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CSB - Cashbuild Limited - Audited annual financial results and dividend
declaration for the year ended June 2007
CASHBUILD LIMITED
(Registration number: 1986/001503/06)
(Incorporated in the Republic of South Africa)
JSE Share Code: CSB ISIN: ZAE000028320
AUDITED ANNUAL FINANCIAL RESULTS AND DIVIDEND DECLARATION
FOR THE YEAR ENDED JUNE 2007
REVENUE UP 27%
NET ASSET VALUE PER SHARE UP 36%
OPERATING PROFIT UP 38%
HEADLINE EARNINGS UP 45%
DIVIDENDS PER SHARE UP 49%
CONDENSED GROUP INCOME STATEMENT - AUDITED
R`000 Year ended Year ended
30 June 30 June
2007 2006 %
53 weeks 52 weeks Change
Revenue 3 448 386 2 710 417 27
Cost of sales (2 709 854) (2 114 497) 28
Gross profit 738 532 595 920 24
Selling and marketing expenses (474 334) (394 323) 20
Administrative expenses (85 404) (72 223) 18
Other operating expenses (3 674) (1 931) 90
Other income 7 228 4 499 61
Operating profit 182 348 131 942 38
Finance cost (2 533) (1 336) 90
Finance income 11 856 4 807 147
Profit before income tax 191 671 135 413 42
Income tax expense (63 333) (45 547) 39
Profit for the year 128 338 89 866 43
Attributable to:
Equity holders of the company 121 640 82 700 47
Minority interest 6 698 7 166 (7)
128 338 89 866 43
Earnings per share (cents) 536.3 366.3 46
Diluted earnings per share (cents) 536.3 366.3 46
ADDITIONAL INFORMATION - AUDITED
R`000 Year ended Year ended
30 June 30 June
2007 2006
Net asset value per share (cents) 1 361 1 003
Ordinary shares (`000):
- In issue 25 805 25 805
- Weighted-average 22 681 22 575
- Diluted weighted-average 22 681 22 575
Capital expenditure 75 918 77 349
Depreciation of property, plant and
equipment 28 635 20 403
Amortisation of intangible assets 1 333 1 734
Impairment of intangible assets 462 -
Capital commitments 75 445 52 633
Property operating lease commitments 733 872 530 936
Contingent liabilities 12 376 6 387
CONDENSED GROUP BALANCE SHEET - AUDITED
R`000 30 June 30 June
2007 2006
ASSETS
Non-current assets 261 721 215 026
Property, plant and equipment 248 434 205 094
Intangible assets 5 047 6 852
Deferred income tax assets 8 240 3 080
Current assets 772 583 678 106
Assets held for sale 2 740 6 637
Inventories 609 308 482 836
Trade and other receivables 60 955 56 609
Cash and cash equivalents 99 580 132 024
Total assets 1 034 304 893 132
EQUITY AND LIABILITIES
Shareholders` equity 383 293 286 845
Share capital and reserves 351 218 258 909
Minority interest 32 075 27 936
Non-current liabilities 35 537 29 358
Deferred operating lease liability 31 982 25 917
Deferred profit 1 907 1 959
Deferred income tax liability 3 28
Borrowings (non interest-bearing) 1 645 1 454
Current liabilities 615 474 576 929
Trade and other liabilities 575 123 540 438
Current income tax liabilities 39 222 35 542
Employee benefits 1 129 949
Total equity and liabilities 1 034 304 893 132
CONDENSED GROUP CASH FLOW STATEMENT - AUDITED
R`000 Year ended Year ended
30 June 30 June
2007 2006
53 weeks 52 weeks
Cash flows from operating activities
Cash generated from operations 120 421 84 324
Interest paid (2 533) (1 336)
Taxation paid (64 838) (28 678)
Net cash generated from operating
activities 53 050 54 310
Cash flows from investing activities
Net investment in assets (66 233) (76 533)
Interest received 11 856 4 807
Net cash used in investing activities (54 377) (71 726)
Cash flows from financing activities
Net treasury shares movement 2 313 7 662
Increase in other borrowings 191 38
Dividends paid
- own equity (31 062) (25 350)
- minorities (2 559) (80)
Net cash used in financing activities (31 117) (17 730)
Net decrease in cash and cash
equivalents (32 444) (35 146)
Cash and cash equivalents at
beginning of year 132 024 167 170
Cash and cash equivalents at
end of year 99 580 132 024
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY - AUDITED
R`000
Attributable to equity holders of the company
Treasury Treasury Cum.
Share share Share share translation Retained Minority Total
capital capital premium premium adjustment earnings interest equity
Balance at 1 July 2005
258 (34) 115 817 (93 656) (6 401) 178 362 20 850 215 196
Profit for the year
- - - - - 82 700 7 166 89 866
Dividend paid
- - - - - (25 350) (80) (25 430)
Treasury shares movement
- 4 - 7 658 - - - 7 662
Currency translation adjustments
- - - - (449) - - (449)
Closing balance at 30 June 2006
258 (30) 115 817 (85 998) (6 850) 235 712 27 936 286 845
Profit for the year
- - - - - 121 640 6 698 128 338
Dividend paid
- - - - - (31 062) (2 559) (33 621)
Treasury shares movement
- 1 - 2 312 - - - 2 313
Currency translation adjustments
- - - - (582) - - (582)
Closing balance at 30 June 2007
258 (29) 115 817 (83 686) (7 432) 326 290 32 075 383 293
CONDENSED GROUP SEGMENTAL ANALYSIS - AUDITED
Other members
of common Botswana
South Africa monetary area* and Malawi Group
Year ended Year ended Year ended Year ended
30 June 30 June 30 June 30 June
R`000 2007 2007 2007 2007
Income statement
Revenue 2 843 136 382 039 223 211 3 448 386
Operating profit 150 272 16 593 15 483 182 348
Balance sheet
Segment assets 814 280 118 612 101 412 1 034 304
Segment liabilities 536 731 42 157 72 123 651 011
Other segment items
Depreciation 24 618 2 927 1 090 28 635
Amortisation 1 298 - 35 1 333
Impairment of
intangible assets 462 - - 462
Capital expenditure 66 926 6 476 2 516 75 918
*Includes Namibia, Swaziland & Lesotho
Other members
of common Botswana
South Africa monetary area* and Malawi Group
year ended year ended year ended year ended
30 June 30 June 30 June 30 June
R`000 2006 2006 2006 2006
Income statement
Revenue 2 197 666 332 807 179 944 2 710 417
Operating profit 111 068 16 800 4 074 131 942
Balance sheet
Segment assets 693 185 116 145 83 802 893 132
Segment liabilities 498 203 47 048 61 036 606 287
Other segment items
Depreciation 17 355 2 066 982 20 403
Amortisation 1 699 - 35 1 734
Impairment of
intangible assets - - - -
Capital expenditure 57 129 13 377 6 843 77 349
*Includes Namibia, Swaziland & Lesotho
NOTES TO THE CONDENSED GROUP FINANCIAL INFORMATION
1. Basis of preparation. The condensed consolidated financial information
("financial information") announcement is based on the audited financial
statements of the group for the year ended 30 June 2007 which have been prepared
in accordance with International Financial Reporting Standards ("IFRS"), the
listing requirements of the JSE Limited and the South African Companies Act
(1973).
2. Independent audit by the auditors. These condensed consolidated results have
been audited by our auditors PricewaterhouseCoopers Inc., who have performed
their audit in accordance with International Standards on Auditing. A copy of
their unqualified audit report is available for inspection at the registered
office of the company.
3. Reporting period. The group adopts the retail accounting calendar, which
comprises the reporting period ending on the last Saturday of the month (2007:
30 June (53 weeks); June 2006: 24 June (52 weeks)).
4. Earnings per share. Earnings per share is calculated by dividing the earnings
attributable to shareholders for the year by the weighted average number of 22
680 722 ordinary shares in issue during the year.
(June 2006: 22 575 442 shares).
5. Headline earnings per ordinary share. The calculations of headline earnings
and diluted headline earnings per ordinary share are based on headline earnings
of R 119.8 million (June 2006: R 82.8 million) and a weighted average of 22 680
722 (June 2006: 22 575 442) and fully diluted of 22 680 722 (June 2006: 22 575
442) ordinary shares in issue.
Reconciliation between net profit attributable to the equity holders of the
company and headline earnings:
R`000 Jun-07 Jun-06 % Change
Net profit attributable to the
company`s equity holders 121 640 82 700 47
Impairment of goodwill 462 -
(Profit)/loss on sale of assets
after taxation (2 351) 78
Headline earnings 119 751 82 778 45
Headline earnings per share (cents) 528.0 366.7 44
Diluted headline earnings
per share (cents) 528.0 366.7 44
6.Declaration of dividend
The board has declared a final dividend (No. 29), of 94 cents (June 2006: 58
cents) per ordinary share to all shareholders of Cashbuild Limited. The dividend
per share is calculated based on 25 805 347 (2006: 25 805 347) shares in issue
at date of dividend declaration. The total dividend for the year amounts to 173
cents (2006: 116 cents) a 49% increase year on year.
Date dividend declared: Monday, 17 September 2007
Last day to trade "CUM" the dividend: Friday, 5 October 2007
Date commence trading "EX" the dividend: Monday, 8 October 2007
Record date: Friday, 12 October 2007
Date of payment: Monday, 15 October 2007
Share certificates may not be dematerialised or rematerialised between Monday, 8
October 2007 and Friday, 12 October 2007, both dates inclusive.
On behalf of the board
DONALD MASSON PAT GOLDRICK
Chairman Chief executive
Johannesburg Date: 17 September 2007
COMMENTS
NATURE OF BUSINESS
Cashbuild is southern Africa`s largest retailer of quality building materials
and associated products, selling direct to a cash-paying customer-base through
our constantly expanding chain of stores (164 at the end of this reporting
period). Cashbuild carries an in-depth quality product range tailored to the
specific needs of the communities we serve. Our customers are typically home-
builders and improvers, contractors, farmers, traders, large construction
companies and government-related infrastructure developers, as well as all
customers requiring quality building materials at lowest prices.
Cashbuild has built its credibility and reputation by consistently offering its
customers quality building materials at the lowest price and through a
purchasing and inventory policy that ensures customers` requirements are always
in stock.
INTERNATIONAL FINANCIAL REPORTING STANDARDS
The group is reporting its audited results in accordance with International
Financial Reporting Standards ("IFRS").
TRADING WEEKS
In the year under review Cashbuild had a 53rd trading week compared to the
normal 52 weeks of the prior year. This extra trading week yielded additional
revenue of R 67 million. If the effect of the 53rd week is excluded from the
results, operating profit, headline earnings per share and earnings per share
would have been 28%, 33% and 36% higher respectively than that of the prior
year.
FINANCIAL HIGHLIGHTS
Revenue for the year increased by a very healthy 27% whilst profit increased by
43%. This increase in profit was the result of an increase in operating profit
of 38% as well as a 169% increase in net finance income. Basic earnings per
share increased by 46% whilst headline earnings per share increased by 44%. Net
asset value per share has increased by 36%, from 1 003 cents (June 2006) to 1
361 cents. Cash and cash equivalents decreased by 25% due to suppliers being
paid an amount of R 230 million before the cut-off for year-end. On a comparable
basis cash resources would have improved by 92%.
Stores in existence since the beginning of July 2005 (pre-existing stores)
accounted for 16% of the increase in revenue with the remaining 11% increase due
to the 32 new stores the group has opened since July 2005. The increase for the
year has been achieved on the back of exceptional revenue growth in both the
third & fourth quarters of this financial year combined with good growth in the
first half. The strategic initiatives put in place to address revenue growth as
well as selling price increases of 10%, contributed to this positive
performance. Gross profit margins for the year were slightly lower in percentage
terms, but have recovered in the second half to similar levels experienced in
the second half of the prior year. In rand terms gross profit increased by 24%.
Operational expenses for the year remained well controlled with existing stores
increasing by 11%. New stores contributed 9%, the total increase for the year
being 20%. The main contributor to the higher than inflation increase on the
existing stores is the continued investment in people to maintain and improve
customer service standards, as well as higher incentive payouts and accruals,
due to performance targets being achieved.
The effective tax rate for the year of 33% is at the expected level, with STC
charges being the main contributor to the higher than statutory effective rate.
Cashbuild`s balance sheet remains solid. Stock levels have increased by 26% on
the back of higher trading volumes with the Cashbuild stock model being adhered
to by line management. This increase is further attributable to the stocking of
15 additional stores during this financial year (accounting for 10% of the
increase). Overall stockholding at 72 days (June 2006: 65 days) remains within
acceptable parameters, but will be an area of focus for management in the year
ahead. Trade receivables remain well under control.
During the year Cashbuild opened 15 new stores. Seven stores were relocated
during the year as well as two stores refurbished. Cashbuild will continue its
store expansion, relocation and refurbishment strategy in a controlled manner.
INFORMATION TECHNOLOGY
Cashbuild has selected SAP All-in-One as its preferred system for the support
office with our original selection of Active Retail remaining our preferred
solution for the stores. These solutions will be implemented as an integrated
package by the UCS group that has extensive experience of installing similar
solutions in the retail sector in southern Africa.
PROSPECTS
Management remains confident about the trading prospects for the financial year
ahead. The first nine trading weeks after year-end have reported an increase in
revenue in the region of 16% on that of the comparable nine weeks.
Directors: D Masson* (Chairman), PK Goldrick (Chief executive) (Irish), WF de
Jager, J Molobela*, KB Pomario, FM Rossouw*, NV Simamane*, SA Thoresson, A van
Onselen
(*Non-executive)
Company secretary: Corporate Governance Leaders CC
Registered office: cnr Aeroton and Aerodrome Roads, Aeroton, Johannesburg 2001
PO Box 90115, Bertsham 2013
Transfer secretaries: Computershare Investor Services 2004 (Pty) Limited,
70 Marshall Street, Johannesburg 2001
PO Box 61051, Marshalltown 2107
Auditors: PricewaterhouseCoopers Inc.
Sponsor: Nedbank Capital
QUALITY BUILDING MATERIALS AT THE LOWEST PRICE
www.cashbuild.co.za
Date: 18/09/2007 09:19:01 Supplied by www.sharenet.co.za
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