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National Tyre Services Ltd FY 2015 financial results

National Tyre Services Ltd Listed on the Zimbabwe Stock Exchange has released its Full Year Results. Check out Insights into this company in their presentation which appears below. Sign up to the www.theinvestormailinglist.com to receive earnings presentations of all listed companies in Africa by email
Published on: Mar 3, 2016
Published in: Investor Relations      
Source: www.slideshare.net

Transcripts - National Tyre Services Ltd FY 2015 financial results

  • 1. ABRIDGED STATEMENT OF PROFIT OR LOSSAND OTHER COMPREHENSIVE INCOME MARCH 2015 MARCH 2014 US$ US$ Revenue 14,256,118 15,718,446 Operating (loss)/ profit (463,764) 92,999 Other income 280,023 379,372 Finance income 1,452 4,646 (Loss)/Profit before tax (182,289) 477,017 Income tax credit/(expense) 10,189 (156,213) (Loss)/profit attributable to shareholders (172,100) 320,804 Other comprehensive (loss)/ income (3,562) 1,338 Total comprehensive (loss)/income for the year (175,662) 322,142 Number of shares in issue (thousands) 253,872 253,872 Weighted average number of shares (thousands) 253,872 253,872 Basic (loss)/earnings per share (cents) (0.07) 0.13 Diluted (loss)/earnings per share (cents) (0.07) 0.13 ABRIDGED STATEMENT OF FINANCIAL POSITION MARCH 2015 MARCH 2014 US$ US$ ASSETS Non-current assets 3,961,987 3,933,651 Property, plant and equipment 2,804,714 2,750,058 Investment property 1,085,279 1,107,849 Available for sale investments 71,994 75,744 Current assets 4,756,282 4,698,186 Total assets 8,718,269 8,631,837 EQUITY AND LIABILITIES Shareholders’ equity 6,028,804 6,204,466 Deferred income - 25,000 Deferred tax 774,103 801,096 Current liabilities 1,915,362 1,601,275 Total equity and liabilities 8,718,269 8,631,837 ABRIDGED STATEMENT OF CASH FLOWS MARCH 2015 MARCH 2014 US$ US$ Cash flows from operating activities before changes in working capital (5,579) 620,600 Changes in working capital (351,784) 344,625 Tax paid (60,330) (185,462) Net cash (utilized in)/generated from operating activities (417,693) 779,763 Cash flows utilized in investing activities (233,796) (82,121) Net cash movement for the period (651,489) 697,642 Opening balance – cash and cash equivalents 1,215,137 517,495 Closing balance – cash and cash equivalents 563,648 1,215,137 CONDENSED STATEMENT OF CHANGES IN EQUITY MARCH 2015 MARCH 2014 US$ US$ Opening balance 6,204,466 5,882,324 (Loss)/profit for the period (172,100) 320,804 Other comprehensive (loss)/income (3,562) 1,338 Closing balance 6,028,804 6,204,466 NOTES TO THE ABRIDGED FINANCIAL STATEMENTS 1. GENERAL INFORMATION National Tyre Services Limited is a company incorporated in Zimbabwe. Its activities include the reconditioning and retailing of tyres and related services. 2. STATEMENT OF COMPLIANCE The company’s financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and the International Financial Reporting Interpretations Committee (IFRIC) interpretations. They are also prepared in accordance with the Companies Act (Chapter 24.03) and relevant statutory instruments (SI 33/99 and SI 62/96). Thefinancial statements are based on statutory records that are maintained under the historical convention as modified by the valuation of certain assets. Historical cost is generally based on the fair value of consideration given in exchange for assets. The company’s external auditors, Deloitte &Touche, have issued their opinion on the company’s financial statements for the year ended 31 March 2015. The audit was performed in accordance with International Standards on Auditing. They have issued an unqualified audit opinion. These condensed results have been derived from the company’s annual financial statements and are consistent in all material respects with the company’s financial statements. A copy of the external audit report is available for inspection at the company’s registered office. Any reference to future financial performance and operational information included in this announcement has not been audited or reported on by the company’s external auditors. 3. CURRENCY OF REPORTING The financial statements are presented in United States Dollars which is the functional currency of the company. 4. ACCOUNTING POLICIES Accounting policies and methods of measurement are consistent in all material respects with those used in the prior year and with the requirements of International Financial Reporting Standards applicable for the year ended 31 March 2015. MARCH 2015 MARCH 2014 US$ US$ 5. REVENUE SEGMENTATION Revenue from the sale of goods 13,816,834 15,308,367 Revenue from the provision of services 439,284 410,079 14,256,118 15,718,446 6. (LOSS)/PROFIT BEFORE TAXATION (Loss)/profit for the year has been arrived at after charging (crediting): Current year audit fees and expenses 29,433 36,500 Depreciation of property, plant and equipment and investment property 196,146 260,660 Assets written off - 14,474 Transport charges 206,594 191,979 Management and technical fees 286,116 321,042 Electricity and lighting 106,713 109,326 Motor vehicle fuel expenses 118,636 130,386 Rental income (263,479) (211,895) Deferred income recognized on rentals (25,000) (60,000) Loss/(Profit) on disposal of property, plant and equipment 7,016 (66,905) Employee costs 2,222,897 2,167,087 Fees for services as Directors 14,251 10,500 7. TAXATION Current tax expenses 16,616 207,369 Capital gains tax - 5,000 Deferred tax credit relating to the origination and reversal of temporary differences (26,805) (56,156) (10,189) 156,213 MARCH 2015 MARCH 2014 US$ US$ 8. RELATED PARTY TRANSACTIONS AND BALANCES Trading transactions: Apollo Tyres Zimbabwe- Purchases 1,859,473 2,272,590 Apollo Tyres Africa (Pty) Ltd- Purchases 295,089 3,259,504 Apollo Tyres Zimbabwe- Sales 16,519 4,412 Apollo Tyres Africa (Pty) Ltd- Technical fees 285,016 223,189 Apollo Durban (Pty) Ltd – Technical fees - 91,253 Balances: Apollo Tyres Zimbabwe - purchases 122,333 171,381 Apollo Durban (Pty) Ltd- Technical fees - 91,253 Apollo Tyres Africa (Pty) Ltd- Technical fees 211,947 53,412 9. PROPERTY, PLANT AND EQUIPMENT Movement in the property, plant and equipment balance for the year: Balance at the beginning of the year 2,750,058 2,822,782 Capital expenditure 238,138 186,753 Depreciation (173,576) (237,896) Assets written off - (14,474) Disposals (9,906) (7,107) Balance at the end of the year 2,804,714 2,750,058 10. INVENTORY Raw materials 609,892 407,253 Finished goods 1,906,814 1,539,579 Consumable stores 130,069 117,299 2,646,775 2,064,131 11. TRADE AND OTHER PAYABLES Trade and other payables 1,822,471 1,459,381 Provisions 92,891 118,850 1,915,362 1,578,231 12. COMMITMENTS OF CAPITAL EXPENDITURE Capital commitments authorized but not contracted 641,598 200,048 13. EVENT AFTER REPORTING DATE There have been no significant events after the Statement of Financial Position date. 14. GOING CONCERN The Directors have assessed the company’s ability to continue operating as a going concern for the foreseeable future and the financial statements have accordingly been prepared on the going concern basis. 15. DIRECTORS’ RESPONSIBILITY The Directors are responsible for the preparation of financial statements for each reporting period, that give a true and fair view of the state of affairs of the company. COMMENTARY ENVIRONMENT The economy remained subdued and growth prospects difficult in the period under review. Annual inflation for the country closed in the negative at -1.20%. There was no significant improvement in the declining employment levels and the tight liquidity situation prevailing in the economy. Against this background customer spending power was curtailed hence initiatives by our competitors, and other retailers of different products and services, to reduce margins and remain competitive to stimulate demand. The trading environment remained tough with competition in the industry intensifying. Second hand tyres continued to cause price distortions in the market. The growth of the informal sector was identified as an opportunity to increase market share and appropriate strategies were initiated. OPERATIONS REVIEW Financial Performance A 9% decline in revenue to $14.3 million in comparison to the prior year, coupled with a reduction in margins due to competitive pressures mainly contributed to an overall loss recorded for the period under review. Overheads were 4% down when compared to the prior year due to cost containment measures undertaken. The harsh trading environment impacted negatively on the company’s ability to generate sufficient cash resulting in substantial reduction in the cash position at the close of the period in comparison to prior year. Retail & Services There was no significant movement in units of new tyres compared to prior year. During the latter half of the year there was greater focus on a balanced product portfolio in response to market trends. Participation in promotional activities and exhibitions presented opportunities which were explored, yielding positive results. To cater for market requirements a satellite service centre was opened in Bulawayo whilst the “Tyres-On-The-Go” outlets continued to make positive contributions in this regard. Retreading Throughput was 8% below prior year mainly attributable to market conditions, shortage of good quality casings in the market and credit control measures implemented during the year. Focus was on productivity and quality enhancement which resulted in improved margins. SUSTAINABILITY As an integral part of the Company’s business processes its Environmental Management System’s certification to ZWS ISO 14001:2004 was maintained. The Company is an active member of the Business Council for Sustainable Development Zimbabwe (BCSDZ). DIVIDEND DECLARATION In view of the loss incurred by the Company, the Board considers it inappropriate to declare a dividend for the year ended 31 March 2015. DIRECTORATE Three Non-Executive Directors, namely Messrs. Moses Tonderayi Chingwena, Benson Phillip Hlungupi Samudzimu and Rutenhuro James Moyo, were appointed as Directors with effect from 4 March 2015. Mr. Tafadzwa Andrew Chimanyiwa was appointed as an Alternate Director to Mr. R. J. Moyo with effect from 26 May 2015. Mr. Manish Bhatia, who was Chairman of the Board of Directors resigned from the Board on 28 April 2015. Mr. R.J. Moyo was duly elected as Chairman of Board of Directors with effect from 26 May 2015. We thank Mr. M. Bhatia for his contribution over the past six years OUTLOOK Although the trading environment is expected to remain tough, opportunities have been identified for revenue growth and improved profitability. These initiatives are anchored on existing customer base, a strategic based product and distribution portfolio and new business development. In addition, the ongoing cost containment measures are expected to contribute to the company’s return to profitability. For the retreading business, the initiatives started during the second six months of the year to recover volumes, including value addition services to big fleets, will be continued. APPRECIATION We record our thanks and appreciation to employees, customers, suppliers, various advisers and our colleagues on the Board for their positive contribution to the Company during the year under review. For and on behalf of the Board R. J. Moyo Chairman 23 June 2015 DIRECTORS: R. J. Moyo # (Chairman), K. Mandevani (Group Managing Director), T.P. Choto, S.N. Mandimika, B.V. Mancama #, T.C. Mazingi # , B.P.H. Samudzimu #, M.T. Chingwena #, Alternate Director: Mr. T.A. Chimanyiwa # (# Non-Executive) NATIONAL TYRE SERVICES LIMITED ABRIDGED AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2015 HIGHLIGHTS REVENUE FOR THE YEAR TO 31 MARCH 2015 US$ 14,256,118 REVENUE FOR THE YEAR TO 31 MARCH 2014 US$ 15,718,446 CHANGE IN REVENUE -9% PBT FOR THE YEAR TO 31 MARCH 2015 US$ (182,289) PBT FOR THE YEAR TO 31 MARCH 2014 US$ 477,017 CHANGE IN PBT -138% BASIC EPS (CENTS) – MARCH 2015 (0.07) BASIC EPS (CENTS) - MARCH 2014 0.13 CHANGE IN BASIC EPS -154%

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