& Notice of the Annual General Meeting
2015
mber
For the year ended 30
ANNUAL REPOR EXTRACT OF WINHOLD LIMITEDte
Sep
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Winhold Limited ("Winhold") is a holding company with its main investments being in its 74,9% owned subsidiaries Gundle and Inmins.
Gundle comprises three divisions, the Industrial and Consumer Flexible Pack- aging Division with its factories in Germiston and Swaziland, the Flexible Building, Construction and Agricultural Division in Springs (including the Ge- osynthetics Dam Lining Division) and the Trading division with branches in the main coastal cities, Bloemfontein and Mbombela.
Gundle manufactures polyethylene bags, construction sheeting, consumer and industrial packaging, agricultural film and dam linings and distributes to the agricultural, chemical, construction, food processing, industrial and consumer markets, as well as installing dam linings in sub-Saharan Africa.
Inmins Trading comprises 19 strategically located operations servicing the mining and industrial sectors with a wide range of consumable and main- tenance products, and includes divisions specialising in hose, mining pipe systems, chain and sprocket systems and conveyor belting.
A full version of the Integrated Annual Report is available on the company's website
www.winhold.co.za
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
Please read this document immediately. If you have any doubts about what action you should take, contact your independant financial adviser.
If you have sold or transfered all of your shares in the Winhold Limited, you should pass on this document, and the associated proxy form, to the person through whom you made the sale or transfer, for transmission to the purchaser or transferee.
CHIEF EXECUTIVES REPORT
It is pleasing to report that operating profit increased by 86% on a revenue increase of 11%. Headline earnings per share improved by 94,6% to 21,6 (2014: 11,1) cents per share. The improvement is mainly due to the excellent performance of the Flexible Building and Trading segments of Gundle.
Both the mining and industrial sectors serviced by Inmins are under pressure, resulting in reduced revenue and margins.
The strikes of 2014 were fortunately not repeated, however the mining sector remained depressed due to lower global demand for minerals. The manufacturing sector, the Group's largest customer base, experienced lower demand leading to increased price competition in an overtraded market.
International sentiment towards South Africa was negative and the Rand continued to weaken, thereby inflating the cost of imported product. Polymer prices were less volatile than in 2014.
The plastic sheet market continues to be very competitive and is dominated by over-capacity and competitors chasing volume with margin. Electricity and other administrative prices continued to increase, making it difficult to recover cost increases in the market. Load shedding during the first three quarters of the financial period caused production losses and increased scrap.
The availability of recycled polymers improved significantly in the second half of the year leading to increased sales volumes of construction sheeting.
Legislation in respect of water preservation and pollution control in the mining sector as well as waste disposal facilities created opportunities in the dam lining industry despite the slowdown of the mining industry in sub-Sahara Africa.
Inmins Trading
Revenue decreased by 2%. The partial recovery of the mining division sales (+5,5%) was offset by the depressed demand in the industrial sector (-8%). The weaker currency put pressure on the margin of imported products. The mining supplies division returned to profitability, albeit at levels below those achieved in 2013. A number of new products were introduced in the network during the year, however the contribution has not
yet been significant.
WINHOLD LIMITED 2015
PA G E 1
CHIEF EXECUTIVES REPORT
Gundle Plastics Group
Gundle revenue increased by 15,3% on a 7,2% production volume increase. The sporadic shortage of virgin polymers caused some production losses and increased imported material costs. Recycled polymers were more readily available which led to a much improved performance in the construction and agricultural division. During the first half of the financial year electricity supply was interrupted between 20 and 30 times. This resulted in loss of production, excess scrap and costly damage to electronic equipment. Although the supply improved in the second half, the Swaziland operation was still experiencing up to five interruptions per day.
Gundle GeoSynthetics, our geo-membrane supplier and installer, more than doubled its turnover due to completing a number of large projects both in South Africa and Sub-Sahara Africa, resulting in record profits for the operation. This business is now one of the leading supplier/installers in its field and has a solid track record in the industry.
The Swaziland business has returned to profitability after making losses for the past three years. The unstable electricity supply contributed to high scrap levels and loss of production.
The turnaround actions in Germiston have not yet borne fruit and the business continued its loss making trend. Turnaround consultants have been appointed to assist the new management in implementing the changes required. The implementation phase of the project started in November and positive changes are already visible.
Revenue of the Gundle distribution branches grew by 9,5% with pre-tax profit up 63%. These branches have increased their product base to also include products not manufactured by the group. Operating expense increases were contained in all the operations.
Repi Colourants
Despite the increased opposition reported on last year and the weaker Rand, this operation improved its revenue and profit before tax after achieving success in neighbouring countries.
Gundle - The turnaround strategy in Germiston is in its second year and a financial improvement is expected in 2016. Although the dam lining division tendered on various projects both locally and in Sub-Sahara Africa, the drop in demand for resources has caused a number of the projects to be postponed. However, new projects in the waste disposal environment are envisaged and some have already been tendered on. If successful, the effect of the smaller demand from the mining sector will be reduced. The introduction of innovative products for the construction and agricultural markets should help to maintain volumes.
PA G E 2
WINHOLD LIMITED 2015
Winhold Limited issued this content on 2015-12-24 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 2016-01-14 09:48:04 UTC
Original Document: http://www.winhold.co.za/pdf/NOTICE OF ANNUAL GENERAL MEETING -2016.pdf
