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Wescoal - Reviewed Interim Results For The Six Months Ended 30 September 2006

Release Date: 06/12/2006 11:05:02      Code(s): WSL
Wescoal - Reviewed Interim Results for the six months ended 30 September 2006   
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 2006             
HIGHLIGHTS                                                                      
Revenue up 39%                                                                  
Operating profits up 47%                                                        
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2006            
The interim results for the six months ended 30 September 2006, with            
comparative results for the period ended 2005 and the audited results for       
the year ended 31 March 2006 are presented.                                     
Consolidated Group Income Statements                                            
Reviewed    Reviewed     Audited                 
                                interim     interim     results                 
                            results for results for     for the                 
                                the six     the six        year                 
months      months       ended                 
                                  ended       ended    31 March                 
                                     30          30        2006                 
                              September   September       R"000                 
2006        2005                             
                                  R"000       R"000                             
Revenue                         136 057      98 266     178 735                 
Gross Profit                     11 689       9 157      14 357                 
Other operating income               91          33         117                 
Other operating costs           (5 701)     (5 055)    (10 739)                 
Profit on sale of                     -           -         437                 
associate company                                                               
Profit from operations            6 079       4 135       4 172                 
Acquisition expenses            (1 527)           -           -                 
written off                                                                     
Finance costs                     (386)        (36)       (323)                 
Profit before taxation            4 166       4 099       3 849                 
Taxation                        (1 177)       (166)         748                 
Profit for the period             2 989       3 933       4 597                 
                                  2 989       3 933       4 597                 
Headline earnings                                                               
reconciliation:                                                                 
Net profit for the period                                                       
Less: Profit on sale of               -           -       (437)                 
associate company                 1 084           -           -                 
Plus: Acquisition expenses                                                      
written off                                                                     
Headline earnings for the         4 073       3 933       4 160                 
period                                                                          
Ordinary shares in                                                              
issue(000"s)                                                                    
-Total at period end            103 709     103 709     103 709                 
-Weighted average shares        103 709      92 517      98 098                 
in issue                                                                        
-Fully diluted weighted         104 114      92 594      98 233                 
average shares in issue                                                         
(Note 1)                                                                        
Earnings per share:                                                             
Attributable earnings per           2.9         4.3         4.7                 
ordinary share (cents)                                                          
Headline earnings per               3.9         4.3         4.2                 
share (cents)                                                                   
Fully diluted attributable          2.9         4.2         4.7                 
earnings per share(cents)                                                       
Fully diluted headline              3.9         4.2         4.2                 
earnings per share(cents)                                                       
Note:                                                                           
(1)  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       
     per share.                                                                 
Consolidated Group balance sheets                                               
Reviewed    Reviewed     Audited                 
                                interim     interim     results                 
                            results for results for     for the                 
                                the six     the six        year                 
months      months       ended                 
                               ended 30       ended    31 March                 
                              September          30        2006                 
                                   2006   September       R"000                 
R"000        2005                             
                                              R"000                             
ASSETS                                                                          
Non-current assets               47 407      40 433      44 787                 
Property, plant and              12 850       7 719      10 588                 
equipment                                                                       
Goodwill                         32 691      32 254      32 691                 
Interests in associate                -           -           -                 
company                                                                         
Deferred taxation                 1 866         460       1 508                 
Current assets                   48 520      31 423      36 502                 
Total assets                     95 927      71 856      81 289                 
EQUITY AND LIABILITIES                                                          
Total Shareholders" funds        45 650      41 997      42 661                 
Long-term debt                    6 367         262       6 435                 
Current liabilities              43 910      29 597      32 193                 
Total equity and                 95 927      71 856      81 289                 
liabilities                                                                     
Net asset value per share         44.02       40.50       41.14                 
(cents)                                                                         
Tangible net asset value          12.50        9.39        9.61                 
per share (cents)                                                               
Consolidated Statement of Changes in Equity                                     
                             Share    Share     Distri-   Total                 
Capital  Premium     butable   R"000                 
                             R"000    R"000     Reserve                         
                                                  R"000                         
Balance at 1 April 2006        204   37 860       4 597  42 661                 
Share issued                     -        -           -       -                 
Listing expenses                 -        -           -       -                 
Earnings attributable to         -        -       2 989   2 989                 
shareholders                                                                    
Balance as at 30               204   37 860       7 586  45 650                 
September 2006                                                                  
Group Cash Flow Statements                                                      
                               Reviewed    Reviewed     Audited                 
interim     interim     results                 
                            results for results for     for the                 
                            Wescoal for Wescoal for        year                 
                                the six     the six       ended                 
months ended      months    31 March                 
                           30 September       ended        2006                 
                             2006 R"000          30       R"000                 
                                          September                             
2005                             
                                              R"000                             
Net cash from operating         (2 266)       6 407          80                 
activities                                                                      
Investing activities            (3 559)    (10 765)     (7 344)                 
Financing activities              2 187       8 365       9 458                 
Net increase/(decrease)         (3 638)       4 007       2 194                 
in cash and cash                                                                
equivalents                                                                     
Cash and cash                     2 962         768         768                 
equivalents at beginning                                                        
of period                                                                       
Cash and cash                     (676)       4 775       2 962                 
equivalents at end of                                                           
period                                                                          
Commentary                                                                      
Operations and market review                                                    
The group"s revenue for the six month period was 38.5% higher than the          
comparative period. The group experienced strong demand from both the           
domestic market as well as from sales of coal into the industrial market.       
The improvement in revenue levels is both volume and price driven with          
volume increasing by 8.4% and price increases contributing 27.7%. Demand        
for coal has been extremely high since May 2006 and this is expected to         
continue throughout this financial year.                                        
The gross margin improved by 0.6% to 8.6% since March 2006 and is expected to   
improve even further towards the 9% level by March 2007. This is mainly         
driven by a further increase in coal prices of 20% on 1 October 2006, the       
high demand for inland coal and the group"s focus on higher margin              
business.                                                                       
Profits from operating activities are up 47% however headline earnings for the  
period are only 3.6% higher and attributable earnings 24% lower than the        
comparative period due to the expenses incurred during the acquisition          
process of Anker Coal and Mineral Holdings (Pty) Limited.                       
Subsequent to the reporting period, the group terminated the proposed           
acquisition of Anker Coal and Mineral Holdings South Africa (Pty) Limited       
as the outstanding regulatory approvals could not be obtained timeously.        
The costs associated with this proposed transaction have been expensed in       
the period to end September 2006.                                               
Prospects                                                                       
The group continues to aggressively pursue additional coal deposits and value   
adding businesses. The demand for coal is extremely high and the expansion      
of the Richards Bay Coal Terminal will put additional pressure on the           
inland supply of coal. Additional coal deposits will therefore secure part      
of the future supply line. The inland price of coal is reaching export          
parity and it is expected to be on par within the next financial year.          
The group and the coal industry in general are experiencing the most buoyant    
market conditions for many years and this is expected to continue in the        
short to medium term due to worldwide energy demand. Based on this and the      
results to end September 2006, the group expects to achieve its forecast        
earnings of 8.6 cents per share for the year to March 2007 with further         
improvement thereafter.                                                         
Dividends                                                                       
No interim dividend has been declared.                                          
Accounting policies and presentation                                            
The consolidated interim financial statements have been prepared in accordance  
with International Financial Reporting Standards (IFRS) as well as the          
South African Companies Act, 1973.                                              
Audit opinion                                                                   
The group"s auditors, Middel & Partners have reviewed the financial             
information in terms of Rule 3.18 of the listing requirements of the JSE.       
Their unqualified review opinion is available for inspection at Wescoal"s       
offices.                                                                        
By order of the Board                                                           
5 December 2006                                                                 
T E Skweyiya             A R Boje                                               
Chairman                 Chief Executive Officer                                
CORPORATE INFORMATION                                                           
Non-Executive          JG Pansegrouw,                                           
directors:             TA Tulwana,                                              
                       JM Nieman (alternate for TA Tulwana)                     
Executive directors:   TE Skweyiya                                              
                       AR Boje                                                  
P Janse van Rensburg                                     
Registration number:   2005/006913/06                                           
Registered address:    74 von Brandis Street                                    
                       Krugersdorp                                              
1740                                                     
Postal address:        PO Box 133                                               
                       Krugersdorp                                              
                       1740                                                     
Company secretary:     P Janse van Rensburg                                     
Telephone:             011 - 660 2484                                           
Facsimile:             011 - 660 2894                                           
Transfer secretaries:  Computershare Investor Services 2004 (Pty)               
Limited                                                  
Designated Adviser:    Exchange Sponsors (Pty) Limited                          
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.                                                          
Date: 06/12/2006 11:05:20 AM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                                             
                                                                                
                                                                                
                                                                                



                                        
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