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Wsl - Wescoal Holdings Limited - Audited Results For The Year Ended 31 March

Release Date: 28/06/2007 12:33:43      Code(s): WSL
WSL - Wescoal Holdings Limited - Audited results for the year ended 31 March    
                                2007                                            
                                                                                
Wescoal Holdings Limited                                                        
(Incorporated in the Republic of South Africa)                                  
(Registration number 2005/006913/06)                                            
(JSE code: WSL ISIN: ZAE000069639)                                              
("Wescoal" or "the Group")                                                      
                                                                                
AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2007                      
CONSOLIDATED GROUP INCOME STATEMENTS                                            
Audited    Audited                               
                               results    results                               
                               for the    for the                               
                            year ended       year                               
31 March      ended                               
                                  2007   31 March                               
                                 R`000       2006                               
                                            R`000                               

Revenue                         269 558    178 735                              
Gross Profit                     18 189     14 357                              
Other operating income              204        117                              
Operating costs                (11 625)   (10 739)                              
Profit on sale of                     -        437                              
associate company                                                               
Profit from operations            6 768      4 172                              
Acquisition expenses            (2 105)          -                              
written off                                                                     
Finance costs                   (1 132)      (323)                              
Profit before taxation            3 531      3 849                              
Taxation                        (1 089)        748                              
Profit for the period             2 442      4 597                              
                                 2 442      4 597                               
Headline earnings                                                               
reconciliation:                                                                 
Net profit for the period                                                       
Less: Profit on sale of               -      (437)                              
associate company                 1 495          -                              
Plus: Acquisition expenses                                                      
written off                                                                     
Headline earnings for the         3 937      4 160                              
period                                                                          

Ordinary shares in issue                                                        
(000`s)                                                                         
-Total at period end            103 709    103 709                              
-Weighted average shares        103 709     98 098                              
in issue                                                                        
-Fully diluted weighted         104 209     98 233                              
average shares in issue                                                         
(Note 1)                                                                        
                                                                                
Earnings per share:                                                             
Attributable earnings per           2.4        4.7                              
ordinary share (cents)                                                          
Headline earnings per               3.8        4.2                              
share (cents)                                                                   
Fully diluted attributable          2.3        4.7                              
earnings per share (cents)                                                      
Fully diluted headline              3.8        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                                              
                        Audited      Audited                                    
                    results for  results for                                    
                       the year     the year                                    
ended        ended                                    
                       31 March     31 March                                    
                           2007         2006                                    
                          R`000        R`000                                    
ASSETS                                                                          
                                                                                
Non-current assets        47 705       44 787                                   
                                                                                
Property, plant           13 065       10 588                                   
and equipment                                                                   
Goodwill                  32 691       32 691                                   
Deferred taxation          1 949        1 508                                   

Current assets            54 665       36 502                                   
                                                                                
Total assets             102 370       81 289                                   

EQUITY AND                                                                      
LIABILITIES                                                                     
                                                                                
Total                     45 103       42 661                                   
Shareholders`                                                                   
funds                                                                           
                                                                                
Long-term debt             4 995        6 435                                   
                                                                                
Current                   52 272       32 193                                   
liabilities                                                                     

Total equity and         102 370       81 289                                   
liabilities                                                                     
                                                                                
Net asset value            43.49        41.14                                   
per share (cents)                                                               
Tangible net asset         11.97         9.61                                   
value per share                                                                 
(cents)                                                                         
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY                                     
                          Share    Share   Distribut      Total                 
                        Capital  Premium        able      R`000                 
R`000    R`000     Reserve                            
                                               R`000                            
Balance at 1 April           204   37 860       4 597     42 661                
2006                                                                            
Share issued                   -        -           -          -                
Listing expenses               -        -           -          -                
Earnings attributable          -        -       2 442      2 442                
to shareholders                                                                 
Balance as at 31 March       204   37 860       7 039     45 103                
2007                                                                            
GROUP CASH FLOW STATEMENTS                                                      
                              Audited      Audited                              
results  results for                              
                              for the     the year                              
                           year ended        ended                              
                             31 March     31 March                              
2007         2006                              
                                R`000        R`000                              
Net cash from operating          2 610           80                             
activities                                                                      
Investing activities           (5 202)      (7 344)                             
Financing activities               846        9 458                             
Net (decrease)/increase        (1 746)        2 194                             
in cash and cash                                                                
equivalents                                                                     
Cash and cash                    2 962          768                             
equivalents at                                                                  
beginning of period                                                             
Cash and cash                    1 216        2 962                             
equivalents at end of                                                           
period                                                                          
Commentary                                                                      
Operations and market review                                                    
The  group`s  revenue  for the year was 51% higher than prior  year.  The  group
experienced strong demand from both the domestic market and from sales  of  coal
into the industrial market. The improvement in revenue levels is both volume and
price  driven  with volume increasing by 20.5% and price increases  contributing
25.2%. The domestic coal price has now reached export parity and is expected  to
remain  at  that level. Demand for coal has been extremely high throughout  this
financial  year and this trend has continued into the first quarter of  the  new
financial year.                                                                 
The  trading  division performed exceptionally well with revenue  up  by  48,6%,
profit  from  operations up by 194% and after tax profit up 181%. Trading  gross
margin  remained  relatively static but the washing operation however  posted  a
dismal performance in the second half of the financial year, affecting both  the
gross margin and after tax profit.                                              
The  gross  margin decreased by 1.3% to 6.7% since March 2006. Margins  achieved
from trading decreased by 0.2% to 7.8% compared to last year but increased costs
in  the  second  half  of  the financial year from the  coal  washing  operation
accounted for the biggest drop in margin. Following the termination of the Anker
Coal and Mineral Holdings South Africa (Pty) Limited ("Anker Coal") acquisition,
the  group  was  forced to source alternative run of mine supply  for  the  coal
washing  operation  to  service existing supply contracts and  maintain  certain
sectors of the trading operation`s customer base. A short term source of  supply
was  found  at substantially higher input costs without any improvement  in  the
quality of coal. Subsequent to the reporting period the group secured a new long
term  supplier  of  quality run of mine with substantial  improvements  in  coal
washing  yields  being experienced. This is expected to continue  for  the  year
ending 31 March 2008 and the goal is to achieve a minimum of break even for  the
washing operation going forward                                                 
Profits from operating activities are up 62.2% however headline earnings for the
period  are   5.4%  lower  and  attributable  earnings  46.9%  lower  than   the
comparative  period due to the expenses incurred during the acquisition  process
of  Anker Coal a 245.6% increase in the taxation charge and a 250.5% increase in
finance costs.                                                                  
During the year, the group terminated the proposed acquisition of Anker Coal  as
the  outstanding regulatory approvals could not be obtained timeously. The costs
associated with this proposed transaction have been expensed.                   
Segment analysis:                                                               
                                                                                
                                                                                
                                                                                

R`000                                                                           
31 March 2007                                                                   
Income Statement       Trading   Washing Acquisition      Total                 
expense                             
                                        written off                             
Revenue                259 275    10 283           -    269 558                 
Profit           from    8 865   (2 097)           -      6 768                 
Operations               7 441   (2 009)     (1 495)      3 937                 
Headline earnings                                                               
R`000                                                                           
31 March 2007                                                                   
Balance Sheet          Trading   Washing  Elimination     Total                 
                                             entries                            
                                                                                
                                                                                
Current assets          45 106     9 559            -    54 665                 
Non current assets      16 043     9 996     (11 025)    15 014                 
Goodwill                30 231         -        2 460    32 691                 
Shareholders Funds      44 963   (2 320)        2 460    45 103                 
Non           current        -    16 020     (11 025)     4 995                 
liabilities             46 417     5 855            -    52 272                 
Current liabilities                                                             
R`000                                                                           
31 March 2006                                                                   
Income Statement       Trading   Washing  Profit on    Total                    
                                           sale of                              
                                         associate                              
Revenue                174 452     4 283    company  178 735                    
Profit           from  3 015         720          -    4 172                    
Operations             2 647       1 513        437    4 160                    
Headline earnings                                 -                             
R`000                                                                           
31 March 2006                                                                   
Balance Sheet        Trading   Washing  Elimination    Total                    
                                           entries                              

Current assets        25 825    10 677            -   36 502                    
Non current assets    13 946     8 784     (10 634)   12 096                    
Goodwill              30 231         -        2 460   32 691                    
Shareholders Funds    41 396   (1 195)        2 460   42 661                    
Non          current       -    17 069     (10 634)    6 435                    
liabilities           28 606     3 587            -   32 193                    
Current liabilities                                                             
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 has reached export parity with the  price
increase of 15% to 20% on 1 April 2007.                                         
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.                                  
Corporate Governance                                                            
The group fully subscribes to the principles of, and implements where possible, 
the recommendations of the King II Code on Corporate Governance.                
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 audited 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                                                           
28 June 2007                                                                    
A R Boje                                                                        
Chief Executive Officer                                                         
CORPORATE INFORMATION                                                           
Non-Executive          JG Pansegrouw                                            
directors:                                                                      
Executive directors:   AR Boje                                                  
P Janse van Rensburg                                      
Registration number:   2005/006913/06                                           
Registered address:    228 Voortrekker Street                                   
                      Krugersdorp                                               
1740                                                      
Postal address:        PO Box 133                                               
                      Krugersdorp                                               
                      1740                                                      
Company secretary:     P Janse van Rensburg                                     
Telephone:             011 - 954 2721                                           
Facsimile:             011 - 954 6737                                           
Transfer secretaries:  Computershare  Investor Services  2004                   
(Pty) Limited                                             
Designated Adviser:    Exchange Sponsors (Pty) Limited                          
                                                                                
Date: 28/06/2007 12:33:42 Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                             .                  



                                        
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