Barloworld Limited Trading Statement (3718N)
May 08 2018 - 6:30AM
UK Regulatory
TIDMBWO
RNS Number : 3718N
Barloworld Limited
08 May 2018
Barloworld Limited
(Incorporated in the Republic of South Africa)
(Registration number 1918/000095/06)
(Income Tax Registration number 9000/051/71/5)
(JSE Share code: BAW)
(JSE ISIN: ZAE000026639)
(Share code: BAWP)
(JSE ISIN: ZAE000026647)
(Namibian Stock Exchange share code: BWL)
("Barloworld" or "the Company")
Trading Statement
The group much improved result for the six months ended 31 March
2018 particularly on the back of strong earnings in our southern
African and Russian Equipment businesses.
Investors are referred to the SENS announcement relating to the
finalization of negotiations for the sale of our Equipment Iberia
business (issued 25 April 2018). This disposal is expected to be
concluded by 2 July 2018 with the sale price representing a premium
to net asset value. The results of these operations have been
presented as discontinued operations and assets and liabilities
held for sale consistent with the treatment at September 2017.
Comparatives have been restated to represent the continuing
operations of the group and commentary within is regarding
continuing operations unless otherwise stated.
Equipment
Equipment Southern Africa's operating performance has shown a
steady improvement in the first half of FY2018 supported by
favourable global commodity prices and increased mining activity.
This also assisted our joint venture in the Katanga province of the
Democratic Republic of Congo to deliver strongly improved earnings
for the period. Equipment Russia has continued to benefit from
greenfield and brownfield mining projects, as well as a recovery in
commodity prices, in particular the coal sector, mining projects
and produced record US$ revenue and operating profit for the first
six months of FY2018.
Automotive
The Automotive division produced solid results despite
challenging market conditions. Revenues were negatively impacted by
the sale and closure of a number of BMW and GM dealerships in the
latter part of FY2017. Both operating profit and operating margin
for the division exceeded the first half of 2017.
Logistics
Revenue in Logistics was negatively impacted by lower activity.
Turnaround initiatives implemented towards the end of 2017 are
bearing fruit with operating profits, operating margins and overall
return metrics all significantly up on the FY2017 first half
results.
Earnings per share (EPS)/Headline earnings per share (HEPS)
guidance
Barloworld expects that EPS, including both continuing and
discontinued operations, for the six months ended 31 March 2018
will be between 35%-45% higher than the reported EPS for the
previous six months ended 31 March 2017 of 336.6 cents. This
translates to an expected EPS range of between 454.4 cents and
488.1 cents for the period.
The company expects that EPS from continuing operations for the
six months ended 31 March 2018 will be between 15%-25% higher than
the adjusted reported EPS from continuing operations for the
previous six months ended 31 March 2017 of 380.5 cents. This
translates to an expected EPS from continuing operations range of
between 437.6 cents and 475.6 cents for the period.
The company expects that HEPS, including both continuing and
discontinued operations, for the six months ended 31 March 2018
will be between 25%-35% higher than the reported HEPS for the
previous six months ended 31 March 2017 of 364.9 cents. This
translates to an expected HEPS range of between 456.1 cents and
492.6 cents for the period.
Barloworld expects that HEPS from continuing operations for the
six months ended 31 March 2018 will be between 10%-20% higher than
the restated reported HEPS from continuing operations for the
previous six months ended 31 March 2017 of 400.0 cents. This
translates to an expected HEPS from continuing operations range of
between 440.0 cents and 480.0 cents for the period.
Net debt and Funding
Net debt increased in the first half mainly as a result of
working capital absorption across the group. Extended Caterpillar
lead times and the uptick in mining activity has resulted in an
increased investment in inventories in the first six months of the
year. We however expect our working capital to normalize in the
second half to ensure that we reduce net debt levels by year
end.
In October 2017 two bonds totaling R425 million were repaid
using existing facilities. In February 2018 we issued a new five
year bond (BAW 29) for R400 million.
The group's results for the six months ended 31 March 2018 are
scheduled to be announced on the Stock Exchange News Service on or
about 21 May 2018.
The financial information on which this trading statement has
been based has not been reviewed or reported on by the Company's
auditors.
08 May 2018
J.P. Morgan Equities South Africa (Pty) Ltd.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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