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ABU - abe - Audited provisional financial results for the 12 months ended 31 May
2010
a.b.e. CONSTRUCTION CHEMICALS LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number: 1982/005383/06)
Share Code: ABU & ISIN: ZAE000102059
("abe" or "the Company")
AUDITED PROVISIONAL FINANCIAL RESULTS FOR THE 12 MONTHS ENDED 31 MAY 2010
STATEMENTS OF COMPREHENSIVE INCOME
Audited Audited
12 months 12 months ended
ended 31 May 2009
31 May 2010
NOTE R 000`s R 000`s
Revenue 261,040 262,729
Cost of sales (152,304) (162,574)
Gross profit 108,736 100,155
Other income 357 2,271
Distribution costs (7,581) (8,638)
Administration expenses (10,442) (10,259)
Other expenses (57,102) (47,972)
Operating profit 33,968 35,557
Investment revenue 1,743 1,086
Finance costs (430) (617)
Profit before taxation 35,281 36,026
Taxation (10,609) (10,846)
Profit and total 24,672 25,180
comprehensive income for
the period
Profit and total
comprehensive income
attributable to:
Equity holders of abe 24,672 25,180
Earnings per share 2
- Basic and diluted 24,7 25.2
earnings per share (cents)
- Headline and diluted 24,8 25.0
headline earnings per share
(cents)
STATEMENTS OF FINANCIAL POSITION
Audited Audited
12 months ended 12 months
31 May 2010 ended
31 May 2009
NOTE R 000`s R 000`s
Assets
Non-Current Assets 39,331 40,329
Property, plant and 39,331 40,329
equipment
Current Assets 131,739 121,891
Inventories 47,060 57,609
Trade and other 38,704 42,367
receivables
Cash and cash 45,969 21,915
equivalents
Current tax 6 -
Total Assets 171,070 162,220
Equity and Liabilities
Equity 117,155 102,483
Share capital 1 1,000 1,000
Share premium 33,636 33,636
Non-distributable 16,121 16,247
reserves
Retained income 66,398 51,600
Liabilities
Non-Current Liabilities 7,097 8,642
Other financial 2,026 3,534
liabilities
Provisions 2,927 2,379
Deferred tax 2,144 2,729
Current Liabilities 46,819 51,095
Other financial 2,091 2,233
liabilities
Current tax payable - 2,054
Trade and other payables 43,427 45,538
Provisions 1,301 1,270
Total Liabilities 53,915 59,737
Total Equity and 171,070 162,220
Liabilities
STATEMENTS OF CHANGES IN EQUITY
Audited Audited
12 months 12 months
ended ended
31 May 2010 31 May 2009
R 000`s R 000`s
Opening balance as 102,483 85,803
previously reported
Changes in reserves
Total comprehensive income 24,672 25,180
for the period
Dividends paid (10,000) (8,500)
Closing balance 117,155 102,483
Comprising:
Share capital 1,000 1,000
Share premium 33,636 33,636
Retained earnings 66,398 51,600
Non-distributable reserve 16,121 16,247
Total Shareholders` equity 117,155 102,483
STATEMENTS OF CASH FLOWS
Audited Audited
12 months 12 months
ended ended
31 May 2010 31 May 2009
R 000`s R 000`s
Cash flow from operating
activities
Cash generated from 48,847 23,518
operations
Interest income 1,743 1,086
Finance cost (430) (617)
Tax paid (12,472) (10,279)
Net cash from operating 37,689 13,708
activities
Cash flows from investing
activities
Purchase of property, (2,364) (4,828)
plant and equipment
Disposal of property,
plant and equipment 213 545
Net cash from investing (2,151) (4,283)
activities
Cash flows from financing
activities
Proceeds/(repayment) of (1,484) 1,300
other financial
liabilities
Dividend paid (10,000) (8,500)
Net cash from financing (11,484) (7,200)
activities
Total cash movements 24,054 2,225
Cash at the beginning of 21,915 19,690
the period
Total cash at the end of 45,969 21,915
the period
SEGMENTAL ANALYSIS
Reportable Segments
Company Reconciling item South Africa
31 May 31 May 31 May 31 May 31 May 31 May
2010 2009 2010 2009 2010 2009
Segment 261,040 262,729 -7,362 -7,825 240,655 244,929
revenue-
external
customers
Segment 35,281 36,026 -26,637 -19,814 52,924 47,835
Profit
Interest 1,313 469 1,313 469
expense
Trade 37,941 41,904 -675 -629 34,798 39,128
receivabl
es
Export
31 May 2010 31 May 2009
Segment revenue- 27,747 25,625
external customers
Segment Profit 8,994 8,005
Interest expense
Trade receivables 3,818 3,405
Business Company Reconciling Item Resellers
Activity
31 May 31 May 31 May 31 May 31 May 31 May
2010 2009 2010 2009 2010 2009
Segment 261,040 262,729 -7,362 -7,825 93,293 94,981
revenue-
external
customers
Segment 108,736 100,155 -11,043 -11,511 42,307 41,347
gross
profit
Business Construction Export
Activity
31 May 31 May 31 May 31 May
2010 2009 2010 2009
Segment 147,362 149,948 27,747 25,625
revenue-
external
customers
Segment 66,340 60,748 11,132 9,571
gross
profit
Sales By product 31 May 2010 31 May 2009
category
Segment gross profit 66,340 60,748
Waterproofing 138,592 140,743
Silicones & Sealants 57,644 60,249
Other 9,499 8,428
Total 268,402 270,554
Reconciling item -7,362 -7,825
Company 261,040 262,729
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The audited provisional financial report for the twelve months ended 31 May 2010
has been prepared in compliance with the Listings Requirements of the JSE
Limited, International Financial Reporting Standards (IFRS) (in particular
International Accounting Standard 34 Interim Financial Reporting) and the
Companies Act of South Africa.
The accounting policies applied in the presentation of the financial report are
consistent with those applied for the year ended 31 May 2009 and the six months
ended 30 November 2009 except for IAS1 - Presentation of Financial Statements
(revised). The adoption of this standard has no material effect on the results,
nor has it required any restatement of the results.
These audited provisional financial statements have been prepared in accordance
with the historic cost convention except for certain financial instruments which
are stated at fair value.
The financial results are presented in Rands, which is a.b.e.`s functional and
presentational currency.
SELECTED EXPLANATORY NOTES
1. SHARE CAPITAL
There has been no change in the share capital in the period under review
and there are 100,000,000 ordinary shares in issue.
2. EARNINGS PER ORDINARY SHARE
The calculation of basic earnings per share is based on net profit
attributable to ordinary shareholders of R24, 671,718 (2009: R25,180,106)
and weighted average of 100,000,000 (2009: 100,000,000) shares in issue.
The calculation of headline earnings per share is based on earnings of
R24,764,347 (2009: R25,033,152) and a weighted average of 100,000,000
(2009: 100,000,000) shares in issue.
Reconciliation between earnings and headline earnings:
Basic Earnings 24,671,718 25,180,106
Loss/( Profit )on sale of fixed assets 92,629 (146,954)
Headline Earnings 24,764,347 25,033,152
3. PROVISIONS
A provision for bonuses has been recognised and it is calculated in terms
of the Company`s remuneration policy.
4. CORPORATE ACTION
In terms of a SENS announcement dated Monday, 24 May 2010, shareholders
were advised of an intention by Chryso Southern Africa (Pty) Ltd to acquire
100% of the issued shares of a.b.e. at a price of R2 per share.
Shareholders received the circular dated 30 July 2010 detailing this offer
by Chryso which is proposed to be achieved by way of a Scheme of
Arrangement in terms of Section 311 of the Companies Act.
5. POST FINANCIAL YEAR-END EVENTS
Other than the continuation of the corporate action as noted in 4 above,
the directors are not aware of any material matter or circumstance arising
since the end of the financial year and the date of this report.
6. ENVIRONMENTAL MATTERS
The directors of a.b.e. have become aware that a.b.e. may require a
registration certificate in terms of the National Environment Management:
Air such registration certificate is required, it would have been required
from 1 April 2010.
Consultants have been appointed to make the necessary enquiries and, if
necessary, applications.
7. DIVIDEND
During the current period dividends amounting to R10,000,000 were paid. We
are restrained from proposing a dividend in terms of the corporate action.
8. FINANCIAL RESULTS
The directors of a.b.e. are pleased to present the results for the twelve
months ended 31st May 2010.
- REVENUE
Decreased by 0.6% to R261m.
- GROSS PROFIT
Grew by 8.6%. The improved margins were achieved as a direct result
of intense focus on input costs for locally manufactured as well as
imported materials particularly those based on the petroleum industry.
- OPERATING PROFIT
Operating profit was affected by an amount of approximately R3.5m
which relates to a once-off payment to the former CEO who left the
Company in January 2010. If this payout is excluded operating profit
would be R37.5m which is 5.4% greater than the previous year.
Reported operating profit declined by 4.4%.
- CASH FLOW
a.b.e. again exhibited a strong positive cash flow as cash on hand at
year end increased to nearly R46 million after paying a R10m dividend.
9. OPERATIONAL REVIEW
- RESELLERS
Resellers Sales (35% of sales) declined by 1.8% due to tough economic
conditions in the building material supply industry and increased
competition.
Consolidation of the national chain stores continued unabated and the
strategy of focusing on these key accounts along with emphasis on
brand and product mix were key to our success.
- CONSTRUCTION
Construction Sales (55% of sales) similarly decreased by 1.7% as the
business felt the effects of the completion of all the major world cup
projects along with delays in infrastructure spending.
- EXPORTS
Export Sales (10% of sales) grew by 8%.
Exports again showed pleasing growth in turnover and margins were
maintained in the face of increased competition.
10. PROSPECTS
The launch of new products along with our key account strategy should
result in moderate growth for the next financial year.
11. AUDITORS REPORT
The provisional financial results for the twelve months ended 31 May 2010
set out above have been extracted from the Company`s annual financial
statements which have been audited by BDO Inc. A copy of their unmodified
audit opinion on the annual financial statements is available for
inspection at the Company`s registered offices.
For and on behalf of the Board
S K Mota L F Avis
Chairman Financial Director
Johannesburg
20 August 2010
Registered Office:
7 Wilcox Road
Isipingo
KwaZulu-Natal
4110
Company Secretary
William Somerville
Transfer Secretaries:
Computershare Investor Services (Pty) Limited
70 Marshall Street
Johannesburg
2001
Directors:
S K Mota*
W R G Post*
L F Avis
S Rault
I Hague
R Patmore**
M Meehan**
* Non-executive
** Independent Non-executive
Designated Advisor:
PSG Capital (Pty) Limited
Auditors:
BDO South Africa Incorporated
Registered Auditors
Date: 20/08/2010 16:01:01 Supplied by www.sharenet.co.za
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