Wrap Text
Unaudited Interim Results for the period ended 30 June 2018 and Cash Dividend Declaration
BELL EQUIPMENT LIMITED
('Bell' or 'the group' or 'the company')
(Incorporated in the Republic of South Africa)
Share code: BEL
ISIN: ZAE000028304
Registration number: 1968/013656/06
UNAUDITED INTERIM RESULTS
FOR THE PERIOD ENDED 30 JUNE 2018
AND CASH DIVIDEND DECLARATION
Highlights
Unaudited Unaudited
30 June 2018 30 June 2017 %
Restated Change
Revenue R billion 3,7 3,5 up 6
NPAT R million 133,1 119,6 up 11
HEPS cents 131 119 up 10
Interim dividend cents 20 20 -
Commentary
Ongoing economic growth and increased demand for
equipment in the major global markets of Europe, the
Americas and South East Asia have delivered stable
2018 half year results for Bell Equipment Limited.
This is despite the South African market
underperforming, mainly due to the country's political
landscape failing to boost business confidence and
drive infrastructure development. Investor appetite
for the mining industry has remained under pressure
because of uncertainty surrounding the Mining
Charter while general caution is likely to continue in
the run up to the 2019 national elections.
Volatility in exchange rates has also put margins
under pressure. No immediate respite is expected as
trade threats, Brexit and political instability in Europe
continue to influence emerging markets.
Positive management interventions have enabled the
group to contain losses in its African markets outside
South Africa during this period. During the next six
months the group expects to finalise a transaction
to sell assets of its Democratic Republic of Congo
operation as it migrates to a dealer model in order to
position itself to better serve this market.
The E-series range of trucks has been well accepted
in all global regions and the Bell product continues to
lead the market in terms of providing the lowest fuel
burn, lowest cost per tonne of material moved and in
providing leading innovative features for onsite safety
and vehicle protection.
In Europe new product introductions are settling in
well and will give Bell access to a wider customer
and industry base. These include a range of 4x4
quarry trucks, the new B20E LGP (Low Ground
Pressure) truck, a narrowed B20E truck as well as
the B33L Low Profile truck for underground mining
applications.
The Americas offer good promise for the next few
years as mining, aggregates and construction, the
main applications for Bell ADTs, all continue to show
good growth.
In Southern Africa the strategic partnership with
Japanese excavator specialist, Kobelco, continues to
grow from strength-to-strength with tremendous
interest and uptake from the market. To further
bolster the traditional size classes, three mini
excavator models were introduced in March to
develop new opportunities in the light construction,
demolition and light forestry applications, and
thereby tapping into an expanded customer segment.
Following an exclusive distribution agreement with
Russian heavy-duty tipper manufacturer, Kamaz, the
first trucks have been delivered to customers and
with promising feedback received, Bell is investigating
applications of the product as it explores this highly
competitive market.
South East Asia is another focus market going
forward. In Indonesia the market adoption of the Bell
product through an established dealer network has
been extremely positive, with mining conditions and
operations very similar to Africa where Bell trucks are
born, bred and tested.
We are progressing with investigations towards
introducing BBBEE ownership partners at our South
African manufacturing operations and to build on the
ownership profile at our sales distribution operation
to further improve our empowerment credentials.
OUTLOOK
We are enjoying strong global increase in demand for
all types of heavy equipment. This has however led
to pressure on upstream suppliers to meet increased
volume requirements. The group is mindful of the
challenge this may pose to our manufacturing and
sales operations in the coming months.
A restructuring exercise has commenced to better
utilise and direct resources in pursuit of continuous
improvement and the most effective alignment of
group structures to the evolving group strategy. Key
objectives are to better satisfy market requirements
while being optimised for efficient manufacturing,
to develop a dedicated and effective global sourcing
service to the manufacturing and aftermarket teams
to counter the continuous pressure on margins
and to implement a more coordinated approach
to product quality and on time delivery to enhance
overall business performance.
The group will continue its ongoing focus on its
aftermarket and product support offering in all
regions. The expansion of the Bell Eisenach-Kindel
facility in Germany is underway with completion
of Phase 2 scheduled for the second quarter of
2019. This will facilitate better flexibility and quicker
responsiveness to customers to support the group's
market growth in the Northern Hemisphere.
Our American Logistics Centre (ALC), located in North
Carolina, will start trading in quarter 4 of this year,
and is ideally positioned to service the expanding
dealer network and rapidly growing truck population
in the North American region.
Condensed consolidated statement of financial position
AS AT 30 JUNE 2018
Unaudited Unaudited Audited
30 June 30 June 31 December
2018 2017 2017
R'000 R'000 R'000
ASSETS
Non-current assets 1 250 793 1 102 314 1 111 406
Property, plant and equipment 793 860 767 947 691 429
Intangible assets 256 878 215 584 224 766
Investments 624 584 574
Interest-bearing long-term receivables 105 396 28 736 92 774
Deferred taxation 94 035 89 463 101 863
Current assets 4 768 400 3 969 145 4 246 208
Inventory 3 311 032 2 458 719 3 047 119
Trade and other receivables 1 047 447 1 127 844 778 555
Current portion of interest-bearing long-term receivables 112 093 48 610 96 053
Prepayments 32 748 62 514 51 912
Other financial assets 12 501 1 300 13 139
Current taxation assets 19 073 3 664 9 179
Cash and bank balances (note 13) 233 506 266 494 250 251
Assets classified as held for sale (note 12) 55 562 - -
Total assets 6 074 755 5 071 459 5 357 614
EQUITY AND LIABILITIES
Capital and reserves 3 205 862 2 889 849 2 988 602
Stated capital (note 5) 232 499 232 244 232 244
Non-distributable reserves 638 003 565 176 530 281
Retained earnings 2 316 495 2 086 332 2 214 236
Attributable to owners of Bell Equipment Limited 3 186 997 2 883 752 2 976 761
Non-controlling interest 18 865 6 097 11 841
Non-current liabilities 404 088 389 372 351 819
Interest-bearing liabilities 174 695 151 107 113 183
Repurchase obligations and deferred leasing income 519 1 394 1 243
Deferred income 111 689 102 575 106 568
Long-term provisions and lease escalation 40 455 45 750 42 074
Deferred taxation 76 730 88 546 88 751
Current liabilities 2 464 805 1 792 238 2 017 193
Trade and other payables 1 431 697 1 183 513 1 094 742
Current portion of interest-bearing liabilities 312 083 84 150 215 414
Current portion of repurchase obligations
and deferred leasing income 1 246 3 011 746
Current portion of deferred income 114 021 98 253 94 171
Current portion of provisions and lease escalation 70 363 79 298 60 825
Refund liabilities 12 666 - -
Other financial liabilities 24 1 143 20 272
Current taxation liabilities 11 515 42 057 25 675
Bank overdrafts and borrowings on call 511 190 300 813 505 348
Total equity and liabilities 6 074 755 5 071 459 5 357 614
Condensed consolidated statement of profit or loss
FOR THE PERIOD ENDED 30 JUNE 2018
Unaudited Unaudited Unaudited
six months six months 12 months
ended ended ended
30 June 30 June 31 December
2018 2017 2017
Restated* Restated*
R'000 R'000 R'000
Revenue 3 729 718 3 505 496 6 873 471
Cost of sales (3 090 006) (2 861 329) (5 526 784)
Gross profit 639 712 644 167 1 346 687
Other operating income 75 792 65 587 137 477
Expenses (516 443) (510 168) (1 080 707)
Profit from operating activities (note 2) 199 061 199 586 403 457
Net interest expense (note 3) (15 162) (1 282) (99)
Profit before taxation 183 899 198 304 403 358
Taxation (50 788) (78 685) (131 308)
Profit for the period/year 133 111 119 619 272 050
Profit for the period/year attributable to:
- Owners of Bell Equipment Limited 126 087 113 522 260 209
- Non-controlling interest 7 024 6 097 11 841
Earnings per share (basic) (note 4) (cents) 132 119 273
Earnings per share (diluted) (note 4) (cents) 132 119 273
* Refer to restatements of prior periods in note 11.
Condensed consolidated statement of comprehensive income
FOR THE PERIOD ENDED 30 JUNE 2018
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
30 June 30 June31 December
2018 2017 2017
R'000 R'000 R'000
Profit for the period/year 133 111 119 619 272 050
Other comprehensive income (loss)
Items that may be reclassified subsequently to profit or loss:
Exchange gains/(losses) arising during the period/year 108 132 9 388 (22 311)
Exchange gains/(losses) on translating foreign operations 105 351 8 490 (23 744)
Exchange gains on foreign reserves 2 781 898 1 433
Items that may not be reclassified subsequently to profit or loss: - - (3 124)
Surplus arising on revaluation of properties - - 258
Taxation relating to surplus arising on revaluation of properties - - (3 382)
Other comprehensive income (loss) for the period/year,
net of taxation 108 132 9 388 (25 435)
Total comprehensive income for the period/year 241 243 129 007 246 615
Total comprehensive income attributable to:
- Owners of Bell Equipment Limited 234 219 122 910 234 774
- Non-controlling interest 7 024 6 097 11 841
Condensed consolidated statement of cash flows
FOR THE PERIOD ENDED 30 JUNE 2018
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
30 June 30 June 31 December
2018 2017 2017
R'000 R'000 R'000
Cash operating profit before working capital changes 374 146 346 369 665 069
Cash utilised in working capital (238 971) (101 615) (533 369)
Cash generated from operations 135 175 244 754 131 700
Net interest paid (29 077) (13 434) (29 635)
Taxation paid (79 576) (21 264) (112 262)
Net cash generated from (utilised in) operating activities 26 522 210 056 (10 197)
Purchase of property, plant and equipment and intangible assets (158 932) (64 613) (135 842)
Proceeds on disposal of property, plant and equipment
and intangible assets 1 721 769 7 975
Increase in interest-bearing long-term receivables (18 716) (807) (9 303)
Net cash utilised in investing activities (175 927) (64 651) (137 170)
Net interest-bearing liabilities raised 150 391 82 264 173 320
Proceeds from share options exercised 255 105 105
Dividends paid (23 828) - (19 062)
Net cash generated from financing activities 126 818 82 369 154 363
Net cash (outflow)/inflow (22 587) 227 774 6 996
Net bank overdrafts and borrowings on call
at beginning of the period/year (255 097) (262 093) (262 093)
Net bank overdrafts and borrowings on call
at end of the period/year (277 684) (34 319) (255 097)
Comprising:
Cash and bank balances (note 13) 233 506 266 494 250 251
Bank overdrafts and borrowings on call (511 190) (300 813) (505 348)
Net bank overdrafts and borrowings on call at end
of the period/year (277 684) (34 319) (255 097)
Condensed consolidated statement of changes in equity
FOR THE PERIOD ENDED 30 JUNE 2018
Attributable to owners of Bell Equipment Limited
Non- Non- Total
Stated distributable Retained controlling capital and
capital reserves earnings Total interest reserves
R'000 R'000 R'000 R'000 R'000 R'000
Balance at 31 December 2016
- audited 232 139 553 298 1 972 810 2 758 247 - 2 758 247
Increase in equity-settled
employee benefits reserve - 291 - 291 - 291
BBBEE share-based
payment charge - 2 199 - 2 199 - 2 199
Total comprehensive income
for the period - 9 388 113 522 122 910 6 097 129 007
Share options exercised 105 - - 105 - 105
Balance at 30 June 2017
- unaudited 232 244 565 176 2 086 332 2 883 752 6 097 2 889 849
Total comprehensive (loss)
income for the period - (34 823) 146 687 111 864 5 744 117 608
Transfer between reserves - (172) 172 - - -
Transfer to retained
earnings relating to
expired share options - (107) 107 - - -
Increase in equity-settled
employee benefits reserve - 207 - 207 - 207
Dividends paid - - (19 062) (19 062) - (19 062)
Balance at 31 December 2017
- audited 232 244 530 281 2 214 236 2 976 761 11 841 2 988 602
Decrease in equity-settled
employee benefits reserve - (410) - (410) - (410)
Total comprehensive income
for the period - 108 132 126 087 234 219 7 024 241 243
Share options exercised 255 - - 255 - 255
Dividends paid - - (23 828) (23 828) - (23 828)
Balance at 30 June 2018
- unaudited 232 499 638 003 2 316 495 3 186 997 18 865 3 205 862
Abbreviated notes to the unaudited interim results
FOR THE PERIOD ENDED 30 JUNE 2018
1. BASIS OF PREPARATION
The accounting policies and methods of computation applied in the preparation of these condensed consolidated
financial statements are in terms of International Financial Reporting Standards and are consistent with those
applied in the previous annual consolidated financial statements, except for the adoption of new accounting
standards.
The group has adopted all of the new accounting standards relevant to its operations and effective for annual
reporting periods beginning 1 January 2018, including IFRS 9 Financial Instruments and IFRS 15 Revenue from
Contracts with Customers. The adoption of these new accounting standards has not had any significant impact
on the results in the condensed consolidated financial statements or the disclosures herein, but resulted merely
in the reclassification of certain transactions in previously published results as disclosed in note 11.
The condensed consolidated interim financial statements are prepared in accordance with the requirements of
the JSE Limited's Listings Requirements for interim reports and the requirements of the Companies Act in South
Africa. The Listings Requirements require interim reports to be prepared in accordance with and containing the
information required by IAS 34: Interim Financial Reporting, as well as the SAICA Financial Reporting Guides
as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial
Reporting Standards Council. The preparation of this interim report was supervised by the Group Finance
Director, KJ van Haght CA (SA).
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
30 June 30 June 31 December
2018 2017 2017
R'000 R'000 R'000
2. PROFIT FROM OPERATING ACTIVITIES
Profit from operating activities is arrived at after taking into
account:
Income
Currency exchange gains 196 656 90 298 156 361
Decrease in provision for doubtful debts - 9 581 81 423
Import duty rebates 48 155 37 031 84 612
Net surplus on disposal of property,
plant and equipment and intangible assets 1 402 442 3 038
Expenditure
Amortisation of intangible assets 12 453 18 053 33 240
Amounts written off as uncollectible 913 10 995 13 618
Auditors' remuneration - audit and other services 5 209 3 169 9 739
Consulting fees 9 685 14 044 27 844
Currency exchange losses 227 643 89 818 157 426
Depreciation of property, plant and equipment 66 179 76 632 152 902
Increase in provision for doubtful debts 14 836 - -
Operating lease charges 56 893 56 873 116 456
Research expenses (excluding staff costs) 20 889 20 968 46 298
Staff costs (including directors' remuneration) 623 278 598 831 1 272 171
Abbreviated notes to the unaudited interim results
FOR THE PERIOD ENDED 30 JUNE 2018
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
30 June 30 June 31 December
2018 2017 2017
R'000 R'000 R'000
3.NET INTEREST EXPENSE
Interest expense 41 002 21 917 43 350
Interest income (restated)* (unaudited) (25 840) (20 635) (43 251)
Net interest expense 15 162 1 282 99
* Refer to restatements of prior periods in note 11.
4.EARNINGS PER SHARE
Basic earnings per share is arrived at as follows:
Profit for the period attributable to owners of
Bell Equipment Limited (R'000) 126 087 113 522 260 209
Weighted average number of ordinary shares
in issue during the period ('000) 95 316 95 307 95 307
Earnings per share (basic) (cents) 132 119 273
Diluted earnings per share is arrived at as follows:
Profit for the period attributable to owners of
Bell Equipment Limited (R'000) 126 087 113 522 260 209
Fully converted weighted average number of shares* ('000) 95 746 95 479 95 454
Earnings per share (diluted) (cents) 132 119 273
* The number of shares has been adjusted for the effect of the dilutive potential ordinary shares relating to the unexercised options in the
group's share option scheme.
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
30 June 30 June 31 December
2018 2017 2017
R'000 R'000 R'000
4.EARNINGS PER SHARE (CONTINUED)
Headline earnings per share is arrived at as follows:
Profit for the period attributable to owners of
Bell Equipment Limited (R'000) 126 087 113 522 260 209
Net surplus on disposal of property,
plant and equipment and intangible assets (R'000) (1 402) (442) (3 038)
Taxation effect of net surplus on disposal of property,
plant and equipment and intangible assets (R'000) 393 124 237
Impairment loss recognised on revaluation
of buildings (R'000) - - 2 597
Taxation effect of impairment loss recognised on
revaluation of buildings (R'000) - - (909)
Reversal of impairment loss in respect of property,
plant and equipment rental assets (R'000) - - (1 942)
Headline earnings (R'000) 125 078 113 204 257 154
Weighted average number of ordinary shares
in issue during the period ('000) 95 316 95 307 95 307
Headline earnings per share (basic) (cents) 131 119 270
Diluted headline earnings per share is arrived at as follows:
Headline earnings calculated above (R'000) 125 078 113 204 257 154
Fully converted weighted average number of shares ('000) 95 746 95 479 95 454
Headline earnings per share (diluted) (cents) 131 119 269
Net asset value per share is arrived at as follows:
Total capital and reserves (R'000) 3 205 862 2 889 849 2 988 602
Number of shares in issue ('000) 95 329 95 307 95 307
Net asset value per share (cents) 3 363 3 032 3 136
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
30 June 30 June 31 December
2018 2017 2017
R'000 R'000 R'000
5. STATED CAPITAL
Authorised
100 000 000 (June 2017: 100 000 000) ordinary shares
of no par value
Issued
95 329 385 (June 2017: 95 306 885) ordinary shares
of no par value 232 499 232 244 232 244
The increase in share capital relates to 22 500
(June 2017: 10 000) share options exercised at an average
share price of R11,34 per share.
6. CAPITAL EXPENDITURE COMMITMENTS
Contracted 164 678 14 60 089
Authorised, but not contracted 50 027 81 944 282 774
Total capital expenditure commitments 214 705 81 958 342 863
This capital expenditure is to be financed from internal resources and long-term facilities.
7. ABBREVIATED SEGMENTAL ANALYSIS
Information regarding the group's reportable segments is presented below.
Information reported to the group's chief operating decision maker for purposes of resource allocation and
assessment of segment performance is focused on geographical areas.
Each reportable segment derives its revenues from the sale of goods (machines and parts) and related services
and rental income. The accounting policies of the reportable segments are the same as the group's accounting
policies.
Operating
Revenue profit (loss) Assets Liabilities
R'000 R'000 R'000 R'000
June 2018
South African sales operation 1 654 320 64 222 1 709 049 1 543 990
South African manufacturing
and logistics operation 2 362 598 30 381 3 974 605 2 329 674
European operation 1 257 303 55 841 1 339 603 844 796
Rest of Africa operation 297 435 16 552 416 263 362 029
North American operation 555 656 17 893 167 061 92 642
All other operations - (2 460) 2 097 197 84 077
Inter-segmental eliminations* (2 397 594) 16 632 (3 629 023) (2 388 315)
Total - unaudited 3 729 718 199 061 6 074 755 2 868 893
June 2017
South African sales operation (restated)** 1 508 866 86 932 1 449 502 1 325 434
South African manufacturing and logistics
operation (restated)** 2 037 734 54 053 3 501 927 1 856 690
European operation (restated)** 1 235 312 56 333 1 161 118 741 213
Rest of Africa operation (restated)** 379 271 (46 009) 501 085 455 195
North American operation (restated)** 610 874 25 456 181 888 111 961
All other operations - (26 526) 1 277 479 69 214
Inter-segmental eliminations* (restated)** (2 266 561) 49 347 (3 001 540) (2 378 097)
Total - unaudited (restated)** 3 505 496 199 586 5 071 459 2 181 610
December 2017
South African sales operation (restated)** 2 956 949 157 356 1 516 718 1 369 180
South African manufacturing and logistics
operation (restated)** 4 479 587 195 949 3 408 012 1 795 870
European operation (restated)** 2 325 297 84 913 1 010 515 587 383
Rest of Africa operation (restated)** 619 510 (70 000) 421 968 405 072
North American operation (restated)** 1 151 175 49 980 233 896 170 066
All other operations - (83 267) 2 040 945 113 310
Inter-segmental eliminations* (restated)** (4 659 047) 68 526 (3 274 440) (2 071 869)
Total - unaudited (restated)** 6 873 471 403 457 5 357 614 2 369 012
* Inter-segmental eliminations above relate to the following:
i)Revenue - the elimination of intra-group sales transactions, mainly sales from the South African manufacturing and logistics
operation, to the distribution operations.
ii)Operating profit (loss) - the elimination of profit (loss) on intra-group transactions, mainly sales transactions from the South
African manufacturing and logistics operation to the distribution operations, where the inventory has not yet been on-sold by the
distribution operations to a third party at period end.
iii)Assets and liabilities - the intra-group transactions result in intra-group receivables and payables balances and furthermore
intra-group loans are in place between certain group operations. These are eliminated on consolidation.
** The segment information has been adjusted for the restatements as disclosed in note 11.
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
30 June 30 June 31 December
2018 2017 2017
R'000 R'000 R'000
8. CONTINGENT LIABILITIES
8.1 The group has assisted customers with the financing of
equipment purchased through a financing venture with
WesBank, a division of FirstRand Bank Limited.
In respect of the different categories of financing
provided by WesBank, the group carries certain credit
risks. These are considered to be financial guarantee
contracts.
The group is liable for all credit risk and therefore the
full balance due to WesBank by default customers
with regard to Bell-backed deals and a portion of the
credit risk and a portion of the balance due to WesBank
by default customers with regard to Bell-shared risk
deals. In terms of the Bell-shared risk deals the group's
exposure is calculated as a percentage of the net selling
price of the equipment.
At period end the group's credit risk exposure to
WesBank under Bell-backed deals for which the group
carries all the credit risk totalled 256 841 140 158 176 091
At period end the group's credit risk exposure to
WesBank under Bell-shared risk deals for which the
group carries a portion of the credit risk totalled 2 628 2 424 1 872
In the event of default, the equipment financed would
be recovered and it is estimated that on re-sale the
equipment would presently realise the following towards
the above liabilities 263 829 241 383 228 782
(4 360) (98 801) (50 819)
Less: provision for non-recovery (2 032) (2 635) (1 549)
Net contingent liability - - -
There is no interest rate saving to customers with regards to Bell-backed deals and therefore no fair value
at initial recognition. Subsequent to initial recognition, where customers are in arrears with WesBank and
there is a shortfall between the estimated realisation values of the equipment and the balances due by the
customers to WesBank, an assessment of any additional security is done and a provision for any residual
credit risk is made on a deal-by-deal basis. A provision for credit risk is also raised on a portfolio basis using
historical rates of defaults and losses.
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
30 June 30 June 31 December
2018 2017 2017
R'000 R'000 R'000
8. CONTINGENT LIABILITIES
8.1 The group has entered into similar shared risk
arrangements with various other institutions. These
arrangements are first-loss undertakings and the group's
exposure remains fixed until the capital is repaid. These
are considered to be financial guarantee contracts.
At period end the group's credit risk exposure to
these financial institutions totalled 1 191 3 843 6 123
In the event of default, the equipment financed would
be recovered and it is estimated that on re-sale the
equipment would presently realise the following towards
the above liabilities 9 415 7 685 7 935
(8 224) (3 842 ) (1 812)
Less: provision for non-recovery - (117 ) -
Net contingent liability - - -
Where customers are in arrears with these financial
institutions and there is a shortfall between the
estimated realisation values of the equipment and
the balances due by the customers to these financial
institutions, an assessment of any additional security is
done and a provision for any residual credit risk is made
on a deal-by-deal basis. A provision for credit risk is
also raised on a portfolio basis using historical rates of
defaults and losses.
8.2 The residual values of certain equipment sold to financial
institutions have been guaranteed by the group. The
group's exposure is limited to the difference between the
group's guaranteed amount and the financial institution's
predetermined estimate.
In the event of a residual value shortfall on this
equipment, the group would be exposed to a maximum
amount of 46 113 22 941 41 952
Net contingent liability 46 113 22 941 41 952
The transactions described in note 8.2 above relate to sales transactions to financial institutions which
lease the equipment to customers for an agreed lease term. In certain cases, the group has a remarketing
agreement with the institution for the disposal of the equipment returned after the lease term, but in all
instances the group's risk is limited to the residual value risk described above.
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
30 June 30 June 31 December
2018 2017 2017
R'000 R'000 R'000
9. RELATED PARTY TRANSACTIONS
Information regarding significant transactions with related
parties is presented below. Transactions are carried out on
an arm's-length basis.
Shareholders
John Deere Construction and Forestry Company
- sales 10 680 10 103 22 101
- purchases 317 816 362 393 594 738
- amounts owing to 220 300 170 412 136 858
- amounts owing by 7 043 3 527 5 144
Enterprises over which directors and shareholders are able
to exercise significant influence and/or in which directors
and shareholders have a beneficial interest
Ario Properties Limited
- property purchase commitment - - 51 537
10. FINANCIAL INSTRUMENTS
Categories of financial instruments included in the condensed consolidated statement of financial position:
-Loans and receivables at amortised cost comprising interest-bearing long-term receivables, trade and
other receivables and cash and bank balances. The directors consider that the carrying amount of loans and
receivables at amortised cost approximates their fair value.
-Financial liabilities at amortised cost comprising interest-bearing liabilities, trade and other payables
and bank overdrafts and borrowings on call. The directors consider that the carrying amount of financial
liabilities at amortised cost approximates their fair value.
-Financial assets and liabilities carried at fair value through profit or loss include forward foreign exchange
contracts and fair value is determined based on a Level 2 fair value measurement. Level 2 fair value
measurements are those derived from inputs other than quoted prices. The fair value of these contracts
is based on observable forward exchange rates at period end from an independent provider of financial
market data.
-Available for sale financial asset comprising an unlisted equity investment.
11. PRIOR PERIOD RESTATEMENTS
The group adopted IFRS 15 Revenue from Contracts with Customers on 1 January 2018 for the first time.
The group's previously published results have been restated and the adjustments are presented below.
The adjustments only relate to reclassifications of the following transactions within the group's statement of
profit or loss:
i)income from extended warranty contracts sold has been reclassified from other operating income to
revenue;
ii)warranty expenses relating to standard warranties and extended warranties have been reclassified from
other expenses to cost of sales;
iii)income and expenses from transport services relating to the sale of goods, previously included in cost of
sales and other expenses on a net basis, have been reclassified to revenue and cost of sales on a gross
basis; and
iv)the interest component on extended warranty contracts and service contracts sold, where the contract
periods exceed twelve months, has been reclassified from revenue and other operating income to interest
income included in net interest expense.
The reclassifications have the following impacts on the Condensed Consolidated Statement of Profit or Loss:
Unaudited Unaudited Unaudited
As previously
reported Adjustment Restated
R'000 R'000 R'000
June 2017
Revenue 3 446 757 58 739 3 505 496
Cost of sales (2 744 277) (117 052) (2 861 329)
Gross profit 702 480 (58 313) 644 167
Other operating income 105 234 (39 647) 65 587
Expenses (595 030) 84 862 (510 168)
Profit from operating activities 212 684 (13 098) 199 586
Net interest expense (14 380) 13 098 (1 282)
Profit before taxation 198 304 - 198 304
Audited Unaudited Unaudited
As previously
reported Adjustment Restated
R'000 R'000 R'000
December 2017
Revenue 6 766 586 106 885 6 873 471
Cost of sales (5 328 636) (198 148) (5 526 784)
Gross profit 1 437 950 (91 263) 1 346 687
Other operating income 221 431 (83 954) 137 477
Expenses (1 226 135) 145 428 (1 080 707)
Profit from operating activities 433 246 (29 789) 403 457
Net interest expense (29 888) 29 789 (99)
Profit before taxation 403 358 - 403 358
Unaudited Unaudited Unaudited
As previously
reported Adjustment Restated
R'000 R'000 R'000
11. PRIOR PERIOD RESTATEMENTS (CONTINUED)
The reclassifications have the following impacts on the
Abbreviated Segmental Analysis:
Revenue
June 2017
South African sales operation 1 523 387 (14 521) 1 508 866
South African manufacturing and logistics operation 1 987 167 50 567 2 037 734
European operation 1 231 898 3 414 1 235 312
Rest of Africa operation 378 863 408 379 271
North American operation 610 884 (10) 610 874
All other operations - - -
Inter-segmental eliminations (2 285 442) 18 881 (2 266 561)
Total - unaudited 3 446 757 58 739 3 505 496
Audited Unaudited Unaudited
As previously
reported Adjustment Restated
R'000 R'000 R'000
Revenue
December 2017
South African sales operation 2 991 387 (34 438) 2 956 949
South African manufacturing and logistics operation 4 376 792 102 795 4 479 587
European operation 2 324 683 614 2 325 297
Rest of Africa operation 618 845 665 619 510
North American operation 1 151 199 (24) 1 151 175
All other operations - - -
Inter-segmental eliminations (4 696 320) 37 273 (4 659 047)
Total - audited 6 766 586 106 885 6 873 471
Unaudited Unaudited Unaudited
As previously
reported Adjustment Restated
R'000 R'000 R'000
11.PRIOR PERIOD RESTATEMENTS (CONTINUED)
Operating profit (loss)
June 2017
South African sales operation 87 155 (223) 86 932
South African manufacturing and logistics operation 66 928 (12 875) 54 053
European operation 56 333 - 56 333
Rest of Africa operation (46 009) - (46 009)
North American operation 25 456 - 25 456
All other operations (26 526) - (26 526)
Inter-segmental eliminations 49 347 - 49 347
Total - unaudited 212 684 (13 098) 199 586
Audited Unaudited Unaudited
As previously
reported Adjustment Restated
R'000 R'000 R'000
Operating profit (loss)
December 2017
South African sales operation 159 513 (2 157) 157 356
South African manufacturing and logistics operation 223 581 (27 632) 195 949
European operation 84 913 - 84 913
Rest of Africa operation (70 000) - (70 000)
North American operation 49 980 - 49 980
All other operations (83 267) - (83 267)
Inter-segmental eliminations 68 526 - 68 526
Total - audited 433 246 (29 789) 403 457
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
30 June 30 June 31 December
2018 2017 2017
R'000 R'000 R'000
12.ASSETS HELD FOR SALE
During the current period management resolved to sell
certain assets in the group's operation in the Democratic
Republic of the Congo. This disposal group of assets is
actively being marketed and the sale is expected to be
completed during the next 12 months. No impairment loss
was recognised on reclassification of this disposal group of
assets held for sale, as the estimated fair value less cost to
sell is higher than the carrying amount.
The assets that are intended to be sold includes the following (at carrying value):
Inventory 40 519 - -
Trade and other receivables 13 729 - -
Plant, equipment and vehicles 1 314 - -
Total assets 55 562 - -
These assets have been included in the segment results of
the Rest of Africa operation as disclosed in note 7.
13.RESTRICTED ACCESS TO CASH
AND BANK BALANCES
In the group's cash and bank balances are cash and cash
equivalents which form part of the operation in Zimbabwe
that are not immediately available for use by the group due to
foreign currency shortages in Zimbabwe and bank delays in
releasing payments for imports.
The cash and cash equivalents consist of the following cash
balances in Zimbabwe:
Cash and bank balance and cash on call 114 282 - -
14. POST FINANCIAL POSITION EVENTS
No fact or circumstance material to the appreciation of these condensed consolidated interim financial
statements has occurred between 30 June 2018 and the date of this report.
15.CASH DIVIDEND DECLARATION
Notice is hereby given that the directors have declared a gross interim cash dividend of 20 cents per ordinary
share for the six-month period ended 30 June 2018 payable to ordinary shareholders in accordance with the
timetable below.
The interim net dividend is 16 cents per share for ordinary shareholders who are not exempt from dividends tax.
The dividend withholding tax rate is 20%.
The dividend has been declared from income reserves.
The company's income tax reference number is 9022169206.
The issued share capital at the declaration date is 95 329 385 ordinary shares.
The salient dates for the dividend will be as follows:
2018
Last day of trade to receive a dividend Tuesday, 18 September
Shares commence trading "ex" dividend Wednesday, 19 September
Record date Friday, 21 September
Payment date Tuesday, 25 September
Share certificates may not be dematerialised or rematerialised between Wednesday, 19 September 2018 and
Friday, 21 September 2018, both days inclusive.
By order of the board
29 August 2018
Directors
Non-executive
GW Bell (Chairman), JR Barton* (Lead Independent), AJ Bell, DH Lawrance*, HR van der Merwe*,
ME Ramathe*, R Naidu*
*Independent
Appointed: GW Bell was appointed as Chairman and JR Barton was appointed as Lead Independent Director
on 1 June 2018.
Executive
L Goosen (Group Chief Executive), A Goordeen (Alternate), KJ van Haght (Group Finance Director)
Retired: GW Bell retired as Group Chief Executive on 31 May 2018.
Appointed: L Goosen was appointed as Group Chief Executive on 1 June 2018.
Company Secretary
D McIlrath
Registered Office
13 - 19 Carbonode Cell Road, Alton, Richards Bay, 3900
Transfer Secretaries
Link Market Services South Africa Proprietary Limited, 19 Ameshoff Street, Johannesburg, 2001
Sponsor
Investec Bank Limited
100 Grayston Drive, Sandown, Sandton, 2196
Release date: 30 August 2018
www.bellir.co.za
Date: 30/08/2018 05:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
