates and is based on unaudited financial statements. These financial statements have been subject to an independent review by our auditors, PricewaterhouseCoopers.
CONSOLIDATED INCOME STATEMENT
Current Half Year NZ$'000: Up(Down)%; Previous Corresponding Half Year NZ$'000
OPERATING REVENUE:
206,712; 8%; 192,183
PROFIT BEFORE INTEREST AND INCOME TAX
34,624; 7%; 32,273
Net interest and finance costs
6,661; (4%); 6,971
PROFIT BEFORE INCOME TAX
27,963; 11%; 25,302
Income tax
6,929; 9%; 6,333
NET PROFIT ATTRIBUTABLE TO SHAREHOLDERS
21,034; 11%; 18,969
Earnings per share:
13.7; 11%; 12.3
Interim Dividend (fully imputed)
9.0cps; 8.5cps
Record date: 15 March 2013
Payment date: 2 April 2013
Appendix 7 is attached.
Detailed information: The Half Year Report December 2012 and the presentation are attached and can also be located in the Investor Relations section of Freightways' website (www.freightways.co.nz).
HALF YEAR REVIEW
From the Chairman and Managing Director
The Directors are pleased to present the financial result of Freightways Limited (Freightways) for the half year ended 31 December 2012, that was above the prior half year in all respects and a record result for the company.
Highlights include sustaining the growth momentum in the express package businesses throughout the half compared to a very strong prior comparative period (pcp), the deployment of several customer-facing technology initiatives which added further value to the service we already provide, and market share growth we achieved in Australia from the winning of some significant nationwide customers.
Operating performance
Consolidated operating revenue of $207 million for the half year was 8% higher than the pcp.
EBITDA (excluding non-recurring items) of $40 million for the half year and EBITA (excluding non-recurring items) of $34 million for the half year were 9% and 8% higher than the pcp, respectively.
Consolidated NPAT (excluding non-recurring items) of $20 million for the half year was 10% higher than the pcp.
Cash flows generated from operations were again strong at $37 million.
Earnings per share (EPS) for the half year (excluding non-recurring items) was 13 cents per share, an improvement of 9% over the pcp.
A one-off $1 million EBITA benefit ($1 million after tax) relating to the reversal of an accrued acquisition earnout payment that is not expected to be payable when it falls due on 30 June 2013 has been recorded in the Income Statement. This amount has been treated as a non-recurring item and has not been included in the above operating revenue and earnings numbers. The business that this acquisition earnout payment relates to is performing well, albeit it is not expected to reach the performance hurdle that would trigger this final earnout payment.
Dividend
The Directors have declared an interim dividend of 9.0 cents per share, fully imputed at an effective tax rate of approximately 28%, as the last imputation credits at 30% are used and the balance of the dividend is imputed at 28%. This represents a pay out of approximately $13.9 million compared with $13.1 million for the pcp interim dividend of 8.5 cents per share. The interim dividend will be paid on 2 April 2013. The record date for determination of entitlements to the interim dividend is 15 March 2013.
The Dividend Reinvestment Plan (DRP) will not be offered in relation to this interim dividend. As a capital management tool, the application of the DRP will be reviewed for each future dividend.
REVIEW OF OPERATIONS
Strong results have again been achieved in both the express package & business mail and information management divisions.
Express Package & Business Mail
The express package & business mail division operates a multi-brand strategy in the domestic market through New Zealand Couriers, Post Haste, Castle Parcels, NOW Couriers, SUB60, Security Express, Kiwi Express, DX Mail and Dataprint.
Operating revenue of $158 million for the half year was 6% higher than the pcp.
EBITDA of $29 million for the half year was 4% higher than the pcp and EBITA of $26 million for the half year was 2% higher than the pcp.
The sustained performance of the express package & business mail division in the first and second quarters, that again demonstrated steady year-on-year improvement, is encouraging, particularly given the very strong performance experienced in the prior year. Underpinning this result was growth in volumes from existing customers, pricing improvement and some acquired revenue. We have continued to develop and extend our suite of services and how we take them to market. Technology-based innovation plays an important part in our service offer. A number of technology-based initiatives have been deployed recently, following the completion of a major IT project in the prior year. Overall margin as a percentage of revenue was slightly below the prior year due to the currently higher cost of servicing the Canterbury region and the impact of reduced postal volumes from existing customers in our business mail operations. The recently acquired Dataprint is performing well and to expectation.
Overall, Freightways express package & business mail division has been able to once again demonstrate its resilience and its growth attributes to deliver a good half year result.
Information Management
The information management division is established in New Zealand through the brands of Online Security Services, Archive Security, Document Destruction Services and Data Security Services and in Australia through the brands of DataBank, Archive Security, Filesaver and Shred-X.
Operating revenue of $50 million for the half year was 15% above the pcp.
EBITDA of $11 million for the half year was 21% higher than the pcp and EBITA of $9 million for the half year was 23% higher than the pcp.
The information management division has again recorded a very good result, with growth occurring in all locations that we operate from in both New Zealand and Australia. This growth is offsetting the impact of the currently low prices we continue to receive from the sale of recycled paper from the document destruction operations. A number of contingencies to mitigate the impact of these reduced prices have been implemented, however the contribution from this particular revenue source remains significantly lower than the pcp. Following the recent gaining of another significant nationwide customer, the Shred-X business has invested in resources to extend its paper collection network beyond metropolitan areas to regional areas throughout the east coast of Australia.
Overall, the performance of the information management division has again been very strong.
Internal service providers
Fieldair Holdings provides airfreight linehaul services, Parceline Express provides road linehaul services and Freightways Information Services provides IT development and support to the express package & business mail division. All three internal service providers have continued to deliver outstanding service, underpinning the service offered by our front line businesses.
Corporate
Corporate overhead costs continue to be well contained. Net bank borrowings increased by $4 million during the half year; in part to fund the recent acquisition of Dataprint in July 2012.
Capital expenditure of $7 million was invested during the half year to maintain Freightways airfreight and IT infrastructure and to support the groups growth strategies.
OUTLOOK
Overall we expect to be operating in a slow growth environment for the foreseeable future. We do however remain mindful of any further deterioration in the global economy that will inevitably influence the markets that we operate in.
The positive momentum that we have been achieving in our express package businesses is expected to continue at similar levels for the foreseeable future. Along with gradual growth in our traditional customer base, we are experiencing continued strong growth in volume that originates from businesses and consumers shopping online. Our business mail operations, which are a smaller part of this division, will continue to face declining letter volumes, though we do expect it to offset much of this decline by increasing its share of the market.
The growth that we have consistently been achieving in the information management division is expected to continue. Strong market support for the services we provide and the gaining of a number of nationwide customers following our investment in capacity and resources in recent years is very positive. A number of new digital services to complement our traditional physical information management services have recently been introduced. No near-term improvement is expected in the prices we receive from the sale of recycled paper, that continue to track significantly lower than we were able to achieve in the prior year.
Capital expenditure for the full year ending 30 June 2013 is expected to be $14 million to support the growth and development of both the Freightways operating divisions. Overall, cash flows are expected to remain strong throughout the 2013 financial year.
In recent years, Freightways has strengthened its earnings profile by diversifying its activities both geographically and deeper into the information management market. Freightways will continue to seek out and develop growth opportunities to support this strategy and will also explore other opportunities that complement its core capabilities.
Subject to business factors beyond its control, Freightways is well positioned to reap the benefits of further improvement in the markets in which it operates.
CONCLUSION
Freightways has delivered a record half year result. The positive features of the markets it operates in, the resilience of its business models and the successful execution of its growth strategies by a very experienced and capable team, are evident in this result. Accordingly, the Directors have been able to declare a fully imputed 9.0 cents per share interim dividend.
The Directors acknowledge the outstanding work and ongoing dedication of the Freightways team of people throughout New Zealand and Australia.
Attachments
SUMMARY OF PRELIMINARY HALF YEAR ANNOUNCEMENT
Name of Listed Issuer: Freightways Limited
Reporting Period: 6 months to 31 December 2012.
This report has been prepared in a manner which complies with generally accepted accounting practice and fairly presents the matters to which the report relates and is based on unaudited financial statements. These financial statements have been subject to an independent review by our auditors, PricewaterhouseCoopers.
CONSOLIDATED INCOME STATEMENT
Current Half Year NZ$'000: Up(Down)%; Previous Corresponding Half Year NZ$'000
OPERATING REVENUE:
206,712; 8%; 192,183
PROFIT BEFORE INTEREST AND INCOME TAX
34,624; 7%; 32,273
Net interest and finance costs
6,661; (4%); 6,971
PROFIT BEFORE INCOME TAX
27,963; 11%; 25,302
Income tax
6,929; 9%; 6,333
NET PROFIT ATTRIBUTABLE TO SHAREHOLDERS
21,034; 11%; 18,969
Earnings per share:
13.7; 11%; 12.3
Interim Dividend (fully imputed)
9.0cps; 8.5cps
Record date: 15 March 2013
Payment date: 2 April 2013
Appendix 7 is attached.
Detailed information: The Half Year Report December 2012 and the presentation are attached and can also be located in the Investor Relations section of Freightways' website (www.freightways.co.nz).
HALF YEAR REVIEW
From the Chairman and Managing Director
The Directors are pleased to present the financial result of Freightways Limited (Freightways) for the half year ended 31 December 2012, that was above the prior half year in all respects and a record result for the company.
Highlights include sustaining the growth momentum in the express package businesses throughout the half compared to a very strong prior comparative period (pcp), the deployment of several customer-facing technology initiatives which added further value to the service we already provide, and market share growth we achieved in Australia from the winning of some significant nationwide customers.
Operating performance
Consolidated operating revenue of $207 million for the half year was 8% higher than the pcp.
EBITDA (excluding non-recurring items) of $40 million for the half year and EBITA (excluding non-recurring items) of $34 million for the half year were 9% and 8% higher than the pcp, respectively.
Consolidated NPAT (excluding non-recurring items) of $20 million for the half year was 10% higher than the pcp.
Cash flows generated from operations were again strong at $37 million.
Earnings per share (EPS) for the half year (excluding non-recurring items) was 13 cents per share, an improvement of 9% over the pcp.
A one-off $1 million EBITA benefit ($1 million after tax) relating to the reversal of an accrued acquisition earnout payment that is not expected to be payable when it falls due on 30 June 2013 has been recorded in the Income Statement. This amount has been treated as a non-recurring item and has not been included in the above operating revenue and earnings numbers. The business that this acquisition earnout payment relates to is performing well, albeit it is not expected to reach the performance hurdle that would trigger this final earnout payment.
Dividend
The Directors have declared an interim dividend of 9.0 cents per share, fully imputed at an effective tax rate of approximately 28%, as the last imputation credits at 30% are used and the balance of the dividend is imputed at 28%. This represents a pay out of approximately $13.9 million compared with $13.1 million for the pcp interim dividend of 8.5 cents per share. The interim dividend will be paid on 2 April 2013. The record date for determination of entitlements to the interim dividend is 15 March 2013.
The Dividend Reinvestment Plan (DRP) will not be offered in relation to this interim dividend. As a capital management tool, the application of the DRP will be reviewed for each future dividend.
REVIEW OF OPERATIONS
Strong results have again been achieved in both the express package & business mail and information management divisions.
Express Package & Business Mail
The express package & business mail division operates a multi-brand strategy in the domestic market through New Zealand Couriers, Post Haste, Castle Parcels, NOW Couriers, SUB60, Security Express, Kiwi Express, DX Mail and Dataprint.
Operating revenue of $158 million for the half year was 6% higher than the pcp.
EBITDA of $29 million for the half year was 4% higher than the pcp and EBITA of $26 million for the half year was 2% higher than the pcp.
The sustained performance of the express package & business mail division in the first and second quarters, that again demonstrated steady year-on-year improvement, is encouraging, particularly given the very strong performance experienced in the prior year. Underpinning this result was growth in volumes from existing customers, pricing improvement and some acquired revenue. We have continued to develop and extend our suite of services and how we take them to market. Technology-based innovation plays an important part in our service offer. A number of technology-based initiatives have been deployed recently, following the completion of a major IT project in the prior year. Overall margin as a percentage of revenue was slightly below the prior year due to the currently higher cost of servicing the Canterbury region and the impact of reduced postal volumes from existing customers in our business mail operations. The recently acquired Dataprint is performing well and to expectation.
Overall, Freightways express package & business mail division has been able to once again demonstrate its resilience and its growth attributes to deliver a good half year result.
Information Management
The information management division is established in New Zealand through the brands of Online Security Services, Archive Security, Document Destruction Services and Data Security Services and in Australia through the brands of DataBank, Archive Security, Filesaver and Shred-X.
Operating revenue of $50 million for the half year was 15% above the pcp.
EBITDA of $11 million for the half year was 21% higher than the pcp and EBITA of $9 million for the half year was 23% higher than the pcp.
The information management division has again recorded a very good result, with growth occurring in all locations that we operate from in both New Zealand and Australia. This growth is offsetting the impact of the currently low prices we continue to receive from the sale of recycled paper from the document destruction operations. A number of contingencies to mitigate the impact of these reduced prices have been implemented, however the contribution from this particular revenue source remains significantly lower than the pcp. Following the recent gaining of another significant nationwide customer, the Shred-X business has invested in resources to extend its paper collection network beyond metropolitan areas to regional areas throughout the east coast of Australia.
Overall, the performance of the information management division has again been very strong.
Internal service providers
Fieldair Holdings provides airfreight linehaul services, Parceline Express provides road linehaul services and Freightways Information Services provides IT development and support to the express package & business mail division. All three internal service providers have continued to deliver outstanding service, underpinning the service offered by our front line businesses.
Corporate
Corporate overhead costs continue to be well contained. Net bank borrowings increased by $4 million during the half year; in part to fund the recent acquisition of Dataprint in July 2012.
Capital expenditure of $7 million was invested during the half year to maintain Freightways airfreight and IT infrastructure and to support the groups growth strategies.
OUTLOOK
Overall we expect to be operating in a slow growth environment for the foreseeable future. We do however remain mindful of any further deterioration in the global economy that will inevitably influence the markets that we operate in.
The positive momentum that we have been achieving in our express package businesses is expected to continue at similar levels for the foreseeable future. Along with gradual growth in our traditional customer base, we are experiencing continued strong growth in volume that originates from businesses and consumers shopping online. Our business mail operations, which are a smaller part of this division, will continue to face declining letter volumes, though we do expect it to offset much of this decline by increasing its share of the market.
The growth that we have consistently been achieving in the information management division is expected to continue. Strong market support for the services we provide and the gaining of a number of nationwide customers following our investment in capacity and resources in recent years is very positive. A number of new digital services to complement our traditional physical information management services have recently been introduced. No near-term improvement is expected in the prices we receive from the sale of recycled paper, that continue to track significantly lower than we were able to achieve in the prior year.
Capital expenditure for the full year ending 30 June 2013 is expected to be $14 million to support the growth and development of both the Freightways operating divisions. Overall, cash flows are expected to remain strong throughout the 2013 financial year.
In recent years, Freightways has strengthened its earnings profile by diversifying its activities both geographically and deeper into the information management market. Freightways will continue to seek out and develop growth opportunities to support this strategy and will also explore other opportunities that complement its core capabilities.
Subject to business factors beyond its control, Freightways is well positioned to reap the benefits of further improvement in the markets in which it operates.
CONCLUSION
Freightways has delivered a record half year result. The positive features of the markets it operates in, the resilience of its business models and the successful execution of its growth strategies by a very experienced and capable team, are evident in this result. Accordingly, the Directors have been able to declare a fully imputed 9.0 cents per share interim dividend.
The Directors acknowledge the outstanding work and ongoing dedication of the Freightways team of people throughout New Zealand and Australia.
Attachments
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Share Investor - Share Investor Forum - Admin
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NZX - 2012 Full Year Results
by Share Investor » 18 Feb 2013 10:15
9:00am, 18 Feb 2013 | FLLYR
NZX 2012 Full Year Results
18 February 2013. NZXs results for the full year ended 31 December 2012 reflect continued growth in the core information, markets and infrastructure businesses offset by a year of low capital raising activity, a number of one-off expenses and the need to invest in the business to take advantage of revenue growth opportunities going forward.
Operating revenue grew to $56.0 million, 2.4% higher than the prior corresponding period (PCP).
Expenses rose from $29.5 million to $34.0 million. This includes $1.3 million of costs associated with the CEO transition, other one-off items, and the Ralec litigation. A further $1.0 million of one-off revenue and expense accruals also reduced reported earnings. As previously signalled to the market at the half-year result, EBITDAF was down 12.7% to $22.0 million.
A change in useful lives of intangible assets to reflect latest estimates resulted in an increase in amortisation expense of $0.7 million, while a one-off foreign exchange loss of $1.5 million on the realisation of the Markit investment was an additional factor in the reduction in net earnings. NPAT was down 31.7% to $9.9 million.
NZX CEO Tim Bennett commented: A number of one-off factors influenced this years result, which was set against a background of very low levels of capital raising by historic standards. Despite this, the year ended on a positive note, with two successful IPOs, the launch of the Fonterra Shareholders Market and a number of sell-downs by major shareholders. The resulting momentum in trading volumes carried into the new financial year
It is pleasing to note the growth of NZXs Derivatives and Clear Grain Exchange businesses, which, despite their relatively small scale, performed strongly.
NZX made significant investments in core operations during 2012. The successful launch of the Nasdaq X-stream trading platform was the result of an intensive, seven-month project involving stakeholders across the industry, to whom I would like to express our gratitude for the work programme involved.
Ultimately, the new trading platform will drive innovation in NZXs market offerings, while enhancing our global connectivity capabilities, making our local markets more accessible internationally in the long term.
Operational performance across all the business remains world-class. The trading, clearing and settlement functions had 100% uptime in 2012. The investment in the Clearing House in previous years benefited the market as clearing volume rose to record levels.
We also made strategic investments in our people, bringing staff numbers to appropriate levels to support and grow the business, and we are working hard to address staff turnover.
While impacting negatively on costs overall, this investment in resources is required to meet our obligations to stakeholders and position us to capture future growth opportunities.
The change in our structure in June, particularly the separation of our commercial and regulatory roles and the recruitment of three new members of the management team has further strengthened the organisation.
Positive feedback from our customers and stakeholders in response to our increased customer focus gives me confidence that this investment will provide the required payback to our shareholders.
Information
NZXs agricultural data and information businesses achieved continued steady growth during the year, with revenue up 3% on PCP to $12.3 million, on the back of continued solid performance by its market-leading publications.
NZX Agri delivered a number of achievements that will support future growth including the launch of New Zealands first Agri news website, Fwplus.co.nz, and the opening of an expanded headquarters for the NZX Agri business in Feilding.
NZXs securities information businesses were buffeted by a high exchange rate and reduction in capital markets spending globally, resulting in securities information revenue being down 1% on PCP to $9 million.
Markets
The Initial Public Offering of Moa Group and the listing of the Fonterra Shareholders Fund were notable events against a backdrop of an otherwise disappointing year for new capital raising. Primary issuance was $1.6 billion, well below the 10-year average of $2.1 billion.
Secondary capital raising was also at historically low levels, mainly due to strong corporate balance sheets. Total secondary capital raised in 2012 was $4.6 billion, the lowest annual capital raising figure since 2005.
Trading activity, however, saw significant growth during 2012 with the number of trades up 22% on PCP.
Commodity trading and dairy derivatives continued on strong growth trajectories during the year, and have considerable future growth potential.
Infrastructure
The successful launch of the Fonterra Shareholders Market and renewal of Electricity Authority contracts were important milestones for the Infrastructure business.
The launch of the Fonterra Shareholders Market was the result of valuable collaboration with industry, and is an example of how an organisation can retain control by one set of shareholders, while accessing the public equity markets and therefore providing the business with permanent capital.
Much of New Zealands future growth potential is in agriculture, especially dairy, and the launch of Trading Among Farmers is a major step in supporting that growth potential, said Tim Bennett.
NZX also recorded further growth in securities clearing revenue, boosted by the increase in trading volumes.
Expenses
Expenses increased by 15% to $34 million in 2013 as a result of a number of one-off items, a reduction in capitalisation and a reset of the cost base. One-off expense items during the year reduced EBITDAF by $2.0 million including the CEO transition, Ralec litigation costs and other one-off expenses and accruals. Additional provisioning for doubtful debts totalled $0.2 million. A reduction in capitalisation of labour costs of $1.0 million contributed to an increase in reported personnel costs, as did an increase in staff numbers. With the majority of the increase occurring in the last quarter of the financial year, the full impact of this will not be seen until 2013.
2013 Outlook
Agricultural and securities information, annual listing and participant fees, and market operations, provide steady, low to moderate growth revenue streams. NZX expects mid-single digit growth across these revenue lines in 2013.
Commodity trading and derivatives (dairy and equity which will be launched in 2013), while a small proportion of total revenues, are expected to continue to show strong growth.
Additional upside to 2013 revenues are dependent on primary and secondary capital raising activity and an associated increase in trading volumes and clearing activity. Possible listings include the proposed Government partial share offers and a range of other listings. While the IPO pipeline is stronger than it has been in many years, the extent to which this translates into actual listings is highly dependent on market conditions.
Trading in 2013 has started strongly with January value traded up 60% on PCP and the pattern of sell downs by major shareholders has continued into this year.
As highlighted earlier, the full year impact of resetting the cost base in 2012 is expected to be evident in 2013, particularly in respect of personnel costs. Overall costs are expected to increase by high single digits in 2013 with a sharp reduction in the rate of growth expected thereafter.
NZX also expects a reduction in capital expenditure from 2012 levels with no major projects currently contemplated.
2013 has some exciting possibilities for the development of New Zealands capital markets and for the continued evolution of NZX. We are working hard to capture these opportunities for the benefit of our shareholders and New Zealand, said Tim Bennett.
Dividend
The NZX Board has declared a final dividend of 1.25 cents per share, fully imputed. This is consistent with the Boards previously stated policy of an increase of at least 1 cent per share per year, adjusted to reflect the change in capital structure resulting from the share split in May 2012.
The dividend record date will be 8 March 2013, with a payment date of 22 March 2013.
Annual Meeting
As previously communicated, NZX will hold its Annual Meeting in Wellington on May 3rd.
After three years of service on the NZX Board, Rod Drury, the CEO of Xero, has indicated his intention to step down from the Board. Xeros rapid international expansion of its online accounting solution for small businesses is increasingly requiring all of Rods time. The NZX Board sincerely thanks Rod for his contribution and looks forward to his continued support in attracting new listings to NZX.
ENDS
Attachments
FY12 Financial Statements
Appendix 1
Appendix 7
2012 Full Year Results Presentation
Media contact:
Kate McLaughlin
Corporate Communications
M: 027 533 4529
T: 09 309 3654
E: [email protected]
Investor contact:
Bevan Miller
Chief Financial Officer
M: 021 276 7359
T: 04 498 2271
E: [email protected]
NZX 2012 Full Year Results
18 February 2013. NZXs results for the full year ended 31 December 2012 reflect continued growth in the core information, markets and infrastructure businesses offset by a year of low capital raising activity, a number of one-off expenses and the need to invest in the business to take advantage of revenue growth opportunities going forward.
Operating revenue grew to $56.0 million, 2.4% higher than the prior corresponding period (PCP).
Expenses rose from $29.5 million to $34.0 million. This includes $1.3 million of costs associated with the CEO transition, other one-off items, and the Ralec litigation. A further $1.0 million of one-off revenue and expense accruals also reduced reported earnings. As previously signalled to the market at the half-year result, EBITDAF was down 12.7% to $22.0 million.
A change in useful lives of intangible assets to reflect latest estimates resulted in an increase in amortisation expense of $0.7 million, while a one-off foreign exchange loss of $1.5 million on the realisation of the Markit investment was an additional factor in the reduction in net earnings. NPAT was down 31.7% to $9.9 million.
NZX CEO Tim Bennett commented: A number of one-off factors influenced this years result, which was set against a background of very low levels of capital raising by historic standards. Despite this, the year ended on a positive note, with two successful IPOs, the launch of the Fonterra Shareholders Market and a number of sell-downs by major shareholders. The resulting momentum in trading volumes carried into the new financial year
It is pleasing to note the growth of NZXs Derivatives and Clear Grain Exchange businesses, which, despite their relatively small scale, performed strongly.
NZX made significant investments in core operations during 2012. The successful launch of the Nasdaq X-stream trading platform was the result of an intensive, seven-month project involving stakeholders across the industry, to whom I would like to express our gratitude for the work programme involved.
Ultimately, the new trading platform will drive innovation in NZXs market offerings, while enhancing our global connectivity capabilities, making our local markets more accessible internationally in the long term.
Operational performance across all the business remains world-class. The trading, clearing and settlement functions had 100% uptime in 2012. The investment in the Clearing House in previous years benefited the market as clearing volume rose to record levels.
We also made strategic investments in our people, bringing staff numbers to appropriate levels to support and grow the business, and we are working hard to address staff turnover.
While impacting negatively on costs overall, this investment in resources is required to meet our obligations to stakeholders and position us to capture future growth opportunities.
The change in our structure in June, particularly the separation of our commercial and regulatory roles and the recruitment of three new members of the management team has further strengthened the organisation.
Positive feedback from our customers and stakeholders in response to our increased customer focus gives me confidence that this investment will provide the required payback to our shareholders.
Information
NZXs agricultural data and information businesses achieved continued steady growth during the year, with revenue up 3% on PCP to $12.3 million, on the back of continued solid performance by its market-leading publications.
NZX Agri delivered a number of achievements that will support future growth including the launch of New Zealands first Agri news website, Fwplus.co.nz, and the opening of an expanded headquarters for the NZX Agri business in Feilding.
NZXs securities information businesses were buffeted by a high exchange rate and reduction in capital markets spending globally, resulting in securities information revenue being down 1% on PCP to $9 million.
Markets
The Initial Public Offering of Moa Group and the listing of the Fonterra Shareholders Fund were notable events against a backdrop of an otherwise disappointing year for new capital raising. Primary issuance was $1.6 billion, well below the 10-year average of $2.1 billion.
Secondary capital raising was also at historically low levels, mainly due to strong corporate balance sheets. Total secondary capital raised in 2012 was $4.6 billion, the lowest annual capital raising figure since 2005.
Trading activity, however, saw significant growth during 2012 with the number of trades up 22% on PCP.
Commodity trading and dairy derivatives continued on strong growth trajectories during the year, and have considerable future growth potential.
Infrastructure
The successful launch of the Fonterra Shareholders Market and renewal of Electricity Authority contracts were important milestones for the Infrastructure business.
The launch of the Fonterra Shareholders Market was the result of valuable collaboration with industry, and is an example of how an organisation can retain control by one set of shareholders, while accessing the public equity markets and therefore providing the business with permanent capital.
Much of New Zealands future growth potential is in agriculture, especially dairy, and the launch of Trading Among Farmers is a major step in supporting that growth potential, said Tim Bennett.
NZX also recorded further growth in securities clearing revenue, boosted by the increase in trading volumes.
Expenses
Expenses increased by 15% to $34 million in 2013 as a result of a number of one-off items, a reduction in capitalisation and a reset of the cost base. One-off expense items during the year reduced EBITDAF by $2.0 million including the CEO transition, Ralec litigation costs and other one-off expenses and accruals. Additional provisioning for doubtful debts totalled $0.2 million. A reduction in capitalisation of labour costs of $1.0 million contributed to an increase in reported personnel costs, as did an increase in staff numbers. With the majority of the increase occurring in the last quarter of the financial year, the full impact of this will not be seen until 2013.
2013 Outlook
Agricultural and securities information, annual listing and participant fees, and market operations, provide steady, low to moderate growth revenue streams. NZX expects mid-single digit growth across these revenue lines in 2013.
Commodity trading and derivatives (dairy and equity which will be launched in 2013), while a small proportion of total revenues, are expected to continue to show strong growth.
Additional upside to 2013 revenues are dependent on primary and secondary capital raising activity and an associated increase in trading volumes and clearing activity. Possible listings include the proposed Government partial share offers and a range of other listings. While the IPO pipeline is stronger than it has been in many years, the extent to which this translates into actual listings is highly dependent on market conditions.
Trading in 2013 has started strongly with January value traded up 60% on PCP and the pattern of sell downs by major shareholders has continued into this year.
As highlighted earlier, the full year impact of resetting the cost base in 2012 is expected to be evident in 2013, particularly in respect of personnel costs. Overall costs are expected to increase by high single digits in 2013 with a sharp reduction in the rate of growth expected thereafter.
NZX also expects a reduction in capital expenditure from 2012 levels with no major projects currently contemplated.
2013 has some exciting possibilities for the development of New Zealands capital markets and for the continued evolution of NZX. We are working hard to capture these opportunities for the benefit of our shareholders and New Zealand, said Tim Bennett.
Dividend
The NZX Board has declared a final dividend of 1.25 cents per share, fully imputed. This is consistent with the Boards previously stated policy of an increase of at least 1 cent per share per year, adjusted to reflect the change in capital structure resulting from the share split in May 2012.
The dividend record date will be 8 March 2013, with a payment date of 22 March 2013.
Annual Meeting
As previously communicated, NZX will hold its Annual Meeting in Wellington on May 3rd.
After three years of service on the NZX Board, Rod Drury, the CEO of Xero, has indicated his intention to step down from the Board. Xeros rapid international expansion of its online accounting solution for small businesses is increasingly requiring all of Rods time. The NZX Board sincerely thanks Rod for his contribution and looks forward to his continued support in attracting new listings to NZX.
ENDS
Attachments
FY12 Financial Statements
Appendix 1
Appendix 7
2012 Full Year Results Presentation
Media contact:
Kate McLaughlin
Corporate Communications
M: 027 533 4529
T: 09 309 3654
E: [email protected]
Investor contact:
Bevan Miller
Chief Financial Officer
M: 021 276 7359
T: 04 498 2271
E: [email protected]
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PPG - Appendix 4D - Half year Results
by Share Investor » 18 Feb 2013 13:10
10:36am, 18 Feb 2013 | HALFYR
HALF YEAR REPORT FOR THE 6 MONTHS ENDED 31 DECEMBER 2012
In accordance with Australian Securities Exchange Listing Rule 4.2A, attached is the Companys Appendix 4D Half year Report for the period 1 July 2012 to 31 December 2012, together with a copy of a Press Release which the Company intends to send to the media today.
* * * * *
Half Year Results Announcement
- Reported net profit after tax of $38.9 million (no significant items) for the 6 months ended 31 December 2012 (1H13) up from a reported loss of $362.4 million (impacted by significant items)
- Sales down 6.6% but net profit after tax up 8.9% and earnings per share up 10.0% (before significant items) with continued strong cash flow
- Dividend up 25% on the previous corresponding period to 2.5 cents per share fully franked (declared), representing an increase in the payout ratio to 59% (up from 51%)
- Underwear showed encouraging growth, driven by Bonds, Berlei and Jockey
- Workwear has been impacted by a cyclical downturn in market conditions
- Premium footwear up and Sheridan marginally down in difficult markets; a turnaround in other HFO brands and businesses is being undertaken
- Further detail provided on strategic priorities to stabilise sales and deliver sustainable growth over time
Group result (reviewed) for the 6 months ended 31 December 2012
$ millions Reported Before significant items
1H13 1H12 Change 1H13 1H12 Change
Sales 639.2 684.7 (6.6)% 639.2 684.7 (6.6)%
EBIT 64.3 (336.5) n.m. 64.3 65.6 (2.0)%
NPAT 38.9 (362.4) n.m. 38.9 35.7 8.9%
EPS (cps) 4.3 (39.3) n.m. 4.3 3.9 10.0%
DPS (cps) 2.5 2.0 25.0% 2.5 2.0 25.0%
Payout ratio 59% n.m. n.m. 59% 51% 8pts
Net debt 177.7 242.2 (26.6)% 177.7 242.2 (26.6)%
Chief Executive Officer, John Pollaers, said: Pacific Brands today announced a net profit after tax of $38.9 million for the six months ended 31 December 2012. This is up from a reported loss of $362.4 million after significant items and represents an 8.9% increase on the result before significant items recorded for the previous corresponding period. This result reflects gains achieved through strong operating and financial discipline across the business in continued challenging market conditions.
There is still plenty of work to be done to stabilise sales performance and return the business to sustainable growth. It is early days, but we are encouraged that the Underwear group returned to growth in the period, with Bonds, Berlei and Jockey all up. It shows that good results can be obtained from strategic focus, discipline and investment in great brands.
The Workwear group remains a global leader in an attractive industry. While it is clearly not immune to the current cyclical downturn characterised by low business confidence and slow employment growth, it has generally maintained market share and it has opportunity ahead of it when we see a return of business confidence in its markets.
In HFO, premium footwear was up and Sheridan was marginally down in difficult markets. Outerwear improved but still has further to go. Flooring stabilised after a difficult second half last year. Tontine is dealing with increased private label competition, and the non-premium footwear business is still in the process of being turned around.
Group results
Reported sales were down 6.6% (or 5.8% in terms of underlying sales , ) primarily due to low consumer sentiment and business confidence and reduced sales from lower margin portfolio brands.
Sales through the direct-to-consumer channel were up, reflecting the increased investment and success in both online and retail for certain brands. The business-to-business channel was down as a result of reduced Workwear sales.
The Companys sales through wholesale channels were generally lower due to low consumer sentiment and retailers private label strategies continuing to impact portfolio brands.
Mr Pollaers said: Restoring the Company to sales growth is a top priority. The strategy, which includes focusing on key brands and diversifying channels to market, is the right one. We are finding the different channels to market complementary. For example, some newer products are being trialled in our own stores and then, once proven, leveraged through our wholesale customers to deliver great results.
Gross margins improved by 1.9 percentage points (46.8% to 48.7%) reflecting the mix benefits from a greater proportion of sales from relatively higher margin products, increased vertical margin from greater direct-to-consumer sales and lower import costs.
Cost of doing business reduced by $7.4 million to $247.2 million, representing continued tight cost control. This reduction was achieved despite the increase in costs associated with additional investment in the direct-to-consumer channel.
Mr Pollaers said: Its important that we get the balance right between the need for cost containment whilst also investing in the business where it makes sense. Thats why this latest cost outcome is a good one, because it has occurred at a time when we have increased our investment in the direct-to-consumer channels.
Net profit after tax before significant items also benefited from a significant reduction in net interest (down 20.0%) and a lower effective tax rate.
Cash flow remained strong through effective working capital management resulting in cash conversion7, of 103%. This enabled an $11.4 million reduction in net debt from $189.1m at 30 June 2012 to $177.7m at 31 December 2012. The Company has a conservative capital structure with gearing7, at 1.3 times and interest cover7,9 at 6.0 times.
Segment results
Underwear
Reported sales were up 1.4% to $220.4 million. Reported EBIT was $38.8 million, up from an EBIT loss of $360.7 million (or an increase of 9.9% before significant items).
There was a continued pipeline of new products, with Bonds Zip Wondersuit being a prime example of innovation driving sales. The direct-to-consumer channels complemented this, and helped trial and prove the merits of new products for wider (ie wholesale) distribution.
Key brands (Berlei, Bonds, Jockey, Explorer and hosiery brands) represented 85%7 of Underwear sales and grew by $15.17 million or 8.8%7.
Bonds benefited from increased distribution in branded retailers and supermarkets and its sales were up in wholesale and direct channels. Seasonal sales were strong in most categories and replenishment rates were also up. There was also continued growth in direct-to-consumer sales. Berlei is online following its launch in April 2012. Bonds online is now shipping to Canada, Hong Kong, New Zealand, Singapore, the UK and the US, and the first three Bonds retail stores have been opened. Jockeys wholesale sales in New Zealand drove its performance.
The trajectory of hosiery brands improved following the 2H12 decline, as distribution in the supermarket channel stabilised.
The majority of portfolio brands, most notably Rio, were down. These lower margin portfolio brands represented 15%7 of Underwear sales and declined by $12.07 million or 26.3%7, reflecting additional private label product in some categories.
EBIT margins were up due to mix effects, lower import costs and the full period benefits of the Bonds and Omni integration.
Workwear
Reported sales were down 9.1% to $176.8 million. Reported EBIT was $18.8 million, an increase of 2.2% (or a decrease of 3.0% before significant items).
New products are performing well, key examples being Stubbies Workwear, the new denim ranges for Hard Yakka and KingGee, and KingGee WorkCool 2.
Major corporate sales were steady, with contract renewal rates remaining high and stable, and the business continues to win additional contracts, including international opportunities with the Emirates Group in UAE.
Overall business-to-business sales of industrial workwear and corporate uniforms continue to be impacted by weak business confidence, slow employment growth, the slowdown in the resource sector and reduced government spending (eg Defence). While indent sales were up, replenishment levels were down and retail sales declined, particularly in the small to medium enterprise segment. Sales were affected by tighter procurement practices, lower employee turnover and slow employment growth.
Wholesale sales were impacted by similar factors to those affecting direct business-to-business sales. Sales to wholesale customers servicing the small to medium enterprise segment were most affected. Demand from the resource sector, particularly in Western Australia and Queensland, continued the slowdown which commenced in 2H12.
EBIT margins were relatively steady, with reductions in import costs and tight cost management offsetting the impact of lower sales.
Homewares, Footwear & Outerwear (HFO)
Reported sales were down 11.3% to $242.0 million (or 9.5% in terms of underlying sales6,7). Reported EBIT was $12.0 million, down 18.9% (or 32.2% before significant items).
Sales in boutiques were up, but Sheridans sales were marginally down overall due to reduced concession sales and clearance volumes.
Key premium footwear brands Clarks, Hush Puppies and Julius Marlow were all up, but Footwear & Sport was down overall due to declines in portfolio brands (Grosby, Dunlop, Slazenger). There was increased clearance activity and discounting in the footwear market throughout the period which impacted margins, and sales and earnings were also impacted by the Payless administration.
Outerwear improved performance in both the retail (eg Mossimo) and wholesale (eg Superdry) channels.
Tontine continues to be impacted by increased private label competition. Dunlop Flooring sales were down but have stabilised following the 2H12 decline, and margins were lower due to increased competitive intensity and continued softness in the housing market.
Gross margins were relatively steady overall, with the EBIT margin decline principally reflecting the impact of lower sales.
Dividends and capital management
Directors declared a dividend of 2.5 cents per share fully franked, representing an increase of 25% on the previous corresponding period and an increase in the payout ratio to 59% (up from 51%).
The on-market buy-back period expired on 6 September 2012. The Board is currently prioritising balance sheet strength and dividends in the current challenging market environment. The Board will continue to proactively consider various alternatives for capital management as appropriate over time, subject to various considerations including capital structure, share price and alternative investment opportunities.
Strategic priorities
Pacific Brands today further expanded on its strategy for achieving sustainable growth following completion of the transformation program, including the following key future characteristics:
- Clear purpose: We are Australian for innovation and design that is loved by the world with more external focus on growth
- Focused portfolio delivering consistent growth
- Strong indirect wholesale customer base balanced with complementary direct channels to market (ie online, retail and business-to-business)
- Delivery of high impact innovation in the core categories and capturing adjacent category expansion opportunities
- Growing international business, particularly for Bonds, Sheridan and Workwear
The corporate strategic imperatives to achieve this position are centred around the strategic themes outlined in October 2012 at the Annual General Meeting, namely to:
- Maximise the full potential of each business
- Drive direct shopping experiences (online and retail) that excite our -consumers
- Explore the potential for geographic expansion
- Maintain an internationally competitive sourcing & supply chain
- Build a breakthrough performance culture
These imperatives are being translated into strategic priorities for each operating group, as summarised below.
Underwear
- Invest in core brands for sustainable wholesale growth
- Grow direct-to-consumer channels
- Capture adjacent category opportunities
- Develop international business
Workwear
- Extend product and brand leadership
- Strengthen distribution platform
- Capture adjacent segment and category opportunities
- Develop international business
- Accelerate growth through acquisitions
HFO
For HFO, priorities differ by business, but key priorities include:
- Invest in and focus on key brands for sustainable wholesale growth (all businesses)
- Expand / optimise direct-to-consumer channels (Sheridan, Footwear, Outerwear)
- Capture adjacent category opportunities (Sheridan)
- Develop international business (Sheridan)
- Optimise / manage businesses to address competitive challenges (Tontine, Flooring)
- Turn around operational performance and returns (Footwear, Outerwear)
Mr Pollaers said: Some initiatives will take time to have a visible impact on reported results and further performance improvement is required. However, in my short time here I can already see traction in the initiatives we are taking.
F13 Outlook
Second half-to-date underlying sales performance continues to be mixed with Underwear up, Workwear down, HFO down and the overall group marginally down compared to the previous corresponding period.
Gross margins and costs of doing business are expected to be broadly in line with 1H13. Continued efforts to control costs of doing business are being undertaken, and the Company will also continue its planned investment in the direct-to-consumer channels.
Earnings outcomes will be largely dependent upon market conditions, associated sales performance and implementation of the new strategy over time, and may be impacted by ongoing restructuring and rationalisation.
The Company remains well placed to deal with the continued challenging trading environment and to benefit from any improvement in market conditions.
For further information contact:
Investors Media
Chris Richardson Sue Cato
Manager, Group Treasury and Investor Relations Cato Counsel
Pacific Brands Limited
+61 3 9947 4926
+61 410 728 427 +61 419 282 319
[email protected]
Appendix A: Underlying sales1
Change
$ millions 1H13 1H12 $m %
Underlying sales 636.0 675.5 (39.5) (5.8)
Net business divestments2 3.2 9.2 (6.0) (65.0)
Reported sales 639.2 684.7 (45.5) (6.6)
1 Data not subject to independent review. Defined as reported sales less sales from brand acquisitions, divested businesses and businesses held for sale
2 Bikes business divested in 1H12 (effective 31 August 201
HALF YEAR REPORT FOR THE 6 MONTHS ENDED 31 DECEMBER 2012
In accordance with Australian Securities Exchange Listing Rule 4.2A, attached is the Companys Appendix 4D Half year Report for the period 1 July 2012 to 31 December 2012, together with a copy of a Press Release which the Company intends to send to the media today.
* * * * *
Half Year Results Announcement
- Reported net profit after tax of $38.9 million (no significant items) for the 6 months ended 31 December 2012 (1H13) up from a reported loss of $362.4 million (impacted by significant items)
- Sales down 6.6% but net profit after tax up 8.9% and earnings per share up 10.0% (before significant items) with continued strong cash flow
- Dividend up 25% on the previous corresponding period to 2.5 cents per share fully franked (declared), representing an increase in the payout ratio to 59% (up from 51%)
- Underwear showed encouraging growth, driven by Bonds, Berlei and Jockey
- Workwear has been impacted by a cyclical downturn in market conditions
- Premium footwear up and Sheridan marginally down in difficult markets; a turnaround in other HFO brands and businesses is being undertaken
- Further detail provided on strategic priorities to stabilise sales and deliver sustainable growth over time
Group result (reviewed) for the 6 months ended 31 December 2012
$ millions Reported Before significant items
1H13 1H12 Change 1H13 1H12 Change
Sales 639.2 684.7 (6.6)% 639.2 684.7 (6.6)%
EBIT 64.3 (336.5) n.m. 64.3 65.6 (2.0)%
NPAT 38.9 (362.4) n.m. 38.9 35.7 8.9%
EPS (cps) 4.3 (39.3) n.m. 4.3 3.9 10.0%
DPS (cps) 2.5 2.0 25.0% 2.5 2.0 25.0%
Payout ratio 59% n.m. n.m. 59% 51% 8pts
Net debt 177.7 242.2 (26.6)% 177.7 242.2 (26.6)%
Chief Executive Officer, John Pollaers, said: Pacific Brands today announced a net profit after tax of $38.9 million for the six months ended 31 December 2012. This is up from a reported loss of $362.4 million after significant items and represents an 8.9% increase on the result before significant items recorded for the previous corresponding period. This result reflects gains achieved through strong operating and financial discipline across the business in continued challenging market conditions.
There is still plenty of work to be done to stabilise sales performance and return the business to sustainable growth. It is early days, but we are encouraged that the Underwear group returned to growth in the period, with Bonds, Berlei and Jockey all up. It shows that good results can be obtained from strategic focus, discipline and investment in great brands.
The Workwear group remains a global leader in an attractive industry. While it is clearly not immune to the current cyclical downturn characterised by low business confidence and slow employment growth, it has generally maintained market share and it has opportunity ahead of it when we see a return of business confidence in its markets.
In HFO, premium footwear was up and Sheridan was marginally down in difficult markets. Outerwear improved but still has further to go. Flooring stabilised after a difficult second half last year. Tontine is dealing with increased private label competition, and the non-premium footwear business is still in the process of being turned around.
Group results
Reported sales were down 6.6% (or 5.8% in terms of underlying sales , ) primarily due to low consumer sentiment and business confidence and reduced sales from lower margin portfolio brands.
Sales through the direct-to-consumer channel were up, reflecting the increased investment and success in both online and retail for certain brands. The business-to-business channel was down as a result of reduced Workwear sales.
The Companys sales through wholesale channels were generally lower due to low consumer sentiment and retailers private label strategies continuing to impact portfolio brands.
Mr Pollaers said: Restoring the Company to sales growth is a top priority. The strategy, which includes focusing on key brands and diversifying channels to market, is the right one. We are finding the different channels to market complementary. For example, some newer products are being trialled in our own stores and then, once proven, leveraged through our wholesale customers to deliver great results.
Gross margins improved by 1.9 percentage points (46.8% to 48.7%) reflecting the mix benefits from a greater proportion of sales from relatively higher margin products, increased vertical margin from greater direct-to-consumer sales and lower import costs.
Cost of doing business reduced by $7.4 million to $247.2 million, representing continued tight cost control. This reduction was achieved despite the increase in costs associated with additional investment in the direct-to-consumer channel.
Mr Pollaers said: Its important that we get the balance right between the need for cost containment whilst also investing in the business where it makes sense. Thats why this latest cost outcome is a good one, because it has occurred at a time when we have increased our investment in the direct-to-consumer channels.
Net profit after tax before significant items also benefited from a significant reduction in net interest (down 20.0%) and a lower effective tax rate.
Cash flow remained strong through effective working capital management resulting in cash conversion7, of 103%. This enabled an $11.4 million reduction in net debt from $189.1m at 30 June 2012 to $177.7m at 31 December 2012. The Company has a conservative capital structure with gearing7, at 1.3 times and interest cover7,9 at 6.0 times.
Segment results
Underwear
Reported sales were up 1.4% to $220.4 million. Reported EBIT was $38.8 million, up from an EBIT loss of $360.7 million (or an increase of 9.9% before significant items).
There was a continued pipeline of new products, with Bonds Zip Wondersuit being a prime example of innovation driving sales. The direct-to-consumer channels complemented this, and helped trial and prove the merits of new products for wider (ie wholesale) distribution.
Key brands (Berlei, Bonds, Jockey, Explorer and hosiery brands) represented 85%7 of Underwear sales and grew by $15.17 million or 8.8%7.
Bonds benefited from increased distribution in branded retailers and supermarkets and its sales were up in wholesale and direct channels. Seasonal sales were strong in most categories and replenishment rates were also up. There was also continued growth in direct-to-consumer sales. Berlei is online following its launch in April 2012. Bonds online is now shipping to Canada, Hong Kong, New Zealand, Singapore, the UK and the US, and the first three Bonds retail stores have been opened. Jockeys wholesale sales in New Zealand drove its performance.
The trajectory of hosiery brands improved following the 2H12 decline, as distribution in the supermarket channel stabilised.
The majority of portfolio brands, most notably Rio, were down. These lower margin portfolio brands represented 15%7 of Underwear sales and declined by $12.07 million or 26.3%7, reflecting additional private label product in some categories.
EBIT margins were up due to mix effects, lower import costs and the full period benefits of the Bonds and Omni integration.
Workwear
Reported sales were down 9.1% to $176.8 million. Reported EBIT was $18.8 million, an increase of 2.2% (or a decrease of 3.0% before significant items).
New products are performing well, key examples being Stubbies Workwear, the new denim ranges for Hard Yakka and KingGee, and KingGee WorkCool 2.
Major corporate sales were steady, with contract renewal rates remaining high and stable, and the business continues to win additional contracts, including international opportunities with the Emirates Group in UAE.
Overall business-to-business sales of industrial workwear and corporate uniforms continue to be impacted by weak business confidence, slow employment growth, the slowdown in the resource sector and reduced government spending (eg Defence). While indent sales were up, replenishment levels were down and retail sales declined, particularly in the small to medium enterprise segment. Sales were affected by tighter procurement practices, lower employee turnover and slow employment growth.
Wholesale sales were impacted by similar factors to those affecting direct business-to-business sales. Sales to wholesale customers servicing the small to medium enterprise segment were most affected. Demand from the resource sector, particularly in Western Australia and Queensland, continued the slowdown which commenced in 2H12.
EBIT margins were relatively steady, with reductions in import costs and tight cost management offsetting the impact of lower sales.
Homewares, Footwear & Outerwear (HFO)
Reported sales were down 11.3% to $242.0 million (or 9.5% in terms of underlying sales6,7). Reported EBIT was $12.0 million, down 18.9% (or 32.2% before significant items).
Sales in boutiques were up, but Sheridans sales were marginally down overall due to reduced concession sales and clearance volumes.
Key premium footwear brands Clarks, Hush Puppies and Julius Marlow were all up, but Footwear & Sport was down overall due to declines in portfolio brands (Grosby, Dunlop, Slazenger). There was increased clearance activity and discounting in the footwear market throughout the period which impacted margins, and sales and earnings were also impacted by the Payless administration.
Outerwear improved performance in both the retail (eg Mossimo) and wholesale (eg Superdry) channels.
Tontine continues to be impacted by increased private label competition. Dunlop Flooring sales were down but have stabilised following the 2H12 decline, and margins were lower due to increased competitive intensity and continued softness in the housing market.
Gross margins were relatively steady overall, with the EBIT margin decline principally reflecting the impact of lower sales.
Dividends and capital management
Directors declared a dividend of 2.5 cents per share fully franked, representing an increase of 25% on the previous corresponding period and an increase in the payout ratio to 59% (up from 51%).
The on-market buy-back period expired on 6 September 2012. The Board is currently prioritising balance sheet strength and dividends in the current challenging market environment. The Board will continue to proactively consider various alternatives for capital management as appropriate over time, subject to various considerations including capital structure, share price and alternative investment opportunities.
Strategic priorities
Pacific Brands today further expanded on its strategy for achieving sustainable growth following completion of the transformation program, including the following key future characteristics:
- Clear purpose: We are Australian for innovation and design that is loved by the world with more external focus on growth
- Focused portfolio delivering consistent growth
- Strong indirect wholesale customer base balanced with complementary direct channels to market (ie online, retail and business-to-business)
- Delivery of high impact innovation in the core categories and capturing adjacent category expansion opportunities
- Growing international business, particularly for Bonds, Sheridan and Workwear
The corporate strategic imperatives to achieve this position are centred around the strategic themes outlined in October 2012 at the Annual General Meeting, namely to:
- Maximise the full potential of each business
- Drive direct shopping experiences (online and retail) that excite our -consumers
- Explore the potential for geographic expansion
- Maintain an internationally competitive sourcing & supply chain
- Build a breakthrough performance culture
These imperatives are being translated into strategic priorities for each operating group, as summarised below.
Underwear
- Invest in core brands for sustainable wholesale growth
- Grow direct-to-consumer channels
- Capture adjacent category opportunities
- Develop international business
Workwear
- Extend product and brand leadership
- Strengthen distribution platform
- Capture adjacent segment and category opportunities
- Develop international business
- Accelerate growth through acquisitions
HFO
For HFO, priorities differ by business, but key priorities include:
- Invest in and focus on key brands for sustainable wholesale growth (all businesses)
- Expand / optimise direct-to-consumer channels (Sheridan, Footwear, Outerwear)
- Capture adjacent category opportunities (Sheridan)
- Develop international business (Sheridan)
- Optimise / manage businesses to address competitive challenges (Tontine, Flooring)
- Turn around operational performance and returns (Footwear, Outerwear)
Mr Pollaers said: Some initiatives will take time to have a visible impact on reported results and further performance improvement is required. However, in my short time here I can already see traction in the initiatives we are taking.
F13 Outlook
Second half-to-date underlying sales performance continues to be mixed with Underwear up, Workwear down, HFO down and the overall group marginally down compared to the previous corresponding period.
Gross margins and costs of doing business are expected to be broadly in line with 1H13. Continued efforts to control costs of doing business are being undertaken, and the Company will also continue its planned investment in the direct-to-consumer channels.
Earnings outcomes will be largely dependent upon market conditions, associated sales performance and implementation of the new strategy over time, and may be impacted by ongoing restructuring and rationalisation.
The Company remains well placed to deal with the continued challenging trading environment and to benefit from any improvement in market conditions.
For further information contact:
Investors Media
Chris Richardson Sue Cato
Manager, Group Treasury and Investor Relations Cato Counsel
Pacific Brands Limited
+61 3 9947 4926
+61 410 728 427 +61 419 282 319
[email protected]
Appendix A: Underlying sales1
Change
$ millions 1H13 1H12 $m %
Underlying sales 636.0 675.5 (39.5) (5.8)
Net business divestments2 3.2 9.2 (6.0) (65.0)
Reported sales 639.2 684.7 (45.5) (6.6)
1 Data not subject to independent review. Defined as reported sales less sales from brand acquisitions, divested businesses and businesses held for sale
2 Bikes business divested in 1H12 (effective 31 August 201
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CEN - Contact Energy Limited 2013 Half Year Results
by Share Investor » 19 Feb 2013 08:36
8:30am, 19 Feb 2013 | HALFYR
CONTACT ENERGY 2013 HALF YEAR RESULTS
Name of Listed Issuer: Contact Energy Limited
For the period ended: 31 December 2012
This report has been prepared in a manner which complies with generally accepted accounting practice and gives a true and fair view of the matters to which the report relates and is based on unaudited accounts.
CONSOLIDATED INCOME STATEMENT
Current Half Year NZ$m; Up/Down %; Previous Corresponding Half Year NZ$m
EBITDAF (Earnings before net interest expense, tax, depreciation, amortisation, change in fair value of financial instruments and other significant items) $253m; up 9.5%; $231m
PROFIT FOR THE HALF YEAR: $88m; up 29.4%; $68m
EARNINGS PER SHARE: 12.2 CPS; up 25.8%; 9.7 CPS
UNDERLYING EARNINGS AFTER TAX (excludes significant items that do not reflect the ongoing performance of the Group non-statutory measure) $92m; up 21.1%; $76m
UNDERLYING EARNINGS PER SHARE: 12.7 CPS; up 16.5%; 10.9 CPS
INTERIM DISTRIBUTION* 11.0 CPS
*In the form of a cash dividend.
Record date: 08/03/2013
Dividend Payment Date: 26/03/2013
MEDIA RELEASE
19 February 2013
Solid first half performance
Overview of results
Contact has delivered a solid half year performance despite weakness in the wholesale electricity market and sustained competition in the retail market. Chief Executive Dennis Barnes says that Contacts results show the benefits of its diverse fuel and asset portfolio and competitive customer offers. Mr Barnes said that this clearly demonstrates Contacts increasing ability to perform and respond to a range of market conditions.
Contact reported profit after tax for the six months ended 31 December 2012 of $88 million, $20 million (29 per cent) higher than the prior corresponding period. Earnings Before Net Interest Expense, Tax, Depreciation, Amortisation, Change in Fair Value of Financial Instruments and Other Significant Items (EBITDAF) were $253 million, up 10 per cent from $231 million in the first half of the 2012 financial year. Underlying earnings after tax (profit for the period adjusted for significant items that do not reflect the ongoing performance of the Group) were $92 million, up $16 million (21 per cent).
Again, the result demonstrates the benefits of our investments in peakers and gas storage. The diversity of our fuel and asset portfolio has more than offset the impact of lower wholesale prices. Our Te Mihi project made good progress and, combined with the expiry of the Huntly swaption contract, will make a significant contribution to earnings from the middle of 2013.
In a retail market where 30,000 customers per month switch supplier we have been successful at retaining a stable market share in both the mass market and commercial and industrial markets; however, margins are lower with continued generation oversupply and the competition that this drives. We will continue our focus on winning and keeping customers.
With our current capital investment programme coming to an end and the flat outlook for energy demand we are taking steps to adjust the cost base and structure of the business Mr Barnes said.
Distribution to shareholders
The Contact Board of Directors resolved to hold the interim distribution to shareholders at the equivalent of 11 cents per share. As indicated in the full year announcement, the distribution will be made as a fully imputed cash dividend and represents a payout ratio of 87% of Contacts underlying earnings after tax.
Diverse portfolio proves it worth again
The benefits of Contacts diverse fuel and asset portfolio were again evidenced in the first half of the 2013 financial year. Higher rainfall in the South Island resulted in increased hydro generation displacing more expensive thermal generation. Contact was able to actively respond by reducing its thermal generation and purchasing a greater proportion of its generation from the spot market while prices were lower.
The peakers and gas storage managed trading risk and enabled increased participation in the ancillary services market.
I have stated before that the investments we have made to increase the diversity of our portfolio will reduce the impact that varied operating conditions have on our performance. I am pleased to see the way we have been able to flex the portfolio over the past six months to deliver good results in both wet and dry conditions, Mr Barnes said.
Te Mihi power station progressing to final stages of development
Progress on building Contacts Te Mihi power station continues. Steamfield work is largely complete and the first stages of commissioning on the power station has commenced. The completion of Te Mihi will bring to an end a greater than $2 billion investment programme, adding lower-cost geothermal, and flexible thermal generation capacity and New Zealands first gas storage facility.
We opened the Wairakei bioreactor, a unique facility that significantly lowers our impact on the Waikato River by removing hydrogen sulphide from cooling fluid from the iconic Wairakei Power Station using bacteria native to the Waikato River. We also opened the Ohaaki wetland, a two-year project managed by Fish & Game NZ which has transformed previously unused land impacted by subsidence into a useful natural resource. These two projects represent important steps in the ongoing care for the environment in which we operate.
In the current low demand growth environment we will not be committing to further generation developments in the near term. Contact maintains a range of high quality development options with the world class resource at Tauhara ready for execution as market signals dictate. In the meantime, our focus will be on minimising the costs required to retain the full range of development options we have in place, Mr Barnes said.
Customer numbers stable, retail margins remain tight
In the retail business, Mr Barnes reported that Contact had achieved an acceptable result. Despite the market continuing to experience high levels of customer switching, Contacts customer numbers saw a modest increase. However, sales volumes were 1 per cent lower than the first half of the 2012 financial year. Margins decreased for electricity sales by $1 per megawatt hour, reflecting the competition for customers in an oversupplied market. The Online OnTime discount for customers who receive their bill online and pay on time has continued to increase in popularity with over 40 per cent of customers taking advantage of this product.
The Retail Transformation programme is moving into the final stages of testing and preparing the business for the introduction of the new system.
Controlling costs a priority
In an environment of flat electricity demand it is important that we continue to manage our cost base. We have announced to staff that we will be restructuring the business. We recognise that workforce changes are unsettling, particularly for any of our people who are affected and we will support them through this transition. Restructuring is one of a number of initiatives underway across the business to control costs.
The proposed changes will control our costs and help us to remain competitive for customers and shareholders Mr Barnes said.
Safety
The health and safety of all people who work for the company remains our number one priority. Mr Barnes reported no improvement in the companys safety statistics, with its total recordable injury frequency rate in line with 30 June 2012.
We are working to ensure every employee and contractor is focussed first and foremost on safety and will continue to improve our leadership, culture and systems. I am confident that the steps we are taking will bring us closer to our goal of zero harm, said Mr Barnes.
Looking forward
For the remainder of 2013 and beyond, Contact will focus on remaining competitive for our customers and improving our cost base.
The completion of Te Mihi will provide Contact with additional lower-cost generation. Contact will make important decisions in the next 12 months relating to the amount of gas we will contract and how we operate our combined-cycle gas-fired power stations.
We will be putting a greater emphasis on ensuring we are meeting the needs of our customers, Mr Barnes said. In time, Retail Transformation will provide us with new ways to engage with our customers and I want to ensure we are totally focused on offering products and solutions that meet their needs.
We are working on the factors that we can control and impact, Mr Barnes said. Completing the current asset and systems investment programme, continuing to improve our fuel purchase costs and ensuring the organisation is sized to match current market conditions will position Contact to grow earnings in coming years.
ENDS
Media enquiries: Nicholas Robinson 027 705 3831
Investor enquiries: Fraser Gardiner 021 228 3688
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CONTACT ENERGY 2013 HALF YEAR RESULTS
Name of Listed Issuer: Contact Energy Limited
For the period ended: 31 December 2012
This report has been prepared in a manner which complies with generally accepted accounting practice and gives a true and fair view of the matters to which the report relates and is based on unaudited accounts.
CONSOLIDATED INCOME STATEMENT
Current Half Year NZ$m; Up/Down %; Previous Corresponding Half Year NZ$m
EBITDAF (Earnings before net interest expense, tax, depreciation, amortisation, change in fair value of financial instruments and other significant items) $253m; up 9.5%; $231m
PROFIT FOR THE HALF YEAR: $88m; up 29.4%; $68m
EARNINGS PER SHARE: 12.2 CPS; up 25.8%; 9.7 CPS
UNDERLYING EARNINGS AFTER TAX (excludes significant items that do not reflect the ongoing performance of the Group non-statutory measure) $92m; up 21.1%; $76m
UNDERLYING EARNINGS PER SHARE: 12.7 CPS; up 16.5%; 10.9 CPS
INTERIM DISTRIBUTION* 11.0 CPS
*In the form of a cash dividend.
Record date: 08/03/2013
Dividend Payment Date: 26/03/2013
MEDIA RELEASE
19 February 2013
Solid first half performance
Overview of results
Contact has delivered a solid half year performance despite weakness in the wholesale electricity market and sustained competition in the retail market. Chief Executive Dennis Barnes says that Contacts results show the benefits of its diverse fuel and asset portfolio and competitive customer offers. Mr Barnes said that this clearly demonstrates Contacts increasing ability to perform and respond to a range of market conditions.
Contact reported profit after tax for the six months ended 31 December 2012 of $88 million, $20 million (29 per cent) higher than the prior corresponding period. Earnings Before Net Interest Expense, Tax, Depreciation, Amortisation, Change in Fair Value of Financial Instruments and Other Significant Items (EBITDAF) were $253 million, up 10 per cent from $231 million in the first half of the 2012 financial year. Underlying earnings after tax (profit for the period adjusted for significant items that do not reflect the ongoing performance of the Group) were $92 million, up $16 million (21 per cent).
Again, the result demonstrates the benefits of our investments in peakers and gas storage. The diversity of our fuel and asset portfolio has more than offset the impact of lower wholesale prices. Our Te Mihi project made good progress and, combined with the expiry of the Huntly swaption contract, will make a significant contribution to earnings from the middle of 2013.
In a retail market where 30,000 customers per month switch supplier we have been successful at retaining a stable market share in both the mass market and commercial and industrial markets; however, margins are lower with continued generation oversupply and the competition that this drives. We will continue our focus on winning and keeping customers.
With our current capital investment programme coming to an end and the flat outlook for energy demand we are taking steps to adjust the cost base and structure of the business Mr Barnes said.
Distribution to shareholders
The Contact Board of Directors resolved to hold the interim distribution to shareholders at the equivalent of 11 cents per share. As indicated in the full year announcement, the distribution will be made as a fully imputed cash dividend and represents a payout ratio of 87% of Contacts underlying earnings after tax.
Diverse portfolio proves it worth again
The benefits of Contacts diverse fuel and asset portfolio were again evidenced in the first half of the 2013 financial year. Higher rainfall in the South Island resulted in increased hydro generation displacing more expensive thermal generation. Contact was able to actively respond by reducing its thermal generation and purchasing a greater proportion of its generation from the spot market while prices were lower.
The peakers and gas storage managed trading risk and enabled increased participation in the ancillary services market.
I have stated before that the investments we have made to increase the diversity of our portfolio will reduce the impact that varied operating conditions have on our performance. I am pleased to see the way we have been able to flex the portfolio over the past six months to deliver good results in both wet and dry conditions, Mr Barnes said.
Te Mihi power station progressing to final stages of development
Progress on building Contacts Te Mihi power station continues. Steamfield work is largely complete and the first stages of commissioning on the power station has commenced. The completion of Te Mihi will bring to an end a greater than $2 billion investment programme, adding lower-cost geothermal, and flexible thermal generation capacity and New Zealands first gas storage facility.
We opened the Wairakei bioreactor, a unique facility that significantly lowers our impact on the Waikato River by removing hydrogen sulphide from cooling fluid from the iconic Wairakei Power Station using bacteria native to the Waikato River. We also opened the Ohaaki wetland, a two-year project managed by Fish & Game NZ which has transformed previously unused land impacted by subsidence into a useful natural resource. These two projects represent important steps in the ongoing care for the environment in which we operate.
In the current low demand growth environment we will not be committing to further generation developments in the near term. Contact maintains a range of high quality development options with the world class resource at Tauhara ready for execution as market signals dictate. In the meantime, our focus will be on minimising the costs required to retain the full range of development options we have in place, Mr Barnes said.
Customer numbers stable, retail margins remain tight
In the retail business, Mr Barnes reported that Contact had achieved an acceptable result. Despite the market continuing to experience high levels of customer switching, Contacts customer numbers saw a modest increase. However, sales volumes were 1 per cent lower than the first half of the 2012 financial year. Margins decreased for electricity sales by $1 per megawatt hour, reflecting the competition for customers in an oversupplied market. The Online OnTime discount for customers who receive their bill online and pay on time has continued to increase in popularity with over 40 per cent of customers taking advantage of this product.
The Retail Transformation programme is moving into the final stages of testing and preparing the business for the introduction of the new system.
Controlling costs a priority
In an environment of flat electricity demand it is important that we continue to manage our cost base. We have announced to staff that we will be restructuring the business. We recognise that workforce changes are unsettling, particularly for any of our people who are affected and we will support them through this transition. Restructuring is one of a number of initiatives underway across the business to control costs.
The proposed changes will control our costs and help us to remain competitive for customers and shareholders Mr Barnes said.
Safety
The health and safety of all people who work for the company remains our number one priority. Mr Barnes reported no improvement in the companys safety statistics, with its total recordable injury frequency rate in line with 30 June 2012.
We are working to ensure every employee and contractor is focussed first and foremost on safety and will continue to improve our leadership, culture and systems. I am confident that the steps we are taking will bring us closer to our goal of zero harm, said Mr Barnes.
Looking forward
For the remainder of 2013 and beyond, Contact will focus on remaining competitive for our customers and improving our cost base.
The completion of Te Mihi will provide Contact with additional lower-cost generation. Contact will make important decisions in the next 12 months relating to the amount of gas we will contract and how we operate our combined-cycle gas-fired power stations.
We will be putting a greater emphasis on ensuring we are meeting the needs of our customers, Mr Barnes said. In time, Retail Transformation will provide us with new ways to engage with our customers and I want to ensure we are totally focused on offering products and solutions that meet their needs.
We are working on the factors that we can control and impact, Mr Barnes said. Completing the current asset and systems investment programme, continuing to improve our fuel purchase costs and ensuring the organisation is sized to match current market conditions will position Contact to grow earnings in coming years.
ENDS
Media enquiries: Nicholas Robinson 027 705 3831
Investor enquiries: Fraser Gardiner 021 228 3688
You must be a member to download Join - it is free and easy
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