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Wescoal - Reviewed Interim Results For The Six Months Ended 30 September 2005

Release Date: 15/11/2005 15:48:02      Code(s): WSL
Wescoal - Reviewed Interim Results for the six months ended 30 September 2005   
Wescoal Holdings Limited                                                        
(Incorporated in the Republic of South Africa)                                  
(Registration number 2005/006913/06)                                            
(JSE code: WSL & ISIN: ZAE000069639)                                            
("Wescoal" or "the Group")                                                      
REVIEWED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2005             
Warning: The listing of ordinary shares in the company is on ALTx. Investors    
are advised of the risks of investing an a company listed on ALTx. Investors    
are advised that the JSE does not guarantee the viability or the success of a   
company listed on ALTx. In terms of the Listing Requirements, the company is    
obliged to appoint and retain a Designated Adviser, which is required to, inter 
alia, attend all board meetings held by the company to ensure that all the      
Listing Requirements and applicable regulations are complied with, approve the  
Financial Director of the company and guide the company in a competent,         
professional and impartial manner. If the company fails to retain a Designated  
Adviser, it must make arrangements to appoint a new Designated Adviser within   
10 business days, failing which the company faces suspension of trading of its  
secrities. If a Designated Adviser is not appointed within 30 days of its       
suspension, the company faces the termination of its listing without the        
prospect of an appropriate offer to minority shareholders.                      
Reviewed Interim Results for the six months ended 30 September 2005             
Commentary on historical results                                                
The group"s revenue for the six month period was 10.2% lower than the           
comparative period. Sales into the domestic market were 19.2% lower than last   
year due to extremely hot conditions prevailing during the winter months. The   
prior year sales figure also include export sales to the value of R18 million   
and gross profit to the value of R1.4 million. Due to the strengthening of the  
rand none of these export orders materialized this year. Sales of coal into the 
industrial market were also down due to the warm weather conditions. Despite    
these factors and the impact on revenue of the hottest winter in 30 years,      
profit after tax and earnings per share increased by 10.2% and 4.9%             
respectively if compared to the comparative period.                             
The group successfully acquired the remaining 66% of Wescoal Mining ("Wesmine") 
on 18 July 2005. Since the group took control over Wesmine production improved  
by 75% and the company turned to profitable levels for the first time. Access   
to its own washed coal has not only secured new customers for the group but     
also allow additional margin at manufacturing as well as trading level.         
Margin improved from last year"s levels of 8.7% to the current level of 9.3%.   
This improvement is due to the successful integration of Wesmine into the       
group.                                                                          
The effective tax rate for the period was only 4% mainly due to the assessed    
loss in Wesmine.                                                                
The successful JSE listing ("JSE") on 20 July 2005 with the capital raising and 
private placing of R 7 million, allowed the group to further upgrade the        
existing coal washing facilities and to aggressively pursue additional coal     
deposits.                                                                       
Future prospects                                                                
The group is aggressively pursuing additional coal deposits and the board is    
confident of success on that front. The trading operation was negatively        
affected by the mild winter conditions but there are no seasonal effects that   
can impact on revenues in the second half of this financial year. The board is  
therefore confident that the group will achieve the profit forecast as set out  
in the prospectus dated 7 July 2005.                                            
Wescoal Holdings Limited - Reviewed Interim Results for the six months ended    
30 September 2005                                                               
The reviewed interim results for the six months ended 30 September 2005, with   
pro forma comparative results for the period ended 2004 and the audited pro     
forma results for the year ended 31 March 2005 are presented.                   
Consolidated  Group Income Statements                                           
                             Reviewed       Unaudited pro  Unaudited pro        
                             interim        forma group    forma group          
                             results for    after          after                
Wescoal for    Chandler*      Chandler*            
                             the six        adjustment     adjustment           
                             months ended   for the six    for the year         
                             30 September   months ended   ended                
2005           30 September    31 March            
                             R"000          2004 (Note 1)  2005 (Note 1)        
                                            R"000          R"000                
  Revenue                    98,266         109,369        194,786              
Gross Profit               9,157          9,509          16,677               
  Other operating expenses   33             47             154                  
  Other operating costs      (5,055)        (3,846)        (8,067)              
  Loss from associates       -              -              (437)                
Profit form operating      4,135          5,710          8,327                
  Finance costs              (36)           (72)           (161)                
  Profit before taxation     4,099          5,638          8,166                
  Taxation                   (166)          (2,070)        (3,370)              
Net profit for the year   3,933          3,568          4,796                
  Headline earnings                                                             
  reconciliation                                                                
   Net profit for the year   3,933          3,568          4,796                
Less: Profit on disposal                  27             27                   
  of asset                                                                      
  Headline earning           3,933          3,541          4,769                
  Earnings per share                                                            
Ordinary in issue(000"s)                                                      
  -Total at period end       103,709        86,000         86,000               
  -Weighted average shares   92,517         86,000         86,000               
  in issue                                                                      
-Fully diluted weighted    92,594         86,000         86,000               
  average shares in issue                                                       
  (Note 2)                                                                      
  Earnings per share                                                            
information                                                                   
  Attributable earnings per  4,3            4,1                                 
  ordinary share (cents)                                   5,6                  
  Headline earnings per      4,3            4,1            5,5                  
share (cents)                                                                 
  Fully diluted attributable 4,2            4,1            5,6                  
  earnings per share(cents)                                                     
  Fully diluted headline     4,2            4,1            5,5                  
earnings per share(cents)                                                     
Notes:                                                                          
(1) - The unaudited pro forma income statement was prepared on the basis that   
the 100% acquisition of the shares of Chandler by Wescoal was completed on 1    
April 2004.                                                                     
(2) - Fully diluted earnings per share information is reflected showing the     
potential effect of full dilution for 1 million options held by the Wescoal     
directors to subscribe for new shares in Wescoal at 50 cents.                   
*  Chandler Coal (Propriety) Limited (Registration number:  1996/011374/07) a   
wholly-owned subsidiary of Wescoal and a company incorporated in accordance     
with the law of South-Africa.                                                   
Consolidated Group balance sheets                                               
Reviewed       Unaudited pro  Unaudited pro        
                             interim        forma group    forma group          
                             results for    after          after                
                             the six        Chandler*      Chandler*            
months ended   adjustments    adjustments          
                             30 September    30 September  31 March             
                             2005           2004 (Note 1)  2005 (Note 2)        
                             R"000          R"000          R"000                
IFRS           IFRS           GAAP                 
  ASSETS                                                                        
  Non-current assets         40,433         31,845         33,806               
  Property, plant and        7,719          1,853          1,696                
equipment                                                                     
  Goodwill                   32,254         27,986         27,986               
  Interests in associate     -              1,971          4,111                
  company                                                                       
Deferred taxation          460            35             13                   
  Current assets             31,423         32,192         21,374               
  Total assets               71,856         64,037         55,180               
  EQUITY AND LIABILITIES                                                        
Total Shareholders" funds  41,997         32,113         30,026               
  Shareholders" loan         -              -              2,265                
                             41,997         32,113         32,291               
  Non-current liabilities                                                       
Long-term debt             262            -              -                    
  Current liabilities        29,597         31,924         22,889               
  Total equity and           71,856         64,037         55,180               
  liabilities                                                                   
Notes:                                                                          
 - The unaudited pro forma balance sheet was prepared on the basis that the     
100% acquisition of the shares of Chandler by Wescoal was completed on 30       
September 2004.                                                                 
- The unaudited pro forma balance sheet was prepared on the basis that the 100% 
acquisition of the shares of Chandler by Wescoal was completed on 31 March      
2005.                                                                           
*  Chandler Coal (Propriety) Limited (Registration number:  1996/011374/07) a   
wholly-owned subsidiary of Wescoal and a company incorporated in accordance     
with the law of South-Africa.                                                   
Consolidated Statement of Changes in Equity                                     
                    Share Capital  Share Premium  Distributable  Total          
R"000          R"000          Reserve        R"000          
                                                  R"000                         
  Balance at 1      86             29,940         -              30,026         
  March 2005                                                                    
Share issued      118            8,953          -              9,071          
  Listing expenses  -              (1,033)        -              (1,033)        
  Earnings          -              -              3,933          3,933          
  attributable to                                                               
shareholders                                                                  
  Balance as at 30  204            37,860         3,933          41,997         
  September 2005                                                                
Group Cash Flow Statements                                                      
Reviewed       Unaudited pro  Unaudited pro        
                             interim        forma group    forma group          
                             results for    after          after                
                             Wescoal for    Chandler*      Chandler*            
the six        adjustment     adjustment           
                             months ended   for the six    for the year         
                             30 September   months ended   ended                
                             2005           30 September    31 March            
R"000          2004 (Note 1)  2005 (Note 1)        
                                            R"000          R"000                
  Net cash from operating    6,407          (3,069)        2,026                
  activities                                                                    
Investing activities       (10,765)       (1,472)        (3,668)              
  Financing activities       8,365          (63)           2,158                
  Net increase/(decrease) in 4,007          (4,604)        516                  
  cash and cash equivalents                                                     
Cash and cash equivalents  768            252            252                  
  at beginning of period                                                        
  Cash and cash equivalents  4,775          (4,352)        768                  
  at end of period                                                              
*  Chandler Coal (Propriety) Limited (Registration number:  1996/011374/07) a   
wholly-owned subsidiary of Wescoal and a company incorporated in accordance     
with the law of South-Africa.                                                   
Accounting policies and presentation                                            
The interim financial statements have been prepared in accordance with          
International Financial Reporting Standards (IFRS) for the six months ending 30 
September 2005 as well as the South African Companies Act, 1973.                
These are Wescoal"s first IFRS interim financial statements and the provisions  
of IFRS 1 First-time adoption of International Financial Reporting Standards,   
have been applied.  The condensed interim financial statements have been        
prepared in accordance with IAS 34.                                             
Audit opinion                                                                   
Middel & Partners have conducted certain procedure with regard to the unaudited 
pro forma income statement, pro forma balance sheet and pro forma cash flow     
statement of Chandler.  Their unqualified review opinion is available for       
inspection at Wescoal"s offices.                                                
Middel & Partners have reviewed the financial information in terms of Rule 3.18 
of the listing requirements of the JSE and their reviewed opinion is available  
for inspection at Wescoal"s offices.                                            
Thuthukile Edy Skweyiya                 Andre Russell Boje                      
Chairperson                             Chief Execuive Officer                  
15 November 2005                                                                
Designated Adviser: Exchange Sponsors (Pty) Limited (Registration number:       
1999/024433/07), 39 First Road, Hyde Park, 2126                                 
Transfer Secretaries: Computershare Investor Services 2004 (Pty) Limited        
(Registration number: 2004/003647/07), Ground Floor, 70 Marshall Street,        
Johannesburg, 2000                                                              
Date: 15/11/2005 03:48:17 PM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                                             
                                                                                
                                                                                
                                                                                



                                        
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