Go Back Email this Link to a friend


Rlf - Rolfes Ltd - Unaudited Interim Results For The Six Months Ended 31

Release Date: 26/02/2008 07:05:03      Code(s): RLF
RLF - Rolfes Ltd - Unaudited interim results for the six months ended 31        
December 2007                                                                   
ROLFES TECHNOLOGY HOLDINGS LIMITED                                              
(Registration number 2000/002715/06)                                            
Share Code: RLF                                                                 
ISIN: ZAE000096202                                                              
("Rolfes" or "the group")                                                       
www.rolfesza.com                                                                
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2007             
HIGHLIGHTS                                                                      
-  Turnover increased by 35% to R 145 million                                   
-  Operating profit increased by 54% to R 21 million                            
-  Headline earnings increased by 65% to R14,3 million                          
-  Headline earnings increased by 44% to 14,0 cents per share                   
CONSOLIDATED GROUP INCOME STATEMENTS                                            
for the period ended 31 December                                                
                         UNAUDITED      UNAUDITED       AUDITED                 
                        SIX MONTHS     SIX MONTHS          YEAR                 
                               DEC            DEC          JUNE                 
2007           2006          2007                 
                             R`000          R`000         R`000                 
Revenue                     145 010        107 173       224 727                
Cost of sales              (113 179)       (81 103)     (172 011)               
Gross profit                 31 831         26 070        52 716                
Other operating income        5 076              -         2 035                
Operating expenses          (15 599)       (12 208)      (24 185)               
Operating profit before                                                         
interest                     21 308         13 862        30 566                
Operating profit percentage    14,7%          12,9%         13,6%               
Interest paid and finance                                                       
charges                      (1 533)        (1 558)       (4 477)               
Income from investments           8              -            84                
Net profit before taxation   19 783         12 304        26 173                
Tax expenses                 (5 436)        (3 582)       (7 123)               
Profit for the year          14 347          8 722        19 050                
Attributable to:                                                                
Equity holders of parent     14 347          8 722        19 050                
Weighted number of shares                                                       
in issue                102 608 535     90 000 000    91 301 000                
Earnings per share (cents)                                                      
- Basic                        14,0            9,7          20,9                
- Diluted                      14,0            9,7          20,9                
- Headline                     14,0            9,7          20,9                
- Diluted headline             14,0            9,7          20,9                
CONSOLIDATED GROUP BALANCE SHEETS                                               
as at 31 December                                                               
                         UNAUDITED      UNAUDITED       AUDITED                 
SIX MONTHS     SIX MONTHS          YEAR                 
                               DEC            DEC          JUNE                 
                              2007           2006          2007                 
                             R`000          R`000         R`000                 
ASSETS                                                                          
Non-current assets           67 846         48 742        54 537                
Plant and equipment          36 674         22 638        28 404                
Property                     16 680         16 680        16 680                
Intangible assets            14 092          9 084         9 100                
Short-term loans                400            340           353                
Current assets              110 921         64 025        86 450                
Inventories                  52 245         26 382        36 740                
Trade and other receivables  58 676         37 491        49 624                
Financial asset                   -              -            36                
Value Added Tax receivable        -            152            50                
Total assets                178 767        112 767       140 987                
EQUITY AND LIABILITIES                                                          
Capital and reserves         98 077         48 099        79 979                
Share capital                 1 036            900         1 025                
Share premium                28 602          1 408        24 864                
Retained income              68 439         45 791        54 090                
Non-current liabilities      20 330         15 892         6 787                
Interest-bearing                                                                
liabilities                  15 305         14 940         5 512                
Deferred tax liability        4 245            213           970                
Provisions                      780            739           305                
Current liabilities          60 360         48 776        54 221                
Trade and other payables     38 060         20 564        39 079                
Cash and cash equivalents    15 179         23 982         8 116                
Current portion of                                                              
interest-bearing liabilities  4 908          2 201         4 126                
Financial liability              30              -             -                
Value Added Tax liability       743              -             -                
Tax liability                 1 440          2 029         2 900                
Total equity and                                                                
liabilities                 178 767        112 767       140 987                
CONSOLIDATED GROUP STATEMENTS OF CHANGES IN EQUITY                              
for the period ended 31 December                                                
                   Ordinary   Share Retained  Minority   Total                  
                     shares premium   income   interest  equity                 
R`000   R`000    R`000      R`000   R`000                 
Balance at                                                                      
30 June 2006               -       -   37 069        686  37 756                
Derecognising of minority                                                       
interest                   -       -        -       (686)   (686)               
Net profit for the period  -       -    8 722          -   8 722                
Issue of new shares        -   2 307        -          -   2 307                
Capitalisation of share                                                         
premium                  900    (900)       -          -       -                
Balance at                                                                      
31 December 2006         900   1 408   45 791          -  48 099                
Issue of new shares      125  23 456        -          -  23 582                
Net profit for the                                                              
period                     -       -   10 300          -  10 300                
Dividend declared          -       -   (2 000)         -  (2 000)               
Balance at                                                                      
30 June 2007           1 025  24 863   54 091          -  79 980                
Issue of new shares       11   3 739        -          -   3 750                
Net profit for the                                                              
period                     -       -   14 347          -  14 347                
Balance at                                                                      
31 December 2007       1 036  28 602   68 439          -  98 077                
CONSOLIDATED GROUP CASH FLOW STATEMENTS                                         
for the period ended 31 December                                                
UNAUDITED      UNAUDITED       AUDITED                 
                        SIX MONTHS     SIX MONTHS          YEAR                 
                               DEC            DEC          JUNE                 
                              2007           2006          2007                 
R`000          R`000         R`000                 
Cash flow (utilised in)/                                                        
generated from operating                                                        
activities                   (2 052)         2 470         9 760                
Cash received from                                                              
customers                   145 786         96 903       204 467                
Cash paid to suppliers     (142 238)       (88 498)     (182 053)               
Cash generated from                                                             
operations                    3 548          8 405        22 414                
Interest received                 7              -            84                
Interest paid and                                                               
finance charges              (1 533)        (1 558)       (4 477)               
Tax paid                     (4 074)        (4 377)       (6 261)               
Dividends declared and paid       -              -        (2 000)               
Cash utilised in                                                                
investing activities        (19 336)        (5 524)      (13 026)               
Additions to property, plant                                                    
and equipment                (6 782)        (5 524)      (13 876)               
Additions to intangible                                                         
assets                            -              -           (16)               
Proceeds from disposal          572              -           879                
Loan advanced                   (47)             -           (13)               
Cost with acquisition of                                                        
companies                   (13 079)             -             -                
Cash generated from                                                             
financing activities         14 325            812        16 890                
Increase/ (decrease) in                                                         
long-term borrowings          9 793            812        (6 950)               
Increase in instalment                                                          
sale agreements - short-term                                                    
portion                         782              -           259                
Issue of shares               3 750              -        23 581                
Cash (shortfall)/ surplus                                                       
for the year                 (7 063)        (2 242)       13 624                
Cash and cash equivalents                                                       
- beginning of the year      (8 116)       (21 740)      (21 740)               
Cash and cash equivalents                                                       
- end of the year           (15 179)       (23 982)       (8 116)               
SEGMENTAL ANALYSIS                                                              
for the six months ended 31 December                                            
Operating                                                   
             Revenue   Profit   Net Profit   Assets Liabilities                 
               R`000    R`000        R`000    R`000       R`000                 
2007                                                                            
Chemicals      49 501    4 354        2 147   36 156      33 892                
Silica         20 566    4 866        2 125   36 010      25 773                
Pigments       73 990    6 785        5 237   77 047      44 198                
Other             953    5 303        4 838   29 554     (23 174)               
Total         145 010   21 308       14 347  178 767      80 690                
                    Operating                                                   
             Revenue   Profit   Net Profit   Assets  Liabilities                
               R`000    R`000        R`000    R`000        R`000                
2006                                                                            
Chemicals      33 167    3 402        1 752   24 359       25 986               
Silica         17 078    3 749        2 227   28 034       21 904               
Pigments       56 224    3 830        2 928   42 864       18 992               
Other             704    2 882        1 815   17 510       (2 213)              
Total         107 173   13 863        8 722  112 767       64 669               
for the twelve months ended 30 June                                             
                    Operating                                                   
Revenue   Profit   Net Profit   Assets  Liabilities                
               R`000    R`000        R`000    R`000        R`000                
2007                                                                            
Chemicals      71 760    6 812        3 496   29 821       29 705               
Silica         33 690    7 710        4 126   33 405       25 293               
Pigments      117 601    9 822        7 177   49 830       22 218               
Other           1 676    6 222        4 251   27 931      (16 208)              
Total         224 727   30 566       19 050  140 987       61 008               
COMMENTARY                                                                      
OVERVIEW                                                                        
Nature of Business                                                              
Rolfes is a diversified manufacturing and technology holdings company listed on 
the Alternative Exchange of the JSE Limited. The group has demonstrated         
continued growth through its subsidiaries, providing a wide range of market-    
leading products to customers through dedicated teams of chemical industry      
specialists in the silica, resins, solvents, speciality chemicals and pigments  
industries.                                                                     
Rolfes manufactures and distributes the following products:                     
-  Organic and inorganic pigments and pigments pastes and dyes for the coatings,
plastics, construction, leather, vinyl and ink industries (through Rolfes Colour
Pigments);                                                                      
-  Resins, solvents and other speciality chemicals for the coatings, plastics   
and construction industries (through Rolfes Chemicals); and                     
-  Pure beneficiated silica for the metallurgical, filtration and construction  
industries (through Rolfes Silica)                                              
Basis of Preparation                                                            
The unaudited interim financial statements for the period have been prepared in 
compliance with International Accounting Standard (IAS 34) - Interim Financial  
Reporting. The accounting policies applied in preparing these unaudited interim 
financial statements are consistent with those applied in the annual financial  
statements for the year ended 30 June 2007 and comply with the statements of    
International Financial Reporting Standards (IFRS) and the South African        
Companies Act. IFRS 7 - Financial Instruments: Disclosures - this statement has 
not been adopted in the results for the six months period ended 31 December 2007
but will be adopted in the annual financial statements for the year ended 30    
June 2008.                                                                      
Financial and Operational Overview                                              
GROUP                                                                           
The six months under review to December 2007 has been a period of further growth
and consolidation for the Rolfes Group. Outstanding sales growth is evident in  
all operating units as a result of continued capitalisation on strategies       
implemented during the past three years. Successful consolidation, increased    
productivity, and considerable growth internationally contributed to the group`s
performance. The electricity shortages have had a limited effect on the group`s 
operations during the period under review.                                      
Turnover increased by 35% percent to reach R 145 million for the six months to  
December 2007. Operating profit improved by 54% to R 21, 3 million and headline 
earnings increased by 65% to R 14,3 million. Headline earnings per share for the
period to December 2007 increased by 44% to 14,0 cents per share.               
The net asset value per share improved to 94,7 cents per share (December 2006:  
53,4 cents per share) with a similar trend in net tangible asset value per      
share.                                                                          
The Group incurred R 6, 8 million of capital expenditure, primarily due to the  
upgrading of some of its manufacturing plants and expanding the transport fleet,
particularly at the silica operation, in order to facilitate production         
expansion and sales growth.                                                     
The Group`s cash generated from operations reduced primarily due to the         
following:                                                                      
-  The insurance settlement from the Alberton plant explosion remained, in part,
outstanding as at December 2007, resulting in additional pressure on cash flow  
due to costs incurred to bring the plant into full operation. The outstanding   
payment of R4,2 million is expected in due course.                              
-  Further investment in stock and debtors due to the exponential growth in the 
European business contributed to the decline in available cash resources.       
-  Strategic investment in certain raw material stock due to spiralling prices  
resulted in higher than normal stock levels, which contributed to the lower cash
flow situation.                                                                 
Management expect the cash flow position to normalise during the period to June 
2008.                                                                           
ROLFES COLOUR PIGMENTS                                                          
Turnover increased by 31,6% to R 73.9 million (December 2006: R 56,2 million).  
The growth in turnover is attributed to increased sales across the board on most
product lines, with a significant improved contribution by the European trading 
unit. The company achieved a gross profit margin of 20, 1% (December 2006:      
23,9%, June 2007: 19, 6%). The decline is largely due to sharp increases in     
local and international raw material prices. Improved contribution in the       
European trading unit at a lower GP% resulted in a lower average GP % for the   
comparative period to December 2006.                                            
As announced on 28 November 2007 on SENS, the group acquired a 100% share in    
Leather-Chem (Pty) Ltd effective 1 July 2007 for R 15 million, payable as to    
R3,75 million in Rolfes shares and R11,25 million in cash. The acquisition will 
improve the technology base and production capacity, adding specialised product 
lines and new customers, and should result in an increased market share for the 
pigment division.                                                               
ROLFES CHEMICALS                                                                
Turnover increased by 49,2% to R 49,5 million (December 2006: R 33, 2 million). 
The company achieved a gross profit margin of 9, 8% (December 2006: 20, 3%; June
2007: 14, 7%). If the proceeds from the loss of profit insurance claim is       
accounted for as part of gross profit and not under other income, the gross     
profit margin will be 13,7%. The effect of the explosion in the Alberton plant  
during April 2007 continued its effect on gross profits during the period under 
review due to lower than expected business, increased costs of manufacturing and
products bought-in at higher costs. The plant was back into full production     
during August 2007. Management expects the gross profit margin to increase above
15% during the period to June 2008. The increase in turnover was as a result of 
increased sales across the board on all products manufactured, together with a  
modest contribution by the solvents and speciality chemicals distribution unit. 
As announced on 26 September 2007 on SENS, the resin manufacturing activities   
has been expanded to Kwazulu Natal. The new facilities are rented on a five year
lease basis with the option to extend for a further five years. Minimal capital 
investment was required to bring the plant into full operation. It is expected  
that full production capacity at this facility will be achieved by April 2008.  
Hence, the full financial contribution from the new plant will only be visible  
during the financial year ending 30 June 2009.                                  
ROLFES SILICA                                                                   
Turnover increased by 20.4% to R 20, 6 million (December 2006: R 17, 1 million).
The company achieved a gross profit margin of 37, 6% (December 2006: 23, 4 %;   
June 2007: 32, 0%). The increase in turnover is as a result of an increase in   
production and a change in the product mix, with more higher value silica fine  
products being sold. The change in product mix, certain capital expenditure and 
improved cost management during the period under review, have increased         
efficiencies significantly, resulting in vastly improved GP%. However, equipment
breakdowns and unfavourable weather conditions have had some negative effect on 
the operations results.                                                         
Human Resources                                                                 
The group continues to employ historically disadvantaged individuals with the   
specific aim to train them into skilled positions. During 2007 the group has    
employed an aggressive management bonus incentive scheme to retain and          
incentivise senior management for optimal performance. This scheme will continue
for this financial year and into the future.                                    
Black Economic Empowerment                                                      
25, 1% of Rolfes` shareholding is black-controlled and 70% of all staff members 
are black. We will continue to improve our employment equity ratios, especially 
in the middle to top management levels. The company is in the process of        
obtaining a formal BEE rating as measured in accordance with the Broad Based    
Black Economic Empowerment Act.                                                 
Market Conditions and Prospects                                                 
During the period under review we experienced a continuation of large increases 
in the prices of all raw materials (imported and local) across the board. The   
various operations were predominantly able to increase selling prices to        
customers due to spiralling raw material costs, and therefore maintaining gross 
margins. The performance of Rolfes Europe for the six months to December 2007   
displayed a further significant increase in export business into Europe as a    
result of continued brand awareness initiatives.                                
With the global spiralling metal, crude oil and other raw material prices,      
increased through-put in our manufacturing plants resulting in lower local      
product conversion costs for the group, and the weakening rand, should not only 
improve our competitiveness in the local market against the importers of        
finished goods, but also in the European market. Furthermore, the change in and 
enforcement of labour and environmental laws in China and India, and therefore  
increasing their manufacturing costs, should in the long term benefit the local 
manufacturers competitiveness.                                                  
The slow-down in the residential and commercial development construction market 
due to interest rate hikes and the National Credit Act as well as electricity   
shortages may have some effect on future growth. However, government`s continued
investment into the economy as is evident from the recent budget speech, and the
group`s existing product and market diversification within its product range,   
will ensure future growth. As a group we will continue to benefit from          
governments investment into infrastructural development but are not totally     
reliant thereon.                                                                
Management is confident that it will achieve as a minimum the 2008 forecast     
profit after taxation of R25,5 million, as per the company prospectus, dated 9  
May 2007.                                                                       
Corporate Activity                                                              
Following on the acquisitions as mentioned above, the group will continue to    
have an aggressive acquisition policy. Management is constantly in the process  
of screening and evaluating a number of acquisition targets. The targets focused
on, are operations with intellectual capital, high barriers to entry, and which 
are complementary to the existing operations of the group.                      
Corporate Governance                                                            
The group recognises the need to conduct its business with integrity,           
transparency and equal opportunity and subscribes to the spirit of good         
corporate governance.                                                           
Board of Directors                                                              
There has been no change to the Board of Directors for the period under review. 
Subsequent Events                                                               
No events material to the understanding of the report have occurred in the      
period between the period-end date and the date of the report.                  
For and on behalf of the Board                                                  
BT Ngcuka                      E van der Merwe                                  
Chairman                       Chief Executive Officer                          
Midrand                                                                         
26 February 2008                                                                
Registered office:                                                              
The Summit, 269 16th Road, Randjiespark, Midrand                                
Transfer Secretaries: Computershare Investor Services 2004 (Pty) Limited, 70    
Marshall Street, Johannesburg 2001                                              
Directors: BT Ngcuka* (Chairman), E van der Merwe (Chief Executive Officer), L  
Dyosi*, AJ Fourie*, AJ Greeff (Financial Director) *Non-executive               
Designated advisor: PSG Capital (Pty) Limited                                   
Registered auditors: BDO Spencer Steward (Jhb) Incorporated                     
Date: 26/02/2008 07:05:02 Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                             .                  
The SENS service is an information dissemination service administered by the    
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or            
implicitly, represent, warrant or in any way guarantee the truth, accuracy or   
completeness of the information published on SENS. The JSE, their officers,     
employees and agents accept no liability for (or in respect of) any direct,     
indirect, incidental or consequential loss or damage of any kind or nature,     
howsoever arising, from the use of SENS or the use of, or reliance on,          
information disseminated through SENS.                                          



                                        
Email this JSE Sens Item to a Friend.

Send e-mail to
© 2017 SHARENET (PTY) Ltd, Cape Town, South Africa
Home     Terms & conditions    Privacy Policy
    Security Notice    Contact Details
Market Statistics are calculated by Sharenet and are therefore not the official JSE Market Statistics. The calculation/derivation may include underlying JSE data.