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Spanjaard Limited - Unaudited Interim Group Results For The Six Months Ended 31 August 2014 And Declaration Of Dividend

Release Date: 31/10/2014 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")

UNAUDITED INTERIM GROUP RESULTS
FOR THE SIX MONTHS ENDED
31 AUGUST 2014 AND
DECLARATION OF DIVIDEND

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                                   Six months to      Six months to   
                                                       31 August          31 August   
                                                            2014               2013   
                                                           R'000              R'000   
Revenue                                                   58 982             58 310   
Turnover                                                  57 993             56 890   
Cost of sales                                            (37 501)           (37 165)   
Gross profit                                              20 492             19 725   
Operating expenses                                       (17 996)           (15 503)   
Depreciation and amortisation                             (1 026)            (1 255)   
Profit from operations                                     1 470              2 967   
Finance (cost)/income ? net                                 (558)              (519)   
Profit before tax                                            912              2 448   
Income tax expense                                           313               (788)   
Profit                                                     1 225              1 660   
Other comprehensive income                                                         
Movement in foreign currency translation reserve             (57)                30   
Total comprehensive income for the six months              1 168              1 690   
Earnings per ordinary share                                                        
? basic and diluted (cents)                                 15,0               20,4   

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                                                   Six months to   Twelve months to   
                                                       31 August        28 February   
                                                            2014               2014   
                                                           R'000              R'000   
Assets                                                                
Non-current assets                                        30 429             30 160   
Property, plant and equipment                             28 998             28 800   
Goodwill                                                     437                437   
Intangibles                                                  994                923   
Current assets                                            51 157             39 022   
Non-current assets held for sale                               ?              3 759   
Total assets                                              81 586             72 941   
Equity and liabilities                                                
Total shareholders' equity                                45 626             42 553   
Ordinary shares and premium                                6 871              6 871   
Reserves                                                  38 755             35 682   
Non-current liabilities                                    8 656              9 377   
Borrowings                                                 4 627              4 253   
Deferred tax liabilities                                   4 029              5 124   
Current liabilities                                       27 304             21 011   
Total equity and liabilities                              81 586             72 941   
Net asset value per share                                  560,3              522,6   

CONSOLIDATED STATEMENT OF CASH FLOWS
                                                   Six months to      Six months to   
                                                       31 August          31 August   
                                                            2014               2013   
                                                           R'000              R'000   
Cash flows from operating activities                       2 325              1 394   
Cash flows from investing activities                      (2 262)            (1 776)   
Cash flows from financing activities                      (2 281)               (50)   
Net decrease in cash and cash equivalents                 (2 218)              (432)   
Cash and cash equivalents at beginning of year              (223)             3 318   
Cash and cash equivalents at end of year                  (2 441)             2 886   

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                                   Six months to      Six months to   
                                                       31 August          31 August   
                                                            2014               2013   
                                                           R'000              R'000   
Ordinary shares                                              407                407   
Share premium                                              6 464              6 464   
Foreign currency translation reserve                        (184)              (571)   
Opening balance                                             (541)               (93)   
Movement for the year                                        357               (478)   
Revaluation reserve                                        7 769              7 872   
Opening balance                                            8 082              9 630   
Movement for the year                                       (313)            (1 758)   
Retained earnings                                         30 366             28 158   
Opening balance                                           28 141             24 397   
Total comprehensive income for the year                    2 225              3 761   
Total shareholders' equity                                44 822             42 330   

DIVIDENDS

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

SUPPLEMENTARY INFORMATION
                                                   Six months to      Six months to   
                                                       31 August          31 August   
                                                            2014               2013   
                                                           R'000              R'000   
Capital expenditure                                        1 225              1 780   

OPERATING SEGMENTS
                                                   Six months to      Six months to   
                                                       31 August          31 August   
                                                            2014               2013   
                                                           R'000              R'000   
Segment revenue                                                           
Special lubricants and allied chemicals                   57 556             52 412   
External customers                                        11 299              6 334   
Local customers                                           46 257             46 078   
Lubricant powders/Metal powders                            3 962              7 000   
External customers                                         2 572              3 067   
Local customers                                            1 390              3 933   
Other                                                      2 543              1 203   
External customers                                         2 543              1 203   
Reconciling items                                         (6 068)            (3 725)   
External customers                                        (3 566)            (1 453)   
Local customers                                           (2 502)            (2 272)   
                                                          57 993             56 890   
Segment result                                                            
Special lubricants and allied chemicals                      348              1 708   
Lubricant powders/Metal powders                            1 051              1 294   
Other                                                        257                366   
Reconciling items                                           (186)              (401)   
                                                           1 470              2 967   
  
Segment assets                                                               
Special lubricants and allied chemicals                   66 375             57 762   
Lubricant powders/Metal powders                           13 388             11 558   
Other                                                     26 571             25 193   
Reconciling items                                        (24 748)           (21 572)   
                                                          81 586             72 941   
Segment liabilities                                                          
Special lubricants and allied chemicals                   37 712             29 395   
Lubricant powders/Metal powders                            3 370              1 896   
Other                                                     19 623             20 720   
Reconciling items                                        (24 745)           (21 623)   
                                                          35 960             30 388   
RECONCILIATION OF HEADLINE EARNINGS
                                                   Six months to      Six months to   
                                                       31 August          31 August   
                                                            2014               2013   
                                                           R'000              R'000   
Profit attributable to shareholders                        1 225              1 660   
Loss on disposal of property, plant and equipment            303                  ?   
Income tax effect on disposal                                (85)                 ?   
Headline earnings                                          1 443              1 660   
Weighted average number of ordinary shares                                          
in issue ('000)                                            8 143              8 143   
Headline earnings per ordinary share                                                
? basic and diluted (cents)                                 17,7               20,4   

BASIS OF PREPARATION

The condensed consolidated interim results have been prepared using the measurement and
recognition requirements of the International Financial Reporting Standards (IFRS) and the South
African Institute of Chartered Accountants (SAICA) Financial Reporting Guides as issued by the
Accounting Practices Committee, in accordance with IAS 34: Interim Financial Reporting and in
the manner required by the JSE Listings Requirements and the South African Companies Act,
No. 71 of 2008.

Accounting policies and methods of computation are consistently applied as in the 2014 audited
annual financial statements.

Condensed consolidated interim financial statements are prepared by: Financial Director
HJ van Heerden ? BCom (Acc).

Condensed consolidated interim financial statements date of publication ? 31 October 2014.

COMMENTARY

POINTS OF INTEREST

- Group turnover is up by nearly 2%.
- Interim gross cash dividend declared of 10 cents per share.
- Net asset value increased from 522,6 cents to 560,3 cents per share.

EXECUTIVE CHAIRMAN'S STATEMENT

We have exhibited at the Automechanika exhibition in Frankfurt since 1985. This biennial
event was very successful from a general point of view and as well as for Spanjaard, this year's
show boasted 4 631 exhibitors from 71 countries with more than 140 000 trade visitors from
173 countries. We believe the investment will provide us with a good return.

The turmoil in the mining industry has put our Industrial division's performance under pressure,
as we are an important supplier to several of the large platinum mining operations. On the other
hand, we have seen satisfactory growth in our South African Consumer/Automotive division.

The implementation of the new ERP system was completed during the first half of the year.
Though the implementation posed a challenge, we are confident that the new system will
improve the support of the operations.

The following items contributed to the increase in our operating expenses: effect of the weak
Rand on the cost of export freight which is quoted in US$; the imposition of the e-toll has
impacted our costs from our suppliers due to transport costs and the increase in our labour
costs as previously reported.

The sale of the Alrode property was completed during the first six months of this financial year
realising a loss of R303 000, on the revalued book value as at 28 February 2014.

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

- Increase in working capital;
- Increase in deposits also reflected in current assets.

There have been no material related party transactions during the period under review.

SEGMENTAL ANALYSIS

The Special Lubricants and Allied Chemicals division showed a slight increase in turnover.
The segment's profit is down due to increases in some of the manufacturing expenses. The
Industrial division expects to recoup some of the losses suffered during the mining strikes.
The international sales team is working extremely hard to make up for the growth that we did not
achieve during the first half of the year. We are optimistic that we will achieve a reasonably good
set of results for the second half of the year.

The decision during the 2014 financial year to dispose of part of the Lubricant Powders division
led to a 43% decrease in turnover. Through effective cost management, the division showed a
very satisfactory profit of R1,05 million.

INTERIM DIVIDEND

Notice is hereby given that Dividend No. 26 of 10 (ten) cents per ordinary share has been
declared for the six months ended 31 August 2014.

The dividend will be 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 is disclosed:

- the dividend has been declared out of profits available for distribution;
- the local Dividends Tax rate is 15%;
- the gross local dividend amount is 10 cents per share for shareholders exempt from Dividends
  Tax;
- no Secondary Tax on Companies' credits have been utilised;
- the net local dividend amount is 8,5 cents per share for shareholders liable for Dividends Tax;
- Spanjaard has 8 142 850 ordinary shares in issue; and
- Spanjaard's income tax reference number is 9543 676 84 6.

The following dates are applicable to the dividend:

The last date to trade in order to be eligible for the dividend will be Friday, 14 November 2014.
Shares will trade ex-dividend from Monday, 17 November 2014.

The record date will be Friday, 21 November 2014 and payment will be made on Monday,
24 November 2014.

Share certificates may not be dematerialised/rematerialised between Monday, 17 November 2014
and Friday, 21 November 2014, both days inclusive.

By order of the Board

Mrs SF Pitchford
Company Secretary

31 October 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

Sponsors
Arbor Capital Sponsors Proprietary Limited, 54 Maxwell Drive, Woodmead, 2191

Email: info@spanjaard.biz

Website: www.spanjaard.biz

Available in Afrikaans at the registered offices of Spanjaard Limited.
Date: 31/10/2014 07:05:00 Supplied by www.sharenet.co.za                     
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