TIDMBWO
RNS Number : 6653V
Barloworld Limited
06 November 2017
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)
(Ordinary share ISIN: ZAE000026639)
(Preference share code: BAWP)
(Preference share ISIN: ZAE000026647)
(Namibian Stock Exchange share code: BWL)
("Barloworld" or "the Company")
TRADING UPDATE
Group Overview
The group produced a resilient result for the year ended 30
September 2017 despite the tough trading conditions, particularly
in South Africa.
Investors are referred to the SENS announcement relating to the
strategic review issued on 1 September 2017 where it was indicated
that the group had entered into preliminary discussions with an
interested party for the potential sale of the Equipment Iberia
business. The group will be reporting the results of Equipment
Iberia as a discontinued operation and assets and liabilities held
for sale in the financial statements for the year ended 30
September 2017.
Equipment
Equipment southern Africa's operating performance has seen a
significant improvement in the year following a rebound in mining
and infrastructure demand.
Our joint venture in the Katanga province of the Democratic
Republic of Congo generated a strongly improved result driven by
improved commodity prices and following the resumption of mining
activity by one of our major mining customers.
In Equipment Russia revenue for the year improved significantly
in US Dollar terms, driven by improved mining and after sales
activity. The mining project pipeline remains strong going in
2018.
Activity in the discontinued Equipment Iberia operations
remained at low levels, with an operating loss, mainly as a result
of restructuring costs.
Automotive and Logistics
The Automotive division produced pleasing results despite
challenging market conditions, with both revenue and operating
profit exceeding the 2016 levels.
Revenue in Motor Trading was negatively impacted by the sale and
closure of two BMW dealerships and the closure of three General
Motors (GM) dealerships following GM's announced exit from South
Africa. These closures further negatively impacted non-operating
and capital costs due to related impairments.
Trading levels in Logistics were up on last year due to the full
year impact of acquisitions and new contracts secured in 2016.
However, the operating performance was well below last year. The
loss of a major customer in the KLL business negatively impacted
operating profit and further resulted in significant non-operating
and capital losses related to the impairment of goodwill and
intangibles.
Headline earnings per share (HEPS)/Earnings per share (EPS)
guidance
We expect that HEPS from continuing operations for the year
ended 30 September 2017 will be between 10%-20% higher than the
adjusted reported HEPS from continuing operations for the previous
financial year ending 30 September 2016 of 840.9 cents. This
translates to an expected HEPS from continuing operations range of
between 925.0 cents and 1 009.1 cents for the period.
We expect that HEPS, including both continuing and discontinued
operations, for the year ended 30 September 2017 will be between
3%-7% higher than the reported HEPS for the previous financial year
ended 30 September 2016 of 838.1. This translates to an expected
HEPS range of between 863.2 cents and 896.8 cents for the
period.
We expect that EPS from continuing operations for the year ended
30 September 2017 will be between 1%-5% higher than the adjusted
reported EPS from continuing operations for the previous financial
year ending 30 September 2016 of 876.8 cents. This translates to an
expected EPS from continuing operations range of between 885.6
cents and 920.6 cents. Earnings in the current year were negatively
impacted by non-operating and capital item losses compared to gains
in the prior year.
We expect that EPS, including both continuing and discontinued
operations, for the year ended 30 September 2017 will be between
10%-20% lower than the reported EPS for the previous financial year
ended 30 September 2016 of 890.5. This translates to an expected
EPS range of between 712.4 and 801.5 cents for the period.
Cash flow and net debt
Despite a strong reduction in working capital in the current
year, net cash inflows before financing activities reduced compared
to last year but are well up on previous estimates. Net debt levels
have decreased significantly for the second consecutive year
freeing up capital for future growth opportunities in line with the
strategic objectives outlined at the half year.
Shareholders are advised that the financial information and this
trading statement have not been audited, reviewed or reported on by
the group's external auditors.
The group's results for the year ended 30 September 2017 are
scheduled to be announced on the Stock Exchange News Service on or
about 20 November 2017.
Sandton Sponsor:
06 November 2017 J.P. Morgan Equities South Africa (Pty)
Ltd.
About Barloworld
Barloworld is a distributor of leading international brands
providing integrated rental, fleet management, product support and
logistics solutions. The core divisions of the group comprise
Equipment (earthmoving and surface preparation equipment, drills
and power systems), Automotive (car rental, motor retail, fleet
services, used vehicles and disposal solutions) and Logistics
(logistics management and supply chain optimisation). We offer
flexible, value adding, innovative business solutions to our
customers backed by leading global brands. The brands we represent
on behalf of our principals include Caterpillar, Hyster, Avis,
Budget, Audi, BMW, Ford, Jaguar Land Rover, Mazda, Mercedes-Benz,
Toyota, Volkswagen, Challenger, Massey Ferguson and others.
Barloworld has a proven track record of long-term relationships
with global principals and customers. We have an ability to develop
and grow businesses in multiple geographies including challenging
territories with high growth prospects. One of our core
competencies is an ability to leverage systems and best practices
across our chosen business segments. As an organisation we are
committed to sustainable development and playing a leading role in
empowerment and transformation. The company was founded in 1902 and
currently has operations in over 20 countries around the world with
78% of just over 20 000 employees in South Africa.
Corporate information
Registered office and business address
Barloworld Limited, 180 Katherine Street
PO Box 782248, Sandton, 2146, South Africa
Tel +27 11 445 1000
Email invest@barloworld.com
Instinctif: Hartwell Tshuma, Tel +27 11 447 3030
E-mail hartwell.tshuma@instinctif.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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