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Unaudited Abridged Financial Results for the 6 Months Ended 31 December 2014
Rare Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration Number: 2002/025247/06)
Share Code: RAR ISIN: ZAE000180626
("Rare" or "the Company")
UNAUDITED ABRIDGED FINANCIAL RESULTS FOR THE 6 MONTHS ENDED 31 DECEMBER 2014
Highlights
- Turnover increased by 58.4%
- Gross Profit increased by 22.6%
- Net profit of R0.3m compared to a R3.6m loss in the comparative period
- Cash flow from operating activities of R17.2m due to improved working capital
management
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
December December June
2014 2013 2014
R'000 R'000 R'000
Revenue 215 928 136 334 264 953
Cost of sales (177 662) (105 114) (214 365)
Gross profit 38 266 31 220 50 588
Other income 1 444 1 960 2 221
Operating expenses (32 853) (24 804) (55 151)
EBITDA 6 857 8 376 (2 342)
Depreciation and amortisation (3 805) (2 040) (5 303)
Investment income 49 81 478
Finance costs (2 794) (10 029) (17 234)
Profit/(loss) before taxation 307 (3 612) (24 401)
Income tax - - 1 236
Profit/(loss) for the period 307 (3 612) (23 165)
Attributable to:
Equity holders of the parent 307 (3 612) (23 165)
Non-controlling interest - - -
Weighted average number of ordinary
shares in issue ('000) 42 888 17 888 23 383
Profit/(loss) per ordinary share (cents)
(basic and diluted) 0.72 (20.19) (99.07)
Profit/(loss) attributable to equity holders of
the parent 307 (3 612) (23 165)
Insurance claims received from third parties - - (108)
Profit/(loss) on disposal of property,
plant and equipment - - 120
Headline profit/(loss) attributable to ordinary
shareholders 307 (3 612) (23 153)
Headline profit/(loss) per ordinary share (cents)
(basic and diluted) 0.72 (20.19) (99.02)
CONDENSED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
December December June
2014 2013 2014
R'000 R'000 R'000
Profit/(loss) for the period 307 (3 612) (23 165)
Loss on property revaluation (Kliprivier) - - (1 242)
Gain on property revaluation (Meyerton) - - 4 498
Taxation related to components of other
comprehensive income - - (605)
Total comprehensive profit/(loss) for the year net
of taxation 307 (3 612) (20 514)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
6 Months Months 12 Months
December December June
2014 2013 2014
R'000 R'000 R'000
Assets
Non-current assets
Property, plant and equipment 85 753 65 759 86 513
Intangible assets 572 620 567
Other financial assets - 21 -
Current Assets
Inventories 83 071 83 104 112 813
Trade and other receivables 71 798 57 141 47 490
Other financial assets 160 578 400
Current taxation receivable 112 - 112
Prepayments 49 - 1 041
Cash and cash equivalents 20 217 12 809 4 899
Total Assets 261 732 220 032 253 835
Equity and liabilities
Equity
Share capital 390 335 241 824 391 336
Reserves 8 001 5 350 8 001
Accumulated loss (252 857) (233 611) (253 165)
Equity attributable to equity holders
of parent 145 479 13 563 146 172
Liabilities
Non-current liabilities
Other financial liabilities 55 814 183 368 50 277
Operating lease liability 11 - 11
Deferred taxation 2 440 2 269 2 440
Current liabilities
Trade and other payables 57 613 15 355 53 704
Other financial liabilities 375 4 332 1 174
Current taxation payable - 1 145 -
Bank overdraft - - 57
Total liabilities 116 253 206 469 107 663
Total equity and liabilities 261 732 220 032 253 835
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
December December June
2014 2013 2014
R'000 R'000 R'000
Opening balance 146 172 18 175 18 175
Profit/(loss) for the year 307 (3 612) (23 165)
Adjustments
Revaluation reserve - - 2 651
Issue of shares (1 000) (1 000) 149 000
Purchase of treasury shares - - (489)
Total changes (693) (4 612) 127 997
Closing balance 145 479 13 563 146 172
Comprising of:
Share capital 282 395 132 884 282 395
Share premium 107 940 108 940 108 941
Revaluation reserve 8 001 5 350 8 001
Retained income (252 857) (233 611) (253 165)
Total equity 145 479 13 563 146 172
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
December December June
2014 2013 2014
R'000 R'000 R'000
Cash flows from operating activities
Cash generated from /(used in) operations 17 260 (17 447) (11 667)
Interest income 49 81 478
Finance costs (444) (563) (866)
Tax received/(paid) - (148) (324)
Net cash from operating activities 16 865 (18 077) (12 379)
Cash flow from investing activities
Purchase of property, plant
and equipment (3 044) (17 941) (38 754)
Sale of property, plant and equipment - 25 195
Purchase of other intangible assets (5) - -
Sale of other financial assets 240 200 401
Net cash from investing activities (2 809) (17 716) (38 158)
Cash flows from financing activities
Underwriting fee (1 000) (1 000) (1 000)
Proceeds from financial liabilities 4 000 36 007 44 640
Repayment of financial liabilities (1 681) (1 419) (3 276)
Net cash from financing activities 1 319 33 588 40 364
Total cash movement for the period 15 375 (2 205) (10 173)
Cash at the beginning of the period 4 842 15 014 15 015
Total cash at end of the period 20 217 12 809 4 842
CONDENSED SEGMENTAL INFORMATION - PRIMARY SEGMENT REPORT BUSINESS SEGMENTS
For the 6 months ended 31 December 2014
Total
Water Pipeline continuing
R'000 Trading Treatment services Plastics Investment operations
Total
revenue 50 348 - 34 792 130 788 2 396 218 324
Inter-
segmental
revenue - - - (2 396) (2 396)
External
revenue 50 348 - 34 792 130 788 - 215 928
Segment
results 1 553 (1 309) 1 906 1 380 - 3 530
Other income - - - - - 954
Profit on sale
of assets - - - - - 490
Investment income - - - - - 49
Retrenchment costs - - - - - (1 922)
Finance cost - - - - - (2 794)
Net profit
for the year - - - - - 307
Total assets
Total segmental
assets 62 224 2 895 39 384 103 616 53 613 261 732
Inter-segmental
assets - - - - - -
Reportable segment
operating assets 62 224 2 895 39 384 103 616 53 613 261 732
For the 6 months ended 31 December 2013
Total
Water Pipeline continuing
R'000 Trading Treatment services Investment Plastics
operations
Total
revenue 122 425 597 11 534 2 178 1 778 138 512
Inter-
segmental
revenue - - - (2 178) (2 178)
External
revenue 122 425 597 11 534 - 1 778 136 334
Segment
results 7 910 (1 741) (1 807) (352) 368 4 378
Other income - - - - 1 960
Profit on sale
Investment income - - - - 79
Finance cost - - - - (10 029)
Net loss
for the year - - - - (3 612)
Total assets
Total segmental
assets 116 634 3 079 18 909 46 064 35 346 220 032
Inter-segmental
assets - - - - - -
Reportable segment
operating assets 116 634 3 079 18 909 46 064 35 346 220 032
For the 12 months ended 30 June 2014
Total
Water Pipeline continuing
R’000 Trading Treatment services Plastics Investment operations
Total
revenue 186 777 1 601 33 774 57 208 3 970 283 330
Inter-
segmental
revenue - - - (14 407) (3 970) (18 377)
External
revenue 186 777 1 601 33 774 42 801 - 264 953
Segment
results 6 278 (3 268) (6 583) (309) (1 086) (4 968)
Other
income - - - - - 2 221
Bad debts - - - - - (2 958)
Movement in
provision
for bad debt - - - - - 1 985
Inventory
Impairment - - - - - (3 925)
Finance
cost - - - - - (17 234)
Investment
income - - - - - 478
Income tax
expense - - - - - 1 236
Net loss
for the
year - - - - - (23 165)
Total assets
Total segmental
assets 99 526 2 963 28 908 83 836 38 602 253 835
Inter-segmental
assets - - - - - -
Reportable segment
operating assets 99 526 2 963 28 908 83 836 38 602 253 835
NOTES
BASIS OF PREPARATION
The condensed consolidated interim financial information for the six months ended 31
December 2014 from which these financial statements have been derived has been prepared
in accordance with International Financial Reporting Standards (IFRS), the SAICA
financial reporting guides as issued by the Accounting Practices Committee, the
interpretations adopted by the International Accounting Standards Board (IASB), the
Financial Reporting Pronouncement as issued by the Financial Reporting Standards
Council, the Listings Requirements of the JSE Limited and the requirements of the South
African Companies Act, 71 of 2008, as amended.
These condensed consolidated interim financial results are presented in compliance with
IAS 34 - Interim Financial Reporting and should be read in conjunction with the annual
financial statements for the year ended 30 June 2014.
These financial results were internally compiled by R Viljoen CA(SA) and have not been
reviewed or audited by the Company’s auditors.
ACCOUNTING POLICIES
The accounting policies adopted in the preparation of the abridged interim financial
information are consistent with those of the annual financial statements of the year
ended 30 June 2014. For a full list of standards and interpretations which have been
adopted we refer you to the 30 June 2014 annual financial statements.
COMMENTARY
FINANCIAL RESULTS
Revenue for the financial period increased by 58.4% to R215.9m (2013: R136.3m) as
further explained under the Operational Review below.
The gross profit margin reduced to 17.7% (2013: 22.9%) This was as a result of the
larger contribution from the Rare Plastics factory which operates at lower margins than
the historic Rare business.
Operating expenses increased to R32.9m (2013: R24.8m) for the period under review.
This was as a result of the Rare Plastics factory being fully operational during the
period under review.
EBITDA of R6.9m was realized during the period (2013: R8.4m). The comparative figure
included a large once off project which contributed nearly 90% of the EBITDA. Headline
profit for the period increased to R0.3m (2013 loss: R3.6m).
OPERATIONAL REVIEW
The major reason for the increase in revenue was the fact that the Rare Plastics
division had been in operation for the full period under review. Rare Plastics
contributed R130.8m towards turnover whereas it only contributed R1.8m to the
comparative figure for the six months ended 31 December 2013.
During the period Rare successfully negotiated an extension of the Sasol Supply
contract.
Full scale testing of the new Electro Coagulation Water Treatment Technology is still in
progress at a major coal mine in South Africa.
Attention is drawn to the fact that, in the current reporting period, the weighted
average number of shares in issue was 42 887 500 compared to a restated 17 887 500 for
the previous comparable period, ended 31 December 2013, following the issue of 25
million shares as part of the Claw-Back Offer as announced on SENS on 14 April 2014.
PROSPECTS
The decrease in the oil price has resulted in a decrease in activity within the
petrochemical market. Rare has started to diversify it’s client base and management is
of the opinion that there are sufficient other positive prospects that will compensate
for the decline in the petrochemical market.
DIVIDENDS
No dividend was declared for the period.
On behalf of the board
W. van Coller R. Viljoen
CEO CFO
Kliprivier
16 March 2015
Designated Advisor: PSG Capital (Pty) Limited
Date: 16/03/2015 12:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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