• Normalised headline earnings per share from continuing operations, increased by 29% to 760 cents (2007: 589 cents).

• Debt maturity profile significantly improved.

Group operating performance

Discontinued operations

• The coatings division for the two months until the unbundling in December 2007;
  
• The laboratory business for the two months until disposal in November 2007; and
  
• The Scandinavian car rental business for the twelve months pending its disposal which is expected in 2009.

Black economic empowerment (BEE) transaction

• Strategic black partners

  12 331 337 Barloworld ordinary shares were issued to six partners at par. These shares enjoy full shareholder rights including voting and dividends. The partners contributed R40 million in equity to a special purpose vehicle (SPV) and borrowed R994 million from two financial institutions. These funds were on-lent to Barloworld. The Barloworld loans carry a fixed interest rate of 11.78% per annum and are repayable on 22 September 2015. The loans from the financial institutions to the SPVs comprise a fixed rate loan of R726 million, repayable in fixed semi-annual instalments over seven years, and a subordinated floating rate loan of R268 million. The loans are repaid using the interest received on the loans to Barloworld and dividends received on the Barloworld shares.
  
  At the end of the seven year period (22 September 2015) the six partners are obliged to sell the 12 331 337 Barloworld ordinary shares to Barloworld at par and to subscribe for
  12 331 337 Barloworld ordinary shares at a subscription price of R179.69 per share. The subscription price of R2 216 million payable by the six partners will be funded from the proceeds of the loans repaid by Barloworld and by securing additional funds from lenders. The six partners may not sell or otherwise dispose of their shares during the seven year “lock in” period.
  
  The shares held by the six partners are not included in issued shares for purposes of calculating basic earnings per share. Dividends paid to these shareholders during the financial year are deducted from earnings attributable to ordinary shareholders and therefore impacts the earnings per share calculation. The SPVs which hold the Barloworld shares and the loans are not considered to be subsidiaries and are not consolidated into the Barloworld Limited group results.

• Community service groups (CSGs)

  2 153 676 Barloworld ordinary shares were issued to three CSGs at par. These shares enjoy full shareholder rights including voting and dividends. As in the case of the strategic black partners, the CSGs contributed equity (R4.5 million) to SPVs and borrowed R176 million from the financial institutions. Funds totalling R179 million were on-lent to Barloworld. The loans from the financial institutions comprised a fixed rate portion of R127 million and a floating rate portion of R49 million. The terms and conditions of these loans and the loans to Barloworld are the same as those applying to the strategic black partners.
  
  At the end of the seven year “lock in” period, the CSGs are obliged to sell these shares to Barloworld at par and to subscribe for 2 153 676 Barloworld ordinary shares at a subscription price of R179.69 per share. The subscription price of R387 million will be funded from the proceeds of the loans repaid by Barloworld and by securing additional funds from lenders.
  
  The accounting treatment in respect of the shares held by the CSGs will be the same as that applied to the strategic black partners.

• Education Trust (ET) and Black Managers Trust (BMT)

  1 054 058 Barloworld ordinary shares were issued to the ET and 3 060 166 ordinary shares to the BMT at par. The shares issued to the BMT vest in the beneficiaries over five years from the date of the award. No dividends are paid on the shares held by the BMT and the ET will only be entitled to receive 25% of dividends declared up to 30 September 2009 and 50% of dividends declared after 30 September 2009.
  
  The ET and BMT may not sell or otherwise dispose of the shares during the seven year “lock in” period. At the end of the “lock in” period the number of “free” shares are computed based on an agreed formula. These “free” shares will be transferred to the black managers who will then be free to deal with their shares as they deem fit. The balance of the shares will be returned to Barloworld at par.
  
  For accounting purposes, the ET and the BMT are considered to be subsidiaries of Barloworld and will be consolidated into the group results. The Barloworld shares held by the trusts will be treated as treasury shares. The treasury shares will not be included in issued share capital for purposes of calculating earnings per share. An IFRS2 charge will accrue on the shares awarded by the BMT over the vesting period. This charge is estimated at R3 to R5 million per year. The charge in respect of the shares issued to the ET will arise as the ET distributes any proceeds it receives to its beneficiaries.

• Black non-executive directors’ trust

  108 030 Barloworld ordinary shares were issued to the trust at R83.31 per share to be held for the benefit of three non-executive directors. The shares vest in the beneficiaries over five years. The trust, and the beneficiaries, will be entitled to receive all dividends declared by Barloworld but will not be entitled to sell or otherwise dispose of the shares for seven years.
  
  The trust will be consolidated into the Barloworld group results and the shares will be treated as treasury shares. An IFRS2 charge of approximately R2 million will accrue each year over the vesting period.

• General staff trust (GST)

  2 980 829 Barloworld ordinary shares were issued to the GST at par. These shares were allocated to qualifying employees on 30 September 2008. The trust and the beneficiaries are entitled to receive all dividends declared by Barloworld but may not sell or otherwise dispose of the shares for five years from the allocation date.
  
  The shares vested in the beneficiaries on the allocation date. The shares held by the trust will be included in issued shares for purposes of calculating earnings per share.

Cash flow

Balance sheet

Borrowings

Accounting policies

Acquisitions and disposals

• The laboratory business for R1 077 million;
  
• The Iberian lift truck assets for €30 million; and
  
• The South African handling rental book for R436 million.

Shareholder information

Dividends

The year ahead