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Spanjaard Limited - Audited Group Results For The Year Ended 29 February 2016

Release Date: 31/05/2016 17:35:00      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")

CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME                                    
                                                                                 Year ended    Year ended   
                                                                                29 February   28 February   
                                                                                       2016          2015   
                                                                                                 Restated   
                                                                                    Audited       Audited   
                                                                                      R'000         R'000   
Revenue                                                                             125 825       119 097   
Cost of sales                                                                      (83 509)      (81 456)   
Gross profit                                                                         42 316        37 641   
Other income                                                                            776           294   
Distribution costs                                                                  (3 916)       (5 525)   
Administrative expenses                                                            (31 639)      (35 419)   
Finance costs                                                                       (1 287)       (1 231)   
Profit / (Loss) before tax                                                            6 250       (4 240)   
Taxation                                                                            (1 244)         2 083   
Profit / (Loss) from continuing operations                                            5 006       (2 157)   
Other comprehensive income                                                                                  
Items that may be subsequently reclassified                                                                 
Movement in foreign currency translation reserve                                      (284)           258   
Items that will not be be reclassified                                                                      
Revaluation on property, plant and equipment                                              ?         3 275   
Tax on revaluation on property, plant and equipment                                       ?         (917)   
Total comprehensive income for the year attributable to ordinary
shareholders                                                                          4 722           459   

Earnings and diluted earnings per ordinary share                                       61.5        (26.5)   
- Continuing operations                                                                61.5        (26.5)   
- Discontinued operations                                                                 0             0   

CONSOLIDATED STATEMENT OF FINANCIAL POSITION             
                                                                         As at        As at         As at
                                                                   29 February  28 February       1 March
                                                                          2016         2015          2014
                                                                                   Restated      Restated
                                                                       Audited      Audited       Audited
                                                                         R'000        R'000         R'000
Assets                 
Non-current assets                                                      32 051       34 597        30 160
Property, plant and equipment                                           29 412       31 256        27 717
Goodwill                                                                   437          437           437
Intangibles                                                              2 202        2 904         2 006
Current assets                                                          40 286       40 399        39 022
Inventories                                                             17 433       19 202        17 230
Trade receivables and prepayments                                       20 911       15 865        17 811
Amount due by subsidiaries and related companies                             0            0            73
Amount due by ultimate holding company                                       0        2 932         3 657
Current income tax receivable                                              346        1 774           248
Cash and cash equivalents                                                1 596          626             3
Total assets                                                            72 337       74 996        69 182
Non-current assets held for sale                                             0            0         3 759
Total Assets                                                            72 337       74 996        72 941
                
Equity and liabilities                
Capital and reserves attributable to the                
company's equity holders                
Ordinary shares                                                            407          407           407
Share premium                                                            6 464        6 464         6 464
Reserves                                                                35 995       32 576        35 235
Foreign currency translation reserve                                       131          415           157
Revaluation reserve                                                      6 457        7 517         8 082
Share based payment compensation reserve                                 1 906        1 906         1 906
Retained earnings                                                       27 501       22 738        25 090
Total Shareholders' Equity                                              42 866       39 447        42 106
Non-Current Liabilities                                                  5 599        7 343         9 377
Borrowings                                                               1 143        3 088         4 253
Deferred tax liabilities                                                 4 456        4 255         5 124
Current Liabilities                                                     23 872       28 206        21 458
Trade and other payables                                                13 335       17 393        16 998
Borrowings                                                               2 717        3 087         3 214
Loans from ultimate holding company                                      1 953            0             0
Shareholders for dividends                                               1 362        1 518         1 020
Bank overdraft                                                           4 505        6 208           226
Total Liabilities                                                       29 471       35 549        30 835
Total Equity and Liabilities                                            72 337       74 996        72 941

CONSOLIDATED STATEMENT OF CASH FLOW                                                                       
                                                                                Year ended     Year ended   
                                                                                29 February   28 February   
                                                                                       2016          2015   
                                                                                                 Restated   
                                                                                    Audited       Audited   
                                                                                      R'000         R'000   
Cash flows from operating activities                                                                        
Cash receipts from customers                                                        120 352       119 749   
Cash paid to suppliers and employees                                              (116 559)     (119 820)   
Cash generated from operations                                                        3 793          (71)   
Interest paid                                                                       (1 287)       (1 231)   
Tax received / (paid)                                                                    385       (2 067)   
Net cash generated from / (used in) operating activities                              2 891       (3 369)   
Cash flows from investing activities                                                                        
Purchases of property, plant and equipment                                            (709)       (2 139)   
Proceeds on sale of property, plant and equipment                                        52             ?   
Purchases of intangible assets                                                        (388)       (1 592)   
Amounts due by subsidiaries and related companies                  
Receipts from                                                                             ?            73   
Amount due by holding company - Receipts from                                         2 932           725   
Proceeds on sale of Non-current assets held for sale                                      ?         3 759   
Net cash generated from / (used in) investing activities                              1 887           826   
Cash flows from financing activities                                                                        
Borrowings paid                                                                     (2 852)       (2 246)   
Proceeds from borrowings                                                                537           954   
Loans from holding company - Loans received                                           2 001             ?   
Loans from holding company - Repayments made                                           (48)             ? 
Dividends paid to company's shareholders*                                           (1 459)       (1 782)   
Net cash (used in) / generated from financing activities                            (1 821)       (3 074)   
Net increase in cash and cash equivalents                                             2 957       (5 617)   
Cash and cash equivalents at beginning of year                                      (5 582)         (223)   
Effects of exchange rate changes on cash and cash                  
equivalents                                                                           (284)           258   
Cash and cash equivalents at end of year                                            (2 909)       (5 582)   
                  
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY                                                                 
                                                                                Year ended     Year ended   
                                                                                29 February   28 February   
                                                                                       2016          2015   
                                                                                                 Restated   
                                                                                    Audited       Audited   
                                                                                      R'000         R'000  
 
Ordinary shares                                                                         407           407   
Share premium                                                                         6 464         6 464   
Foreign currency translation reserve restated                                           131           415   
Opening balance                                                                         415           157   
Net movement for the year                                                             (284)           258   
Revaluation reserve                                                                   6 457         7 517   
Opening balance                                                                       7 517         8 082   
Net movement for the year                                                           (1 060)         (565)   
Share based payment compensation reserve restated                                     1 906         1 906   
Opening balance                                                                       1 906         1 906   
Net movement for the year                                                                 ?             ?   
Retained earnings restated                                                           27 501        22 738   
Opening balance                                                                      22 738        25 090   
                  
                  
Total comprehensive income (loss) for the year                                        5 006       (2 157)   
Movement in reserves                                                                  1 060         2 085   
Dividend declared                                                                   (1 303)       (2 280)   
Total shareholders' equity                                                           42 866        39 447   
DIVIDENDS                                                                                                   
Dividend declared per ordinary                                                                              
share (cents)                                                                                               
?  interim                                                                              0.0          10.0   
?  final                                                                               16.0          18.0   
                  
SUPPLEMENTARY INFORMATION                                                                                   
                                                                                Year ended     Year ended   
                                                                                29 February   28 February   
                                                                                       2016          2015   
                                                                                                 Restated   
                                                                                    Audited       Audited   
                                                                                      R'000         R'000  
Capital expenditure                                                                   1 097         3 731   
                    

During the 2016 financial year Motor vehicles with a cost of R141 054 and accumulated depreciation of R140 051 were sold in the normal
course of business with a view on replacing mentioned assets. Office furniture and equipment with a cost of R64,627 and accumulated
depreciation of R32,610 were disposed of in the normal course of business. There were no disposals of Property, plant and equipment during
the 2015 financial year.

RELATED PARTY TRANSACTIONS                                                                    

                                                                  Year ended     Year ended
                                                                 29 February    28 February
                                                                        2016           2015
                                                                                   Restated
                                                                     Audited        Audited
                                                                       R'000          R'000
Transactions with close family members of key management     
personnel                                                                214              0   
Amounts due by subsidiaries and related companies -     
Receipts from                                                              0             73   
Amount due by holding company - Receipts from                          4 933            725   
Loans from holding company - Repayments made                            (48)              0

OPERATING SEGMENTS
                                                                  Year ended     Year ended
                                                                 29 February    28 February
                                                                        2016           2015
                                                                                   Restated
                                                                     Audited        Audited
                                                                       R'000          R'000
Segment revenue               
Special lubricants and allied chemicals                              118 259        110 876
External foreign customers                                            25 635         25 349
External local customers                                              92 624         85 527
Metal powders                                                          5 473          8 276
External foreign customers                                             4 039          5 279
External local customers                                               1 434          2 997
Other                                                                  7 075          9 724
External foreign customers                                             5 035          7 684
External local customers                                               2 040          2 040
Interdivisional transactions                                         (4 982)        (9 779)
Inter segment sales                                                  (4 982)        (9 779)
                                                                     125 825        119 097
                 
Segment result                 
Special lubricants and allied chemicals                                6 474        (2 971)
Metal powders                                                           (87)            420
Other                                                                  1 508          1 848
Interdivisional transactions                                           (358)        (2 306)
Earnings before interest and tax                                       7 537        (3 009)
Segment assets                 
Special lubricants and allied chemicals                               60 895         63 451
Metal powders                                                         13 522         12 854
Other                                                                 26 595         28 612
Interdivisional transactions                                        (28 675)       (29 921)
                                                                      72 337         74 996
Segment liabilities                  
Special lubricants and allied chemicals                               32 554         38 213
Metal powders                                                          4 077          3 165
Other                                                                 15 537         19 843
Interdivisional transactions                                        (22 697)       (25 672)
                                                                      29 471         35 549

RECONCILIATION OF HEADLINE EARNINGS                 
                                                                  Year ended     Year ended
                                                                 29 February    28 February
                                                                        2016           2015
                                                                     Audited        Audited
Continuing operations                                                  R'000          R'000
Profit / (Loss) attributable to shareholders                           5 006        (2 157)
Loss on disposal of property,                 
plant and equipment                                                       67              ?
Income tax effect on disposal                                           (19)              ?
Headline earnings                                                      5 054        (2 157)
Weighted average number of ordinary                  
shares in issue ('000)                                                 8 143          8 143
Headline earnings per ordinary share                  
? basic and diluted (cents)                                             62.1         (26.5)
                 
BASIS OF PREPARATION

The audited condensed consolidated results have been prepared using the measurement and recognition
requirements of the International Financial Reporting Standard (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 repsonsibility 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 2016 annual financial
statements. The 2016 annual financial statements and the related audit report can be viewed on the
company's website at www.spanjaard.biz.

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

The audited condensed consolidated results has been prepared in accordance with IAS34.

Summarised group results prepared by: Financial Director - I. Saunders CA(SA)

COMMENTARY

Salient Features
  - Revenue up 6%
  - GP Margin improved by 1,9%
  - Operating Expenses exceptionally well controlled
  - Change in senior management in the first half the year
  - Large improvement in cash position
  - General turnaround in the business

Dear shareholder

We have had an incredibly turbulent year with many staff changes in key areas especially in the
Finance Department as well as at Board level.

We have successfully overcome these challenges and have put together a solid team that has settled
well into their respective positions.

During the year, most of our contracts and structures were reviewed and where necessary remedial action
was implemented to contain possible negative consequences.

The positive end results did not come easily and we have an excellent second half of the financial year
to thank for our relatively good bottom line. We caught up on lagging exports, but it was growth in our
local sales that really contributed to the improved sales figures. This combined with excellent cost control
throughout the company especially in areas such as marketing, transport, and staff costs resulted in
an achievement of a NPAT of R5 million.

Our balance sheet is looking progressively stronger with a reduction in debt and far better working
capital management in all areas.

We have a few exciting opportunities developing in the contract packaging space and the outlook for
the 2017 financial year looks positive despite the obvious challenges facing the South African
economy.

RESTATEMENT OF COMPARATIVE FIGURES - YEAR ENDED 28 FEBRUARY 2015

We wish to draw your attention to the fact that the comparative figures for the year ended 28
February 2015 have been restated due to numerous errors and reclassifications details of which can
be found in note 33 in the Integrated Annual Report 2016.

AUDIT OPINION

PricewaterhouseCoopers Inc. have audited the annual financial statements for the year ended 29
February 2016 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 Friday, 15 July
   2016 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 Tuesday, 31 May 2016.

Ms L Passmore
Company Secretary
31 May 2016

Directors: RJW Spanjaard (Executive Chairman), GF Cort, Mrs S Hari*, BL Montgomery*, CKT Palmer,
Prof DP van der Nest*, HJ van Heerden (Financial Director) resigned 31 July 2015, K Welgemoed
CA(SA) appointed 11 September 2015, I Saunders CA(SA) appointed 27 May 2016 *Independent Non-executive
Ms E Nepgen resigned as Director on 26 May 2015.
Registered office: 748-750 Fifth Street, Wynberg, Sandton, 2090

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

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

Date: 31/05/2016 05:35:00 Supplied by www.sharenet.co.za                     
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