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TFX - Top Fix Holdings Limited - Unaudited results for the 6 months ended 31
December 2010
Top Fix Holdings Limited
Incorporated in the Republic of South Africa
(Registration number 2006/011359/06)
JSE code: TFX
ISIN: ZAE000088423
Top Fix Holdings Limited ("Top Fix" or "the Group")
UNAUDITED RESULTS FOR THE 6 MONTHS ENDED 31 DECEMBER 2010
COMMENTARY ON THE GROUP`S RESULTS:
The Group achieved headline earnings for the 6 months ended 31 December 2010 of
R11,1 million and headline earnings per share of 5.4 cents, a 19% decline on
those achieved for the corresponding period last year. This is however a 75%
improvement on the headline earnings of 3,1 cents per share achieved for the
full 12 months to 30 June 2010 (where second half earnings of the Scaffolding
Division were adversely affected by the building recession and debtors
provisions raised).
Operating profit at R17,3 million represents a decline of 16% on R20,7 million
achieved for the 6 months to 31 December 2009, but a 36% improvement on the full
year operating profit to 30 June 2010 of R12,7 million. With net interest paid
of R1,9 million for the period to December 2010, profit before taxation amounted
to R15,4 million. Revenue increased 5% compared to the 6 months ended 31
December 2009 to R178 million. The revenue increase represents the net effect of
a 25% increase in Personnel Outsourcing revenues, offset by a 38% decline in
Scaffolding revenue. Since Personnel Outsourcing revenues are at far lower
margins than those of the Scaffolding Division, this resulted in the earnings
decline noted above.
Debtors levels have decreased by R3,7 million since 30 June 2010 to R61 million.
Recovery procedures are continuing against a former partner in a scaffolding
joint agreement as well as other large debtors raised in prior years, still
currently outstanding. An amicable settlement was reached in January 2011 over
disputed balances totalling R6,5 million, which was paid in January. The effect
of this recovery on earnings was not material.
With the improvement in the debtors balance, the Group achieved a net cash
inflow from operations of R5 million for the current interim financial period.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 months ended 31 Year
December ended
R`000 2010 2009 30 June
2010
Unaudited Unaudited Audited
Revenue 178,048 169,808 295,580
Cost of sales (131,361) (115,812) (216,795)
Gross profit 46,687 53,996 78,785
Net operating expenses (29,383) (33,334) (66,092)
Operating profit 17,304 20,662 12,693
Impairment of goodwill - - (44,034)
Interest received 63 1,012 1,257
Interest paid (1,967) (2,496) (5,031)
Profit/(loss) before 15,400 19,178 (35,115)
taxation
Taxation (4,344) (5,428) (2,560)
Profit/(loss) attributable 11,056 13,750 (37,675)
to the equity holders of
the parent
Other comprehensive income - - -
Total comprehensive 11,056 13,750 (37,675)
income/(loss)attributable
to the equity holders of
the parent
Weighted average shares in 203,182 203,182 203,182
issue (`000)
Calculation of headline
earnings
Attributable 11,056 13,750 (37,675)
earnings/(loss)
Impairment of goodwill - - 44,034
Loss/(profit) on sale of
property,plant and
equipment (after taxation) 17 - (15)
Headline earnings 11,073 13,750 6,344
Earnings /diluted earnings
per share (cents)
Earnings/(loss) per share 5.4 6.8 (18.5)
Headline earnings per share 5.4 6.8 3.1
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 December 30 June
R`000 2010 2009 2010
Unaudited Unaudited Audited
ASSETS
Non-current assets 139,239 186,499 141,309
Property, plant and 124,269 126,340 125,263
equipment
Goodwill 13,980 58,014 13,980
Investment in joint 128 1,459 1,433
ventures
Deferred taxation 862 686 633
Current assets 70,136 81,178 64,492
Inventories 8,826 10,652 9,102
Trade and other receivables 61,076 64,780 53,902
Bank and call deposits 234 5,746 1,488
TOTAL ASSETS 209,375 267,677 205,801
EQUITY AND LIABILITIES
Capital and reserves 152,778 193,147 141,722
Non-current liabilities 9,301 15,914 9,295
Interest bearing 3,814 6,004 4,965
liabilities
Deferred taxation 5,487 9,910 4,330
Current liabilities 47,296 58,617 54,784
Interest bearing 12,095 17,894 16,046
liabilities
Advances from joint 908 - -
ventures
Bank overdrafts and invoice 13,358 11,828 14,431
discounting
Trade and other payables 18,425 22,998 22,898
Taxation payable 2,510 5,897 1,409
TOTAL EQUITY AND 209,375 267,678 205,801
LIABILITIES
-
Shares in issue (`000) 203,182 203,182 203,182
Net asset value per share 75.2 95.1 69.8
(cents)
Net tangible asset value 68.3 66.5 62.9
per share (cents)
CONSOLIDATED STATEMENT OF CASH FLOWS
6 months ended 31 Year
December ended
R`000 2010 2009 30 June
2010
Audited
Unaudited Unaudited
Cash flow from operations 4,991 23,408 22,179
Cash generated by 9,210 29,179 37,386
operations
Interest received 63 1,012 1,257
Interest paid (1,967) (2,496) (5,031)
Taxation paid (2,315) (4,287) (11,433)
Cash flow from investing (70) (9,831) (12,575)
activities
Advances from/(to) joint 2,213 (892) (866)
ventures
Net investment in property,
plant and
equipment (2,283) (8,939) (11,709)
Cash flow from financing
activities
Movement in loans payable (5,102) (4,716) (7,604)
(Decrease)/increase cash (181) 8,861 2,000
resources
Cash resources at beginning (12,943) (14,943) (14,943)
of period
Cash resources at end of (13,124) (6,082) (12,943)
period
Cash resources (13,124) (6,082) (12,943)
Bank and call deposits 234 5,746 1,488
Bank overdraft and invoice (13,358) (11,828) (14,431)
discounting
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
6 months ended 31 Year
December ended
R`000 2010 2009 30 June
2010
Audited
Unaudited Unaudited
Equity at beginning of 141,722 179,397 179,397
period
Total comprehensive income 11,056 13,750 (37,675)
for the period
Equity at end of period 152,778 193,147 141,722
SEGMENT REPORTING
6 months ended 31 Year
December ended
R`000 2010 2009 30 June
2010
Audited
Unaudited Unaudited
Revenue
Scaffolding 32,945 53,341 82,873
Personnel outsourcing 138,393 110,766 202,276
Total revenue 141,020 112,982 206,695
Internal (2,627) (2,216) (4,419)
Safety surveillance 6,710 5,701 10,431
Total Group 178,048 169,808 295,580
Segment profit from
operations
Operating profit 17,304 20,662 12,693
Scaffolding (1,382) 8,342 (6,066)
Personnel outsourcing 16,520 10,345 16,254
Safety surveillance 2,160 1,835 2,521
Head office 6 140 (16)
Net interest (1,906) (1,484) (3,774)
(paid)/received
Scaffolding (1,966) (2,076) (5,885)
Personnel outsourcing (31) 592 1,984
Safety surveillance 92 - 125
Head office (1) - 2
Profit before taxation 15,398 19,178 8,919
Scaffolding (3,348) 6,266
(11,951)
Personnel outsourcing 16,489 10,937 18,238
Safety surveillance 2,252 1,835 2,646
Head office 5 140 (14)
Scaffolding
Still adversely affected by the building recession, Scaffolding`s operating loss
of R1,4 million for the 6 months to 31 December 2010 compares to a loss of R6,1
million for the year to 30 June 2010. Sales revenue, at R32,9 million, although
38% below first half sales last year, amounts to an increase of 11% on second
half sales. Aggressive cost cutting measures have been implemented in the
division to stem losses which have resulted from these lower sales levels,
improving operating results to a break even on a monthly basis in November and
December 2010. The full effect of the cost cutting measures taken is, however,
subject to time lags, and yet to become effective.
Personnel Outsourcing
Personnel Outsourcing achieved an operating profit for the interim period to 31
December 2010 of R16,5 million, a 60% increase compared to interim profits of
R10,3 million to 31 December 2009 and equal to the operating profit achieved for
the full year to 30 June 2010. This profit increase, and the revenue increase
noted above, is mainly as a result of record maintenance projects carried out by
customers of the division.
Safety Surveillance
Benefiting from the same projects as the Personnel Outsourcing Division, Safety
Surveillance also performed well and recorded an 18% increase in interim
operating profits to R2,2 million.
RELATED PARTY TRANSACTIONS
An amount of R8,9 million which bears interest at the prime overdraft rate plus
1% and is repayable on demand is due by the Group to MBM Technical Services
(Proprietary) Limited, a company controlled by Mr BW Marais. Interest charges of
R0,8 million have been raised on this loan for the 6 months to 31 December 2010.
FUTURE PROSPECTS
The Scaffolding cost cutting programme and local shortage of skilled artisans
leave both the Scaffolding and Personnel Outsourcing operations well placed to
take advantage of opportunities in South Africa.
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The results for the 6 months ended 31 December 2010 have been prepared adopting
the same accounting policies used in the most recent annual financial
statements, and in accordance with International Financial Reporting Standards,
IAS34, AC 500 Series of Interpretations, the JSE Listing Requirements and the
Companies Act of South Africa. These results have not been reviewed by the
auditors.
CAPITAL COMMITMENTS AND CONTINGENCIES
The Group had no significant outstanding capital commitments or contingencies as
at 31 December 2010.
DIVIDEND DECLARATION
In line with current Group policy, no dividend has been declared for the period.
For and on behalf of the Board
BT Ngcuka (Chairman) BW Marais (Chief Executive)
Date: 14 February 2011
Designated Advisor:
QuestCo Sponsors (Pty) Ltd
Directors:
BT Ngcuka* (Chairman); BW Marais (CEO); JA Barker (Financial Director); KG
Galesitoe*#; FF Goosen; JJ Senekal*#; KT Nondumo*#; FW Swart* (* - non-
executive) (#- independent)
Secretary and Registered Office:
MN Hattingh, 6 Topaz Street, Littleton Manor, Centurion 0157
Transfer Secretaries:
Link Market Services South Africa (Pty) Ltd, 11 Diagonal Street, Johannesburg
2000 (PO Box 4844, Johannesburg 2001)
Website:
www.topfixholdings.co.za
Date: 14/02/2011 16:34:01 Supplied by www.sharenet.co.za
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