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Delta Emd Limited - Audited Consolidated Results And Cash Dividend Declaration For The Year Ended 27 December 2015

Release Date: 22/02/2016 14:35:00      Code(s): DTA     
DELTA EMD LIMITED
Registration number: 1919/006020/06
Income tax number: 9375057719
Share code: DTA   ISIN: ZAE000132817
("Delta EMD" or "the Group")   

AUDITED CONSOLIDATED RESULTS AND CASH DIVIDEND DECLARATION
              FOR THE YEAR ENDED 27 DECEMBER 2015

SUMMARISED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                                                                                     Audited year to     Audited year to
                                                                                                            December            December
                                                                                                                2015                2014
                                                                                            Note               R'000               R'000
Revenue                                                                                                       15 211             283 922
Gross profit                                                                                                   2 988             119 671
Interest received                                                                                             13 223               6 859
Interest paid                                                                                                  (714)                   ?
Under recovery of manufacturing overheads                                                                          ?            (12 258)
Distribution expenses                                                                                        (1 465)            (25 668)
Administrative expenses                                                                                      (8 389)            (70 717)
Expenses related to shutdown of business                                                                    (42 217)           (175 283)
Other income/(expenses)                                                                                        1 694             (1 963)
Pappas Quarry and related expenses                                                                          (16 203)             (1 189)
Profit on sale of assets                                                                                       9 899              23 257
Impairment raised                                                                                                  ?            (33 085)
Net foreign exchange gains                                                                                       839               7 264
Loss for the year before taxation                                                                           (40 345)           (163 112)
Taxation                                                                                                     (1 545)              10 193
Loss for the year                                                                                           (41 890)           (152 919)
Other comprehensive income
Items that may be re classified subsequently to profit or loss:
Reclassification adjustments relating to foreign operations disposed of in the year                            4 650                   ?
Increase in foreign currency translation reserve                                                                   ?                 430
Total comprehensive loss for the year                                                                       (37 240)           (152 489)
Attributable to equity holders of parent company
Loss for the year                                                                                           (41 890)           (152 919)
Total comprehensive loss for the year                                                                       (37 240)           (152 489)
Headline (loss) attributable to ordinary shareholders                                          1            (51 789)           (145 843)
Number of shares in issue ('000)                                                                              49 166              49 166
Weighted number of shares in issue ('000)                                                                     49 166              49 166
Attributable loss per share (cents)
? basic and diluted                                                                                           (85,2)             (311,0)
Dividend per share (cents)                                                                                     250,0                   ?

SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                                                                                                     Audited year to     Audited year to
                                                                                                            December            December
                                                                                                                2015                2014
                                                                                                               R'000               R'000
ASSETS
Non-current assets
Property, plant and equipment                                                                                      ?              53 774
Current assets
? Inventories                                                                                                      ?              14 676
? Trade and other receivables                                                                                  2 616              78 315
Bank balances and cash                                                                                       185 553             227 378
Taxation receivable                                                                                              100                 101
Assets held for sale                                                                                          25 949              45 466
Total assets                                                                                                 214 219             419 710
EQUITY AND LIABILITIES 
Total shareholders' funds                                                                                    127 182             291 970
Non-current liabilities
Non-current provisions                                                                                             ?               5 228
Current liabilities
? Trade and other payables                                                                                    28 672              25 301
? Short-term provisions                                                                                       56 812              97 065
? Taxation payable                                                                                             1 553                   8
Non-current liabilities held for sale                                                                              ?                 138
Total equity and liabilities                                                                                 214 219             419 710
Net asset value per share (cents)                                                                                259                 594

SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS
                                                                                                     Audited year to     Audited year to
                                                                                                            December            December
                                                                                                                2015                2014
                                                                                                               R'000               R'000
Cash (utilised) from trading                                                                                (62 753)            (58 130)
Movement in current and non-current provisions                                                              (45 474)                   ?
Decrease in working capital                                                                                   93 607             135 647
Cash (utilised)/generated by operations                                                                     (14 620)              77 517
Net interest received                                                                                         12 509               6 859
Taxation paid                                                                                                      ?             (7 705)
Cash (outflow)/inflow from operating activities                                                              (2 111)              76 671
Capital expenditure                                                                                         (20 000)             (3 875)
Decrease in non-current asset                                                                                      ?               2 274
Proceeds on sale of assets                                                                                   103 189              30 999
Net cash inflow before financing activities                                                                   81 078             106 069
Dividend paid ? ordinary                                                                                   (122 914)                   ?
Net (decrease)/increase in cash and cash equivalents                                                        (41 836)             106 069
Cash and cash equivalents at beginning of year                                                               227 378             121 128
Currency translation of cash in foreign subsidiary                                                                11                 181
Cash and cash equivalents at end of year                                                                     185 553             227 378

SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                                                     Share                Foreign
                                                                   capital               currency
                                                                       and            translation        Accumulated
                                                                   premium                reserve             profit               Total
                                                                     R'000                  R'000              R'000               R'000
Balance at 27 December 2013 (Audited)                                4 856                  4 220            435 202             444 278
Total comprehensive loss for the year                                    ?                    430          (152 919)           (152 489)
Prior year unclaimed dividend reversed                                   ?                      ?                181                 181
Balance at 27 December 2014 (Audited)                                4 856                  4 650            282 464             291 970
Loss for the year                                                        ?                      ?           (41 890)            (41 890)
Reclassification adjustments relating to foreign operations  
disposed of in the year                                                  ?                (4 650)              4 650                   ?
Dividend paid                                                            ?                      ?          (122 914)           (122 914)
Prior year unclaimed dividend reversed                                   ?                      ?                 16                  16
Balance at 27 December 2015 (Audited)                                4 856                      ?            122 326             127 182

NOTES
                                                                   Audited                Audited
                                                                   year to                year to
                                                                  December               December
                                                                      2015                   2014
                                                                     R'000                  R'000
1.   Reconciliation between attributable loss and headline loss         
     Attributable (loss) after taxation                           (41 890)              (152 919)
     Impairment raised                                                  ?                  33 085
     Profit on sale of assets                                      (9 899)               (23 257)
     Taxation effect (reversed)                                         ?                 (2 752)
     Headline loss attributable to ordinary shareholders          (51 789)              (145 843)
     Attributable headline loss per share          
     ? basic and diluted                                           (105,3)                (296,6)
         
2.   Basis of presentation
     The Group is domiciled in South Africa. The audited summarised consolidated financial results at and for the year ended
     27 December 2015 comprise the company and its subsidiaries (the "Group").
     The Group's principal accounting policies have been applied consistently over the current and prior financial years.
     On 5 March 2014 the company announced that the board of directors had taken the decision, subject to approval by the
     company's shareholders, to discontinue the operations in a phased and orderly manner during 2014 and to realise value for
     the company's assets during 2014 and 2015. The decision was approved at the Annual General Meeting of the company held
     on 9 May 2014. The company will be wound down and de-registered in due course. The above information highlights that
     the going-concern principle is not applicable in the preparation of the company's financial statements. When the company
     ceases trading the directors are of the opinion that the company will be in a position to discharge all of its liabilities, due
     to the company's cash resources and to recover the assets at their carrying amounts. The effect, if any, of preparing the
     financial statements, other than on the going-concern basis will be negligible. Consequently the financial statements have
     been prepared on a basis consistent with IFRS which among other things, requires writing assets down to their recoverable
     amounts. It also requires recognising a liability for contractual commitments that may have become onerous as a consequence
     of the decision to cease trading.
     The Group's summarised financial results have been prepared in accordance with the requirements of the JSE Limited
     Listings Requirements for provisional reports, and the requirements of the Companies Act applicable to provisional financial
     statements. The Listings Requirements require provisional reports to be prepared in accordance with the framework concepts
     and the measurement and recognition requirements of International Financial Reporting Standards (IFRS), the SAICA Financial
     Reporting Guides as issued by the Accounting Practices Committee, Financial Pronouncements as issued by the Financial
     Reporting Standards Council as well as, the information required by IAS 34 Interim Financial Reporting.
     The auditors, Deloitte & Touche, have issued their modified opinion on the Groups' financial statements for the year ended
     27 December 2015. The auditor's report contains an emphasis of matter paragraph regarding the basis of preparation used
     to prepare the consolidated and separate financial statement in the current year: "Without qualifying our opinion, we draw
     attention to the basis of preparation note, Note 1.2, in the financial statements regarding the basis of preparation used to
     prepare the consolidated and separate financial statements in the current year". The audit was conducted in accordance
     with International Standards on Auditing. This provisional report has been derived from the group financial statements and
     consistent in all material respects, with the Group financial statements. A copy of their audit reports are available for inspection
     at the company's' registered office. The auditors have issued a modified opinion for the annual financial statements as well
     as a modified audit opinion for this extract from the annual financial statements. Any reference to future financial performance
     included in this announcement, has not been reviewed or reported on by the company's auditors. The auditor's report does
     not report on the commentary hereon. Shareholders are therefore advised that, in order to obtain a full understanding of the
     nature of the auditor's engagement, they should obtain a copy of the auditor's report together with the accompanying financial
     information from the company's registered office.

                                   2015     2014
                                  R'000    R'000
     Operating lease commitment       8    2 368
 
COMMENTARY ? UNAUDITED
The Group's results for the year ended 27 December 2015 reflect the actions taken toward the discontinuation of the Group's business, including
the sale of inventory, profits and losses on the disposal of assets, and the expenses incurred or accrued relating to the discontinuation.
Revenue totalled R15.2 million (2014: R283.9 million) and included the sale of all remaining inventory, resulting in a gross profit of R3.0 million (2014:
119.7 million). Distribution expenses totalled R1.5 million (2014: R25.7 million), and administrative expenses totalled R8.4 million (2014: R70.7 million).
The Group's expenses relating to the discontinuation of the business totalled R42.2 million (2014: R175.3 million), including salaries and wages,
general works, energy costs and retention incentives.
The Company paid Manganese Metal Company R37.5 million in full settlement of its contractual obligations related to the Pappas Quarry waste
disposal facility. R22.3 million had been provided for those obligations during 2014.
The Group realised a profit of R9.9 million on the sale of assets having a book value of R93.2 million.
Losses for the year totalled R41.8 million (2014: R152.9), and losses per share totalled 85.2 cents (2014: 311 cents). Headline losses per share for
the year were 105.3 cents (2014: 296.6 cents).
Net cash utilised by operations during the year totalled R14.6 million (2014: cash generated R77.5 million). Working capital decreased by
R93.6 million (2014: R135.5 million), and proceeds from sales of assets totalled R103.2 million (2014: R31.0 million). The Group also paid a
R2.50 per share dividend resulting in a R122.9 million cash outflow.
The Group's year-end cash balances decreased by R41.8 million and totalled R185.6 million at year-end (2014: R227.4 million).
The assets classified at year-end as non-current assets held for sale include the Nelspruit land parcels owned by the Company and those
parcels historically leased and during the year purchased by the company from Manganese Metal Company, and have a total net book value of
R 25.9 million.
At year-end, short-term provisions totalled R56.8 million (December 2014: R97.1 million) and include provisions for retrenchment costs (R7.0 million),
retention incentives (R12.4 million), and the demolition and rehabilitation of the Nelspruit plant site (R37.2 million). During December 2015, the
Company received a definitive remediation order for the Nelspruit plant site from the Department of Environmental affairs.

PROSPECT
The salvage and removal of the remaining assets at the Nelspruit plant site are expected to be completed during the first quarter of 2016, and the
demolition of remaining structures and rehabilitation of the plant site will follow and are expected to be completed during the second quarter of 2016.
On 14 October 2015 shareholders were advised that the Group had entered into an agreement for the sale of the Nelspruit plant site. The Group
was advised on 12 February 2016 that the purchaser had terminated the agreement. The Group will recommence marketing the site and will
continue with the demolition and rehabilitation now underway.
Following the sale of the Nelspruit plant site the Group expects to delist and deregister the Company and to pay a final dividend.

CASH DIVIDEND DECLARATION
The Group is pleased to announce the declaration of a final gross cash dividend of 100 cents (85 cents net of dividend withholding tax) per ordinary
share for the year ended 27 December 2015.
The dividend has been declared from income reserves. A dividend withholding tax of 15% will be applicable to all shareholders who are not exempt.
The issue share capital at the declaration date is 49 165 553 ordinary shares.
The salient dates are as follows:
Last day of trade to receive a dividend                                                                              Friday, 11 March 2016
Trading "ex dividend" commences:                                                                                     Monday, 14 March 2016
Record date:                                                                                                         Friday, 18 March 2016
Payment date:                                                                                                       Tuesday, 22 March 2016

Share certificates may not be dematerialised or rematerialised between Monday, 14 March 2016 and Friday, 18 March 2016 both days inclusive.

DIRECTORATE
On 14 May 2015, the following changes to the Board of Directors were made: Mr Praveen Baijnath resigned as Chief Executive, and Mr Baijnath
was appointed a Non-independent, Non-executive Director. Mr Johan Seymore was appointed Acting Chief Executive, and Mrs Emma Nel was
appointed Acting Chief Financial Officer and Company Secretary.
On 27 November 2015, Mr Johan Seymore passed away and thereafter the following changes were made: Mr Todd Atkinson was appointed
Executive Chairman, Mrs Emma Nel was appointed Financial Director and Company Secretary, and Mr Collin Naicker was appointed as Operational
Director.

PREPARER OF FINANCIAL STATEMENTS
These summarised consolidated financial statements have been prepared by EJ Nel CA(SA) in her capacity as Financial Director of the group.

AVAILABILITY OF COMPLETE SET OF FINANCIAL STATEMENTS
Shareholders are therefore advised that in order to obtain a full understanding of the nature of the auditor's engagement they should obtain a copy
of that report together with the accompanying set of financial statements from the registered office of the Delta EMD Ltd.

TG Atkinson                                                                    EJ Nel (Financial Director)
22 February 2016

DELTA EMD LIMITED
Registration number: 1919/006020/06
Income tax number: 9375057719
Share code: DTA ISIN: ZAE000132817
("Delta EMD" or "the Group")

Registered Office
15 Heyneke Street, Industrial Site, Nelspruit, 1200

Transfer Secretaries
Computershare Investor Services Proprietary Limited
70 Marshall Street, Johannesburg, 2001, PO Box 61051, Marshalltown, 2107

Directors:
Independent non-executive: AC Hicks, BR Wright, L Matteucci
Non-Executive: P. Baijnadh
Executive Chairman: TG Atkinson(*) (Chairman) *USA
Executive: EJ Nel (CA)SA (Financial Director), C Naicker (Operations Director)
Sponsor: Rand Merchant Bank (A division of FirstRand Bank Limited)                                                       Released on 22 February 2016



Date: 22/02/2016 02:35:00 Supplied by www.sharenet.co.za                     
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