BWO.L Regulatory News (BWO)

4 Nov 2008 14:31



Barloworld Limited

("Barloworld or the Company")

Interim Management Statement

Trading update

The Equipment southern Africa business has continued to deliver a strong operating performance on the back of robust demand in the mining and construction sectors. Equipment Iberia has felt the effects of the significant construction downturn in the second half of the 2008 financial year, while Equipment Siberia has continued to trade well.

In the Automotive division, Motor retail southern Africa has been impacted by tough trading conditions, while car rental has seen reduced rental day growth, lower fleet utilisation and reduced used vehicle profits. Avis Fleet Services and motor Australia produced solid results.

Within the Handling division, the businesses in Belgium and the Netherlands performed well as did the handling and agriculture operations in South Africa. However, this was offset by weaker performances in the USA and UK due to the worsening economic environments.

The Logistics division has performed well, mainly due to organic growth in southern Africa.

Overall trading profit for the group is expected to show strong growth on the prior year, driven by the Equipment division.

Growth in headline earnings per share from continuing operations will be impacted by a number of largely once-off items in the current and prior financial years. These include:

1. The implementation of the recently approved black economic empowerment transaction which is expected to result in a non-cash IFRS 2 charge of R 296 million after tax (145  cents per share) in the financial year ending 30 September 2008.

2.  In the previous year a gain of R 294 million (145 cents per share) arose from the initial marking to market of PPC shares held to service obligations in respect of the share option scheme. 

3. In the previous year a STC charge of R 125 million (62 cents per share) was incurred in respect of the special dividend paid in April 2007.

As a consequence of the above items, headline earnings per share (HEPS) from continuing operations is expected to be 5% to 15% lower than for the prior year . Adjusting for the above items results in an expected increase in normalised HEPS from continuing operations of 25% to 35% compared to last year.

As reported at 31 March 2008, the maturity profile of the group's borrowings was weighted in favour of the short-term component (56 : 44). The proceeds of R1 207m received in long-term funding from the BEE transaction were used to settle short-term borrowings. The group long-term maturity profile at 30 September 2008 has improved to approximately 54% of total borrowings. This was further enhanced by an issue in early October 2008 of a seven year R750 million corporate bond.

Reporting requirements for the primary listing

In accordance with the listings requirements of the JSE Limited, it is reported as follows:

The group's earnings inclusive of both continuing and discontinued operations will not be comparable due to the unbundling of PPC and the disposal of Melles Griot in the second half of last year and the unbundling this financial year of Freeworld Coatings and the disposal of the Laboratory business. The results of these businesses will be disclosed as discontinued operations in the group's year end results.

In terms of Section 3.4 (b) of the JSE Requirements, reported earnings per share and reported headline earnings per share (including both continuing and discontinued operations) are expected to decline by 45% to 55% due to the once-off items referred to above and the absence this year of the businesses unbundled or sold which contributed substantially to last years earnings. 

This financial information has not been reviewed or reported on by Barloworld's auditors.

Barloworld Limited expects to announce its results for the year to 30 September 2008 on 17 November 2008.

Sandton

4 November 2008

About Barloworld Limited

Barloworld Limited (LSE: BWO) 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 power systems), Automotive (car rental, fleet services and motor trading), Handling (forklift truck distribution and fleet management) and logistics (logistics management and supply chain optimisation).

We offer flexible, value adding, integrated business solutions to our customers backed by leading global brands. The brands we represent on behalf of our principals include Caterpillar, Hyster, Avis, Mercedes, Chrysler, BMW, General Motors, Ford, Toyota, Volkswagen, Audi, Volvo and others. Barloworld has a proven track record of effectively managing long-term relationships with global principals and customers.  The company was founded in 1902 and currently has operations in 42 countries around the world with approximately 20 000 employees. For more information visit www.barloworld.com

(Incorporated in the Republic of South Africa)

(Registration number 1918/000095/06)

(JSE Ordinary Share code: BAW)

(JSE ISIN: ZAE000026639)

 (JSE Preference Share code: BAWP)

(JSE ISIN: ZAE000026647)

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