BARLOWORLD LIMITED | SENS Note - 06 November 2014 |
Barloworld trading statement |
The group continued its solid performance from the first half with a pleasing overall second half operating performance for the year ended September 2014. Equipment southern Africa delivered a good increase in operating profitability despite the ongoing slowdown in the mining sector. Higher than planned activity in the Extended Mining Product Range (EMPR), growth in aftermarket revenues and rand weakness contributed positively to the results.
Equipment Russia had a stronger second half and delivered a solid result for the year despite project deferments in the mining sector and slower economic growth exacerbated by uncertainty resulting from the Ukraine crisis. Construction and public works activity in Iberia remained subdued and trading losses continued in the second half. This led to a decision to restructure our Spanish equipment business to further reduce the overhead base and the expected cost of this restructure was provided at year end.
The Automotive and Logistics division produced another strong performance with all business units performing well ahead of the prior year. Full provision has been made for the exposure arising from the Ellerines Holdings business rescue. At 31 March 2014 the group disposed of the remainder of the motor retail operations in Australia. The total exceptional profit generated on the Australian motor retail disposals of R374 million is included in discontinued operations. The total negative fair value adjustments on financial instruments and finance costs are up on last year, while the effective tax rate for the group also increased slightly.
Full year headline earnings per share (HEPS) from continuing operations is expected to be 8% to 12% (62 cents to 94 cents) higher than the comparable restated HEPS from continuing operations of 780 cents. Full year HEPS including discontinued operations is expected to be 5% to 10% (41 cents to 82 cents) higher than the comparable restated HEPS of 821 cents in the prior year.
Basic earnings per share (EPS) from continuing operations is expected to be 8% to 12% (59 cents to 89 cents) higher than last year's comparable restated Basic EPS of 740 cents. Basic EPS including discontinued operations is expected to be 25% to 35% (191 cents to 267 cents) higher than the restated Basic EPS of 762 cents in the prior year due to the exceptional profit arising on disposal of Motor Retail Australia.
Funding:
Net debt reduced in the second half as a result of the seasonal decrease in working capital, and was positively impacted by the receipt of the proceeds from the sale of Motor Retail Australia. During the second half the group concluded a 5 year revolving bank credit facility of R1 billion for general banking purposes, while our Barloworld Transport Solutions subsidiary finalised banking facilities of R561 million which will be utilised for general banking as well as asset financing.
Barloworld expects to announce its results for the twelve months to 30 September 2014 on 17 November 2014.
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