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Spanjaard Limited - Condensed Group Audited Results For The Year Ended 28 February 2014

Release Date: 29/05/2014 07:05:00      Code(s): SPA     
Spanjaard Limited  
(Incorporated in the Republic of South Africa)
Registration number 1960/004393/06
Share code: SPA ISIN: ZAE000006938
("Company" or "Group")

CONDENSED GROUP AUDITED
RESULTS FOR THE YEAR ENDED
28 FEBRUARY 2014

CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND COMPREHENSIVE INCOME
                                                    Year ended    Year ended   
                                                   28 February   28 February   
                                                          2014          2013   
                                                                    Restated   
                                                         R'000         R'000   
Revenue                                                113 766       109 515   
Turnover                                               111 861       108 347   
Cost of sales                                         (72 109)      (65 303)   
Gross profit                                            39 752        43 044   
Operating expenses                                    (32 171)      (32 540)   
Depreciation and amortisation                          (2 569)       (2 660)   
Finance (cost)/income ? net                            (1 235)       (1 437)   
Profit before tax                                        3 777         6 407   
Income tax expense                                     (1 416)       (1 970)   
Profit from continuing operations                        2 361         4 437   
Discontinued operations                                                        
Profit from discontinued operations                         97         (402)   
Profit for the year                                      2 458         4 035   
Other comprehensive income                                                     
Items that will be reclassified                                                
Movement in foreign currency translation reserve            60         (508)   
Items that will not be reclassified                                            
Profit/(Loss) on revaluation on property,                                      
plant and equipment                                        459         (436)   
Tax effect                                                (85)             ?   
Total comprehensive income for the year                  2 892         3 091   
Earnings and diluted earnings per ordinary share          19,1          50,0   
?  Continuing operations                                  17,9          54,9   
?  Discontinued operations                                 1,2         (4,9)   

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                                                           As at         As at   
                                                     28 February   28 February   
                                                            2014          2013   
                                                                      Restated   
                                                           R'000         R'000   
Assets                                                                           
Non-current assets                                        30 160        35 755   
Property, plant and equipment                             28 800        34 237   
Goodwill                                                     437           437   
Intangibles                                                  923         1 081   
Current assets                                            39 022        36 220   
Non-current assets held for sale                           3 759             ?   
Total assets                                              72 941        71 975   
Equity and liabilities                                                           
Capital and reserves attributable to the Company's                               
equity holders                                            42 553        41 860   
Ordinary shares and premium                                6 871         6 871   
Reserves                                                  35 682        34 989   
Non-current liabilities                                    9 377        10 897   
Borrowings                                                 4 253         5 873   
Deferred tax liabilities                                   5 124         5 024   
Current liabilities                                       21 011        19 218   
Total equity and liabilities                              72 941        71 975   

CONSOLIDATED STATEMENT OF CASH FLOW
                                                        Year ended    Year ended   
                                                       28 February   28 February   
                                                              2014          2013   
                                                             R'000         R'000   
Cash flows from operating activities                       (3 018)         2 732   
Cash flows from investing activities                         1 093         1 811   
Cash flows from financing activities                       (1 616)       (2 703)   
Net (decrease)/increase in cash and cash equivalents       (3 541)         1 840   
Cash and cash equivalents at beginning of year               3 318         1 478   
Cash and cash equivalents at end of year                     (223)         3 318   

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                                     As at         As at   
                                               28 February   28 February   
                                                      2014          2013   
                                                     R'000         R'000   
Ordinary shares                                        407           407   
Share premium                                        6 464         6 464   
Foreign currency translation reserve                 (541)         (601)   
Opening balance                                      (601)          (93)   
Movement for the year                                   60         (508)   
Revaluation reserve                                  8 082         8 296   
Opening balance                                      8 296         9 630   
Movement for the year                                (214)       (1 334)   
Retained earnings                                   28 141        27 294   
Opening balance                                     27 294        24 397   
Total comprehensive income for the year                847         2 897   
Total shareholders' equity                          42 553        41 860   

DIVIDENDS                                                                  
Dividend declared per ordinary share (cents)                               
? interim                                             15,0          15,0   
? final                                               12,0          10,0   

SUPPLEMENTARY INFORMATION

                       Year ended    Year ended   
                      28 February   28 February   
                             2014          2013   
                            R'000         R'000   
Capital expenditure         2 210         1 536   

RECONCILIATION OF HEADLINE EARNINGS
                                                     Year ended    Year ended   
                                                    28 February   28 February   
                                                           2014          2013   
Continuing operations                                     R'000         R'000   
Profit attributable to shareholders                       2 361         4 437   
Loss on disposal of property, plant and equipment       (1 258)            51   
Income tax effect on disposal                               352          (14)   
Headline earnings                                         1 455         4 474   
Weighted average number of ordinary shares                                      
in issue ('000)                                           8 143         8 143   
Headline earnings per ordinary share                                            
?  basic and diluted (cents)                               17,9          54,9   
Discontinued operations                                                         
Profit attributable to shareholders                          97         (402)   
Headline earnings                                            97         (402)   
Weighted average number of ordinary shares                                      
in issue ('000)                                           8 143         8 143   
Headline earnings per ordinary share                                            
?  basic and diluted (cents)                                1,2         (4,9)   

OPERATING SEGMENTS
                                                   Year ended    Year ended   
                                                  28 February   28 February   
                                                         2014          2013   
                                                        R'000         R'000   
Segment revenue                                                               
Special lubricants and allied chemical products       106 864       103 404   
External foreign customers                             18 076        13 780   
External local customers                               88 788        89 624   
Metal powders                                           6 675         8 551   
External foreign customers                              3 572         4 636   
External local customers                                3 103         3 915   
Other                                                   3 750         3 011   
External foreign customers                              3 750         3 011   
Reconciling items                                     (5 428)       (6 619)   
Inter segment sales                                   (5 428)       (6 619)   
                                                      111 861       108 347   

OPERATING SEGMENTS (continued)
                                                   Year ended    Year ended   
                                                  28 February   28 February   
                                                         2014          2013   
                                                        R'000         R'000   
Segment result                                                                
Special lubricants and allied chemical products         2 862         4 105   
Metal powders                                           1 249           419   
Other                                                      12       (1 192)   
Reconciling items                                         889         4 512   
                                                        5 012         7 844   
Segment assets                                                                
Special lubricants and allied chemical products        57 762        50 312   
Metal powders                                          11 558         9 951   
Other                                                  25 193        24 790   
Reconciling items                                    (21 572)      (13 078)   
                                                       72 941        71 975   
Segment liabilities                                                           
Special lubricants and allied chemical products        29 395        21 602   
Metal powders                                           1 896         1 702   
Other                                                  20 720        18 329   
Reconciling items                                    (21 623)      (11 518)   
                                                       30 388        30 115   

BASIS OF PREPARATION
The audited condensed consolidated results have been prepared using the measurement and
recognition requirements of the International Financial Reporting Standards (IFRS), the South
African Institute of Chartered Accountants (SAICA) Financial Reporting Guides as issued by the
Accounting Practices Committee and in the manner required by the South African Companies
Act, 71 of 2008. The accounting policies and methods of computation are consistent with those
of the Annual Financial Statements. This abridged report is extracted from audited financial
information but is not itself audited. The directors take full responsibility for the preparation of
the abridged report and that the financial information has been correctly extracted from the
underlying financial statements.

The condensed financial statements should be read in conjunction with the 2014 financial
statements. The 2014 annual financial statements and the related audit report can be viewed on
the Company's website at www.spanjaard.biz.

The annual financial statements, on which this report is based, were audited in terms of the
Companies Act, 71 of 2008.

Condensed group audited results prepared by: HJ van Heerden ? BCom (Acc).

Condensed group audited results date of publication ? 29 May 2014.

COMMENTARY

POINTS OF INTEREST

- Net asset value increased from 514,1 cents to 522,6 cents
  per ordinary share
- Total gross cash dividend declared for the 2014 financial year
  totalled 27 cents (2013: 25 cents)

This year we faced some important financial and operational challenges.

The high increases in energy, labour and fuel costs continue to negatively impact
manufacturing industries leading to a decline in our gross margin.

The Group reported a profit after tax of R2 458 million (2013: R4 035 million) for the
financial year ended 28 February 2014 with headline earnings per share (HEPS)
amounting to 19,1 cents per share (2013: 50 cents).

There were two significant non-recurring events during the financial year under review
resulting in a 62% decrease in HEPS and also contributing to a 30% decline in the Special
Lubricants segment's profit:

- The weakening of the Rand against all other major currencies lead to us incurring a
  R1,3 million loss on a Foreign Exchange Contract confirmed during April 2013;
- A discrepancy in actual meter readings with City of Johannesburg resulted in an
  additional un-provided-for amount of R1,2 million.

During the second half of the year the property in Slip Products (SA) (Pty) Limited,
together with the melting operations in Coppermet (Pty) Limited and Bronzmet (Pty)
Limited, was sold to Rand Refinery (Pty) Limited for the amount of R6,35 million. This
transaction resulted in a 22% decrease in turnover and a 198% increase in profit of the
metal powders segment. The property transfer is expected to take place in the 2015
financial year with a cash inflow of R3,3 million and is therefore classified as non-current
assets held for sale.

The net decrease in cash and cash equivalents were due to the following:

- Increase of 44% in capital expenditure due to the acquisition of the new ERP software;
- Increase in working capital;
- Repayment of mortgage bond.

In the Specialised Lubricants and Allied Chemicals segment, the Industrial division's sales
increased marginally, whilst the Consumer/Automotive division showed a 4% increase in
sales. The International division benefited from the sharp weakening of the Rand towards
the end of the financial year. A strong focus on our European markets increased sales by
25% in our subsidiary Spanjaard EU BV.

DIVIDENDS 

Dividend No. 25 of 12 (twelve) cents per ordinary share was declared on 25 February 2014 for 
the year ended 28 February 2014.

The dividend was subject to the Dividends Tax that was introduced with effect from 1 April 2012. 
In accordance with the provisions of the Listings Requirements of the Johannesburg Stock Exchange, 
the following additional information was disclosed:

- the dividend was declared out of profits available for distribution;
- the local Dividends Tax rate was 15%;
- the gross local dividend amount was 12 cents per share for shareholders exempt from Dividends Tax;
- no Secondary Tax on Companies? credits was utilised;
- the net local dividend amount was 10,2 cents per share for shareholders liable for Dividends Tax;
- Spanjaard has 8 142 850 ordinary shares in issue;
- Spanjaard?s income tax reference number is 9543 676 84 6.

The following dates were applicable to the dividend:

The last date to trade in order to be eligible for the dividend was Friday, 16 May 2014.
Shares traded ex-dividend from Monday, 19 May 2014.

The record date was Friday, 23 May 2014 and payment was made on Monday, 
26 May 2014.

Share certificates were not able to be dematerialised/rematerialised between Monday, 
19 May 2014 and Friday, 23 May 2014, both days inclusive.

AUDIT OPINION
Mazars Inc. have audited the annual financial statements for the year ended
28 February 2014 from which this report is extracted and their unqualified audit report
is available for inspection at the Company's registered office.

NOTICE OF ANNUAL GENERAL MEETING AND PUBLICATION OF ANNUAL
REPORT

Shareholders are advised that:

- the Annual General Meeting of the Company ("the AGM") will be held at 12:00 on
  Monday, 21 July 2014 at The Wanderers Club, 21 North Road, Illovo, Johannesburg;
- the annual report, incorporating a notice convening the AGM, is available on the
  website of the Company at www.spanjaard.biz and will be distributed to shareholders
  on Monday, 2 June 2014.

By order of the Board

Ms SF Venter
Company Secretary

29 May 2014

Directors:
RJW Spanjaard (Executive Chairman)
Ms E Nepgen (Managing Director)
GF Cort
Mrs S Hari*
BL Montgomery*
CKT Palmer
Prof DP van der Nest*
HJ van Heerden (Financial Director)
*Independent Non-executive

Registered office:
748 ? 750 Fifth Street, Wynberg, Sandton, 2090

Transfer Secretaries:
Computershare Investor Services Proprietary Limited
70 Marshall Street, Johannesburg, 2001

Sponsor:
Arcay Moela Sponsors Proprietary Limited
Ground Floor, ONE Health Building
Woodmead North Office Park, 54 Maxwell Drive, Woodmead

Email: info@spanjaard.biz

Website: www.spanjaard.biz


Date: 29/05/2014 07:05:00 Supplied by www.sharenet.co.za                     
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