Go Back Email this Link to a friend


Rlf - Rolfes - Unaudited Consolidated Condensed Interim Results For The Six

Release Date: 23/02/2011 07:05:44      Code(s): RLF
RLF - Rolfes - Unaudited consolidated condensed interim results for the six     
months ended 31 December 2010 and dividend declaration                          
ROLFES TECHNOLOGY HOLDINGS LIMITED                                              
(Registration number 2000/002715/06)                                            
Share Code: RLF                                                                 
ISIN: ZAE000096202                                                              
("Rolfes" or "the Group" or "the company")                                      
UNAUDITED CONSOLIDATED CONDENSED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31    
DECEMBER 2010 AND DIVIDEND DECLARATION                                          
Highlights                                                                      
* Turnover increased by 18,2% to R228,7 million                                 
* Headline earnings increased by 8,0% to 14,9 cents per share                   
* Long term debt reduced by R9,9 million since June 2010                        
* Dividends of R10,4 million paid to shareholders since December 2009           
* Net Asset value per share increased to 145,2 cents per share from 135,4 cents 
per share                                                                       
CONDENSED STATEMENT OF COMPREHENSIVE INCOME                                     
for the period ended 31 December 2010                                           
                         UNAUDITED      UNAUDITED       AUDITED                 
SIX MONTHS     SIX MONTHS          YEAR                 
                            31 DEC         31 DEC       30 JUNE                 
                              2010           2009          2010                 
                             R`000          R`000         R`000                 
Revenue                     228 680        193 438       369 029                
Cost of sales              (186 180)      (151 142)     (291 372)               
Gross profit                 42 500         42 296        77 657                
Gross profit margin            18,6%          21,9%         21,0%               
Other operating income        1 286            884           907                
Operating expenses          (19 747)       (21 117)      (40 289)               
Operating profit before                                                         
Interest                     24 039         22 063        38 275                
Operating profit percentage    10,5%          11,4%         10,4%               
Interest paid and finance                                                       
Charges                      (2 173)        (2 258)       (4 861)               
Income from investments           -              -            11                
Net profit before taxation   21 866         19 805        33 425                
Tax expenses                 (6 584)        (5 536)       (9 572)               
Total comprehensive income                                                      
for the period               15 282         14 269        23 853                
Attributable to:                                                                
Equity holders of parent     15 282         14 269        23 853                
Attributable to:                                                                
Continuing operations        15 282          14 269        23 853               
Reconciliation of headline                                                      
earnings                                                                        
Attributable profit          15 282         14 269        23 853                
Adjustment for the after-tax                                                    
effect of:                                                                      
Loss/(gain) from sale of                                                        
fixed asset                      87            (9)            8                 
Headline earnings            15 369         14 260        23 861                
Weighted average number of                                                      
shares in issue (`000)      102 968        103 255       102 968                
Earnings per share (cents)                                                      
- Basic                        14,8           13,8          23,2                
- Headline                     14,9           13,8          23,2                
- Diluted                      14,8           13,8          23,2                
- Diluted headline             14,9           13,8          23,2                
CONDENSED STATEMENT OF FINANCIAL POSITION                                       
as at 31 December 2010                                                          
                         UNAUDITED      UNAUDITED       AUDITED                 
                            31 DEC         31 DEC       30 JUNE                 
                             2010            2009          2010                 
R`000          R`000         R`000                 
ASSETS                                                                          
Non-current assets           98 426        105 327        98 594                
Plant and equipment          38 306         39 792        38 296                
Property                     27 762         27 430       27 726                 
Investments - Current             -            411             -                
Intangible assets            32 358         37 696        32 572                
Current assets              157 554        130 813       144 616                
Inventories                  80 427         68 639        77 718                
Trade and other receivables  74 036         61 470        60 771                
Financial asset                 573            493             -                
Cash and cash equivalents         -              -         6 127                
Tax asset                         -            211             -                
Value Added Tax asset         2 518              -             -                
Total assets                255 980        236 142       243 210                
EQUITY AND LIABILITIES                                                          
Capital and reserves        150 422        135 916       140 320                
Share capital                 1 036          1 036         1 036                
Share premium                28 603         28 603        28 603                
Treasury shares                (868)          (635)         (868)               
Retained income             121 651        106 912       111 549                
Non-current liabilities      25 015         32 493        25 487                
Interest-bearing                                                                
Liabilities                  12 093         23 562        15 315                
Deferred tax liability        9 691          5 795         7 036                
Provisions                    3 231          3 136         3 136                
Current liabilities          80 543         67 733        77 403                
Trade and other payables     59 316         44 652        60 617                
Cash and cash equivalents    11 983          3 293             -                
Current portion of                                                              
interest-bearing liabilities  7 373          6 016         8 825                
Current portion of                                                              
vendor loan                       -         13 073         5 220                
Financial liability               -              -           100                
Value Added Tax liability         -            409           932                
Tax liability                 1 226              -         1 239                
Provisions                      645            290           470                
Total equity and                                                                
Liabilities                 255 980        236 142       243 210                
Number of shares in                                                             
issue (`000)                103 609        103 609       103 609                
Net Asset Value per                                                             
share (cents)                 145,2          131,2         135,4                
Net Tangible Asset Value                                                        
per share (cents)             114,0           94,8         104,0                
CONDENSED CONSOLIDATED GROUP STATEMENTS OF CHANGES IN EQUITY                    
for the period ended 31 December 2010                                           
                   Ordinary   Share Retained Treasury     Total                 
shares   premium   income   shares    equity                 
                    R`000     R`000    R`000    R`000     R`000                 
Balance at                                                                      
30 June 2009         1 036    28 603   92 643     (635)  121 647                
Net profit for the                                                              
Period                   -         -   14 269        -    14 269                
Balance at                                                                      
31 December 2009     1 036    28 603  106 912     (635)  135 916                
Net profit for the                                                              
Period                   -         -    9 584        -     9 584                
Reallocation of fair                                                            
Value                    -         -      233     (233)        -                
Dividends paid           -         -   (5 180)       -    (5 180)               
Balance at                                                                      
30 June 2010         1 036    28 603  111 549     (868)  140 320                
Net profit for the                                                              
Period                   -         -   15 282        -    15 282                
Dividends paid           -         -   (5 180)       -    (5 180)               
Balance at                                                                      
31 December 2010     1 036    28 603  121 651     (868)  150 422                
UNAUDITED      UNAUDITED       AUDITED                 
                        SIX MONTHS     SIX MONTHS          YEAR                 
                            31 DEC         31 DEC       30 JUNE                 
                              2010           2009          2010                 
R`000          R`000         R`000                 
Cash flow generated from                                                        
operating activities          4 806         20 509        47 938                
Finance income                    -              4            11                
Finance cost                 (2 173)        (2 262)       (4 861)               
Taxation paid                (3 971)        (1 464)       (4 143)               
Dividends paid               (5 180)             -        (5 180)               
Cash flow (utilised in)/                                                        
generated from                                                                  
investing activities         (3 416)        (1 485)        4 378                
Cash flow utilised in                                                           
financing activities         (8 176)       (18 947)      (32 368)               
Cash (shortfall)/ surplus                                                       
for the period              (18 110)        (3 645)        5 775                
Cash and cash equivalents                                                       
- beginning of the period     6 127            352           352                
Cash and cash equivalents                                                       
- end of the period         (11 983)        (3 293)        6 127                
SEGMENTAL ANALYSIS                                                              
                           Operating   Net                   Liabi-             
Revenue   Profit       Profit      Assets    lities             
                  R`000    R`000       R`000       R`000     R`000              
2010 - for the                                                                  
six months ended                                                                
31 December                                                                     
Chemicals         66 304    5 747     3 597      58 479    57 592               
Silica            16 799    3 270     2 245      53 273    30 756               
Pigments         144 404   16 141    11 010     132 136    60 241               
Other              1 173   (1 119)    (1570)     72 647    20 348               
Elimination                                                                     
of intergroup                                                                   
items                  -        -         -     (59 668)   (63379)              
Total            228 680   24 039    15 282     255 980   105 558               
                          Operating    Net                   Liabi-             
                Revenue   Profit       Profit      Assets    lities             
                  R`000    R`000       R`000       R`000     R`000              
2009 - for the                                                                  
six months ended                                                                
31 December                                                                     
Chemicals         48 522    4 977     3 710      73 330    76 676               
Silica            19 732    4 157     2 989      51 832    32 523               
Pigments         123 929   15 849    11 417     138 033    79 314               
Other              1 255   (2 920)   (3 847)    281 472    38 796               
Elimination                                                                     
of intergroup                                                                   
items                  -        -         -    (308 525) (127 083)              
Total            193 438   22 063    14 269     236 142   100 226               
                              Operating   Net                  Liabi-           
Revenue     Profit      Profit     Assets    lities           
                  R`000       R`000       R`000      R`000     R`000            
2010 - for the                                                                  
twelve months ended                                                             
30 June                                                                         
Chemicals         99 968    7 676     5 805     61 876     54 490               
Silica            37 418    7 618     5 348     49 349     27 823               
Pigments         229 558   25 637    19 174    113 569     45 705               
Other              2 085   (2 656)   (6 474)    42 649       (894)              
Elimination of                                                                  
intergroup                                                                      
items and other        -        -         -    (24 233)   (24 234)              
Total            369 029   38 275    23 853    243 210    102 890               
The basis of preparation of the segmental analysis includes certain intercompany
transactions (excluding management fees) being eliminated in the respective     
segmental results in the current and previous period`s reporting.               
COMMENTARY                                                                      
Nature of business                                                              
Rolfes manufactures, buys-in and distributes a wide range of market-leading,    
high-quality products through various divisions to diverse industries including 
the coatings, plastics, vinyl, leather, ink, metallurgical, water filtration,   
fertilizer, cleaning, automotive, general chemicals and construction industries.
Rolfes Colour Pigments is responsible for the distribution of resins,           
dispersions, organic and inorganic pigments, pigments pastes, additives and     
dyes. Solvents, lacquer thinners, creosotes, waxes and specialty chemicals are  
distributed through Rolfes Chemicals, while Rolfes Silica distributes pure      
beneficiated silica.                                                            
Brief overview                                                                  
Group performance was enhanced by the excellent performance of the Chemicals    
business, supported by significant growth in the resins and dispersions product 
groups incorporated in the Pigments business. Although market conditions        
remained difficult, the Group managed to excel and deliver on most expected     
targets. Group revenue growth of 18,2% was counteracted by increased raw        
material prices,significant energy and to a certain extent labour costs, and    
lower buy-in margin business, resulting in a 3% reduction in Group gross profit 
margins. Achievements include overhead cost reduction, a slight reduction in    
interest paid, reduction in Group debt (including settling the final payment for
the Triangle Solvent acquisition in cash) and dividends paid to shareholders    
from cash resources, all of which supports the Group`s continued strong         
financial position.Overall market share was sustained, with exports growing by  
43,0 % if compared to December 2009, now comprising 12,4% of Group turnover.    
Rolfes exports mainly to Europe and Africa.                                     
Rolfes has a solid reputation and positive brand perception locally and         
internationally.Opportunities in both the local and international markets are   
still available. Regular strategy review ensures relevance and assists with     
maximising growth and expansion prospects. Proactive measures ensure that we    
remain competitive in light of fierce competition from China and India in the   
buoyant African market with the Group consistently focussing on increasing      
market share and expanding the product basket.  We look forward to the European 
economic recovery already noted in Germany. Chinese market input costs are      
increasing due to economic pressures experienced from labour, energy and        
environmental factors which bodes well for the Group`s manufacturing operations 
in terms of exports to Europe and the rest of Africa.                           
We are dedicated to growing our business through expansion of product offerings 
to the local and international markets as well as through the pursuit of new    
acquisitions in the agricultural chemicals, mining chemicals and other chemicals
sectors.                                                                        
Group financial performance                                                     
Profit growth for the six months under review amounted to 7,1% to R15,3 million 
(Dec 2009: R14,3 million). The business operated in a recessionary local and    
international economic environment. Group revenue increased by 18,2% to R228,7  
million (Dec 2009: R193,4 million) with top line growth in both the Pigments    
(16,5%) and the Chemicals (36,7%) businesses. Gross profit margins were under   
pressure and declined to 18,6% (2009: 21,9%) primarily for reasons mentioned    
above. Operating profit increased by 9,0% to R24,0 million (2009: R22,1 million)
with operating expenses reducing by 6,5% primarily due to the bad debt          
provisions for December 2010 being significantly lower than in December 2009. As
a result, headline earnings increased by 7,8% to R15,4 million (2009: R14,3     
million). Fully diluted headline earnings per share are 14,9 cents per share    
(2009: 13,8 cents per share), an increase of 8,0% over December 2009.           
Group liquidity and solvency ratios improved from June 2010 with the total net  
asset value increasing to R150,4 million (June 2010: R140.3 million). The net   
asset value per share improved to 145,2 cents per share (June 2010: 135,4 cents 
per share) while net tangible asset value per share increased to 114,0 cents per
share (June 2010: 104,0 cents per share).                                       
Interest cover increased to 11,1 times (Dec 2009: 9,8 times) with the total debt
(interest-bearing) equity ratio at 0,23 for December 2010. The favourable       
increase in interest cover is due to the Group`s ability to increase operating  
profits.                                                                        
The Group incurred capital expenditure of R2,6 million (Dec 2009: R1,5 million),
spent mainly to expand manufacturing and distribution capability at the         
Chemicals business to support local and export market growth and upgrading of   
facilities at the Silica business.                                              
Group cash flow                                                                 
The Group settled the final cash payment for the Triangle Solvent acquisition of
R5,2 million as well as paying cash dividends of R5,2 million during October    
2010 (excluding STC) to shareholders, all from current cash resources.          
Cash generated from operations amounted to a disappointing R4,8 million (Dec    
2009: R20,5 million) for the period. The increase in net working capital        
investment during the six months to December 2010 of R20,8 million, represents  
an increase in inventory and accounts receivable of R2,7 million and R13,3      
million respectively, and a decrease in accounts payable and value added tax of 
R4,8 million.The main reason for the reduction in creditors finance was due to a
temporary reduction in credit terms of certain key overseas Pigments suppliers  
to facilitate market demand of a certain key imported product. Debt collection  
for December 2010 was also slower than anticipated, however the quality of the  
debtors book remains strong. Both the inventory and accounts receivable         
investment supported export trading and manufacturing activities with debt      
collection days on exports ranging between 90 and 120 days. Debtors` days       
reduced to 51 days (June 2010: 53 days), while stock days reduced to 78 days    
(June 2010: 97 days) and creditor days reduced to 50 days (June 2010: 67 days). 
The lower than expected cash flow position as at the end of December 2010 due to
slow debtors collections and shortened creditor terms, was temporarily in nature
and has since been normalised.                                                  
Operational review                                                              
Rolfes Colour Pigments                                                          
Increased activities on certain imported and manufactured product lines resulted
in turnover growth of 16,5% to R144,4 million (Dec 2009: R123,9 million).Resins 
turnover growth of 28,4% was mostly market share growth while dispersions       
turnover growth of 34,2% was attributable to volume demand and market share     
gain. Other areas of significant growth include titanium dioxide, organic       
pigments, offset by an expected decline in lead chrome pigment sales. African   
exports also showed significant growth, albeit from a low base.                 
The division`s gross profit margin decreased to 18,3% (2009: 22,4%) due to      
increased activities on buy-in products at lower margins, influenced further by 
increased prices on certain metals and crude product raw materials, and very    
high energy cost increases placed additional pressure on gross profit           
performance. The resins margins remained low as a result of increased raw       
material costs and market price pressure.                                       
Operating expenses reduced by 10,2% primarily due to a large debtor write-off in
December 2009.                                                                  
Capital expenditure incurred amounted to R0,3 million (2009: R0,4 million) to   
improve production capability to support export market demand.                  
The business unit expects further increases in export and buy-in sales          
activities, especially into Europe and Africa. Prospects include expansion into 
local and international market sectors with the new organic and other buy-in    
product offerings, with further growth expected in the resin and dispersions    
product ranges.                                                                 
Rolfes Chemicals                                                                
Turnover increased by 36,7% to R66,3 million (2009: R48,5 million) primarily as 
a result of increased volumes on most product lines and a positive market       
response to a wider product offering. Oil prices somewhat increased over the    
period under review, but had little impact on pricing. Imported solvent and     
speciality chemicals product lines contributed to the performance with          
anticipated volume targets being met and in some cases exceeded. Market share   
increased in both Gauteng and the Western Cape with Rolfes Chemicals remaining a
leading player in the Gauteng solvents market.Exports into Africa increased     
exponentially during the period under review, albeit from a low base.           
Increasing market share in Gauteng, Africa and the Western Cape resulted in the 
slight reduction of 1,0% in gross profit margins from 15,1% in December 2009 to 
14,1% in December 2010.                                                         
Operating expenses increased by 56,8 % mainly due to increased employment costs,
and expansion costs into the Western Cape.                                      
Capital expenditure amounted to R1,1 million (2009: R0,01 million), the majority
spend being on expanding and improvement of both logistics capacity and         
manufacturing facilities as well as IT system upgrades.                         
Volumes are expected to increase with the new expansion into Kwa-Zulu Natal,    
further African export growth and the Western Cape performing to expectation    
while new product offerings in particular speciality chemicals, providing firm  
prospects for upcoming growth. As the crude oil price increases, solvent        
purchasing and selling prices will increase.                                    
Rolfes Silica                                                                   
Turnover declined by 14,9% to R16,8 million (2009: R19,7 million). Volume demand
for fines increased by 5,9% while the demand for aggregates reduced by 13,5%    
undoubtedly due to the recessionary environment resulting in reduced product    
demand by the government infrastructural, construction and building industry.   
Market share was maintained with a wider customer base growth but lower demand  
by larger aggregate customers negatively influenced the results to date.        
Gross profit margins at 32,9 % (2009: 30,0%) increased as a result of increased 
production efficiencies by matching production levels to demand. Capital        
expenditure incurred amounted to R1,2 million (2009: R0,8 million) and remains  
high due to the nature of the business, and is incurred to ensure mainly        
compliance to safety, security and DMR regulations, and upgrading certain       
equipment and housing.                                                          
The economy is expected to improve in the 2011 financial year in particular the 
building and construction markets. Strategic emphasis remains on local          
opportunities with particular focus on the metallurgical sector.                
Dividends                                                                       
The Group paid dividends to shareholders of 5 cents per share in both March and 
October 2010.  The Group will continue rewarding shareholders and the directors 
have therefore declared an interim dividend for the six months ended 31 December
2010, of 5 cents per share payable to shareholders on 22 March 2011.            
The salient dates of the dividend payment are as follows:                       
                                                2011                            
Last date to trade "cum" the dividend            Friday, 11 March               
Shares to commence trading "ex" the dividend     Monday, 14 March               
Record date                                      Friday, 18 March               
Payment date                                     Tuesday, 22 March              
Share certificates may not be dematerialised or rematerialised between Monday,  
14 March 2011 and Friday, 18 March 2011, both days inclusive.                   
Corporate governance and sustainability                                         
The Group recognises the recommendations of King III and remains committed to   
sound corporate governance and sustainability practices.                        
Basis of preparation                                                            
The Board acknowledges its responsibility for the preparation of the interim    
condensed consolidated financial statements. The interim condensed consolidated 
financial statements for the six months ended 31 December 2010 has been prepared
in accordance with and containing the information required by IAS 34: Interim   
Financial Reporting, as well as the AC 500 standards as issued by the Accounting
Practices Board or its successor.                                               
Market Conditions and Prospects                                                 
None of the market conditions and prospects information contained in this       
announcement have been reviewed or reported on by Rolfes` auditors.             
Accounting policies                                                             
The accounting policies adopted in the preparation of the interim condensed     
consolidated financial statements comply with IFRS and is consistent with those 
applied in the preparation of the annual financial statements for the year ended
30 June 2010.                                                                   
For and on behalf of the Board                                                  
BT Ngcuka                                E van der Merwe                        
Chairman                                 Chief Executive Officer                
23 February 2011                                                                
Midrand                                                                         
Company secretary:                                                              
J Schlebusch                                                                    
Registered office:                                                              
The Summit, 269 16th Road, Randjespark, Midrand                                 
Transfer Secretaries:                                                           
Computershare Investor Services (Proprietary) Limited, 70 Marshall Street,      
Johannesburg 2001                                                               
Directors:                                                                      
BT Ngcuka* (Chairman), E van der Merwe (Chief Executive Officer), L Dyosi*, AJ  
Fourie*, L Lynch (Financial Director), KT Nondumo**, T Tshivhase**              
*Non-executive                                                                  
** Independent non-executive                                                    
Designated advisor:                                                             
Grindrod Bank Limited                                                           
Registered auditors:                                                            
BDO South Africa Inc.                                                           
www.rolfesza.com                                                                
Date: 23/02/2011 07:05:43 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.